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Bob Stewart (Beckenham) (Con)
1. What steps he is taking to promote the benefits of Scotland remaining within the UK.
The Secretary of State for Scotland (Michael Moore)
As my right hon. Friend the Prime Minister has made clear, we believe that Scotland is stronger in the United Kingdom and that the United Kingdom is stronger with Scotland in it. Leading up to the referendum, the Government will produce detailed evidence and analysis to assess the benefits that Scotland gains from being part of the United Kingdom and the contribution that Scotland makes to our United Kingdom.
Bob Stewart
I thank the Secretary of State. Does he agree that the defence of Scotland, England, Wales and Northern Ireland will be greatly enhanced if we do not have a separate Scotland? Defence matters greatly to the whole of this country.
Michael Moore
My hon. Friend makes an important point. Over the next 18 months, civil servants will prepare detailed analysis and evidence that will show the basis of the arguments that we need to be involved in as Scotland confronts this great debate. Fundamentally, protecting our citizens is one of the most important parts of our role in government. We will also want to consider our position in the world and the economic benefits that we get from being part of the United Kingdom.
Angus Robertson (Moray) (SNP)
The Secretary of State and his Tory and Labour allies in the anti-independence coalition all say that they believe the constitutional status quo is not sustainable. With only days to go until the formal launch of the no campaign, will he outline to the House what joint proposals they have for further devolution? What powers will be devolved, and when?
Michael Moore
I hope that the hon. Gentleman has not got himself into trouble by mentioning the “independence” word, but he is a brave guy, so perhaps he thought it was a risk worth taking.
It is a bit rich for the hon. Gentleman to come here and ask questions of us, with our having just delivered the biggest transfer of financial powers from London to Scotland since the Act of Union. Every time we ask him what “independence” means, his proposals unravel.
Angus Robertson
Last time I looked this was Scottish questions—questions to the Secretary of State and the UK Government. I ask him for a second time: given that he and his allies say that the constitutional status quo is not sustainable, what specific joint proposals do they have for the further devolution of powers? He did not answer the question the first time I asked it. Will he please answer it now?
Michael Moore
I thought that the hon. Gentleman’s party had belatedly and even grudgingly welcomed the fact that the Scotland Act 2012 has now set in place the biggest transfer of financial powers north of the border, including borrowing powers, the Scottish rate of income tax and the transfer of stamp duty land tax. The debate to which he refers, which we all need to get on with, is the one about independence. That is why the UK Government are absolutely committed to ensuring that we get the necessary evidence and analysis, working with experts, academics and outside bodies to ensure that we are equipped for that great debate across the country.
Sir Menzies Campbell (North East Fife) (LD)
Does my right hon. Friend consider that Scotland being part of the United Kingdom is an important benefit in any international trade disputes? I particularly have in mind the efforts of the United States some years ago to restrict the import of the finest quality cashmere goods from his own constituency, in a dispute about bananas. Was the fact that Scotland was part of the United Kingdom an important factor in ensuring a proper resolution of that issue?
Michael Moore
My right hon. and learned Friend is absolutely right. It was critical to us in the borders, and to the producers of luxury goods the length and breadth of Scotland, that we were part of the United Kingdom. We had great clout within the European Union and could negotiate within the World Trade Organisation to get the right outcome. Our position in the world, the protection of our citizens and the future of our economy are the three key strands that we will examine to ensure that we are well informed in this great debate.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
We heard it here first: the launch of the “Separatists for Devolution” campaign. Scottish National party Members do not like the word “separation” or the word “independence”, and they want to leave Britain in order to make us more British. What a ludicrous set of proposals.
Andrea Leadsom (South Northamptonshire) (Con)
What representations has my right hon. Friend had on whether an independent Scotland would wish to join the euro?
Michael Moore
None, but it is a matter for the Scottish National party and Scottish Government to set out their proposals. They have singularly failed to do so.
Margaret Curran (Glasgow East) (Lab)
The Secretary of State may be aware that I received answers to parliamentary questions yesterday that indicate that although the Scottish Government argue that a separate Scotland will continue to use sterling, the Bank of England and UK financial regulatory institutions, they have not yet undertaken any work behind the scenes to explore those options—no correspondence has been sent, no questions have been asked and no discussions have taken place. Does he agree that the First Minister should spend less time in Hollywood and more time in Holyrood—[Interruption.] It was a good try. Given that the Scottish Government have made those statements on the economy and a separate Scotland, what steps has the Secretary of State taken to clear up the confusion and ambiguity of such claims?
Michael Moore
I agree with the hon. Lady that it is quite striking that the SNP and Scottish Government are curiously short on the detail as they set out their lifelong ambition to create an independent Scotland, and that they are not curious to ask more questions. I start from a simple point: Scotland is stronger within the UK and the UK is stronger for having Scotland as part of it. The economy is a key part of that argument.
Margaret Curran
I thank the Secretary of State for that argument. In such debates on Scotland, we have assertion, not argument, and fantasy rather than facts—the Scottish Government’s arguments cannot pass the most basic test of credible evidence. Will the Secretary of State and the whole UK Government therefore work with others to ensure that we have credible evidence and arguments that pass the test of objective and independent scrutiny to ensure that Scottish people get the arguments they deserve?
Michael Moore
I absolutely agree with the hon. Lady that it is important that this great debate is well informed by detailed evidence and strong analysis. That is why the Government are getting civil servants to work through the key issues and to engage with academics, think-tanks and other respected experts outside the Government to ensure we have all the evidence to inform the debate. As we do that over the next 18 months, I am confident we will show beyond doubt that Scotland’s place is much stronger as part of the UK.
Sheila Gilmore (Edinburgh East) (Lab)
2. What discussions he has had on the effect of the Scottish Government’s modern apprenticeship scheme on employment in Scotland.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
I am in regular contact with the Scottish Government on a range of issues. Later this week, the British-Irish Council is due to discuss the effectiveness of programmes and policies to support youth employment in Members’ respective Administrations.
Sheila Gilmore (Edinburgh East) (Lab)
In the Scottish Parliament last week, the Labour spokesperson on youth unemployment, Kezia Dugdale MSP, uncovered figures showing that of the 25,000 modern apprenticeships that the Scottish Government claim to have set up, more than 10,000 involved people who were already in work. Does the Minister agree that the Scottish Government should spend public money on creating additional jobs, and not just on rebadging jobs?
David Mundell
I share the hon. Lady’s concerns about how the Scottish Government seek to present facts. The facts of their responsibilities on employment matters are clear, and they have had £22 million of additional money in relation to youth contract consequentials. I should like them to focus on how they spend that money rather than on their obsession with the constitution.
Mr Speaker
Order. I entirely understand, but I would like greater brevity from now on, to be exemplified by the hon. Member for Epping Forest (Mrs Laing).
Mrs Eleanor Laing (Epping Forest) (Con)
Is the Minister aware that almost every economic analysis shows beyond doubt that employment prospects in Scotland would be significantly reduced if Scotland were separate from the UK?
David Mundell
I absolutely agree with my hon. Friend, who I am sure will welcome with me the fact that employment in Scotland increased by 18,000 in the last period.
Pete Wishart (Perth and North Perthshire) (SNP)
I am sure that, like me, the Minister has witnessed the Labour party’s ridiculous and scurrilous campaign against what is undoubtedly one of the most successful modern apprenticeship schemes in Scotland. Seemingly, Labour Members’ complaint is against rules that they introduced themselves. Should the Minister not instead congratulate the Scottish Government on almost doubling the number of modern apprenticeships in the past year and on the extra £72 million of investment?
David Mundell
I noticed that the hon. Gentleman did not mention the word “independence”, so he is obviously on message. On unemployment in Scotland, including youth unemployment, the UK and Scottish Governments should work together.
Mr Iain McKenzie (Inverclyde) (Lab)
3. What steps he is taking to expand employment opportunities in Scotland.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
5. What steps he is taking to expand employment opportunities in Scotland.
The Secretary of State for Scotland (Michael Moore)
The Government are committed to creating the right environment for sustained economic growth to provide the basis for the creation of secure jobs.
Mr McKenzie
It should come as no surprise to the Secretary of State that unemployment in Scotland is at crisis level. The unemployment figures are unacceptable; in particular, the youth unemployment figures are disgraceful. If it were not for my council in Inverclyde—
Mr McKenzie
May I press on the Secretary of State and the Government the need to make reducing the unemployment figures in Scotland their absolute priority? Will he join—
Michael Moore
I agree that we must do everything possible to reduce unemployment, particularly youth unemployment, which, as the hon. Gentleman will recall, began to rise during the growth periods under the previous Labour Government. Through our measures, including the Work programme, the youth contract and our joint work with the Scottish Government, we have been bearing down on the problem, but I am happy to meet him to discuss the matter further, if he wishes.
Sandra Osborne
Is the Secretary of State aware that the Scottish chambers of commerce have today called for an expansion of infrastructure investment to help Scottish businesses? What will he do to ensure that this happens?
Michael Moore
The hon. Lady needs to recognise the serious steps we are taking to get the economy back on a secure path to growth, after what we inherited from her Government two years ago. We must also bear in mind the crisis in other parts of Europe. By cutting corporation tax, keeping interest rates as low as possible and introducing specific measures for Scotland, including the enterprise areas in Irvine, Nigg and Dundee, we are taking action to help the Scottish economy.
Oliver Heald (North East Hertfordshire) (Con)
Does the Secretary of State agree that by cutting corporation tax, reducing regulation and, at the same time, having the largest Work programme the country has ever seen, we are succeeding in Scotland, with 14,000 fewer unemployed people this month—the third month in a row?
Michael Moore
I certainly welcome the reduction in unemployment, but we need to recognise that things will continue to be challenging for people the length and breadth of Scotland and the rest of the UK. My hon. Friend is right, though, that our measures to get the economy back on the right track are fundamentally right and are the way to create secure jobs.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Does the Secretary of State agree that Statoil’s decision to invest in the North sea and a further 300 jobs for Aberdeen is recognition that the Treasury’s positive new approach to encourage investment is bearing fruit?
Michael Moore
My hon. Friend is right. There have been significant announcements in the energy sector from Statoil, BP, Gamesa and others on the future of Scotland’s energy needs, not only in oil and gas but elsewhere. They recognise that that is an important part of what the Government are committed to and that Scotland is better for being part of the UK when it comes to delivery.
Stewart Hosie (Dundee East) (SNP)
I am glad that the Secretary of State welcomed the 14,000 fall in unemployment—that is good news—and I am sure he will also want to welcome today’s news on foreign direct investment into Scotland creating jobs, but of course he is right that we must create the right environment for businesses to employ people. That means downward pressure on costs, particularly fuel prices, which are recognised as one of the most significant cost pressures that businesses face. Will he therefore ask his Treasury colleagues to cancel the fuel duty rise planned for August?
Michael Moore
I point out to the hon. Gentleman that thanks to the Government’s actions in introducing the fuel duty stabiliser and abandoning the escalator we inherited from the Labour party, we are doing a lot to help motorists, and will continue to do so.
Mr Speaker
I remind the House that the clue is in the heading—“Questions to the Secretary of State for Scotland”.
Mr William Bain (Glasgow North East) (Lab)
Listening to the Secretary of State reminds us how totally isolated he is in Scotland in believing that the answer to this crisis of weak economic demand is harsher austerity over the next four years. Does he not accept that nearly twice as many people as on black Wednesday are being forced to work part time because there are not enough full-time jobs in our economy? Some 320,000 people in Scotland are struggling below the poverty line despite being in work, and real wages have fallen every month that this Government have been in office. Is that not the real explanation of why we face a double-dip recession, made in Downing street?
Michael Moore
It may suit the hon. Gentleman’s case, but he cannot be allowed to forget the legacy of his Government and the mess that we inherited two years ago, nor can the Opposition be allowed to be blinkered about the challenges around Europe and the world. We are ensuring that we create the right financial and economic conditions to get Scotland and the UK economy back on the right foot.
Amber Rudd (Hastings and Rye) (Con)
4. What recent discussions representatives of his Department have had with representatives of the Scottish agricultural industry.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
I meet regularly with representatives of the Scottish agricultural industry, including the National Farmers Union of Scotland and individual producers. I look forward to further direct engagement tomorrow, when I attend the royal highland show.
Amber Rudd
Does the Minister agree that those in the Scottish agricultural sector are better off with Scotland remaining part of the UK?
David Mundell
I absolutely agree with my hon. Friend. An independent Scotland would shrink our home market of 60 million consumers to a mere 5 million overnight. Farmers would be reliant on exporting their produce. Some 64% of Scottish beef was sold to the rest of the UK, as the first point of delivery, in 2011.
Mr Mike Weir (Angus) (SNP)
Perhaps the Minister could try answering a question about something that is actually the responsibility of the UK Government. Is he aware of the huge concern in the Scottish agricultural and horticultural sectors about the future of the seasonal agricultural workers scheme, which is due to expire next year? Has he made representations to the Home Office for the continuation of the scheme?
David Mundell
I note the hon. Gentleman’s concerns and I would be happy to meet him to discuss them further.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
6. What recent discussions he has had with the Scottish Government on youth unemployment.
The Secretary of State for Scotland (Michael Moore)
I meet with Scottish Ministers regularly to discuss a range of issues. On 15 March, Scottish Ministers joined me in Dundee for a joint-Government summit to discuss youth unemployment in Scotland, and we agreed to continue to work together on this important issue.
Michael Connarty
With the information that there was falsification going on in the apprenticeship schemes—with people already in work being counted as new apprentices—and with the offshore oil industry saying that it needs 44% of those with non-graduate technical skills to fill the spaces that are coming up in the industry, is it not time that the Secretary of State showed some leadership and called an all-party, all-Parliament forum in Scotland about unemployment and stopped the behaviour of the Scottish National party, which has been running a single-party state, with its Ministers wandering round having one-party meetings?
Michael Moore
I appreciate the length of time that the hon. Gentleman has spent working on this issue over his political career. I also believe that it is important that the parties can work together, because the origins of youth unemployment lie elsewhere, rather than just under this Government’s tenure. I am happy to work with him and others to ensure that we get all the best ideas focused on tackling youth unemployment.
Jo Swinson (East Dunbartonshire) (LD)
I welcome the Secretary of State’s recent visit to my constituency’s largest employer, Aviva in Bishopbriggs, which has 1,100 staff, and his support for my “Get East Dunbartonshire Working” initiative, which has helped to create 43 new employment and training opportunities in the local area since the end of April. What more can the Government do to ensure that businesses are aware of the support that is available, particularly through the £1 billion youth contract, to employ young people in particular?
Michael Moore
I thank my hon. Friend for the opportunity to pay a visit with her to the Aviva offices in her constituency, and I pay tribute to Aviva for the work it is doing with young people and others. It is very important that we do all that we can to support young people. That is why the youth contract is now in place, boosting work experience, increasing the number of wage incentives that are available and ensuring that the Scottish Government have support for more apprenticeships.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
The Secretary of State recently visited my constituency. I wonder whether he could give us a progress report on how he has got on with the schools-industry liaison committees.
Michael Moore
I regret to inform the hon. Gentleman that I have not made as much progress as he would wish me to. I hope, however, that he will recognise the important support that we have given to Irvine, in the form of the enterprise allowances—the 100% capital allowances that are now available—and I will be happy to catch up with him on the school-industry partnership and the Scottish Government’s role in it any time soon.
Iain Stewart (Milton Keynes South) (Con)
Does my right hon. Friend agree that the plans to reform employment law will particularly encourage small businesses to take on more young people?
Michael Moore
As my hon. Friend will know, the employment law review will carry on through this Parliament, and I look forward to seeing the proposals that will come forward in due course.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
7. What steps he is taking to reduce energy prices in Scotland.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The Government are committed to ensuring that consumers get the best deal for their energy usage, and have put in place measures to help to reduce household energy bills. In May, I held a summit in Rutherglen, bringing together the big six energy suppliers, Scottish consumer groups and the regulator, Ofgem, to examine ways of addressing this issue.
Mr Clarke
Over the past eight years, average energy prices have increased by 140% per household, while the increase in average income for households has been a mere 20%. What are the Government doing to respond to people’s worries—especially those of low-income families, elderly people and people with disabilities—and to deal with this onslaught on vulnerable people?
David Mundell
The Government are continuing the cold weather and winter fuel payments, and bringing forward the green deal. We are also working with voluntary organisations across Scotland to help them to support the most vulnerable people, so that they can access all the fuel-related benefits that are available to them.
Mr Alan Reid (Argyll and Bute) (LD)
Many islanders are telling me that the 5p fuel duty discount is not being passed on to the motorist. Will the Minister ask Her Majesty’s Revenue and Customs and the Office of Fair Trading to investigate this matter? They must ensure that this discount is passed on to the motorist in its entirety.
David Mundell
I am concerned to hear what the hon. Gentleman is saying, and I would be happy to meet him and other concerned island MPs to discuss the matter.
Mr Edward Leigh (Gainsborough) (Con)
8. What steps he is taking to reform central Government funding for the devolved Government in Scotland.
The Secretary of State for Scotland (Michael Moore)
As the coalition agreement sets out, we are committed to a review of public funding arrangements once we have dealt with the unprecedented deficit that we inherited from the previous Government.
Mr Leigh
Someone would need an intelligence as profound as that of Spinoza to understand central Government funding of Scotland, but it must be clear to even the most basic English person that not only do we have no say over education and health in Scotland while they run ours, but we pay over the odds for theirs. Should not the Scottish National party be careful what it wishes for when it calls for independence?
Michael Moore
My hon. Friend, more than most, understands the complexities of public spending in this country. I say to him, however, that our priority has to be to reduce the deficit, after which we can look at these issues again. I would also gently point out to him that within England there are quite large variations, and that the figure per head for spending in London is higher than in Scotland.
Ian Murray (Edinburgh South) (Lab)
10. Given that the Scottish Government have had no discussions with either the Chancellor or the Bank of England about having a place on the Bank’s Monetary Policy Committee—which would be a committee of a foreign country—does the Secretary of State agree that this is another fanciful assertion that cons the Scottish people?
Michael Moore
The hon. Gentleman is entirely right to highlight the fact that the Scottish Government are yet again making such assertions rather than producing detailed analysis and evidence, which is what this Government are determined to provide in this great debate. The Scottish Government seem willing and able to swap a good partnership for some kind of new dependency, and that is not right.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
9. What assessment he has made of the implications for the Scottish fishing industry of the recent EU Fisheries Council.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The UK Government have worked hard to influence the content of the “General Approach” at the Fisheries Council. It would deliver positive benefits for Scotland’s fisheries and those who depend on them, and I welcome its commitment to manage fish stocks sustainably, to move towards more regionalised fisheries management and to ensure that discards are eliminated.
Dr Whiteford
I also welcome the progress that was made in Luxembourg last week, but does the Minister think that this would be an appropriate juncture in the process at which to introduce more transparency into fisheries management in the form of the UK Government making public the individuals and companies that hold fish quota here?
David Mundell
I agree with the hon. Lady that it is important for the UK Government and the Scottish Government to work well together, and the recent Fisheries Council is a good example of them doing that for the benefit of Scotland’s fishermen.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The hon. Member for Banff and Buchan (Dr Whiteford) is absolutely right: we need a register of active fishermen—[Interruption.]
Mr Speaker
Order. The House must come to order. The House should be listening to the Chair of the Select Committee on Environment, Food and Rural Affairs—listening with respect.
Miss McIntosh
—and fisheries. [Laughter.] The hon. Lady is absolutely right that, without a register, we do not know who are active fishermen in Scotland and who are slipper skippers.
David Mundell
Ministers both here in the UK Government and in the Scottish Government will have heard the comments of my hon. Friend, who is a respected contributor on such matters.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
11. What plans he has to mark the bicentenary of Dr David Livingstone’s birth in March 2013.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
I have met representatives of the Scotland-Malawi partnership to discuss the best way for the UK Government to mark this bicentenary. The Scotland Office will hold a commemorative event at Dover house. My officials will work with other interested parties to ensure that this anniversary is celebrated across the UK.
Tom Greatrex
I thank the Minister for his reply. Will he join me in supporting my invitation to the President of Malawi, Joyce Banda, to visit the UK during the bicentenary and as part of that visit to come to Blantyre, Lanarkshire, in my constituency?
David Mundell
I commend the hon. Gentleman for the role he has played in promoting the David Livingstone bicentenary, which has great resonance in his constituency. Yes, the Scotland Office will work with him and others to encourage the President of Malawi to come to Scotland.
Dr William McCrea (South Antrim) (DUP)
Q1. If he will list his official engagements for Wednesday 20 June.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I have been asked to reply. My right hon. Friend the Prime Minister is attending the G20 summit in Mexico.
I am sure the whole House will wish to join me in paying tribute to those servicemen who have lost their lives in Afghanistan since the last Prime Minister’s Question Time, Lance Corporal James Ashworth of 1st Battalion Grenadier Guards and Corporal Alex Guy of 1st Battalion the Royal Anglian Regiment. Our sincere condolences are with their families and their loved ones. Last week, I visited our armed forces in Helmand where I was once again reminded of their exceptional work on behalf of this country. That work and these sacrifices must never be forgotten.
Dr McCrea
I join the Foreign Secretary in expressing our deepest sympathy to the families of our fallen heroes and pray God will comfort them.
The Belfast International air link into Heathrow is an invaluable asset to the economy of Northern Ireland. There are deep concerns, however, that this link is at risk, because the landing slots are allocated to carriers rather than to regional airports. Will the Government urgently publish an aviation strategy that ensures our international airport maintains its link with Heathrow?
Mr Hague
The Department for Transport will consult in the summer on our future aviation policy and ask for evidence on options about maintaining the UK’s status as an international hub for aviation. The hon. Gentleman is quite right that the London to Belfast link is important to the economy. There are currently more than 18,000 flights a year between the two Belfast airports and the five main London airports. I hope that he agrees that our steps to devolve power to set air passenger duty rates for direct long-haul flights departing from Northern Ireland will also boost investment and tourism.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
As my right hon. Friend will know from my recent letter to the Prime Minister, the situation at the Coryton oil refinery on the Thames is becoming increasingly difficult. In an attempt to support manufacturing, secure well-paid jobs and secure our UK fuel supplies, will he use the offices of the Prime Minister to secure an urgent summit, bringing together the heads of the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and the Treasury to explore every single avenue possible to keep this refinery open?
Mr Hague
I know that this has been very disappointing news and that my hon. Friend has been very active on this matter. The work force and the local community have worked tirelessly to help the administrators to secure the long-term future of the refinery. We are keeping in close contact with the administrators, who are still looking at further options, and working with Thurrock council’s taskforce as well. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), has met representatives of the work force and local community. I will, of course, draw my hon. Friend’s remarks to the attention of the Prime Minister as well.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I join the Foreign Secretary in paying tribute to Lance Corporal James Ashworth of 1st Battalion Grenadier Guards and Corporal Alex Guy of 1st Battalion the Royal Anglian Regiment? They died serving our country with the utmost bravery, and we join the Foreign Secretary in sending our deepest condolences to their families and friends.
We know that there is still a long way to go before the people of Burma get the democracy to which they are entitled, but the fact that progress has been made is due to the extraordinary commitment and courage of one woman who has endured more than two decades of house arrest. Will the Foreign Secretary join me in expressing our utmost admiration for Aung San Suu Kyi?
Mr Hague
I absolutely will, and I think it highly appropriate to raise this matter during Prime Minister’s Question Time. I believe that I was the first European Foreign Minister to visit Aung San Suu Kyi and to visit Burma at the beginning of the year, and I found her, not only in reputation but in substance, an inspirational figure.
As the right hon. and learned Lady says, there is still a long way to go, not only in bringing democracy to Burma but in ending ethnic conflicts, one of which is still going on in Kachin state. We look to the Government of Burma to continue to travel on this road and to release remaining political prisoners, and I think that across all parties we look forward to giving Daw Aung San Suu Kyi a tremendous welcome tomorrow.
Ms Harman
I thank the Foreign Secretary for his answer. He was right to visit Burma when he did. We support the suspension of sanctions on Burma, but will he reassure us that the position of the British Government will remain that sanctions will be re-imposed unless there is sustained progress towards democracy and the rule of law?
Mr Hague
That is very much our position, and I have said so in terms to the Foreign Minister of Burma. Indeed, we have argued in the European Union that sanctions and other restrictive measures should not be lifted unconditionally, but should be suspended so that they can be re-imposed if necessary and if progress comes to a stop. They have been suspended for 12 months, and we will of course continue to review progress throughout that period.
Having met the President of Burma on my visit, I believe that he is absolutely sincere in his intentions, but there will of course be elements in the Government of Burma who are not so enthusiastic about these changes and who will be alarmed by the success of Aung San Suu Kyi and her party in recent by-elections. We will keep up the pressure, as well as the welcome, for these changes.
Ms Harman
I thank the Foreign Secretary for that answer, and for his commitment to keeping up the pressure for progress. Let me now turn to domestic issues, and specifically to the national health service.
This week a survey showed that 90% of primary care trusts are restricting access to treatment because of the financial pressure that they are under. That will hit older people particularly. How can the Foreign Secretary justify an elderly person with cataracts in both eyes being told that they can have surgery in only one of them?
Mr Hague
It is totally unacceptable if trusts are rationing on the basis of financial considerations. The NHS medical director has written to trusts telling them that the criteria for decisions must be only clinical and not financial. If evidence is found that they are ignoring that, the Secretary of State can intervene. The Department of Health will look into any cases in which trusts are using financial conditions for the purpose of decisions. Allegations have been made about this issue before, including under the last Government. The Department of Health is very clear about what it will do, and that should be welcomed throughout the House.
Ms Harman
But there is evidence and the Foreign Secretary is still not acting. This is not just about cataract operations: 125 different treatments are being rationed on grounds of cost, including hip and knee replacements. What does the Foreign Secretary say to an elderly patient who needs a hip replacement—“Wait in pain” or “Try to pay and go private”? What does he say?
Mr Hague
I say three things. First, I say what I said a moment ago when answering the right hon. and learned Lady’s question about rationing. Secondly, I say that arbitrarily restricting access to operations was not just happening under the last Government, but allowed under the last Government. In 2007, patients in Suffolk had to wait for a minimum of 14 weeks for routine surgery, and York NHS Trust was told by its primary care trust not to operate on non-urgent cases until they had waited for a minimum of 20 weeks.
Thirdly, I say to any of those individuals that their GP—their doctor—should be at work tomorrow, and not on strike. We on this side of the House encourage those doctors to go to work, and I hope that the right hon. and learned Lady and all those on her side of the House will say clearly today that those doctors should be at work tomorrow.
Ms Harman
We do not want patients to suffer, so we do not want the GPs to be going on strike, but we are proud of what we did in the NHS—more doctors, more nurses and cutting the waiting lists. It is always the same: Labour builds up the NHS and the Tories drag it down.
Today, the Foreign Secretary is saying that he is 100% behind the Government’s health plans, but it is a different story in his own constituency. Last month, he took to the streets, marching in protest against the NHS cuts. Let us remind ourselves of what the Prime Minister said about midwives. Just before the general election, the Prime Minister wrote for The Sun newspaper—because, professionally of course, they were all in it together—and said that
“we will increase the number of midwives by 3,000.”
Can the Foreign Secretary confirm that they have broken their promise on midwives?
Mr Hague
That was a long question, although I congratulate the right hon. and learned Lady on not having the shadow Chancellor here today, which does help everyone to hear and concentrate. [Interruption.] The Chancellor is at the G20; the shadow Chancellor is presumably doing another opinion poll on what people think of him—and by the way, we could have told him that for nothing. [Laughter.] More value under the Conservatives.
On the questions that the right hon. and learned Lady asked, I am glad that she says that GPs should be at work tomorrow. She should tell that to her own spokesman, the hon. Member for Hackney North and Stoke Newington (Ms Abbott), who said that she had “a lot of sympathy” with the British Medical Association and that there would be a lot of public support for the action it is taking. So there is a clear division across the Floor of the House.
It is perilous for the right hon. and learned Lady to go into the affairs of another constituency, because what is happening in my constituency is nothing to do with funding or health reforms. But I will tell her all about that separately, if she would like. She says that Labour Members are proud, but we are proud of what has happened in the NHS. Average waiting times for both in-patients and out-patients are lower than at the last general election; the best performance ever has now been attained for patients waiting after 18 weeks to be treated; the total number of qualified clinical staff is higher than at the election; there are 3,900 more doctors since the election; and hospital infections are at their lowest level since surveillance of them began.
Ms Harman
And he never answered the question about midwives, because before the election the then Leader of the Opposition was all “Yes we Cam,” but as soon as he became Prime Minister it is “No we can’t.” Services rationed, patients suffering and public satisfaction at a new low—that is the Tories on the NHS. The Prime Minister once told us that he could sum up his priorities in three letters—NHS. Isn’t it more like “LOL”?
Mr Hague
It obviously took a long time to think of that one. I have set out the achievements of the Government on the NHS. Even the King’s Fund, in its latest report, which has sometimes been quoted by the Opposition, says:
“There is no evidence of a…decline in service quality or performance”.
It also says:
“infection rates have not noticeably deteriorated—remaining relatively stable in…most measures…or, in the case of MRSA and C difficile, reducing.”
These are important achievements in the health service, and they are a contrast with the Opposition health spokesman saying in June 2010:
“It is irresponsible to increase NHS spending in real terms”.
They are also a contrast with the number of managers doubling under the Labour party; a contrast with Labour’s last year in power, when the number of NHS managers rose six times as fast as the number of nurses: and a huge contrast with the situation in Wales, where Labour is cutting NHS spending.
Mr Peter Bone (Wellingborough) (Con)
Given the appalling behaviour of Liberal Democrat Cabinet Members in not supporting the Secretary of State for Culture, Olympics, Media and Sport, would my preferred Deputy Prime Minister arrange a divorce from the yellow peril so that we can govern with Conservative policies as a minority Government?
Mr Speaker
Order. I am sure that Members, having heard the question, will wish to hear the answer.
Mr Hague
I am sure that they will, Mr Speaker. My hon. Friend’s bringing up of the subject of divorce might be deeply troubling to Mrs Bone, so we should all seek to reassure her immediately that he is talking only about a political divorce. As someone who helped to negotiate the coalition and who values enormously co-operation with the Liberal Democrats, I will not be advocating a divorce in the Government.
Katy Clark (North Ayrshire and Arran) (Lab)
Q2. Will the Foreign Secretary confirm that, apart from Italy, the UK is the only country in the G20 in a double-dip recession?
Mr Hague
The fact of the matter is that the IMF now forecasts that in the coming year the British economy—[Interruption.] Opposition Members might not want to know what has been said by the IMF, but the shadow Chancellor—who is not here to make his hand gestures—has always said that we should take notice of the IMF. It says that in the coming year the British economy will grow faster than the German or French economy and that next year growth in the British economy will be similar to that of the United States and twice that of the eurozone. That would not be happening had we not brought the excessive deficits and debts of the previous Government under control.
Esther McVey (Wirral West) (Con)
In the light of the historic signing of a deal in China for record investment in Wirral Waters, the granting of the turnaround cruise terminal in Liverpool and the support for the automotive industries that has led to 1,000 more jobs at Jaguar and the saving of Vauxhall at Ellesmere Port, would the Foreign Secretary say that this Government have done more in two years to expand private enterprise on Merseyside than Labour did in its entire tenure?
Mr Hague
Well, yes, I would say exactly that and I point out that the success my hon. Friend describes is part of a process that in the last two years has seen British exports to Brazil going up 37%, British exports to China going up 61% and British exports to India going up 73%. That is happening because the British Government are out there championing British business, which the Labour party neglected to do.
Mr David Hamilton (Midlothian) (Lab)
Q3. Will the Secretary of State inform the House why, under the proposals for regional pay, he wants his nurses in Richmond, Yorkshire to be paid substantially less than nurses doing exactly the same job in Richmond, Surrey?
Mr Hague
The pay review bodies are now examining that issue, as the hon. Gentleman will know, and they will report next month, making their recommendations, which we can then all debate. The case for local pay was once made by a Chancellor of the Exchequer, who said that
“it makes sense to recognise that a more considered approach to local and regional conditions in pay offers the best modern route to full employment in our country.”—[Official Report, 9 June 2003; Vol. 406, c. 412.]
That Chancellor of the Exchequer was the hon. Gentleman’s near neighbour, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).
Mr Speaker
Order. I am sure that Conservative Back Benchers wish to hear from one of their coalition colleagues. I call Tessa Munt.
Tessa Munt (Wells) (LD)
Q4. The Department of Health accepts that radiotherapy is the cheapest and most effective way of treating cancer. Despite that, the Department will spend more than £1.5 billion on cancer drugs this year and less than a third of that on radiotherapy. In the south-west, seven of our hospitals rely on charity to fund basic radiotherapy services. The cancer drugs fund is underspent—
Tessa Munt
So, will the right hon. Gentleman speak to the Prime Minister about authorising the investment of that unused money into radiotherapy so that hospitals in my region can cure cancer patients?
Mr Hague
My hon. Friend is right to point out the importance of radiotherapy. It is also important to stress that decisions on treatments should be made by clinicians on the basis of whatever is most appropriate for their patients. We are investing an additional sum of more than £150 million over the next four years to expand radiotherapy capacity. I know that she will welcome that, as well as the fact that more than 12,500 extra patients have benefited from the £650 million cancer drugs fund that this Government introduced.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Q5. The regional growth fund is the Government’s flagship scheme for boosting jobs and growth in the regions. A recent National Audit Office report criticised it for spending too much on projects creating too few jobs, with the cost sometimes being £200,000 per job. What are the Government doing about it?
Mr Hague
The hon. Gentleman’s region will benefit from the regional growth fund, including through £235 million from the fund. It is, of course, important that the money is spent effectively, and my ministerial colleagues will do their utmost to ensure that that happens, but it is also important to remember that his region benefits from many other things that the Government are doing, including infrastructure projects to support growth in the west midlands, and enterprise zones for Birmingham city centre and for the black country. These measures are much more likely to get regional growth going than the excessive tax and spending of the Labour party.
Mel Stride (Central Devon) (Con)
Q6. My constituent Ian Tapp has now lost 300 cattle to bovine TB, and that scourge has been exacerbated by the fact that the previous Government did precisely nothing about the problem. Although I recognise the sterling work that this Government have done, will my right hon. Friend reassure my livestock farmers that, when it comes to disease control regulations, there will be proportionality and nothing that is likely to detract from their livelihood?
Mr Hague
My hon. Friend raises an important point. Bovine TB is a devastating disease and one of the most serious challenges facing the British cattle farming industry. Last year, around 26,000 cattle were compulsorily slaughtered in England alone. The Department for Environment, Food and Rural Affairs will make an announcement tomorrow about how it intends to proceed on this subject. Cattle measures continue to be the foundation of our TB control programme, but it is clear that those alone are not sufficient in some areas, so I invite him to stand by for a further announcement tomorrow.
Fabian Hamilton (Leeds North East) (Lab)
The Foreign Secretary will be aware that His Holiness the 14th Dalai Lama of Tibet is in London today and that he will visit Parliament this afternoon. On such an auspicious day, will the right hon. Gentleman use this opportunity to restate the Government’s commitment to the human rights of Tibetans within China?
Mr Hague
In this country and the House, we believe in the universality of human rights. I often make that point to Chinese leaders, including in the annual strategic dialogue that I conduct with China. We also have a formal human rights dialogue with China and we do not shy away from raising any of these cases. Of course, like the previous Government, we see Tibet as part of the People’s Republic of China, but we also look for meaningful dialogue between representatives of the Dalai Lama and the Chinese authorities, and we will continue to support that.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Q7. The Government have made clear their commitment to root out tax avoidance by public officials and civil servants. Will the deputy—the Foreign Secretary—make it clear that the Government will be equally robust in rooting out tax avoidance by the corporate sector that does jobs for the Government, or that is employed by the Government?
Mr Hague
Absolutely, and I will not mention that slip to the Deputy Prime Minister—it is entirely between ourselves and these four walls.
In the Budget, the Chancellor set out clearly his absolute determination to deal with tax avoidance and to do so in the future without warning. If the Chancellor was here, I know that he would say that that applies to the corporate sector, too.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Q8. If he will amend his policy on the benefit cap in respect of families with children.
Mr Hague
The Government believe that it is not reasonable or fair that households should receive a greater income from benefits than the average weekly wage for working households. In some cases it can be more than double the average household income. Our changes will mean that no family on benefits will earn more than a working family’s average salary, £26,000 a year for couple and single-parent households. This strikes the right balance between supporting families and providing incentives to work.
Jim Fitzpatrick
Rent levels in inner London and near Canary Wharf in my constituency are disproportionately high. Jobcentre Plus has written to 900 families in my constituency, who between them have 4,000 children, telling them that their benefits will be cut on 1 April by £200 a month on average. This will cause them either to rack up rent arrears or to have to move. Mayor Boris Johnson—
Jim Fitzpatrick
Mayor Boris Johnson says he will not preside over the removal of the poor from inner London. Boris gets it: why don’t the Government?
Mr Hague
I know that the hon. Gentleman has long-running concerns about this and has frequently expressed them. It is important to stress that for all but the most expensive parts of London, at least 30% of all private rental properties will be affordable. In London, under the system that we inherited, 150 families were receiving housing benefit of more than £50,000 a year, and that is not acceptable to the taxpayers of this country in general. Our reforms are fair. Housing benefit will still be paid to meet rents of almost £21,000 a year. There is also a £190 million fund for discretionary payments to help local authorities with the changes, including assistance to renegotiate lower rents with landlords, but the principle remains, and I say it again, that it is not fair that people on housing benefit can afford to live in streets and homes that people out working hard are unable to live in.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Q9. Wales is the only nation in the UK without a single yard of electrified rail track, thanks in part to the Labour party. As a former Secretary of State for Wales, could the Foreign Secretary persuade the Government that extending the track as far as Swansea, not just Cardiff, would be great for jobs, great for Wales, and somewhat cheaper than the current refurbishment of Tottenham Court Road station?
Mr Hague
I know that my right hon. Friend the Welsh Secretary is working hard on this. We are committed to electrifying more than 300 miles of railway routes, which compares with just 9 miles electrified under the previous Government—an interesting contrast in infrastructure investment. The Department for Transport is currently considering a business case for electrification between Cardiff and Swansea prepared in Wales, and I understand that the decision will be made by the summer. Of course, it will depend on whether it is affordable and on the assessment of competing priorities as well.
Angus Robertson (Moray) (SNP)
There is more work to do, but for the third month unemployment has reduced in Scotland, and for the second year in a row Scotland is the best performing location for foreign direct investment in the UK. Will the Foreign Secretary take the opportunity to congratulate the Scottish Government and Scottish Development International, which is the lead agency that secures foreign direct investment?
Mr Hague
The hon. Gentleman is right to draw attention to the employment figures, which we must never be complacent about. There is always so much more work to do, but the right hon. and learned Member for Camberwell and Peckham (Ms Harman) did not ask about the figures, which show a quarterly fall in unemployment of 51,000, the rate of unemployment coming down in the quarter and, importantly, youth unemployment coming down by 29,000 in the past quarter, although long-term unemployment is still rising and remains a challenge. Scotland, as part of the United Kingdom, is an attractive place to invest. I congratulate many Scottish people and businesses on their work. They would have much harder work to do if Scotland were not part of the United Kingdom.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Q10. While welcoming overseas students who come to this country to get a world-class education and then return home to benefit their countries, will my right hon. Friend look extremely sceptically on vice-chancellors who believe they cannot compete unless students are given an additional incentive to stay on in this country, legally or illegally, especially as last year 120,000 students sought and were granted the right to extend their stay here?
Mr Hague
Yes, as my right hon. Friend knows, the Government have introduced radical reforms to stamp out abuse and restore order to a student visa system that was out of control, making the immigration system easier for students, universities and the UK Border Agency. We are closing bogus colleges and regulating the remainder, restricting the right to work here and bring dependants and making sure that all but the very best go home at the end of their studies. On that basis, of course talented students from around the world are welcome here in the United Kingdom.
Mr Denis MacShane (Rotherham) (Lab)
As MP for Rotherham, may I welcome the fact that the right hon. Gentleman has realised his ambition, thwarted in 2001, and is now briefly in charge of the clattering train? As two Asian Nobel peace prize winners will visit the House of Commons this week, will he take the opportunity to invite a third, Liu Xiaobo, currently rotting in the Chinese gulag, who was awarded the Nobel peace prize last December, and will he mention his name, Liu Xiaobo, from the Dispatch Box, rather than referring to it in the human rights dialogue, and invite him to London next year?
Mr Hague
It is good that nice words about Rotherham are being exchanged at Prime Minister’s Question Time, so I welcome the right hon. Gentleman’s question. We do raise individual cases with the Chinese, often publicly, but I will assess which ones to raise and when to do so. The human rights dialogue we have with China is very important, and it is important that in China there is an understanding of our deep concerns about many of these cases. He can rest assured that I will be raising them.
Mr Speaker
The right hon. Member for Rotherham (Mr MacShane) has got his answer on Liu Xiaobo and will doubtless be content.
Mr Christopher Chope (Christchurch) (Con)
Q11. In the cause of deficit reduction, the Government are reducing police funding by 20% in real terms over four years. Can my right hon. Friend therefore assure me that, also in the cause of deficit reduction, he will insist on a reduction in our contribution to the European Union budget of more than 20%?
Mr Hague
Highly desirable though that would be, my hon. Friend is aware that that contribution is not determined by a single decision of Government; it is the balance between two large figures determined in other ways. However, he can rest assured that we will be far better at negotiating on this than were Opposition Members. When the shadow Foreign Secretary was Minister for Europe, the Labour party gave away £7 billion of the British rebate, for nothing in return—an abject failure of negotiation and leadership that we will not repeat.
Phil Wilson (Sedgefield) (Lab)
Q12. Does the Foreign Secretary agree with the hon. Member for Hexham (Guy Opperman), who was quoted in Newcastle’s The Journal as saying:“I see no economic argument for introducing regional pay”?
Mr Hague
I think that there is a variety of views on regional and local pay in all political parties—I pointed out earlier the views expressed by the former leader of the Labour party on local and regional pay. It is also worth pointing out that the previous Government introduced local pay into Her Majesty’s Courts and Tribunals Service in 2007.
Heather Wheeler (South Derbyshire) (Con)
Does my right hon. Friend agree how wonderful the announcement was about the investment in Derby for Rolls-Royce, which will mean future engineering jobs? Bombardier is looking for 44 new jobs and unemployment in South Derbyshire has gone down by 150 in the past two months.
Mr Hague
That is indeed good news, as my hon. Friend says. It is good news for investment in this country and for Derby and the surrounding area, and it is good news for the long-term security of this country that we are prepared to invest confidently in submarine technologies for the long term.
John Cryer (Leyton and Wanstead) (Lab)
Q13. How does the snoopers’ charter that the Government plan to introduce shortly differ from the 2009 proposals, which both governing parties opposed when they sat on the Opposition Benches?
Mr Hague
It differs enormously, because the previous Government’s proposal was to hold all data in a central database. Our proposal would require providers to hold on to their data. The hon. Gentleman uses the catchphrase “a snoopers’ charter”, but it is designed to be a criminals’ nightmare. If we do not update our ability to detect terrorism and criminality in this country, that will have a very serious effect, so I encourage the hon. Gentleman to look at this in detail. It is very important for maintaining law and order in the UK.
Mr David Amess (Southend West) (Con)
Q14. Is my right hon. Friend aware that the highlight of the Olympic torch relay will take place on 6 July, when it arrives in Southend to be met by a choir of 2,000 on the longest pier in the world, with its new, iconic building? Does he agree that the Olympic games are an opportunity for our country to come together and celebrate this Government putting the “Great” back into Britain?
Mr Hague
The arrival of the torch in Southend is one of the highlights, the other being the fact that today it is passing through Richmond, Yorkshire—and I would have dearly loved to be there to see it. But that is one of the highlights, and my hon. Friend is quite right: the Olympics are an enormous opportunity for this country. We are looking, through the Olympic games, to secure more than £1 billion of inward investment, to attract an additional 4 million visitors, including to Southend, and to use the games to inspire more young people to take up sport. It is a great moment for Britain.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Q15. We all know that the Prime Minister likes to “chillax” down the pub, but when it comes to Anglo-French relations should he not adopt a more sober approach?
Mr Hague
The Prime Minister always has excellent relations, in my experience, with any President of France, including with the new President of France. We should welcome and applaud the fact that the city in which we are sitting is the seventh largest for French people in the world, and they are of course welcome here in the United Kingdom whatever their Government are doing at home.
Mr Speaker
I understand why the right hon. Gentleman would have liked to have been in Richmond, but he has paid the price of fame, which is why he has had to be here instead, and we are extremely grateful to him.
We now come to a statement from the Secretary of State for Business, Innovation and Skills, Mr Secretary Cable. [Interruption.] Order. I know that Members are toddling out of the Chamber—quickly and quietly so that we can hear from Mr Secretary Cable.
Directors’ Pay
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I welcome this opportunity to set out the Government’s proposals for directors’ pay. This follows extensive consultation with business and the investment community.
Since I first addressed the House on the issue, the Government have initiated a broad, national debate about shareholder activism, and this encouraged shareholders to become more engaged as owners of their companies during the so-called “shareholder spring”. We have also seen many companies engage constructively in the face of that opposition, and this is an important step in encouraging improved pay discipline.
There is, as I said then, compelling evidence of a disconnect between pay and performance in large UK-listed companies, and it is right that the Government act to address that market failure. Today I can therefore announce a far-reaching package of reforms that will strengthen the hand of shareholders to challenge excessive pay while not imposing unnecessary regulatory burdens.
We will give shareholders new powers to hold companies to account on the structure and the level of pay, and make it easier to understand what directors are earning and how that links to company strategy and performance. Shareholders will have a binding vote on a company’s pay policy, including their approach to exit payments, and, rather than being a one-off vote, for the first time there will be a real, lasting and binding control on pay.
A company will be able to make payments only within the limits that have been approved by a majority of shareholders, and this binding vote will happen annually unless companies choose to leave their pay policy unchanged, in which case the vote will happen a minimum of every three years. This will encourage companies to set out and stick to a clear, long-term pay strategy, and it will put a brake on the annual upward pay ratchet.
The policy should explain clearly how pay supports the strategic objectives of the company and include better information on how directors’ pay relates to that of the wider work force. There will be increased transparency on employee pay, including information that will show the difference between rises in directors’ pay and that of the employees. Indeed, employee views on pay are important. That is why I am proposing that companies report on whether they have taken steps to seek the views of their work force. As part of their policy, companies will have to spell out their approach to exit payments. When a director leaves, the company must publish a statement explaining to shareholders exactly what payments the director has received, and companies will not be able to pay more than shareholders agree.
Alongside the binding vote on pay, there will, as now, be an annual advisory vote on how the policy has been implemented, including all remuneration paid in the previous year. If a company fails the advisory vote, that will automatically trigger a binding vote on policy the following year. Both the binding and the advisory vote should be as strong as possible to keep up pressure on companies. I therefore welcome the CBI’s call for the Financial Reporting Council’s corporate governance code to be updated to codify current best practice whereby companies make a statement when a significant minority of shareholders vote against a pay resolution. This will publicly hold directors to account. Pay reports will be clearer and more transparent for investors. Companies will have to report a single figure for the total pay that directors received for the year, details of whether they met performance measures, and a comparison between company performance and chief executives’ pay.
The Government will shortly bring forward amendments to the Enterprise and Regulatory Reform Bill to introduce these reforms. In tandem, as good policy-making requires, we will publish for comment revised, simplified regulations setting out what companies must report on directors’ pay.
Lasting reform is dependent on business and investors maintaining this activism and developing and adopting good practice. The best companies and investors are already leading the way and acting as early adopters of these reforms. We welcome the close engagement of institutional shareholders and their willingness to use their voting powers. We want this to be sustained and we shall continue to monitor disclosure levels. Evidence suggests that more institutional investors are disclosing their voting records and that up to three quarters of these investors are now disclosing their votes. We will consider further action if the number of investors volunteering to disclose their voting records does not continue to increase.
In summary, this is a strong package of reform. It builds on the UK’s status as a global leader in corporate governance, it commands wide support from investors and business, and it addresses public concerns about directors’ pay. These proposals restore a stronger, clearer link between pay and performance; reduce rewards for failure; promote better engagement between companies and shareholders; and, overall, empower shareholders to hold companies to account through binding votes. We look forward to discussing the proposals further with the Business, Innovation and Skills Committee on 28 June and in the Public Bill Committee that will consider the Enterprise and Regulatory Reform Bill.
Mr Chuka Umunna (Streatham) (Lab)
I thank the Secretary of State for advance sight of his statement.
In the past decade, the value of FTSE 350 companies increased by 80% while the average total earnings of executives in those companies increased by 108%. So the evidence is clear: many of these rewards, as the Secretary of State said, are not linked to success or performance. This problem has grown over the past few decades under Governments of all persuasions. In fact, one has to go back to 1979 to find things more in proportion, with executive pay growing by 0.8% on average in the three decades since that year. It is imperative that we all do what we can to address this problem.
In government, rightly, we did not rush to legislation. It was right to see whether legislation could be avoided. When it became clear that that was not the case, in 2002 we made it mandatory for quoted companies to publish a separate directors’ remuneration report, and we gave shareholders the right to vote on remuneration through advisory votes. As the Secretary of State said, shareholders, to their credit, have been exercising those rights with some verve this year. That is very welcome, because change and reform must be led by them.
The Secretary of State outlined a number of proposals to assist shareholders in that endeavour. I welcome the binding vote on exit payments, the measures to simplify pay reports and the measures to increase transparency, but I have a number of concerns and questions in relation to the other things that he mentioned.
First, on the annual binding vote on future remuneration policy, it is deeply disappointing that having marched us all up the hill, the Secretary of State appears to be marching us back down again by performing a U-turn on his original proposal. Having proposed an annual vote, he now seeks one every three years, unless there is a change to the policy during those three years. Will that not incentivise boards to draft policy as broadly as possible to avoid anything other than a triennial vote? Exactly how does he define a change to remuneration policy? Who will be the arbiter in each company as to whether a change has occurred—the board or the shareholders? I know that bureaucracy has been raised as an objection to an annual vote, but given that there are many other annual votes, I am not sure whether that holds water.
Secondly, the Government should have been bolder on the majority that is required for a pay policy to be approved and gone for a 75% threshold, as opposed to a simple majority. Dominic Rossi, the chief investment officer of Fidelity Worldwide Investment, has said that such a threshold would
“ensure that companies consult widely with shareholders prior to a vote.”
He went on to say that it would give
“companies a clear mandate and the need for a clear majority also encourages all shareholders to express their views”.
Why does the Secretary of State not take heed of that advice?
Thirdly, the Secretary of State says that employees’ views on pay are important. If that is the case, why does he persist in standing in the way of the requirement for employee representatives to sit on board remuneration committees?
Fourthly, we fully support the introduction of an annual advisory vote on how remuneration policy has been implemented over the previous year. The Secretary of State said that the loss of such a vote would “automatically trigger a binding vote on policy the following year.” Will he clarify to which vote in the following year he was referring—the backward-looking vote that would usually have been advisory or the forward-looking vote on policy?
Finally, I too welcome the CBI’s call for the Financial Reporting Council’s corporate governance code to be updated. Will the Secretary of State consider requiring the FRC to produce an annual report on the operation of the UK stewardship code to keep shareholder activism and good pay and remuneration practices high on the national agenda in the years to come? It would be a great shame if it fell off the agenda.
Vince Cable
I thank the hon. Gentleman for his positive comments. It was useful that he started with a bit of history. It is worth recalling that in the 13 years of Labour Government, seven Secretaries of State occupied my job—eight if we include Lord Mandelson twice. In the seven years that followed the introduction of advisory votes, none of my predecessors thought it necessary to introduce a binding vote on pay, despite there being, as the hon. Gentleman acknowledged, a continuing trend for top pay to diverge from the performance of companies, let alone from the pay of employees.
The hon. Gentleman continues to raise the issue of workers on boards. I think that having workers on boards is an excellent idea. The question is whether it should be mandatory. If it was such a good idea, why did none of my predecessors do anything about it? Most of them were nominated by trade unions and one was a distinguished general secretary of a trade union. None of them took any action to implement the measure that the hon. Gentleman is demanding. I welcome employee participation and will expect a report back from companies on whether they have consulted their employees on pay.
There will be an annual vote if pay policy changes. The hon. Gentleman seems to find a problem with the idea that if nothing changes, a policy can last for a three-year period. I would have thought that he would see the obvious attraction of a system that encourages companies to think long term. As I understand it, he has just copied my example in setting up a report on long-termism. We want companies to think long term. Should they choose to use the three-year process and leave their policies unchanged, it would put a stop to the ratcheting of annual pay awards. That process would be a considerable improvement should companies choose to use it, but for the most part, as I have indicated, the vote will take place annually.
I personally believe that it would be desirable to have a 75% vote threshold in the advisory votes, and the FRC will pursue the requirement of a statement to the market. As the hon. Gentleman will know, the FRC is an independent body, and I do not mandate it, but I believe that having a higher threshold would be desirable in that case.
The hon. Gentleman specifically asked what the FRC was doing to strengthen overall corporate governance. It is pursuing investigations on a variety of issues such as how companies should formally respond when a significant minority oppose a pay vote, requiring all companies to adopt clawback mechanisms and the extent to which executives should serve on remuneration committees in other companies. Those are big issues, and subject to the FRC’s recommendations we will have considerable improvements in the corporate governance system.
These are radical changes, and I would have thought it would enhance the hon. Gentleman’s reputation if he was gracious enough to acknowledge that a major set of reforms has been undertaken.
Mr Andrew Tyrie (Chichester) (Con)
Banks have taken excessive risks, for which we have all paid. The Treasury Committee is now investigating that and has heard extensive evidence that senior bank executives have been rewarded excessively for taking those risks. What in these proposals specifically addresses the problem of systemic risk in our major financial institutions?
Vince Cable
As the hon. Gentleman knows in his important role as Chairman of the Treasury Committee, a separate set of regulations introduced by the Financial Services Authority deals with the link between the types of pay package that are introduced and systemic risk. Excessive bonusing has undoubtedly had an effect in the past, and as a result of the experience of the financial crash, those regulations have been tightened. Banks, as public limited companies, will be governed by the new regulations, and I imagine that after their experiences shareholders in our leading banks will want to ensure that forward-looking pay policies take proper account of the systemic risk of their institutions.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I broadly welcome the Minister’s statement and I welcome his agreement to appear before the Select Committee on Business, Innovation and Skills on 28 June to be further questioned on it. May I probe him on his comments about the disclosure levels of institutional investors? Currently, only 15% of asset management companies reveal their voting behaviour at shareholder annual general meetings. In the light of his statement, will he consider introducing legislation to ensure that that becomes 100%?
Vince Cable
I have already indicated in my statement that we are examining disclosure levels. There is an encouraging trend towards disclosure, and as the hon. Gentleman knows, the big weight of votes comes through the big pension and insurance companies. I have said that we will consider further measures if the current ones do not lead to the right trajectory, and his point is a useful one.
Lorely Burt (Solihull) (LD)
I very much welcome these proposals. The three-year binding pay policy will help to constrain the constant upward spiral in directors’ pay increases that we have seen in recent years. It has been suggested that the three-year pay policy agreement may turn out to be deflationary as growth improves in the economy and, hopefully, in companies. Does my right hon. Friend agree, and would he welcome that?
Vince Cable
My hon. Friend is right, and that was one point that institutional investors made when we consulted them. They saw that the option of having a three-year unchanged policy would be helpful in deflating top pay. She is right that the problem that we are dealing with is an upward spiral in which pay is often unrelated to performance and top executives are trying to get into the top quartile, where by definition they cannot all be.
Mr Dennis Skinner (Bolsover) (Lab)
Is the Secretary of State not singing a different song from the one that he used to utter from the seat where I am now? He used to talk about the balance between people on both sides in business—the trade unions and the bosses. Is the truth not that he has come here with a set of proposals that might have been okay some time ago, but that he has been tied hand and foot by the Tories in the coalition and even got rattled by being asked a few decent questions by the pleasant shadow Business Secretary? What a transformation.
Vince Cable
I know that the shadow Secretary of State is indeed very pleasant. I will concede that point. I did not think his questions were terribly good, but he is certainly very pleasant.
As for my performance when I used to sit in the seat where the hon. Member for Bolsover (Mr Skinner) is now, I did indeed warmly welcome Patricia Hewitt’s changes seven years before the end of the Labour Government. They were a big step forward, and they were helpful even though taken as a whole they were quite a weak package. What is happening today builds substantially on those proposals.
Mr Peter Bone (Wellingborough) (Con)
The Secretary of State’s proposals are unnecessary and will just be an additional burden on industry. Should he not concentrate instead on his day job? Gallay Ltd, in my constituency, has been waiting since February for an export licence and will lose an order to the Americans. Should we not have more action and fewer stunts?
Vince Cable
If there is a genuine problem with export licensing, I will be happy to address it, but only a very small proportion of exports are covered by the licensing regime. As the hon. Gentleman will know, they cover defence and national security, and it is important that we are careful in how—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sure the Secretary of State is going to mention directors’ pay as well.
Vince Cable
I thought the question was about export licensing, and I tried to address it.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I welcome much of what the Secretary of State said, but the proof of the pudding will be in the eating. What difference will the changes make to the so-called directors—I call them the vermin—of the private equity world who took over Boots the Chemist five years ago and have now sold it off to the Americans? Will he announce how much money they have screwed out of this deal?
Vince Cable
This change deals with public listed companies, not with private equity. There is a whole set of separate issues to consider about the regulation of private equity companies and about tax policy, but this change is about public listed companies.
Mr David Evennett (Bexleyheath and Crayford) (Con)
I welcome my right hon. Friend’s taking a reasonable approach on directors’ pay following consultation with business and investors. Does he believe that more power for shareholders and greater transparency will encourage more people to participate in companies’ meetings, get involved and buy company shares? That is surely what we all want—more shareholders and more involvement.
Vince Cable
That is absolutely right, and I congratulate shareholders who have become actively engaged in issues of pay policy for the first time in many years. I think one reason why they have been active is that they knew legislation to cement their position was coming.
Tony Lloyd (Manchester Central) (Lab)
The Secretary of State was quite right to castigate previous Governments for their complacency on top pay, which is now not simply a practical issue but a moral one. However, if he is honest I think he knows that his statement was timid. Is it not time that we had a high pay commission to consider how we begin to dismantle the obscenely high pay of the top-paid at a time when the poor are getting poorer?
Vince Cable
I have seen the work of the existing High Pay Commission, which I think is a voluntary body and which has made some good suggestions, many of which we have taken on board. If the community of investors, think-tanks and others were to come together to examine top pay, I would look with great interest at what it suggested.
Esther McVey (Wirral West) (Con)
I welcome the Government’s announcements on executive pay, especially after a decade of runaway executive pay. Does my right hon. Friend agree that it is imperative that board members understand that what they do has to be in the interests of not only employees, stakeholders and shareholders but above all else the long-term sustainability and well-being of the business, operating by ethical means?
Vince Cable
The hon. Lady is absolutely right—that is what the corporate stewardship code is all about. That initiative goes hand in hand with the others we are taking to ensure that companies operate on a long-term basis. British business has been undermined for far too long by short-term decision making, and we are trying to move it in the opposite direction.
David Simpson (Upper Bann) (DUP)
I broadly welcome the Government’s proposals, but on a practical matter, if a company were to default or not implement the legislation, what penalties could the Government impose on them?
Vince Cable
There is already a set of rules under the stewardship code. If companies fail to observe the binding vote, they will be making unauthorised payments. Very considerable liabilities can accrue to directors of companies that do that.
Greg Mulholland (Leeds North West) (LD)
I welcome the statement, and the Secretary of State is right to tackle rewards for failure. Surely the worst example is that of Enterprise Inns, which suffered a 96.6% decline in share values over five years. Over three years when share values declined by 80%, Ted Tuppen, the chief executive, thought it fit to reward himself with £850,000 in performance-related bonuses. Does my right hon. Friend agree that shareholders are only part of the answer? Thousands of businesses are being damaged by the pubco model, so will he pledge to uphold the will of Parliament and announce a review in the autumn? As everyone in the industry knows, the imbalance in that sector has not been changed by the so-called self-regulatory solution.
Vince Cable
The Minister who formerly had responsibility for pubs, who is now Secretary of State for Energy and Climate Change, had extensive debates with my hon. Friend on Enterprise Inns and the damage that the pubco model has done. The figures my hon. Friend produces are striking. I cannot understand why shareholders are not more active if there has been such a divergence between pay and performance. Perhaps he, with his formidable campaigning skills, will help them to be so.
Stewart Hosie (Dundee East) (SNP)
I thank the Secretary of State for his statement and early sight of it. He says: “Pay reports will be clearer and more transparent for investors.” Investors in large listed companies have the capacity to do such work, but has he no concerns about the potential unintended consequence that business investors will see that burden as a de facto requirement of any business in which they seek to invest? Is he not concerned that there might be too much work involved for smaller businesses that are seeking investment to grow?
Vince Cable
That is a perfectly correct statement of the balance we are trying to strike. We want investors and shareholders to be actively involved. In order to be so, they need to know what is going on and to have other information. I fully acknowledge that indirectly that has some regulatory impact. We have tried to strike the correct balance, and I believe we have done so.
Mark Field (Cities of London and Westminster) (Con)
The Secretary of State is right to identify the deep public distaste not just for rewards for failure but for general rewards for those who are not in any meaningful way risk-takers or entrepreneurs. How will he judge whether the policy has been a success over the next three years? When we are sitting here in June 2015, on what basis will he see today as a success?
Vince Cable
The hon. Gentleman is right to stress that we are talking not just about reward for failure but about the general escalation of the pay of top executives unrelated to company performance. It is not likely that we could produce a simple metric of how the policy will work through, but if annual or tri-annual reviews of policy are successfully implemented across companies, with well informed shareholders exercising their votes, I think that in a few years’ time we will see a good deal of restraint and more strategic thinking in the setting of pay policies. That is what we are trying to achieve.
Mr Michael Meacher (Oldham West and Royton) (Lab)
Three years is an awful long time to pack in share options, mega-bonuses, huge share handouts, long-term incentive pay schemes and so on. Why not have an annual binding shareholder vote to stop top executive remuneration ballooning wildly out of control within a three-year grace period?
Vince Cable
Even if that perverse behaviour were to occur, there would still be the existing annual backward-looking advisory vote. If shareholders are dissatisfied, the company, subject to the Financial Reporting Council’s work, will be required to issue a statement, which will require a binding vote the following year. Checks and balances are built into the system to ensure that the abuses the right hon. Gentleman describes simply do not happen.
David Rutley (Macclesfield) (Con)
Does my right hon. Friend agree that there is a vital role for remuneration committees, and particularly their non-executive members, in re-linking rewards with positive performance in companies throughout the country?
Vince Cable
Yes, there is an important role for remuneration committees and the consultants who advise them. One thing I did not mention was the effort being made to ensure that fees for remuneration consultants are properly declared, so that there is more transparency in that aspect of the process.
John McDonnell (Hayes and Harlington) (Lab)
I welcome the statement, not least because I proposed an amendment to the Finance Bill to the effect that we should introduce a binding vote. I appreciate that the Government were consulting during that period. However, the shareholder vote is a binary vote—a straightforward yes or no. Does the Secretary of State envisage a process in which shareholders can amend the pay policy, for example to introduce a ratio between the highest and lowest paid within companies?
Vince Cable
It will be possible for shareholders’ representatives to work out the ratio because of the information that will become available. We suggested that it would not be sensible to make that metric compulsory, because it can be misleading. I have previously described to the House the anomalies that can arise. A company with a large number of low-paid employees would have a big ratio, but a company that has outsourced such employees, which might be less socially responsible, will none the less have a better ratio, for entirely artificial reasons. We do not attach overriding importance to that measure, but the hon. Gentleman is right that it should not simply be a question of saying yes or no. Shareholders must engage with the company should there be a failure to pass a binding vote to produce a more satisfactory outcome. That is a process, not simply an event.
Paul Uppal (Wolverhampton South West) (Con)
I would be grateful if the Secretary of State could elaborate on the concept of long-termism that he has mentioned in a few of his replies. I ran a business for 20 years before I came to the House, and the best decisions I made were long-term ones. Only when we take a long-term view will we tackle mediocre performance head on.
Vince Cable
The hon. Gentleman is absolutely right. The big issue is essentially a cultural question—the evolution of business in the UK over a long period is central. That is why I set up the review under Professor Kay, which was supported by Sir John Rose and others. That will report in July. Some of its proposals—on, for instance, an end to quarterly reporting—will emerge in detail shortly.
Mr David Winnick (Walsall North) (Lab)
While millions of people are trying to make ends meet—far more than under the previous Government—why should we believe that the massive annual sums, amounting to millions of pounds, given to the heads of the banks and other organisations are likely to change? We are in an unfair society, and there is no indication that that will change in any way as a result of what the Secretary of State has told us.
Vince Cable
The proposal is not designed to solve all the problems of income and wealth distribution in society; it is designed to ensure that public listed companies operate responsibly, and that they are properly policed by their shareholders. The wider questions the hon. Gentleman raises involve tax and other policies, which I am sure we will debate on many other occasions.
Neil Parish (Tiverton and Honiton) (Con)
I welcome the Secretary of State’s statement, but are we giving shareholders enough power quickly enough to stop companies providing a lot of executive pay for very poor performance?
Vince Cable
The measures in the Bill on the binding vote are strong ones. Whether they are implemented quickly enough depends partly on how quickly the House proceeds with the legislation. I would expect to see it coming into effect soon.
Mark Durkan (Foyle) (SDLP)
In welcoming the Secretary of State’s statement, may I caution against weather presenters claiming credit for the spring? On the three-year binding pay policies reported by institutional investors, will he ensure that they will not have elasticity and undue headroom built in? He recognises that there will be changes in the Enterprise and Regulatory Reform Bill, but on institutional investors does he envisage the possible need for changes in the Financial Services Bill?
Vince Cable
We are not proposing changes in the Financial Services Bill. Whether there is elasticity in the policy will depend on the shareholders: they own the companies and make the judgments, and they will ensure that the powers we are giving them are enforced in their companies.
On credit for the shareholder spring, I think the prospect of legislation has probably helped, although I would not claim credit for it. By passing these measures, however, we will ensure the spring is not a one-off event but is sustained; that is the purpose of what we are doing.
Ben Gummer (Ipswich) (Con)
I very much welcome the Secretary of State’s measured proposals to give shareholders, who after all own the businesses in which they have shares, greater control over top pay. Further to the question from my hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett), does the Secretary of State agree that the best way to increase shareholder activism is to increase the number of shareholders, especially non-institutional ones? What measures are the Government taking to increase the number of private, non-institutional shareholders?
Vince Cable
The hon. Gentleman is right to stress the point that shareholders own the companies. That is self-evident but often overlooked, and they have often been treated as outsiders. Clearly, widening shareholding would be desirable, and we are considering a variety of ways of doing that, not least through encouraging employees to have shares in their own company. The Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for North Norfolk (Norman Lamb), and I will consider how to effect that in one of the companies for which we still have direct responsibility—the Royal Mail.
Mr Andrew Love (Edmonton) (Lab/Co-op)
There is growing evidence that a major contributor to the ratchet effect on directors’ remuneration is the role of remuneration committees. People are concerned about the very narrow base from which remuneration committees are drawn, and there have been recommendations to widen their membership. The Secretary of State has already indicated his support for having an employee on remuneration committees. If he does not make that mandatory, will he make mandatory a wider base from which to draw the membership of remuneration committees?
Vince Cable
I take the hon. Gentleman’s broader point that diversity among directors is critical to changing the culture of companies. At the moment, we are focusing on women on boards of companies, on which significant progress has already been made. That is part of the wider picture of having more diversity, and more employees, among directors.
Ian Swales (Redcar) (LD)
A large proportion of the population has a direct or indirect stake in the stock market. Does the Secretary of State believe that there is a link between the relatively poor performance of the stock market over the past 10 years and the increasing share of corporate wealth taken out by directors and senior managers?
Vince Cable
It is precisely the divergence between those two things that we are endeavouring to correct. My hon. Friend’s point is certainly true of the banking system, where very large salaries and bonuses have come at the expense of dividends. These reforms should help to correct that.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Today’s measures are welcome, but it should not just be a question of trying to stop the upward spiral of excessive directors’ pay; something needs to be done about the current excesses. When this measure comes into effect, will the Secretary of State urge companies to consider existing levels of directors’ pay? If that does not deal with the existing excesses, will he consider returning with other measures to drive them down?
Vince Cable
There is an important distinction between existing pay arrangements, which are governed by contract, and future pay policies, which will be the subject of binding votes, after which those contracts can be set on a fresh principle. There is a restraint on existing pay through the advisory vote, and, as I have set out, I envisage the disciplines around the advisory vote being strengthened by the statement, subject to the operation of the Financial Reporting Council.
Jason McCartney (Colne Valley) (Con)
When an employee and union representative at ITV in Leeds, I was dismayed to see the then boss of ITV, Charles Allen, receive millions in pay, perks and bonuses, while making a series of catastrophic business decisions that brought the company to its knees and saw the share price plummet. I am also dismayed to see that he is now sacking workers at Labour party headquarters. Does my right hon. Friend agree that work forces’ views on executive pay should be considered?
Vince Cable
They should be considered. If my predecessors had been as active as this Government have been in bringing forward this legislation, the Labour party would probably not be facing these redundancies.
Mr Christopher Chope (Christchurch) (Con)
I congratulate my right hon. Friend on securing this socialist measure through the coalition Government. Will he assure me that this will not drive UK-listed companies out of the UK? What will it do to encourage more companies to get listed in the UK?
Vince Cable
I am frequently accused of socialist tendencies by colleagues behind me, but the promotion of shareholders is a rather strange definition of socialism. There is not a shred of evidence to suggest that this will promote the outward movement of companies. Indeed, all the leading business associations and investor groups have welcomed what we are doing.
David Mowat (Warrington South) (Con)
In many quoted companies, highly paid employees actually earn more than directors. Will the Secretary of State consider extending at least the transparency aspect of this legislation to employees, as well as directors?
Vince Cable
I have identified that problem. It is particularly a problem in banks, where the so-called code staff, including traders, are sometimes paid more than their directors. That will be covered by the regulation on financial services, which is being strengthened in that respect. There are probably very few public listed companies outside the banking sector where the phenomenon the hon. Gentleman describes is real.
Julian Smith (Skipton and Ripon) (Con)
Will the Secretary of State talk a little more about the transparency proposals for paid consultants? Is it worth considering adding to that the fee structures and mechanics for executive search consultants in relation to board positions?
Vince Cable
I will happily give the hon. Gentleman more information on the detailed work done on the rules governing transparency in that sector. His point about executive search agencies is a new one—I had not encountered it before—and we will certainly consider it, but the principle of greater transparency is absolutely right.
Gavin Williamson (South Staffordshire) (Con)
Will my right hon. Friend assure the House that the Government, as a major investor in some of the country’s largest banks, will be a proactive investor and ensure that rewards reflect results in those banks?
Vince Cable
As my hon. Friend knows, the banks are governed by an arm’s length arrangement, through United Kingdom Financial Investments Ltd, but he will have seen that the pay and bonuses of senior executives, particularly at RBS, in the last season reflected the Government’s concerns about excessive pay in general.
Bob Blackman (Harrow East) (Con)
Will my right hon. Friend confirm that high-performing individuals in successful companies that perform within the proper corporate governance have nothing to fear from these proposals, but that those companies that do not follow best practice clearly do? Are the Government proposing guidance on what would be best practice?
Vince Cable
Guidance will be issued, particularly on what needs to be disclosed and how the legislation will be implemented. The starting point of the hon. Gentleman’s question is absolutely right. To make it clear, we have no objection to people being very well rewarded if their companies perform well. We want to see rewards for success.
Richard Fuller (Bedford) (Con)
I draw the House’s attention to my entry in the register of interests as a non-executive director of an alternative investment market-listed company. The Secretary of State is absolutely right to focus on the long-term perspective of compensation and to opt for a three-year, rather than a one-year, binding vote. Will he also emphasise another point about company performance? Often, the issue is relative company performance. When times are good, it is good for a chief executive officer to reflect, particularly in their equity performance, that their company is doing well, because all companies are doing well. I think, however, that the Secretary of State’s aim is that the best companies, doing comparatively well, should be better rewarded. Will he comment on that?
Vince Cable
That is a helpful point that is emerging from the study on long-termism, the analysis of which shows clearly that people’s overriding motivation in respect of remuneration changes with relative performance, but what actually matters is absolute performance.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Last but certainly not least, Charlie Elphicke.
Charlie Elphicke (Dover) (Con)
Thank you, Mr Deputy Speaker. I welcome this announcement, because power going to the shareholders and the business owners is how capitalism is supposed to work, yet it is essential that shareholders are able to exercise their votes in practice. Will the Secretary of State tell the House what action he has taken to ensure that brokerages communicate to their nominees—shareholder-owners—the fact that they have the right to vote at board meetings and are able to exercise it? What action he will take to address stock lending, which is all too often used to steal away votes from the real owners so that other people can use them instead?
Vince Cable
We are not taking specific action on brokerages, but it is clear that the increasing participation of shareholders reflects good practice and a favourable trend. To address the hon. Gentleman’s introductory comment, we are talking about capitalism working well and working properly, so perhaps he could have a word with his colleague sitting behind him—the hon. Member for Christchurch (Mr Chope)—about the difference between capitalism and socialism.
Points of Order
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Greg Mulholland (Leeds North West) (LD)
On a point of order, Mr Deputy Speaker. My constituent Fran Prenga is languishing in a Greek prison, in conditions that are clearly unacceptable and with normal standards of judicial process not having been followed. I have corresponded with the Foreign and Commonwealth Office on five occasions, and was told last Wednesday that I would receive a reply on Friday. I did not receive a reply then, so I called the office on Monday and was told that I would have a response yesterday, which I have still not received. I have therefore had no reply, despite the matter being incredibly urgent, to letters on 25 May, 1 June and 14 June. I have not even had an acknowledgment from the Secretary of State for Foreign and Commonwealth Affairs of letters dated 18 May and 14 June. Does he think—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have certainly got the message. As the hon. Gentleman knows, that is not a point of order for me, but I am sure that everybody will have heard what he has said and that there will be a letter or that the matter will be taken very seriously, now that he has raised it on the Floor of the House.
Mr Tom Harris (Glasgow South) (Lab)
On a point of order, Mr Deputy Speaker. This morning The Guardian carried a report of the announcement by the Deputy Prime Minister that, after months of prevarication, the Government are to introduce mandatory carbon emission reporting by large companies. The Department for Environment, Food and Rural Affairs rushed out a written ministerial statement on the issue, but it was not available for Members to read until 19 minutes past 10 this morning. I know that you and Mr Speaker take a dim view of Ministers making announcements to the media rather than to this House. Have you received any indication from either the Secretary of State for Environment, Food and Rural Affairs or the Deputy Prime Minister of their intention to make a full statement to this House? Alternatively, can you recommend which newspapers we should take in order to keep abreast of the Government’s thinking?
Mr Deputy Speaker
The first part of the hon. Gentleman’s point of order is correct: we do take a dim view of such behaviour. This House should get the message first, before the newspapers. I can assure the hon. Gentleman that we are all listening to him, and the point has been echoed, once again, on all Benches and in all parts of the House.
Bills Presented
Bank of England (Appointment of Governor) Bill
Presentation and First Reading (Standing Order No. 57)
John McDonnell, supported by Mr Andrew Tyrie, Mr George Mudie, Mr David Ruffley, Mr Andrew Love, Andrea Leadsom, Teresa Pearce, John Mann, Mark Field, Stewart Hosie, Mark Durkan and Mr Graham Brady, presented a Bill to provide that the appointment and dismissal of the Governor of the Bank of England be subject to the consent of a Committee of the House of Commons; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 6 July, and to be printed (Bill 8).
Scrap Metal Dealers Bill
Presentation and First Reading (Standing Order No. 57)
Richard Ottaway, supported by Chris Kelly, Sir Tony Baldry, Graham Jones, Graham Allen, Simon Hughes and Caroline Lucas, presented a Bill to amend the law relating to scrap metal dealers; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 13 July, and to be printed (Bill 9).
Social Care (Local Sufficiency) and Identification of Carers Bill
Presentation and First Reading (Standing Order No. 57)
Barbara Keeley, supported by Heidi Alexander, Sir Tony Baldry, Annette Brooke, Alex Cunningham, Dr Hywel Francis, Mrs Sharon Hodgson, Diana Johnson, Stephen Lloyd, Caroline Lucas, Sarah Newton and Laura Sandys, presented a Bill to make provision about the duties of local authorities in relation to the sufficiency of provision of social care and related support; to make provision about the duties of health bodies in England in relation to the identification and support of carers; to make provision in relation to the responsibilities of local authorities, schools and higher and further education organisations for the needs of young carers and their families; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 7 September, and to be printed (Bill 10).
Mental Health (Discrimination) (No. 2) Bill
Presentation and First Reading (Standing Order No. 57)
Gavin Barwell, supported by Mr Charles Walker, Nicky Morgan, Oliver Colvile, Dr Julian Lewis, Sir Peter Bottomley, Alison Seabeck, Rushanara Ali, John Pugh, Hywel Williams and Gloria De Piero, presented a Bill to make further provision about discrimination against people on the grounds of their mental health; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 14 September, and to be printed (Bill 11).
Mobile Homes Bill
Presentation and First Reading (Standing Order No. 57)
Peter Aldous, supported by Stephen McPartland, Heather Wheeler, Natascha Engel, Sarah Newton, Annette Brooke, Andrew Miller, Steve Brine, Ian Paisley, Dr Sarah Wollaston, Rebecca Harris and Mr Robert Buckland, presented a Bill to amend the law relating to mobile homes.
Bill read the First time; to be read a Second time on Friday 19 October, and to be printed (Bill 12).
Family Justice (Transparency, Accountability and Cost of Living) Bill
Presentation and First Reading (Standing Order No. 57)
John Hemming presented a Bill to make provision regarding arrangements for children involved in court cases; to make provision about the transparency, administration and accountability of courts and case conferences; to require the promotion of measures to assist families and such other persons as may be specified to reduce the cost of living through lower fuel bills; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 26 October, and to be printed (Bill 13).
Antarctic Bill
Presentation and First Reading (Standing Order No. 57)
Neil Carmichael, supported by Martin Caton, Katy Clark, Zac Goldsmith, Dr Julian Huppert, Mr Bernard Jenkin, Charlotte Leslie, Caroline Nokes, Paul Uppal, Joan Walley, Dr Alan Whitehead and Simon Wright, presented a Bill to make provision consequential on Annex VI to the Protocol on Environmental Protection to the Antarctic Treaty; to amend the Antarctic Act 1994; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 2 November, and to be printed (Bill 14).
Prisons (Interference with Wireless Telegraphy) Bill
Presentation and First Reading (Standing Order No. 57)
Sir Paul Beresford presented a Bill to make provision about interference with wireless telegraphy in prisons and similar institutions.
Bill read the First time; to be read a Second time on Friday 6 July, and to be printed (Bill 15).
Prevention of Social Housing Fraud Bill
Presentation and First Reading (Standing Order No. 57)
Richard Harrington, supported by John Healey, John Mann, Stephen Pound, Mr William Cash, Mr Richard Shepherd, Mr James Clappison, Mr Edward Timpson, Karen Bradley, Andrew Griffiths, Caroline Nokes and Steve Brine, presented a Bill to create offences and make other provision relating to sub-letting and parting with possession of social housing; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 13 July, and to be printed (Bill 16).
Winter Fuel Allowance Payments (Off Gas Grid Claimants) Bill
Presentation and First Reading (Standing Order No. 57)
Mr Mike Weir, supported by Hywel Williams, Mr Nigel Dodds, Sarah Newton, Albert Owen, Mr Alan Reid, Ms Margaret Ritchie, Sir Robert Smith, Mr Angus Brendan MacNeil, Katy Clark and Dr Thérèse Coffey, presented a Bill to provide for the early payment of winter fuel allowance to eligible persons whose residences are not connected to the mains gas grid and whose principal source of fuel is home fuel oil, liquid petroleum gas or propane gas; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 7 September, and to be printed (Bill 17).
Prisons (Property) Bill
Presentation and First Reading (Standing Order No. 57)
Stuart Andrew, supported by Sheryll Murray, Jason McCartney, Martin Vickers, Kris Hopkins, Iain Stewart, Andrew Percy, Jessica Lee, Conor Burns, Amber Rudd and Karen Lumley, presented a Bill to make provision for the destruction of certain property found in prisons and similar institutions.
Bill read the First time; to be read a Second time on Friday 14 September, and to be printed (Bill 18).
Marine Navigation (No. 2) Bill
Presentation and First Reading (Standing Order No. 57)
Sheryll Murray, supported by Jackie Doyle-Price, James Wharton, Oliver Colvile, Ian Paisley, Charlie Elphicke, Martin Vickers, Stuart Andrew, Mrs Mary Glindon, Caroline Nokes, Dr Matthew Offord and Bob Stewart, presented a Bill to make provision in relation to marine navigation and harbours.
Bill read the First time; to be read a Second time on Friday 19 October, and to be printed (Bill 19).
Off-Road Vehicles (registration) Bill
Presentation and First Reading (Standing Order No. 57)
Lindsay Roy, supported by Mr David Anderson, Fiona Bruce, Mr Mike Hancock, Barbara Keeley, David Mowat, Fiona O'Donnell, Jim McGovern, Iain McKenzie, Sir Bob Russell, Graham Stringer and Valerie Vaz, presented a Bill to make provision for the establishment of a compulsory registration scheme for off-road mechanically propelled vehicles; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 26 October, and to be printed (Bill 20).
Presumption of Death Bill
Presentation and First Reading (Standing Order No. 57)
John Glen, supported by Ann Coffey, Sir Peter Bottomley, Zac Goldsmith, Sir Bob Russell, Mrs Madeleine Moon, Jeremy Lefroy, Fiona Bruce, Mr Jeffrey M. Donaldson, Dai Havard, Sir Alan Beith and Nicky Morgan, presented a Bill to make provision in relation to the presumed death of missing persons: and for connected purposes.
Bill read the First time; to be read a Second time on Friday 2 November, and to be printed (Bill 21).
Price Marking (Consumer Information) Bill
Presentation and First Reading (Standing Order No. 57)
Jo Swinson, supported by Mrs Linda Riordan, Mrs Anne McGuire, Laura Sandys, Justin Tomlinson, Jonathan Edwards, Caroline Lucas, Lorely Burt, Amber Rudd and Stephen Gilbert, presented a Bill to amend the Price Marking Order 2004 to simplify, consolidate and improve price marking legislation; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 2 November, and to be printed (Bill 22).
International Development (Official Development Assistance Target) Bill
Presentation and First Reading (Standing Order No. 57)
Mark Hendrick, supported by Alison McGovern and Mr Michael McCann, presented a Bill to make provision about the meeting by the United Kingdom of the target for official development assistance (ODA) to constitute 0.7 per cent of gross national income; to make provision for independent verification that ODA is spent efficiently and effectively; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 13 July, and to be printed (Bill 23).
Disabled Persons’ Parking Badges Bill
Presentation and First Reading (Standing Order No. 57)
Simon Kirby, supported by Chris Heaton-Harris, Paul Maynard, Paul Goggins, Karen Bradley, Mr Robert Buckland, Damian Hinds, Robert Halfon, Ian Swales, Mr David Blunkett, Stephen Lloyd and Richard Harrington, presented a Bill to amend section 21 of the Chronically Sick and Disabled Persons Act 1970; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 6 July, and to be printed (Bill 24).
General Anti Tax-Avoidance Principle Bill
Presentation and First Reading (Standing Order No. 57)
Mr Michael Meacher, supported by Sir Alan Beith, Sir Peter Bottomley, Tom Brake, Frank Dobson, Andrew George, Helen Goodman, Kelvin Hopkins, Martin Horwood, John Mann and Austin Mitchell, presented a Bill to introduce a principle that any financial arrangements made by a company or individual should not have as their primary purpose the avoidance of tax; to establish a statutory rule to apply in the assessment of such arrangements; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 14 September, and to be printed (Bill 25).
Transparency in UK Company Supply Chains (Eradication of Slavery) Bill
Presentation and First Reading (Standing Order No. 57)
Michael Connarty, supported by Tom Brake, Katy Clark, Mr Tom Clarke, Ann Coffey, Stella Creasy, Jim Dobbin, Mark Durkan, Dr Julian Lewis, Fiona Mactaggart, Jim Shannon and Jim Sheridan, presented a Bill to require large companies in the UK to make annual statements of measures taken by them to eradicate slavery, human trafficking, forced labour and the worst forms of child labour (as set out in Article 3 of the International Labour Organisation’s Convention No. 182) from their supply chains; to require such companies to provide customers and investors with information about measures taken by them to eliminate slavery, human trafficking, forced labour and the worst forms of child labour; to provide victims of slavery with necessary protections and rights; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 19 October, and to be printed (Bill 26).
European Communities Act 1972 (Repeal) Bill
Presentation and First Reading (Standing Order No. 57)
Mr Douglas Carswell, supported by Mr Philip Hollobone, Steve Baker, Mr Jeffrey M. Donaldson, Philip Davies and Mark Reckless, presented a Bill to repeal the European Communities Act 1972 and related legislation; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 26 October, and to be printed (Bill 27).
Opposition Day
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Disability Benefits and Social Care
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:19 - The House divided: - Ayes: 236 / Noes: 298 - Question accordingly negatived.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I beg to move,
That this House believes that cuts to support for disabled people and carers pose a potential risk to their dignity and independence and will have wider social and economic costs; regrets that the Department for Work and Pensions has dropped the aim of achieving disability equality; whilst recognising that the disability living allowance (DLA) needs to be reformed, expresses concern that taking the DLA from 500,000 disabled people and contributory employment and support allowance from 280,000 former workers will take vital financial support from families under pressure; expresses further concern at the Work Programme’s failure to help disabled people and the mismanaged closure of Remploy factories; notes the pressing need for continuing reform to the work capability assessment (WCA) to reduce the human cost of wrong decisions; agrees with the eight Carers’ Week charities on the importance of recognising the huge contribution made by the UK’s 6.4 million carers and the need to support carers to prevent caring responsibilities pushing them into ill-health, poverty and isolation; and calls on the Government to ensure reform promotes work, independence, quality of life and opportunities for disabled people and their families, to restore the commitment to disability equality in the Department for Work and Pensions’ business plan, to conduct a full impact assessment of the combined effects of benefit and social care cuts on disabled people and carers, to reform WCA descriptors as suggested by charities for mental health, fluctuating conditions and sensory impairment and to re-run the consultation on the future of Remploy factories.
Once upon a time, the Conservatives liked to tell us that we were all in this together. Those words ring rather hollow today. After a Budget that gave us the granny tax and cuts to tax credits while giving a tax cut to millionaires, I think we can assume that the Chancellor was simply taking us for a ride. Yesterday, Bob Holman—the man who introduced the Secretary of State to Easterhouse—said it all. He said that he now had so much confidence in the Secretary of State’s belief that we were all in it together that he thought the Secretary of State should resign. Today’s debate is about many of the people Mr Holman stood up for. They are the one in four of our fellow citizens who are not all in it together with the Chancellor and the Prime Minister. They are not part of the Chipping Norton set. They do not get to go to the kitchen suppers. They are Britain’s disabled citizens. They are parents of disabled children. They are former workers, now disabled, who have paid in and paid their stamp and now find a Government determined to renege on a deal that they believed in.
In today’s debate on what I hope will be a consensual motion, there will be interventions from those on the Treasury Bench asking which cuts the Opposition support, and that is a perfectly reasonable line of argument. Let me deal with it at the outset. We do not believe that the spending review set out by this Government was wise. We warned of the risks of cutting too far and too fast. We also warned of the risks of a double-dip recession, and now we have one. The cost is astronomical. That is why the Chancellor had to explain to the House, in his last Budget, that he had to borrow £150 billion more than the Office for Budget Responsibility said Labour would have borrowed, as set out in our last Budget. In the Department for Work and Pensions, the bill for jobseeker’s allowance and housing benefit is now running out of control as a consequence of the Secretary of State’s failure to get people back into work, and £9 billion more than was originally forecast is now projected to be spent. Someone has to pay that bill, and the Government—the Cabinet and those on the Front Bench today—have decided that it should be paid by Britain’s disabled people.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I am glad that the right hon. Gentleman has mentioned the disabled. Will he explain why Labour supports segregated employment—apartheid for the disabled—in Remploy? Are the disabled community not full members of society too?
Mr John Baron (Basildon and Billericay) (Con)
Welfare reform is long overdue. Will the shadow Minister explain why, when his party was in government, it did not get to grips with this matter? On disability living allowance payments, for example, there was a complete lack of transparency regarding where the money was heading. The previous Labour Government had plenty of opportunity to reform welfare, but they failed to do so. Will he explain why?
Mr Byrne
The Labour Government introduced some of the biggest reforms of the welfare system that we have ever seen in this country. That is why Lord Freud, in his review of the changes that we had made, said that the progress that had been made was “remarkable”. The hon. Gentleman would do well to study his remarks.
I want to return to the point about who is to pay the bill for this Government’s failure. Every Chancellor, every Cabinet and every Government have to make a decision on how the load is to be carried. The point at the heart of this debate is that this Government have decided that much of the load must be carried by Britain’s disabled people. New research from the House of Commons Library, which I am publishing today, shows that over the course of this Parliament, disabled people in our country will pay more than Britain’s bankers. Indeed, in the final year of the Parliament, disabled people will be paying 40% more than the banks. That tells us everything we need to know about this Government’s values.
The House should be grateful to Carers UK, and to the eight carers week charities, for the service they have done us by setting out the combined impact of these decisions. Their conclusion is blunt:
“It is a scandal that the UK’s carers are being let down in this way.”
The situation that confronts us is not going to get better; it is going to get worse. Scope reminds us that universal credit—if it is ever introduced—will hit disabled people 30% harder than non-disabled households, and that the halving of support for disabled children will cut £1,300 from their families. The Government’s arbitrary 20% cut to disability living allowance risks plunging 500,000 families into a financial black hole.
Alok Sharma (Reading West) (Con)
The right hon. Gentleman is talking about the cuts; perhaps he will tell us how he would reform the budget. I believe that the Government’s reforms are very sensible. Will he also tell us how many Remploy factories were shut down while Labour was in power?
Mr Byrne
I invite the hon. Gentleman to intervene on me again when I talk about Remploy in more detail—[Interruption.] No, Remploy forms an important part of our motion, and it is right that we should have an informed debate on the matter. I assure the hon. Gentleman that I will let him have his say at that stage.
We believe that disability living allowance needs reform, and that an independent assessment is needed. We also believe, however, that the assessment should be designed first, and that the savings should be calculated afterwards. This Government have set an arbitrary, top-down financial cut, and they are now scrambling around trying to figure out what kind of assessment will deliver that cut. So little thought has gone into this that disabled people now face being tested for employment and support allowance, DLA and social care, as well as for a raft of other benefits. The testing alone will cost the taxpayer £710 million.
Surely we should be thinking harder about this. Surely we should be trying to determine what is the right assessment for DLA and ESA—which are different benefits—and asking how we can bring them together in a way that would be more convenient for disabled people and that would help them to secure the support that they need to live an independent life. Such a reform would save money. Indeed, when I was at the Treasury, my civil servants costed it and determined that it would save £350 million by 2015.
To this bleak picture we must, I am afraid, add more. Cuts to social care and to housing benefit will make the situation worse, £1 billion has now been cut from local council budgets for social care since this Government took office, and Ministers are still dragging their feet over long-term reform. Meanwhile, 1 million unpaid carers have given up work or reduced their hours, and four in 10 have fallen into debt, thanks to a system that does not work and is set to get worse.
George Hollingbery (Meon Valley) (Con)
I seem to recall that the Government announced some time ago that £3 billion would be transferred from national health service budgets to the social services sector each year. Is that correct, or is my recollection wrong?
Mr Byrne
The cut is from the Department for Communities and Local Government’s own figures. If the hon. Gentleman looks at the study published by the Association of Directors of Adult Social Services, he will see the reality of what is hitting social care services up and down the country and the vulnerable people they support.
The great tragedy of this story is that there might be some kind of explanation if this were all part of a grand master-plan to get disabled people back to work.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am a little intrigued. The right hon. Gentleman stood at the Dispatch Box at the beginning of his speech and said that we were not cutting housing benefit enough. Labour let it run out of control; it nearly doubled in 10 years. The outturn, however, is that we will be spending £3 billion less than Labour would have done under their proposals. Now, however, he is saying that we are cutting housing benefit too much. He needs to make his mind up. He cannot have it both ways. Are we cutting it too much or too little?
Mr Duncan Smith
The shadow Secretary of State should make his mind up about what he is really saying. Half his Front-Bench team have been going around saying that we are socially cleansing London because we are being too fierce on housing benefit tenants, and he goes around telling us that we are not cutting enough. It is pathetic.
Mr Byrne
I am grateful that the Secretary of State decided to temper his language, in contrast to the crass words that he used from a sedentary position.
The truth is that the housing benefit bill is spiralling out of control because this Government have strangled the recovery and put unemployment up to its highest level since 1996. There are now more than 1 million young people out of work, and long-term unemployment is up 10%. A third of the people on the dole have now been out of work for more than a year, because of the catastrophic failure of the Secretary of State’s back-to-work programme. That is why the dole bill and the housing benefit bill are going up. He should be ashamed of the record that he has presided over.
Stephen Hammond (Wimbledon) (Con)
And all that from the gentleman who left us the note to say that there was no money left! Would he like to correct a statement he made earlier? This Government have already recognised that some of the eligibility criteria and some of the testing will need to be changed. They have stated that they are open to those changes, so will he correct his statement on the record?
Mr Byrne
I will believe it when I see it. As for the fiscal position, the hon. Gentleman will know that the Chancellor had to confess to the House that he was borrowing £150 billion more than would have been needed under Labour’s plans.
The truth is that there is no plan to get disabled people back to work. The reform of ESA is being so botched that 40% of people are winning their appeals, and those appeals are costing us £50 million a year. Charity after charity is saying that the descriptors used in the work capability assessment are failing. This is the point about reform: if we introduce changes, we have to adapt. We have to be flexible, and move as we learn. This Government are not doing anything. The charity Mind has so little confidence in the Government’s ability to get the reforms right that it has resigned from the advisory group. The Royal National Institute for the Blind has told me that someone who is totally blind can be found fit for work and put straight on to jobseeker’s allowance. That is why our motion, which I hope the hon. Member for Wimbledon (Stephen Hammond) will support, calls for the right reform of the work capability assessment.
Comments reported in The Guardian say that the Secretary of State has been warned by his civil servants running job centres that people are being pushed to suicide by the botched reforms of employment and support allowance—a system that costs us £50 million a year and in which 40% of people are winning their appeals. How can that reform be right?
Harriett Baldwin
Would the shadow Secretary of State like to remind us who was the Chief Secretary to the Treasury when the work capability assessment was introduced and who it was that refused to listen to the arguments of the disability lobby to improve that test? This Government brought in the Harrington review, and they are implementing it.
Mr Byrne
Actually, Mr Harrington was appointed by the previous Government. The reform of ESA is right, but the point about reform is that we need to adapt and show flexibility. What the House needs to know this afternoon is that charities such as Mind have so little confidence in the Government’s ability to get it right that they are resigning from the process. I put it to the hon. Member for West Worcestershire (Harriett Baldwin) that that is not a vote of confidence.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Does my right hon. Friend share my view that the interventions of Conservative Members so far, in seeking to make cheap political points, do not represent at all the view of organisations for disabled people? Sense, for example, which speaks for deafblind people, said:
“We still remain very concerned by the overall aim of reducing the future DLA spend by over £1 billion.”
Are those not the worries that the House should be addressing?
Mr Byrne
Those are precisely the kinds of worries that the House should reflect on because this is a very difficult and sensitive area of policy. The Government are not attempting to prosecute reform with any kind of consensus at all. That is why charities are resigning and resiling from their administration.
To the picture of ESA reform, I am afraid we have to add the Work programme. Once billed as the greatest back-to-work programme designed by human hand it is now missing its target for disabled people by 60%. Charity after charity says that the number of people referred to them for specialist help to get back to work is minuscule and tiny. St Mungo’s and now the Single Homeless Project have even gone to the lengths of resigning from the programme altogether.
This Government’s contempt is not reserved for disabled people without a job. There is plenty of it to go around for people with a job, including those Remploy workers in factories to whom the Secretary of State said, “You don’t produce very much at all. They are not doing any work at all. They are just making cups of coffee.” I hope that, in the course of this debate, the Secretary of State will take the opportunity to resign—I mean apologise. [Interruption.] I may not give way to calls on that point, but I congratulate the Sunday Express on its campaign, highlighting the disgraceful treatment of Remploy workers. We all know that Remploy has to change—that is the point I would make to Conservative Members—but this Government have decided to press ahead, closing these factories at breakneck speed. These factories are in constituencies where twice as many people as the national average are chasing every single job. How can it be right to say to these factories that they have until Monday to complete a business plan that, if it is not successful, will see the closure of factories in communities that need jobs and cannot afford to lose them?
Paul Maynard
Let me give the right hon. Gentleman another chance to answer the question put to him earlier. How many of these factories were closed under the last Labour Government? I know what the figure is; I wonder whether he knows what it is.
Mr Byrne
I will not deny the fact that a number of factories were closed under Labour, but that was part of a reform programme that saw £500 million added in support for the future of Remploy. The point for the House this afternoon is this: the time given to help Remploy factories figure out a future is too short.
Helen Goodman (Bishop Auckland) (Lab)
Does my right hon. Friend agree with my constituent Christine Tyleman who wrote on behalf of the workers at the Spennymoor Remploy factory:
“I would be lost if I was not working. You cannot live on fresh air”?
In my constituency, the ratio is 9:1 of jobseekers to vacancies. Does my right hon. Friend agree that my constituent is completely realistic in her assessment of her situation?
Mr Byrne
My hon. Friend makes a very powerful point. For many Remploy workers, their place of work is more than simply a job; it is a community and it is vital to their life and well-being. In a community like my hon. Friend’s, where nine people are chasing every job, these people deserve real answers about a sustainable future.
Mark Tami (Alyn and Deeside) (Lab)
My right hon. Friend is absolutely right that Remploy gives disabled people the dignity of work. It has been shown that, without that, both their mental and physical health suffers, with all the problems that result from it.
Mr Byrne
Of course. My hon. Friend is absolutely right. We have seen reports today, debated in the media and in the House, about the pressure that the national health service is now coming under. When we drag and cut away support such as work and other vital benefits, people will, frankly, be thrown on the mercies of the health service—a health service that we know is terribly overstretched.
Sheila Gilmore (Edinburgh East) (Lab)
Does my right hon. Friend agree that after closures like this, people often end up on benefits? In my constituency, a Blindcraft factory, not Remploy, was closed by the then Lib Dem council. The majority of the people who worked there have not been found jobs in the wider economy, which would have been desirable, and they are back to being unemployed and sitting around at home.
Mr Byrne
My hon. Friend makes my point for me. When the reform of ESA and back-to-work programmes such as the Work programme are failing so badly, shutting these factories down without providing real answers about their future will, I am afraid, have terrible consequences in communities all over the country.
Geraint Davies (Swansea West) (Lab/Co-op)
My right hon. Friend says that Remploy must change, which it must, but in Swansea it has been changing. In fact, the order books are—partly owing to my own engagement with major possible local clients—virtually full with increasing orders from universities, the private sector, health authorities and so forth, even when the Remploy central sales and marketing function has dismally failed. In view of the fact that, given a helping hand, Remploy can succeed, does my right hon. Friend agree that it is outrageous for the Secretary of State to make out that these people do not work and sit around drinking coffee? Should the Secretary of State not at the very least apologise—and if not, resign?
Ann Clwyd (Cynon Valley) (Lab)
Eleven people are chasing every single job in my constituency, and there is no point in the Secretary of State going to Merthyr to tell people to get on a bus to Cardiff because there are no jobs in Cardiff either. After the last round of redundancies in the Remploy factory in the Cynon Valley in 1988, only one man ever found a job again. With unemployment now running at 9% in my constituency, I ask the Secretary of State again: where are the jobs? Tell us: where are the jobs for disabled people?
Paul Maynard
I am listening carefully and I promise not to intervene again. Will the right hon. Gentleman clarify something for me? Is he arguing that disabled people should not be expected to be able to work in the wider workplace? The implications of that are a lowering of the expectations of the disabled community and suggest that all we all are fit for is to have a label placed around our necks and then be put out of sight and out of mind? Is that really what he is suggesting?
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
When I visited the Edinburgh Remploy factory, the workers were not having coffee, but working hard and bringing in new business. Unfortunately, however, that is one of the factories that is due to be closed. In Edinburgh, where five unemployed people are chasing each vacancy, every single job is important. Would it not be better to take the best possible advantage of successful Remploy factories by building on what they have done so far, rather than throwing them on to the scrapheap as the Government are suggesting?
Robert Flello (Stoke-on-Trent South) (Lab)
Trentham Lakes Remploy factory in my constituency, which serves the very deprived area of north Staffordshire, is doing fantastic work for companies such as JCB, and is also working for the DWP in fulfilling contracts. Some of its workers have tried working in the outside environment during better times, but they have returned because they need not a separated environment, but a supported environment. Will my right hon. Friend pay tribute to the hard work that is done by people in places such as Trentham Lakes?
Anas Sarwar (Glasgow Central) (Lab)
I met an inspirational young man in my constituency, Martin Dougan, who is now working as a sports presenter for Channel 4 News and ESPN. He told me that he had only found the confidence to take the job because of the support given to him by an assisted workplace employer. Does that not demonstrate the huge benefits that disabled people can enjoy if they are given the right support?
Stephen Hammond
I thank the right hon. Gentleman for giving way again. He is being very generous with his time. I assume that he will accept, in the interests of accuracy, that the level of the overall specialist disability employment budget is to remain at £320 million, and that in the last two years the Government have increased the Access to Work budget. I think that Members in all parts of the House accept Access to Work.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
The right hon. Gentleman will of course know that the £320 million specialist employment support budget is protected, and that any money coming from Remploy will be reinvested in it.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
My right hon. Friend will know that the Wishaw Remploy factory is earmarked for closure. We have learned that article 19 public service contracts will be available to many Remploy factories, but it has now emerged that Remploy has not even contacted the local authorities to ask them about article 19. Is that not shameful?
Mr Byrne
It is shameful, but I am afraid that it is par for the course. After all, that announcement was smuggled out on a very busy day in the House. I believe that the Minister was forced to come to the House at the end of the business to make a statement that she should have been upfront about making.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
I am touched by the right hon. Gentleman’s concern for Remploy employees. I think that it is a good concern. Will he confirm, however, that the Labour Government presided over the closure of 28 Remploy factories?
Mr Byrne
That was part of a reform programme that included £500 million for modernisation. This is the point. Perhaps the hon. Gentleman is missing it. The argument that we are prosecuting this afternoon is not about whether Remploy needs to change. Remploy does need to change, but is now the right time for it do so, given that long-term unemployment is approaching 1 million? Where are the real plans to ensure that these factories have a future?
Ian Lucas (Wrexham) (Lab)
We are engaged in a consultation that has been taking place over a particularly difficult period. During the council elections, it was very difficult for councils to become engaged in the process, and in the course of the consultation the Department changed the terms that were available to staff and prospective purchasers. Will the Secretary of State recognise that businesses need a reasonable length of time in which to consider the facts, and will the Minister confirm that she has considered whether the decision may be legally challengeable?
Mr Byrne
Let me deal with my hon. Friend’s intervention by listing a series of practical measures and steps that I think that the Government could and should now take.
First, why do the Government not honour every letter of the Sayce report? Why do they not honour the recommendations of Liz Sayce that factories should have six months in which to develop a business plan and two years before a subsidy is withdrawn, that the viability of Remploy factories should be decided by an independent panel of business and enterprise experts—with trade union involvement—rather than by unilateral action from the DWP, and that expert entrepreneurial and business support should be provided to develop the businesses into independent enterprises? Each of those recommendations needs to be implemented.
Secondly—here I come to the point made by my hon. Friend the Member for Wrexham (Ian Lucas)—the full 90-day timetable for consultation should be re-started, given that the terms were radically changed halfway through the process.
Thirdly—this is relevant to the points that have been made about procurement—may I ask what steps the Secretary of State has taken to draw together local authorities, as well as central Government Departments, to ensure that any extra work that can be put in a Remploy factory is put in a Remploy factory? Surely we should be exhausting all those opportunities before we move on.
Fourthly, we should take a more flexible approach to each and every factory. The fact is that some factories will need more support in order to continue, while others will need less. And fifthly, we should review the subsidy per worker offered to Remploy workers, given that it may be different from the subsidy that is available under Work Choice.
If the Secretary of State is in any doubt about what these factories do, I will go and do a day’s work in a Remploy factory, and I hope that he will join me. I think that we should invite the Sunday Express as well, for good measure.
George Hollingbery
I am grateful to the right hon. Gentleman for being so generous with his time.
The subsidies involved in the two separate programmes, the Access to Work programme and the social model and Remploy, are not just different but wildly different. The average subsidy per person in Remploy is £25,000 a year, whereas the average subsidy in the support programme is £2,900 a year. Does the right hon. Gentleman agree that it would be much better for the money from Remploy to be redeployed in the Access to Work programme?
Mr Byrne
Where are the jobs that those people are going to go into? When factories are closing in constituencies where the average number of people chasing each job is twice the national average and the Work programme is failing disabled people, we have a problem that needs to be solved. We need practical steps to manage Remploy’s future.
Labour Members feel passionate about this subject. We are proud of the progress that we made for disabled people when we were in government. We appointed the first ever Minister for Disabled People, and we introduced the Disability Discrimination Act 2005, the Equality and Human Rights Commission, Supporting People, the new deal for disabled people, new strategies for disabled children, Valuing People, and the Equality Act. Poverty in disabled households fell by a fifth in the last three years of our Government.
We succeeded because we believed in co-producing policy with disabled people. It is a disgrace that Kaliya Franklin, Sue Marsh and the authors of the Spartacus report had to use freedom of information requests to draw out of the Government that the DWP’s response to the DLA consultation was so misleading. It is also a disgrace that the Government have dropped from their business plan the goal of securing equality for disabled people. They should now set about changing course. They should begin by introducing a combined, cross-governmental assessment of the impact of their reforms. I congratulate Scope on producing a “starter for 10” this week.
Labour Members believe that rights should be made a reality for disabled people. We will campaign for that justice throughout this Parliament and beyond, and I hope that the House will express its support by backing our motion this afternoon.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
As the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) seems to be rather hazily acquainted with some of the facts and the reality of his time as Chief Secretary to the Treasury, perhaps I may take some time to recount to him some of the facts, in particular that spending on disability living allowance increased by 40% between 1998 and 2010 and that the welfare bill rocketed by the same amount. Indeed, in a decade of unprecedented growth and rising employment, improvements in the life chances of disabled people were, sadly, few and far between.
Members do not have to take my word for that. The hon. Member for Dagenham and Rainham (Jon Cruddas) has said:
“We need to address some home truths about the Labour government’s welfare changes…they have seriously eroded the protection of disabled people...The methodologies that underpinned much of our argument are questionable.”
Those are telling words. Labour’s something-for-nothing culture was more than just their Government borrowing money they did not have. They failed to tackle welfare reform. That has corroded people’s trust in the system, and it is disabled people who are left to deal with the fall-out.
Sheila Gilmore
The Minister will be aware that research shows that at least half of the 30%—or 40% now—increase in DLA payments was due to demographic changes. The Minister should not give an exaggerated picture of what has been going on.
Maria Miller
The hon. Lady will know that that 40% figure is an absolute truth. She will also know that the majority of the increase has nothing to do with demographics. She should look at the figures more carefully. Unfortunately, now that Labour is in opposition, it is more willing to engage in the petty politics we have just heard—points scoring—than in a meaningful debate about how to transform disabled people’s lives.
We must not forget that for disabled people independent living is about far more than disability benefits or social care alone: it is about individuals having choice, control and freedom in their daily lives; it is about attitudes, and making sure disabled people receive equal treatment; and it is about us in society, and the make-up of the communities in which we live. I hope that in the winding-up speeches Labour will answer more fully why it still believes in the segregated employment that my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) mentioned earlier.
Mr Lee Scott (Ilford North) (Con)
As we are discussing some of the most needy and underprivileged people in our society, does my hon. Friend agree that we should look at projects such as one that is running in my constituency, through which we, together with employers, the National Autistic Society and local parent groups, are going to get young people into work in front-line jobs—not hidden away? I thank my hon. Friend for the Government’s support for that project.
Maria Miller
I commend my hon. Friend for his work in this area. I hope to visit his constituency to see the work he has been doing, ensuring that the disabled people he represents have the job opportunities I know they want.
Shamefully, much of what we have heard today has been scaremongering. Nothing illustrates that better than the claim by the right hon. Member for Birmingham, Hodge Hill, as stated in the motion,
“that the Department for Work and Pensions has dropped the aim of achieving disability equality”.
That is an outrageous and unfounded claim, intended to frighten some of the most vulnerable people in society.
This Government enacted the Equality Act 2010, which applies to disabled people. Our approach is set out in our equality strategy, which states that
“equality will be a fundamental part of the Government’s programmes across the UK”,
and the DWP business plan explicitly states that we will
“enable disabled people to fulfil their potential”.
That is a clear and practical expression of how we have made equality a reality, rather than merely the warm words offered by the right hon. Gentleman.
Mr Tom Clarke
I mean no disrespect to the hon. Lady in pointing out that I expected the Secretary of State to speak for the Government. If he had, I was going to put the following point to him. Was he reported correctly when he was quoted as saying:
“In other words, do you need care, do you need support to get around. Those are the two things that are measured. Not, you have lost a limb…”?
Does the hon. Lady not accept that such language and insensitivity is doing untold damage to any attempt at reform?
Maria Miller
The right hon. Gentleman does a huge amount of work in this area, and I would not want to fall out with him. I know that we both believe that disabled people should be looked at as individuals, and that he does a lot of work to make that a reality. I do not want to categorise people simply because of a condition they have. People deal with their conditions in different ways. That is what the personal independence payment is all about. I hope we can continue to work on this matter with the right hon. Gentleman, and with many outside organisations, because we need to put right the previous Government’s failure to introduce any reforms.
Let me dispel some of the other myths we have heard, starting with those about Remploy. The right hon. Member for Birmingham, Hodge Hill knows full well that the programme Labour put in place was unsustainable, with more than £250 million in factory losses since its modernisation programme began. Labour set the unachievable target of a 130% increase in Remploy’s public sector sales in 2008, when the right hon. Gentleman, as Chief Secretary to the Treasury at around that time, must have known public sector spending was set to fall. Under Labour, very few additional contracts were won, and what is particularly shameful is that all this did nothing more than give people false hope. The modernisation plan was designed to turn factories around through a £550 million investment, yet it now still costs more than £20,000 to employ an individual in a Remploy factory and losses last year alone amounted to £65 million.
Maria Miller
The right hon. Gentleman knows that my predecessors and I have put a great deal of effort into looking for ways to get work into Remploy factories. He also knows that the DWP has awarded business to Remploy factories.
Mr Frank Roy
Why is it that since the closure of the Wishaw Remploy factory was announced, no one from Remploy has approached either North or South Lanarkshire councils about article 19 contracts under the relevant European Union directive?
Maria Miller
Obviously, we will want to look into all such issues. The hon. Gentleman and I have already had a number of conversations about his factory, and I applaud the work he does in supporting disabled people in his community, but I should also draw his attention to the facts I gave him before: there are many thousands of other disabled people in his community whom I want to make sure are getting support, and our reform of Remploy will help to achieve precisely that.
Stephen Hammond
For the sake of accuracy, can the Minister confirm that there is a period of transitional benefits for anyone leaving a Remploy factory? Can she also confirm that last year Remploy employment services found work for 15,000 disabled people whose disabilities are similar to those of employees at Remploy factories?
Maria Miller
My hon. Friend makes some important points, and we will ensure that support is in place for people affected by the announcements we are making. But what we are about is supporting thousands more disabled people into mainstream employment, and we have clear support for our approach from disabled people and from disabled people’s organisations.
Given that they had to be reminded, the Opposition seem to have forgotten that they closed 29 of these factories. The difference is that when they did that, little attempt was made to find any alternative buyers. Worse, the then Chief Secretary to the Treasury did nothing to put in place a comprehensive support package for those made redundant. Perhaps that is why so many Labour Members know that in their own constituencies many of the people affected by the previous redundancies did not get back into work, and perhaps Labour Members should hold their previous Chief Secretary to account for that. We should contrast that with the £8 million package of support that this Government are putting in place. That shows the importance that we attach to the measure.
Geraint Davies
Would the Minister not agree that the previous Government set aside £500 million specifically to support the modernisation of Remploy factories, not to do something else on access to work? She is saying, “We will raid all that money that was for those factories where modernisation was a success and we will put it somewhere else because we judge it to be more successful.” It is all very well saying that we should have support for access to work, which I agree with, but that money was meant for a purpose. It is being robbed out of the hands of Remploy workers, and they will not get another job in the current conditions.
Maria Miller
The hon. Gentleman just has to face the fact that at the end of the modernisation plan, which we are approaching, decisions will have to be made. Given the fiscal problems we faced when we came into government—the devastating state the country’s finances were in—we could well have made some very different decisions, but we chose not to do so. We chose to stick with Labour’s plan to modernise Remploy, and it has turned out that we had £65 million of losses last year and it still costs more than £20,000 to employ somebody in a Remploy factory. We simply cannot allow that to go on. What we want to do is ensure that that money is working harder. Indeed, the right hon. Member for Birmingham, Hodge Hill would have had to take the same decision.
Maria Miller
The right hon. Gentleman knows exactly what I meant: our very clear commitment is to work at ensuring that those factories can be set free from Government control. That is absolutely what we are doing. We are spending a great deal of time—we started in March—on the process for expressions of interest. We have received more than 60 such expressions in respect of factories throughout the country—I believe we have now received about 65—many of which have gone forward to business plans. We hope that many more will go forward successfully. That is my aim, and it is why we are taking time to do this and taking the time to talk to Labour Members about this issue.
Labour Members need to wake up to what is happening in their constituencies. The hon. Member for Bishop Auckland (Helen Goodman) intervened during the speech by the right hon. Member for Birmingham, Hodge Hill, and I should gently remind her that although there are, importantly, 41 disabled people working in the factory in her constituency, many, many more are not receiving that support. Yet, through employment services, we were able to support more than 500 individuals into mainstream employment, not into segregated factories. So I would rather take the £740,000 loss on the factory in her constituency last year and use the money to support the individuals in that factory into mainstream employment, so that we can actually have the sort of world that my hon. Friend the Member for Blackpool North and Cleveleys has been talking about.
Helen Goodman
The Minister was talking about my constituency so it would be reasonable if she were to give way. She talks about the other disabled people in my constituency. They comprise 5,320 people on employment and support allowance and incapacity benefit, and 650 people who are labelled “disabled”. Does she think those people are pleased with the cuts in benefits she is imposing?
Maria Miller
The hon. Lady will know that they will be pleased that they have a Government who have protected the specialist disability employment budget—£320 million—and we want to make sure that it is working better for more people. We estimate that we could support an extra 8,000 people into employment if we were to use the money in a more compelling way. None of this reform was the sort of reform that the right hon. Member for Birmingham, Hodge Hill was looking at.
Let us also consider the work capability assessment, as Labour Members raised it. They will know that we inherited the programme from the right hon. Gentleman, but it was a harder, harsher and tougher process than the one we have now put in place. Since taking office, this Government have brought in Professor Harrington to renew these arrangements. Furthermore, we have listened to and implemented all the recommendations made in his independent review. The changes softened the system—
Maria Miller
I hope that the hon. Lady will forgive me if I try to make a little more progress, as I know that we want to cover a number of issues in this debate.
These changes have softened the system and made it fairer for people, recognising that many people with a health condition want to work and can do so with the right support. We have asked Professor Harrington to continue to review this process for us and make recommendations, because for too long under the last Government people were written off on benefits.
Maria Miller
If the hon. Gentleman could perhaps sit down and let me make some progress, we would be able to talk about the fullness of this debate. That would be a better way of doing it.
At the moment, some 900,000 people have been on incapacity benefit for a decade or more, many of whom will be disabled. This approach is not only unfair and unkind; it is also a waste of people’s potential.
Tom Greatrex
Is the Minister aware of the memo, published on The Guardian website this afternoon, from Paul Archer, the head of contact centres, headed “Supporting ESA customers”? It was sent to “all staff in operations” and it states:
“The consequences of getting this wrong can have profound results.
Very sadly, only last week a customer of DWP attempted suicide—said to be a result of receiving a letter informing him that due to the introduction of time-limiting contribution based Employment and Support Allowance for people not in the Support Group, his contribution-based Employment and Support Allowance was going to stop.”
Is it not time that the Minister and her departmental colleagues realised the seriousness of the implications of some of the decisions being taken by her Department and undertook a full inquiry into this incident and all other incidents where the real pressure being put on people is completely unfair?
Maria Miller
The hon. Gentleman is absolutely right to be concerned about such a difficult circumstance. I think he would only expect the Department to make sure that staff were handling such cases correctly. Of course every case like that is an absolute tragedy, and we want to make sure that the system works really well for the individuals concerned. I am sure that he will want to applaud the work that the Government are doing to try to make the system better. I repeat that the system we inherited was harsh and difficult, and we have softened that further.
Maria Miller
If the hon. Lady will forgive me, we need to make some progress in this debate or many hon. Members will not be able to contribute to it.
We are also reforming the disability living allowance, on which, again, the Opposition have failed to give any answers. Labour Members say they want reform, but the reality is that they have voted against reform every step of the way. As far back as 2005, the Labour Government found out that £600 million of DLA was being paid out in overpayments, yet they failed to do anything about it. In 2007, they found out that the independent living fund needed serious reform, but again they did nothing about it.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I would ask the right hon. Lady to speak from the Dispatch Box.
Mrs McGuire
The hon. Lady knows full well that when the independent living fund was running into difficulty we established an investigation into it, we reformed the fund and we had Sheffield Hallam university carry out an independent review. She does not need advice from her Secretary of State on that one.
Maria Miller
The right hon. Lady is obviously a little sensitive on that point, perhaps because the fund was about to run out of money when we took over. We had absolutely no choice at all about the action we took and perhaps Labour Members should take a little more of the responsibility. They lost control of the situation for some of the most vulnerable groups in society and they must stand up and be accountable account for that.
Mr Byrne
By the end of the Parliament, nearly £3.5 billion will be cut from disability benefit yet only £2.5 billion net is being taken from Britain’s bankers. How can the Minister justify the disgraceful fact that the Government are taking more from disabled people than from bankers? Will she justify it now?
Maria Miller
The right hon. Gentleman should have taken that opportunity to apologise for writing the note saying that the country had no money left. Although he knows that the banks’ actions made a difficult problem worse, he, as someone who is well versed in economics, also knows that the real foundations of the problems of our country are the structural deficit that he left behind
Maria Miller
The right hon. Gentleman should perhaps keep quiet while listening to what the Government are doing.
The former Chief Secretary did not solve the problems. He and the then Labour Government ducked the important decisions when they were in power—[Interruption.] And now, as I think hon. Members can hear, he is ranting in opposition. Meanwhile, we are working hard to try to implement the new personal independence payment, which is on track for 2013, meaning that support for disabled people will be fairer. At the same time, we are doing much more to support disabled people into work, enabling them to have the same opportunities in life as anybody else: from the Work programme, in which where we are paying providers by results, to Work Choice, through which we are providing intensive back-to-work support for those facing the greatest barriers to employment, and the Access to Work scheme, through which we are investing more to help disabled people and employers with the extra costs of moving into work. None of that was done by the right hon. Member for Birmingham, Hodge Hill in his 13 years in government.
Mr Baron
My hon. Friend makes a strong case for reform. The all-party group on eye health and visual impairment had a very constructive meeting with the Minister about the need to ensure that those who have very serious impairment of sight do not lose access to the enhanced rate mobility element of the PIP at the same rate as wheelchair users. Will she continue to give consideration to the fact that we do not want to return to the pre-2009 anomaly?
Maria Miller
My hon. Friend makes a strong point and I thank him for inviting me to the all-party group to hear some of the concerns expressed to him and to other MPs. Many of my hon. Friends and many other hon. Members who are present in the debate will want to ensure that the new PIP works hard for people who are visually impaired or have a sight loss. They will also be very aware of the fact that the disability living allowance required primary legislation to be changed; it took some two years to change it, because of its inflexibility and inability to take account of the real challenges people with sight impairment have to endure in getting out and about. I can give my hon. Friend a firm assurance that my objective is to consider each individual and the challenges they face, not simply the condition they have. Many people with sight loss or sight impairment face significant mobility problems and my hon. Friend’s points are not lost on me.
Dr Andrew Murrison (South West Wiltshire) (Con)
My hon. Friend, like me, will have constituents who have found themselves at the whip end of work capability assessments conducted by Atos. I hope that her PIP assessments will be a great improvement on that and that we have learned the lessons from Atos and the work capability assessment criteria set out by the previous Administration. Is she able to give me that commitment?
Maria Miller
We certainly need to ensure that lessons are learned from some of the problems we inherited on the work capability assessment. Many have already been learned and there is a clear read-across in the work we are doing. Although the PIP assessment is very different from the work capability assessment, there are many lessons to be learned.
Kate Green
The Minister is proposing to take a substantial proportion of the current DLA budget out of the new PIP budget—the figure we have heard is 20%—and to target the spending on people with a higher level of need. Does she not accept that reducing access to financial support for those with lower levels of need who are enabled as a result to remain in paid employment is a false economy and that prevention is probably better than cure in this case?
Maria Miller
I do not think that it can be a false economy to make a change that will see the end of £600 million going out in overpayments. The change is long overdue. We need a benefit that supports disabled people in a flexible, non-means tested way that is not related to their work status, with a firmer gateway to ensure that we get the money to the people who need it. That will mean that we are not left in the situation we are in now, where 70% of people have a benefit for life and there is no inbuilt way of reassessing that. We need to see an end to that inaccurate use of much-needed money.
Maria Miller
If the hon. Gentleman will forgive me, I will make a little progress. I want to move on to an issue that I think he will find very important: the role of universal credit in our commitment to supporting disabled people. We know that universal credit is a vital part of how we will support disabled people in the future, delivering a welfare system that people finally understand.
Under the current system, some people face losing up to 96p in every pound they earn through tax and benefit withdrawals. There are seven different components associated with disability, paid at different rates with different qualifying conditions. It is little wonder that disabled people have been put off moving into work for fear of losing out under the benefit system. Under universal credit, support for the most severely disabled will remain unconditional, as it rightly should, but we will also see a more generous system of earnings disregards for disabled people and carers. When people are able to work, or choose to work in spite of their disability or health condition, work will pay. The Labour party had 13 years to make those changes, but again it dithered and failed to make the right decisions for disabled people. I hope that the hon. Member for Strangford (Jim Shannon) agrees that it would have been better if Labour had voted with us on welfare reform so that we had strong support for these important reforms.
Jim Shannon
May I cast the hon. Lady’s mind back to the issue of the appeals process, particularly for those on ESA? Can she assure us, and me as the Member for Strangford, that when people attend ESA appeals those on the tribunal will totally understand the issues of mental, intellectual and cognitive behaviour? I perceive that they do not and that because they do not a great many people are turned down. Is it not unusual that 40% of those who are turned down for ESA win their appeals? Perhaps that is proof of the need for change.
Maria Miller
The hon. Gentleman is absolutely right to bring up the challenges in ensuring that the right support is in place for people with fluctuating conditions, particularly those with mental health problems. That is why so much emphasis has been put on that in the reform of how the work capability assessment works and in other areas, too. In the reform of the DLA, we are focusing on that issue—
Maria Miller
If the hon. Lady lets me finish my reply to the last intervention, that would be helpful. We must ensure that across the board we recognise that for many people who are not in employment, mental health problems are the primary cause. We need much broader understanding of how to ensure that we help people with mental health problems to get into work, whether that is through the Work programme or the work capability assessment.
Maria Miller
I will give way to my hon. Friend, then to the hon. Lady, then I really must move on.
George Hollingbery
The Minister might be about to come on to the subject of carers—I imagine that she might wind up on that point—but will she confirm two points? Will she confirm first that households in receipt of DLA, and therefore afterwards PIP, will not be subject to the benefits cap and, secondly, that carer’s allowance will be awarded outwith universal credit?
Maria Miller
My hon. Friend is right to pick up on those details, because such details make a real difference to family life.
Maria Miller
Will the right hon. Gentleman let me finish my comments on this point? I think his hon. Friend the Member for Edinburgh East (Sheila Gilmore) was expecting to intervene, too, so perhaps a little more civility is called for.
My hon. Friend the Member for Meon Valley (George Hollingbery) is absolutely right to say that disability living allowance will not be counted within the benefit cap. People who are in receipt of DLA will not be subject to that cap. That is a really important point to make and it is the sort of detail that can make all the difference. The same is true of his comment about the carer’s allowance, which will be outwith universal credit although the universal credit will also recognise the important role that carers play. As this is carers week, we should pay tribute to their role in our communities and our constituencies. I also pay particular tribute to the work of the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), to make more support available for carers, especially through carers’ breaks and by ensuring that carers are able to continue their important role.
Sheila Gilmore
I want to follow up on fluctuating conditions. Professor Harrington has been mentioned in the debate. He endorsed work carried out by charities on the fluctuating condition and mental health descriptors, so why have the Government chosen not to follow that up?
Maria Miller
We absolutely are following that up. I know that the hon. Lady follows such matters closely, so perhaps I need to ensure that she has more details, because I would have anticipated that she knew we are carrying out more work to ensure that there we have a robust evidence base, as she would expect.
I shall draw my remarks to a close. Given that this is an Opposition day debate, I had hoped that we would hear some clear ideas from the Opposition about what they would do; instead, we have heard the same confusion.
Maria Miller
The right hon. Gentleman was clear about what he would not do—he would not make reforms to DLA; he would not modernise Remploy; and he would not make the WCA fairer—but we heard nothing about what he would do. It is not much of an opposition when rant replaces engagement, when dithering replaces determination, and when there is such political opportunism, including attempting to intervene on someone who is trying to finish their speech. It is no wonder the Leader of the Opposition sacked the right hon. Gentleman as his policy guru; perhaps, for once, the Leader of the Opposition got it right.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To facilitate as many hon. Members as possible, there will be a six-minute limit on speeches, with the usual injury time for two interventions.
Ms Karen Buck (Westminster North) (Lab)
The economic crisis that engulfed the developed world in 2008 was not, of course, caused by the number of people on disability living allowance. Indeed, the proportion of the population on out-of-work benefits fell between 1997 and the beginning of the crisis. Although reform is needed, that point gives the lie to the suggestion that the scale of the situation required us to introduce the kind of measures that are causing such distress and grievance to hundreds and thousands of people with disabilities throughout the country, and leading to such a number of appeals. That is evidenced by the terrible e-mail that emerged from the Department for Work and Pensions today.
Rather than discussing benefits, I want to talk about the social care agenda because, unlike the situation with working-age benefits, we face an emerging crisis in that area. Over two years, the Government have failed to make progress on a way forward on paying for social care, which would be of value to those who need that care and their families who worry about them. In addition, several events that are unfolding, especially in local government, are undermining the agenda.
We have heard from the Government about scaremongering, but nothing can compare with the advertising campaign that ran in the preamble to the general election that featured gravestones alongside a warning about the “death tax” that Labour would apply to fund a social care programme. If there was ever an example of an inability to hold a constructive debate about such a major challenge facing our country, that was it.
The costs of care have been increasing due to a rise in the numbers of the elderly and people with disabilities, as a result of progressive and thankful improvements in medical science. Those costs will double from £14.5 billion today to £27 billion by 2030, and there will be a 100% increase in the number of people who have to pay for their own care.
Changes are taking place in the national health service. A consultation will shortly be held in my NHS region on the closure of five out of nine accident and emergency units as part of a reform to the health service that is designed to move people away from hospitals and into social care in their communities. In itself, that is a positive development, but only if that social care is available and affordable, and we are seeing that the opposite is the case.
On the Sunday before the election, the Prime Minister said on Andrew Marr’s television programme:
“What I can tell you is any cabinet minister, if I win the election, who comes to me and says: ‘Here are my plans’ and they involve frontline reductions, they’ll be sent straight back to their department to…think again.”
After the election—on 28 February 2011—the Secretary of State for Communities and Local Government told the House:
“If councils share back-office services, join forces to get better value from their buying power, cut out excessive chief executive pay, and root out overspending and waste, they can protect key front-line services.”—[Official Report, 28 February 2011; Vol. 524, c. 13.]
I will leave it to the House to decide whether there has been a complete lack of understanding on the part of the Prime Minister and the Secretary of State, or whether this is mendacity, but we know that there has been a £1 billion cut from social care in local government. Councils are front-loading a 28% cut in Government support and producing graphs of doom showing that care costs will swallow up so much of local government’s agenda in the next 15 years that councils will be able to provide only care and waste collection services.
A quarter of Westminster’s £52 million savings programme has come from adult and social care. Some 3,000 older and disabled people have lost care, while £15 million has gone by reducing meals for older people and day care for vulnerable people by 50%. An adult social care survey ranked my local authority as one of the worst in the country. Mr Ash Naghani, one of my constituents, told a local newspaper:
“The attitude before last year was how my council could help you to become more independent and contribute to society…since last year, it’s been as if I’m not important any more. All they are talking about is ways to cut down my care package to see how much money they can save.”
In addition to the cuts in social care, the removal of the taxi card from everyone above a benefit threshold has taken away independence from elderly and disabled people who cannot use public transport. Many of them have pointed out that their savings from a frozen council tax are heavily outweighed by the amount they must spend on travelling now that they are without their taxi card.
Times are tough and the pressures of an ageing population are inescapable. Not all needs will be met, but we must avoid denying what is going on. The Government, however, continue to be in denial about the impact of local government cuts on front-line services, in denial about the reality of more intensive means-testing, and in denial about the extent to which the drip, drip of scepticism about the reality of disability, especially invisible disability, is poisoning the atmosphere, and even feeding into hate crime and abuse.
Duncan Hames (Chippenham) (LD)
We have certainly heard strong words in the debate, but a careful study of the motion suggests that it tells us about those areas on which the Opposition agree with the Government. It says that DLA “needs to be reformed” and that the work capability assessment, which was introduced in the final years of the Labour Government, is in “pressing need” of reform. It even suggests that the principle of the closure of Remploy factories is not in dispute, because I thought that the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), was asking whether now is the right time. There is also agreement throughout the House about the importance of recognising the contribution made by carers, and I suggest that such recognition is reflected by the £400 million that the Government found to support respite breaks for carers. We should clarify where there are points of disagreement.
All parties can agree that the Government’s aim should be to create a system that ensures that every disabled person is treated with dignity and respect, and that they have access to the services and support that they need to fulfil their potential. That is reflected in the aim in the Government’s business plan, although we do not know what change of approach that represents. Despite difficult economic times, that remains the Government’s intention, and Liberal Democrats have already made a difference to the policies that can help to make that a reality. Although we support a cap on the total amount of benefits that a household can receive, we considered it vital that the cap was set at the right level, to protect those who are unable to work through disability or ill health. That is why Liberal Democrats welcomed the original exemption of DLA from the cap, but pressed further to exempt all those in the support group of employment support allowance as well, to which the Government agreed.
Liberal Democrats in the Lords amended the qualifying periods for the personal independence payment to match the existing qualifying periods for disability living allowance. This should ensure that those who need support up front, perhaps to deal with the costs of a new condition, will get that support quickly. However, the principle remains that personal independence payments are a long-term benefit. On the Floor of the House I repeatedly highlighted a campaign in support of disability charities to get the Government to rethink—and ultimately abandon—the proposal to remove the mobility component from the disability living allowance of local authority-funded care home residents.
There is much on which we have been able to agree, but there is certainly still more work to do, especially on getting the work capability assessment right. Liberal Democrats support the plans of the independent reviewer, Professor Harrington, to develop new, evidence-based descriptors, covering chronic fatigue and pain, which would help better assess those with fluctuating conditions. During the exchanges earlier in the debate, I was amazed at the refusal to acknowledge that the work capability assessment as it was operating at the start of this Government barely two years ago was that created by the Labour Government. It relied too heavily on the contracted-out, face-to-face assessment performed by Atos, with decision makers just rubber-stamping a decision that Atos had made. I therefore welcome the Harrington proposals to give DWP decision makers more flexibility to look at evidence other than the Atos assessment in coming to their decisions.
Duncan Hames
I will happily give way because I hope we can at least agree that what was put in place by the previous Government was unacceptable and, in the words of the shadow Secretary of State, needed to be adapted.
Tom Greatrex
I am sure the hon. Gentleman will take the opportunity to remind the House that after the work of the Select Committee and after the pilot areas had highlighted a number of flaws in the system, it was his Government who put in place the migration of people on incapacity benefit to ESA through the work capability assessment. If the Government were so concerned about getting it right, perhaps it would have been a better course to make the changes to the system before starting the migration.
Duncan Hames
I have read speeches in Hansard from before I was elected when colleagues of mine pleaded with the previous Government to make changes to the work capability assessment that they were introducing. On the timing of those changes, they should have been made even before the present Government came to office.
I turn to the matter of Remploy. [Interruption.] Changes are being made now. It is worth noting—
Duncan Hames
I have already given way and I have moved on to the subject of Remploy. It is worth noting that of the 6.9 million disabled people in the UK, fewer than 2,500 are supported by Remploy’s enterprise businesses. As we heard from the Minister, changes to Remploy are not cuts. Every penny of the £320 million budget that we are discussing will be reinvested in getting disabled people into work and supporting them while they are there, and rightly so. [Interruption.] I heard that clearly, and I am sure we will hear more about it later.
It is worth remembering, although the shadow Secretary of State found it difficult to do so, that Labour closed 29 Remploy factories as a result of a decision in 2008. Perhaps it was because the answer was “not more than 30” that the shadow Secretary of State was not able to bring that answer to us earlier. [Interruption.] Indeed. The figure was 29. Clearly, the Labour Front-Bench team did know the answer to the question.
The consultation referred to in the motion is still in progress, and it is not appropriate for us to deliver a verdict on it before it is completed. Proposals for commercially viable factories are still being considered, which may mean that redundancies will not be as extensive as has been reported. To call for a re-run of an ongoing consultation is premature and unwarranted.
There are some key areas on which I hope the Minister will be able to shed some light. What discussions has she had with unions and Remploy managers to ensure that those disabled people who are made redundant are made aware of, and are able to utilise, the support packages—almost £8 million, I believe—that are being made available? Will the Minister ensure that details of the bids to continue and sustain Remploy factories via other means are made public as soon as is reasonably possible in order to give some reassurance to those Remploy workers who will benefit? What discussions has the Minister had with the Remploy board and with voluntary and community groups about how to facilitate organisations wishing to continue Remploy factories as social enterprises? We have heard a great deal of sound and fury in this debate, but Members in all parts of the House need to support disabled people.
Tom Greatrex
I am glad to have the opportunity to speak in this important debate. I congratulate my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) on securing it as part of the Opposition day. If I had more time, there are many topics in the motion on which I would like to speak, but I shall limit my comments to the work capability assessment and, to some extent, follow on from the hon. Member for Chippenham (Duncan Hames) about some aspects.
The work capability assessment is a fundamentally important issue and I shall speak about some of the difficulties that I have encountered in trying to uncover the detail of the contractual conditions and information about the relationship between the Department for Work and Pensions and Atos Healthcare. I welcome the part of the motion that refers to the WCA. Members are aware of many of the concerns surrounding the work capability assessment. In an earlier intervention I made the point about the migration, so I will not repeat it. That, to me, sums up the fact that if the Government wanted to get it right, they would have done so before rolling it out further, and they would have applied the lessons from the pilot areas, Aberdeen and Burnley, and from the very good report from the Select Committee that followed from that.
All of us have many constituency cases to which we could refer. I have had a number, including a constituent with Parkinson’s disease who was assessed as fit for work, went through an appeal, won the appeal—as we heard, 40% of people do—and almost immediately underwent another assessment, was assessed as fit for work, went through another appeal and underwent a third assessment. People with fluctuating and other conditions are not necessarily well served by the work capability assessment. Parkinson’s, as Members know, is a progressive and incurable condition. Although people with Parkinson’s may have good days and bad days, in the case of my constituent he could not come to see me; I went to see him, and it was obvious that he was in severe discomfort and barely able to answer the door to let me into his flat.
To go through a process, win an appeal, be assessed yet again, and then repeat that whole sequence—this crosses over the period of the implementation of some of the changes recommended in the first Harrington report—strikes me as a waste of time and money, quite apart from the stress and anxiety that it causes individuals. Someone who has that condition is not going to get better. I am not saying that everybody with Parkinson’s is unable to work. Many people with Parkinson’s do, but once they get to a certain stage, they are not going to get better. To go through such stress and anxiety as they go round and round in the system does not help anybody get back into work, which is the stated purpose of the work capability assessment.
I support the work capability assessment and I think it is the right thing to do. Many of my constituents who have encountered problems have said that they object not to the assessment, but to the way in which that assessment is carried out. I want to make a few points about the contract between the DWP and Atos Healthcare. I know that I have made a thorough nuisance of myself to Ministers by tabling about 200 written questions about various aspects of that. I have done so because it is very hard to get to the detail. Although the high level contract has been published, every time I ask questions about some of the performance indicators, I get the blanket answer, “We cannot disclose that information for commercial reasons.”
In February this year a BBC Radio 4 programme uncovered the fact that there are potentially financial penalties for Atos within some of the conditions of the contract, yet I cannot get to the detail of those conditions. Some £110 million is being spent in carrying out the assessments, which lead to a huge number of appeals. Those are adding to the cost because the appeals are referred to the tribunals service, extra judges are being taken on and tribunals are being kept open at the weekend. The additional cost for this year will be £50 million to £60 million to get right what Atos has got wrong. Why is it in the interests of the public purse to pay that money in effect twice to get the right decision? I understand and will always accept that there will be decisions that are not necessarily right and that there needs to be an appeals process, but that volume of appeals in the system suggests that there is something wrong.
Why is Atos not being penalised through its contract for getting so many decisions wrong, because the decisions, although made by the decisions makers, are based on the assessment, and in many cases almost completely on them, and so we go round and round in this system? Why is it still the case that—perhaps the Minister can answer this point—after someone goes through an appeal and has another assessment, the information that the tribunal has to make its decision is not available for the next round of assessment? If this was actually about being fair, equitable and helping people, surely that information should be available so that those decisions are better informed.
I think that the root of the problems with the work capability assessment is the contract and the way the assessment operates. It is a great shame that this third report will be Malcolm Harrington’s last and that there will be someone else for the next two years. Perhaps the Minister could explain why that is the case and who will replace him. I have met him and understand that he has had some frustrations in getting some of the detail on the issues. He will be coming to Scotland in the near future to meet the citizens advice bureau in my constituency and understand some of the real issues. The Government must get this right. We are not against people being assessed, but they should be helped into work, not hounded.
George Hollingbery (Meon Valley) (Con)
I wish to speak briefly about four issues, the first of which is Remploy. Only 46% of disabled people are in employment, compared with 76% of non-disabled people, so there is a huge problem that must be addressed, but I think we have to ask ourselves whether an organisation that employs 2,800 people, compared with the 40,000 currently looked after by Access to Work, is the right answer to the question being asked. Furthermore, Remploy’s latest report, for 2010-11, shows that the DWP spent £68.3 million supporting Remploy that year, which equates to £25,000 a head, as I mentioned earlier, and that is £5 million more than in 2009-10, and more than 20% of the total budget available to help disabled people back into work. With the average cost of an Access to Work award at £2,900, as I also mentioned earlier, surely this differential is not sustainable.
We have already heard that Labour announced the closure of 29 Remploy facilities in 2008. I think it knew then, as I think it knows now, that this model is essentially unsustainable. The real issue is that money is much better spent on access to employment and the social model, as has been recommended by not only the Sayce review but many mainstream disability groups. We have to acknowledge that a scheme designed to help disabled ex-servicemen after the second world war is no longer fit for purpose in the modern environment.
What is so surprising about the motion is that it does not seem to recognise that the Government are simply continuing work that the previous Administration put in train, in addition to protecting the £320 million budget for specialist disability employment support.
Turning briefly to the work capability assessment, again we need to recognise some facts. WCA was introduced in 2007 as part of the Welfare Reform Act 2007 under John Hutton. It was then implemented over the following four years by three further Secretaries of State: the right hon. Member for Neath (Mr Hain), James Purnell and, finally, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). In fact, in the previous nine years there had been eight different Secretaries of States for Work and Pensions, which does not suggest the greatest grip on the portfolio. None of those four Secretaries of State since WCA was introduced sought to change it. There were internal reviews in November 2007 and October 2009, but the Government did not implement them, although the current Government have done so.
Professor Harrington has been commissioned to advise on changing WCA. I am going to quote from the foreword to his second review, published in November last year:
“Even without Incapacity Benefit reassessment, the changes I proposed to the WCA system would have presented a big challenge… DWP rapidly adopted my proposals as policy and DWP Operations set about the necessary changes with energy and commitment. Atos, who are contracted to DWP for their part of the WCA, fulfilled their contractual requirements.
I have seen these improvements in the day-to-day running of both DWP Operations and Atos. This has taken time and some observers have told me that they have seen no change. I advise patience. The process of improvement is happening, but is not yet in evidence everywhere. It will take time to have the desired impact and the year three Review will closely monitor the impact of the changes and ensure there is continuing progress in improving the assessment.”
It is a clear, long-term commitment to making WCA work, and the observations from within say it is the right process. Again, we see that the Government are carrying on with a programme introduced by the previous Government and succeeding in improving the outcomes from it.
What about the replacement of disability living allowance with the personal independence payment? DLA was introduced 20 years ago and the world has changed enormously since. A great deal of credit has to go to the Opposition for some of those changes. The Disability Discrimination Act 1995 secured rights for disabled people, which were strengthened greatly by the Equality Act 2010 and a good deal of legislation and effort from the Opposition when they were in office. However, much has been changed in the past 20 years, including attitudes. The materials, machines and many other facilities available to disabled people have improved markedly, but DLA has not changed, and undoubtedly that is a mistake. It needs to change.
There is no objective way of assessing entitlement, no systematic reviews and there are significant over and under-payments. More than 70% of the DLA caseload has an indefinite award. PIP will be fairer and more objective, will deliver more consistent benefits and will be sustainable for the future. Support will be focused on those with the greatest need and a higher proportion of individuals will receive the highest rates under PIP than under DLA. It is odd that even the motion before us recognises that change to DLA is required, so what exactly are we supposed to be debating? I am increasingly puzzled.
Finally, I will say a word or two on carers. I acknowledge the enormous contribution that they make to our society. They are an absolutely vital part of the machinery that keeps this country ticking, and the Government recognise that. As I mentioned in an intervention, carer’s allowance will remain outside the assessment of universal credit. There will also be a carers element within universal credit which will not require the carer to be entitled to carer’s allowance. That is a welcome change. The Government have said that any carer who has regular and substantial caring responsibilities will be entitled to the extra carer amount.
The Labour party has not opposed the change to universal credit or, as far as I know, suggested any changes to the measures that apply to carers within it, so once again I find myself somewhat puzzled by the words of the motion. I am afraid that as I sit and sum all this up in my mind, I reach one inescapable conclusion: the motion is not so much something to be debated but a press release in search of an audience.
Mr Frank Doran (Aberdeen North) (Lab)
I am disappointed that the Minister focused mainly on scoring political points. She will be well aware, because my colleagues have made many representations to her, that Remploy workers see many problems with the process for the transfer of the factories, but she addressed none of those. It is the Opposition’s job to oppose, but she has ministerial responsibility and I would have liked to hear her view on some of the points that have been raised.
I will focus my remarks on the Remploy factory in my constituency and the broader context in which it is trying to function. The Aberdeen factory was scheduled to close in the most recent round of closures, but we managed to save it. In the past couple of years people in the factory, with the fine assistance of the manager, Mr Ben Mardall, have been planning to develop a programme that would see five or six types of business in the existing factory. Currently, the factory works in the textile business and furniture refurbishment; it also has a small market garden, which has been sponsored by BP, a canteen, and aspirations for a commercial laundry, and it is reaching out to other social enterprises in the area. I have organised a meeting quite soon with representatives of a number of those social enterprises to consider the development of a social enterprise hub. Added to the industries would be a development programme for work placements so that long-term unemployed and disabled people would have the opportunity to work, gain proper training and experience a variety of different types of work to improve their skills and build up a CV. We see the possibility of such a facility as an important contribution to the city’s resources. Remploy’s management have never been particularly commercially minded—I think this is the first time that any commerciality has been seen in the Remploy process.
Experience in the company is limited, but the management seem to have become completely hung up on commerciality and to have abandoned almost completely the principles of social service, which were the hallmark of Remploy’s previous 70 years’ operation. For example, the process for transferring the factories is long, cumbersome and often difficult to interpret. The management’s communication with the work force is in business-speak, convoluted and, most of the time, inaccessible to most workers, many of whom are vulnerable individuals. Many workers are completely bamboozled.
Most Remploy businesses and workers have had their hands held for the past half century—it is not the way in which I would operate, but it is the way in which Remploy has—and they are finding it difficult to understand what exactly is expected of them in order to move forward.
When the Government’s decision on Remploy was announced, social enterprises wanted to look at the factories and businesses that might become available, but they were told that they could not have access because a consultation period was under way. It may be hard to get these people who were interested in the factories back again.
There are also tight deadlines for the applications, and I know that many representations have been made to the Minister on this point. It is a virtually impossible timetable—partners have to be brought in and business cases put together, and finance has to be raised for any new start-up. It is worth remembering that the previous round of redundancies started with a consultation in May, ended in November and was not implemented until January—and the factories closed with redundancies in March. The 90-day period, which mirrors the consultation period on redundancy, is totally inappropriate to a business situation, so I hope that the Minister understands why we think that the Sayce report was much more realistic than the current arrangement about what to expect and what could be achieved.
There is also a growing sense also that the process is not there to help Remploy staff to move on and create new social enterprises, which many wish to do. There are also strong rumours of a likely management buy-out of the remaining 18 functioning factories, and of the work of the closing factories being transferred to those remaining factories, but that would diminish the viability of any social enterprise that might emerge out of the closing businesses. That is a serious conflict of interest for the board, so I hope that the Minister will examine the issue and consider whether new management, or at least arm’s length, independent consultants, should be engaged to consider the whole process of factory transfer.
In the meantime, I urge the Minister to take a more hands-on approach to what is happening to Remploy. She can change things. When the closures were announced, the press were extremely critical of the Government, even though the main problem lay with Remploy management over many years.
From years of contact with my local Remploy factory in Aberdeen and with others throughout the country, I know that there is potential for something very real and very positive to come out of this process. There is an opportunity for disabled people to run their own social enterprises and businesses, and to develop facilities to help others to find employment, which is what will happen at the Aberdeen factory if we are given the chance. All they need is a fair chance. They are not being given one by Remploy at the moment, and it is the Minister’s responsibility to ensure that they are.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
I oppose the motion, muddled as it is, and support the Government, based on the principle, which underpins their benefits system reforms, that people should always be better off in work than on benefits; on the fact that disability living allowance needs to be reformed and overhauled for the benefit of the people who receive it; and on the fact also that the Government are increasingly committed to putting in place social care reforms and reforms that benefit carers and people who look after those with disabilities.
It is important to pay tribute to the previous Government’s laudable aims on a number of those objectives, and in that respect we are all Blairites. Tony Blair said, as we believe, that people should be better off in work than on benefits, that we have an over-complex benefits system, and that we live in a country where there is generational worklessness on many estates throughout the land. Those problems are all unacceptable, but it has fallen to this Government to tackle them, and it is a great pity that after the previous Government’s 13 years in power, many still exist and, in fact, became worse rather than better.
The principle that underpins the reforms under discussion is the idea that people should always be better off in work than on benefits. This Government have inherited an over-complex benefits system that is comprehensible only to experts, and the fact that it is so complicated means that the people most in need of benefits find it difficult to access the benefits to which they are genuinely entitled.
The system often lets down the most vulnerable in our society, too, and DLA is in great need of reform. People who have historically been categorised as disabled under the system that we inherited have sometimes been written off by it, even though we know that someone with a mental health problem, or with a physical illness, can greatly benefit from engagement in the workplace. The act of working, and of being part of the workplace, is an important part of the rehabilitation and medical care of somebody who suffers from a mental health condition.
Sheila Gilmore
The hon. Gentleman makes the mistake of confusing DLA with incapacity benefit, which has now become employment and support allowance. DLA is not a benefit that writes people off into unemployment; it exists to help people to meet the additional costs of disability, and many people who receive it are, indeed, in work.
Dr Poulter
I am not making that mistake at all. The point is that the previous Government’s benefits system put people in a category in which they were characterised as not fit for work, often for the long term. But it is important that somebody who has a mental health problem, or who has an intermittent or a lapsing physical illness such as multiple sclerosis, can, if they are able to, work. People with mental health problems—there is very good medical evidence to support this—often benefit from engaging in work. It improves their mental health and is an important part of their recovery.
Mrs McGuire
Will the hon. Gentleman therefore accept that DLA acted as a facilitator for some of those people to whom he refers and who needed to get into work? It met some of their extra costs, and, to echo my hon. Friend the Member for Edinburgh East (Sheila Gilmore), I think that he is confusing two different benefits. I hope that he will consider the exact point that he is making.
Dr Poulter
The point I am making is that the benefits system, which was complicated, wrote off a certain group of people. There were laudable aims, because it is right, for example, to give additional support to people with mental health problems, but an important part of their recovery also involves engaging in the workplace, often on a part-time basis and then, if suitable to that person, by moving on to more permanent employment. The previous system did not, however, help enough people with mental health problems to engage properly with the workplace. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) earlier represented the position of Mind, which has historically taken that position, in agreement with the comments that I have just made.
On support for, and reform of, the care system, my hon. Friend the Member for Meon Valley (George Hollingbery) said in an intervention that the Government are providing an additional £3.8 billion to the NHS to support better integration with social care. The key to improving and supplying better support for carers, and for other people who look after the long-term disabled, is to ensure that the NHS and social care services are better integrated.
We inherited from the previous Government a system of silo working, with the NHS traditionally working in one of them. For example, the payment-by-results system in many hospitals reinforces the fact that not enough attention is paid to the discharge of people with illness, or to the prevention of people becoming unwell in the first place, and what we need to move away from in the NHS, for financial and human reasons, is a crisis management service that fails to invest in proper preventive care. This Government have already put an additional £400 million into talking therapies, which will help to support people with mental health problems.
The £3.8 billion investment in the NHS to provide such integrated working with local social services will provide the support that carers need on the ground to make sure that many people with mental health problems and physical disabilities get the preventive care that they need. It will also provide an important link in making sure that the frail elderly and people with dementia are no longer inappropriately rushed into hospital but are better cared for and better looked after in the community, and that their carers get the care and support that they need, which keeps carers and patients well.
For all those reasons, the Government have a very strong programme that will deal with several of the problems that this country faces as a result of an over-complex benefits system. Their reform of the benefits system will help people with mental health problems and the long-term disabled to engage with the workplace, which is good for their mental health and their recovery. The reformed system will also ensure that the important role that carers play in health care and in social care is properly recognised and properly funded.
It is only under this Government that there has been a genuine approach to integrating health care. It is only through the establishment, through the health care reforms, of health and wellbeing boards that there will for the first time be a genuine joining up of social care, housing care and NHS care at a local level which will allow carers and the disabled, and everybody who is in need of a better and more joined-up community-based care, to be put together in the right way. Those are the very good principles behind the reforms to the health care and benefits systems, and I am proud to support the Government today.
Chris Evans (Islwyn) (Lab/Co-op)
I want to speak about one of the worst days that I have ever had as a Member of Parliament. On the day that workers at the Croespenmaen Remploy factory were told that it was to close, I was rung up by a union official and asked to go there to address them in their canteen. I remember standing in that canteen and telling them about the Government’s proposals to close their factory. I had been to that factory many times before when people were working to capacity, flat out, and had to come off the shop floor to speak to me because they were so busy. But on that day, everyone was there, and everyone was scared. They were worried, fearful and upset—and who could blame them? They were facing a bleak future in a local economy where 11 people are chasing every jobcentre vacancy and youth unemployment has gone up by over 250% in the past year.
The warm words of the Government are all very well when they say, “But we’re making an offer.” It seems strange to me that nobody ever gets sacked or made redundant any more—they are given an offer or future options to take. Well, the future that those workers face is very bleak. Things have been made worse by the crass comments of the Secretary of State. As we heard from my right hon. Friend the shadow Secretary of State, he said that people working in Remploy were good enough only to make a cup of coffee. He also said, “Let’s get away from the Victorian era of employment segregation.” Has he has ever visited a Remploy factory? Has he ever been round one of those modern facilities? Has he ever seen the skills that some of those people have when they operate woodworking machinery that cuts wood to within a fraction of an inch? These are really skilled jobs. If they are in sheltered employment, as he keeps saying, why do blue-chip companies such as BAE Systems want to take out contracts with them? The Government have presented Remploy as merely outdated and outmoded, whereas in my experience it is a modern, forward-looking company with a very motivated work force. If anyone wants further evidence of that, they should consider the fact that the workers at Croespenmaen tell me that they have had sales of £0.5 million since the closure announcement on 9 March. For a company that is supposedly failing, they are still motivated and still want to make things work.
As we face the end of the consultation on Monday, the question is what can be done. I say this: having changed the rules halfway through, the Government need to rip up the rulebook and start again. They could take on Liz Sayce’s recommendations and give the company six months to get a business plan together. When I spoke to the workers, they asked me, “How are we going to save our jobs and our factory, and talk to people who might want to take it over, if we only have three months?” Those workers should be given two years so that they can go about trying to save their business, and the Government should not take their funding away from them straight away and cut their legs off from under them, as they are proposing to do.
The cruellest thing about what is happening to the workers at Croespenmaen is that there is a solution for them. I remember my right hon. Friend the Member for Cynon Valley (Ann Clwyd), in Prime Minister’s questions, asking the Prime Minister whether he would devolve the Remploy budget to Wales for the next three years. At that time, he seemed quite optimistic, and gave them false hope, but when we had the official letter, we got a big fat no. Maybe, just for once, this arrogant, blind Government, who think they are right about everything, might have been proved wrong by those proud workers who are trying to save their factory, but we got a no, and they are facing a bleak future. We have already heard the Minister say that the disability budget is going to be ring-fenced at £320 million, so what do the Government have to lose by devolving that budget to the Welsh Assembly? The answer is absolutely nothing. To me, it is a no-brainer. If it works, that is great, because those 44 people in the Croespenmaen factory will keep their jobs. If it fails, the Government can do what they have always done and blame the Labour Government.
People are always saying that this is all about sheltered employment. As I said, the Secretary of State referred to segregated employment. It is not about employment; it is about something that the Tories used to say they represented—choice. There are people at Remploy who cannot go into mainstream work but want the choice of being able to stay at Remploy, and that choice is being taken away. I sincerely hope that when the Minister responds to the debate, he will think of all those people who are still worried about their future.
Matthew Hancock (West Suffolk) (Con)
One day, Mr Deputy Speaker, you, like me, God willing, will grow old. I want to concentrate on the UK’s care system for the elderly. We have heard much today about benefits and changes to Remploy, but I want to focus a bit more on something that was touched on earlier—the need to provide social care for our elderly and for those with permanent and long-term disabilities, and the urgent need for reform.
I am motivated in this by thinking not only of my own growing old—I hope—and of all those in this Chamber, but family experience and my experience of supporting a friend of my age who, at the age of 28, sadly had a stroke and is now confined to a wheelchair and has to live with permanent care. Supporting him, and starting a trust to support him, gave me the personal experience of trying to navigate the care system for those with permanent disabilities, and it brought into sharp relief the difficulties that that brings to many people who support disabled people, whether they are of what would otherwise be working age or in old age.
The Dilnot commission has been the most important step forward in this area for many years. Criticisms of inaction can be levelled not only at the previous Government but at previous Governments. This is an area where cross-party support and a lack of political tension is necessary.
Over the past decade, 200,000 people have sold their homes to pay for their care. Yet more people, who did not have assets, have had to survive with substandard care. BUPA has estimated that in a decade, there will be a shortfall of 100,000 care home places unless action is taken. In the same period that spending on the NHS has risen by about £25 billion, spending on social care for the elderly has risen by only £43 million. Given that 400,000 elderly people are in care homes and that more than £7 billion was announced for this area in the spending review, we need to ensure that Government support is focused and that financial support is brought in from wherever possible to strengthen this crucial sector.
I pay tribute to the work that the Minister has done to bring forward proposals and ensure that we are moving in the right direction. The introduction of carers breaks is a welcome step forward. I warmly welcome the linking of social care and health care budgets in the Health and Social Care Act 2012, which will tie together what have too often been disparate functions.
It is clear that there is also a need for reform in self-funding. There must be support for vulnerable elderly people who do not have access, but we must also ensure that those who do have access do not have to lose their home to pay for their care. The problem is the lack of an insurance market. We can insure all sorts of things in life. The moustache of Mervyn Hughes, the great cricketer, was once insured for £200,000, Kylie Minogue’s rear was insured for $5 million, Heidi Klum’s legs for $2 million and Cristiano Ronaldo’s legs for €100 million. However, I cannot take out insurance for the possibility that I will have to spend many years in social care. Nobody in this country can insure against the small chance that they will need very expensive care in their old age.
The problem is the uncertainty over the cost. For many of us, there will be no care costs at all. For most of us, the costs will be relatively small. For a small proportion of people, however, there will be very high and uncertain costs. There is a role for Government in ensuring that the market works in tackling the uncertainty. There is uncertainty over not only what the cost will be, but who will be hit with the cost.
That brings me to the final point about why this matter is so important. This is not only a practical problem, but a problem of values. Those who save hard and work hard for their whole life feel that they are penalised by a care system that takes away what they have worked for. Those who put money aside and save for their retirement look for a something-for-something system in which people get out according to what they put in. We must look after our most vulnerable and end the scandal of people being forced to sell their homes to pay for their care. I hope that we will come forward soon with serious proposals to take this injustice away.
Ian Lavery (Wansbeck) (Lab)
The Opposition motion highlights the many problems with disability benefits and social care. There is undoubtedly an attack on benefits for disabled people. Disabled people face many acute problems, many of which have been mentioned this afternoon. The changes to disability living allowance will impact on nearly 500,000 people. The problems associated with employment and support allowance will impact on nearly 280,000 people. We have not seen how universal credit or the personal independence payment will work, but I fear that there will be chaos in the benefits system when they are introduced.
I concur with what Members on both sides of the House have said about Atos. It is wholly inefficient and cannot operate the work capability assessment. Some might say that it is wholly incapable. The problem is not the work capability assessment, but the way in which it is carried out, including the way in which people have to tick boxes and the fact that people are being assessed by people who are probably not qualified to carry out such assessments. If I called for nothing else in this debate, I would call on the Government to look again at the way in which Atos is delivering the system on their behalf.
Like many other speakers, I want to focus on Remploy, which is very dear to my heart. The discussions and consultations between the trade unions, individuals, employers and the Government have been nothing but a shambles. I will ask a few questions of the Government about what will happen to Remploy. Each factory is being tret completely differently. They are all being given different advice on what is happening and about whether they are or are not in the consultation period.
I was outraged by the suggestion of the hon. Member for Blackpool North and Cleveleys (Paul Maynard) that Remploy was a form of disabled apartheid. That is outrageous. Remploy was established just after the second world war to look after disabled people, and we should be looking after disabled people now. Nothing has changed. For someone to suggest that it is disabled apartheid is outrageous.
The Remploy ethos was developed by George Tomlinson, who was an MP for a Bolton seat. He wanted there to be secure and open employment for disabled people. Remploy factories have given their employees an income, independence, self-respect and self-esteem. It is often said that society can be judged by how it looks after its most vulnerable people.
Yasmin Qureshi (Bolton South East) (Lab)
I am the Member of Parliament for Bolton South East and it was a Bolton MP many years ago who was involved in setting up the Remploy factories. I have visited the factory in my constituency on a number of occasions and the people there have told me that they take great pleasure in coming to work every day and getting a decent wage packet. They do not want handouts or disability benefits; they want the opportunity to work and to increase their self-respect. Does my hon. Friend agree?
Ian Lavery
I have met every member of the Remploy work force in my constituency and in Newcastle, and I wholeheartedly concur with my hon. Friend.
I will ask a number of questions in the short time that I have left. What is happening with the Remploy pension fund? Is it being closed or kept open? That is important to the people who work there. What is happening to the five-year modernisation plan that was put in place by Labour? Why is it being cut short? What about the huge management structure of people who are not disabled, who have been looking after the Remploy factories but have not implemented the modernisation plan? What is happening to the burdensome costs of that management structure?
Last year, there were 2,500 trainees in Remploy, and it is important that we get an answer to what will happen to them if, as we all believe, the Remploy sites are eventually closed. It is clear that the vast majority of the factories will close, if not all of them, which will mean the end of a working life for many people. Their health will decline. The Minister mentioned the problem of unemployed people who have mental health problems, and said that they should be taken off benefits and given a job. I cannot understand that. If someone who is unemployed has mental health problems and we take them off unemployment benefit and try to get them a job when there are no jobs available, that will be disastrous for them.
If people are taken out of work at Remploy, there will be a cost impact for the Government from what will happen to their health. The Government’s estimate is that benefits given to individuals in that situation could range from £10,200 to £27,000 a year. It is easy and cheaper to keep people in employment than to give them up to £27,000 a year of housing and other benefits. We should give them self-esteem and self-respect by allowing them to go to work, as every one of us enjoys doing.
I appeal to the Government to restart in full the consultation period, which started a few months ago. Things have changed rapidly since the beginning of the process, which makes it wholly unfair. We should restore dignity and self-esteem to people in Remploy and keep them in employment as far as we possibly can.
Ms Margaret Ritchie (South Down) (SDLP)
In supporting the Opposition’s motion, I should like to bring to the debate the perspective of Northern Ireland, where there are separate but basically parallel social security systems.
Our society owes an enormous debt to individuals and organisations that care for friends, family and loved ones. That does not just make our society richer, but in Northern Ireland alone unpaid carers are worth more than £4 billion to the local economy. However, although the Government pay lip service to the work that our voluntary sector does, they are undermining it at every turn through their welfare policies, including the new work capability assessment for employment and support allowance and the move to personal independence payments from the existing disability living allowance.
In Northern Ireland, it has been estimated that some £500 million will be removed from the welfare budget as a result of the Government’s policies. That is clearly a move designed to cut expenditure rather than a constructive reform of the benefit system. By taking away financial support and introducing more stringent qualifications for personal independence payments and the work capability assessment, the Government will take a degree of freedom away from many people. That will only increase the pressure on the thousands of carers who will be left to carry the slack on top of their already demanding role.
Jim Shannon
In Northern Ireland, we have more disabled people and more carers than elsewhere. Does the hon. Lady feel that the impact will be greater on people in Northern Ireland than on those in any other part of the UK?
Ms Ritchie
I agree, and when I was a Minister in Northern Ireland with direct responsibility for benefits, I saw every day of my working life the high proportion of people in receipt of benefits, particularly disability living allowance. That was a result of our divided and conflicted society and a legacy of the conflict itself, because we had a high proportion of people with mental illness. The new policies do not take that on board.
The Department’s subtext is clear—a presumption that many people receiving benefits do not need them. The Government claim that they are restricting the new benefit arrangements to those who need them most, but surely benefits should be granted simply to those who need them, without qualification. That is what any notion of the big society should be based on.
One of the main problems with the work capability assessment for employment and support allowance is the reasonableness of the mobility test. The test is whether a person can mobilise
“unaided by another person with or without a walking stick, manual wheelchair or other aid if such aid can reasonably be used.”
I know of constituents who have arthritis in their back, hips, legs and feet but are physically able to use a wheelchair. The test is hypothetical; even if a person has never been assessed for such a mobility aid, and such an aid has not been considered by their medical professional, they can be considered able to mobilise, despite their having a serious medical condition that would prevent them from mobilising without a wheelchair.
The incongruous element of the test is that, in many cases, a medical professional would not recommend a manual wheelchair for a condition such as arthritis, as it is a hugely life-changing and extreme intervention on someone’s mobility. Frustratingly, without the wheelchair element of the mobility test, many people with a physical illness would meet its criteria.
I am aware from constituents’ experiences at appeal tribunals that legal professionals also struggle with the lack of clarity on “reasonableness”. Such serious problems have left many facing uncertainty, which can cause severe stress to people who already face incredibly challenging circumstances.
Jim Shannon
I congratulate the hon. Lady on the comments she makes on behalf of those who are disabled. One issue with appeal tribunals is that doctors do not appear when they should, another is that people are asked whether they are mobile enough to get out of the building if there is a fire. If they say they cannot, they have to return home. Like me, the hon. Lady believes that those simple matters should be sorted out beforehand. Does she agree that a straightening of the appeal process is needed to make the process easier for applicants?
Ms Ritchie
Like me, the hon. Gentleman would agree that that is not the responsibility either of the Department for Work and Pensions in England or of the Department for Social Development in Northern Ireland; it is the responsibility of the Appeals Service in Northern Ireland. That is a separate organisation, and those questions need to be directed to it for a resolution.
The Government must acknowledge that the introduction of personal independence payments might have a different impact in Northern Ireland. Approximately 100 people per 1,000 currently receive disability living allowance, compared with 50 people per 1,000 in Britain. We simply cannot ignore the fact that Northern Ireland society is emerging, as I have said, from decades of conflict, which have left many people emotionally and physically scarred.
Northern Ireland also faces a common transition difficulty with Scotland, England and Wales. In Northern Ireland alone, some 117,000 people will have their cases reviewed on the introduction of PIPs, which will require the testing of more than 1,000 applicants a week. How will so many people be re-tested in a manner that is just, reasonable and fair? That is an enormous concern. It is especially worrying given the aforementioned fiasco of the introduction of the work capability assessments for ESA. As I have seen in my constituency, the number of successful appeals demonstrates what happens when the Government make ill-advised and poorly thought-out changes to the welfare system. I am extremely concerned that we will face exactly the same problems when PIPs are introduced.
Although it is important to pay tribute to carers this week, we must remember that they are carers for 365 days of the year. They are at the heart of our families and our society, and the Government should help them rather than introduce ill-considered and ideologically motivated welfare cuts that will do nothing more than simply increase financial stress and burdens, and many other burdens within the family and the community. I urge—even at this late hour—the Government to reconsider. The Social Democratic and Labour party firmly supports the Opposition motion.
Sheila Gilmore (Edinburgh East) (Lab)
A lot of strange things have been said by Government Members: they say that the Labour Government did nothing to reform benefits, yet say, “You invented the work capability assessment, so you’re responsible for it.” It cannot be both. As a new Member in 2010, I came here intent on criticising the implementation, not the principle, of WCA, regardless of who formed the Government. I made that clear in one of my first speeches. The fact that someone might think it a good thing, in principle, to carry out an assessment does not mean that the specific form of assessment we have been using has worked.
I want to talk, in particular, about how the change from disability living allowance to personal independent payments is likely to take place. I draw attention to a report published in Scotland and based on work by the Learning Disability Alliance Scotland, which took the proposed test, as published, and ran workshops with about 135 people with learning disabilities to see how the test would work in practice. It found that 12% of DLA recipients would not be awarded PIP. Given that there are 24,500 people with learning disabilities in Scotland, nearly 3,000 could be at risk of losing their entitlement.
The report refers to one case study involving a woman with Down’s syndrome living in the Gorgie area of Edinburgh. At the moment, she receives the low level of the care and mobility components of DLA, which makes a huge difference to her life. The care component means that she can cook meals with fresh food, which is particularly important to people with Down’s syndrome, and the mobility component allows her to get reliably to and from her part-time job in a local supermarket. She can afford the bus fares and can get a taxi if she makes a mistake or gets lost. The awards also help her to cover additional costs. For example, a learning disability means that sometimes she leaves the heating on by mistake and so has higher heating bills. Her DLA means that she can pay these bills without too much worry and difficulty. Under the proposed test, however, she scored only four points, which would mean her losing £41 a week, or £2,000 a year.
The report found that 30% of those in receipt of the mobility component and 40% of those in receipt of the care component would receive less under PIP. For example, Frankie, who lives in a small town in a small group home run by a voluntary organisation, receives nine hours of support a week from paid staff as part of his living accommodation. He has a learning disability, cannot read, has a long-term health condition that requires periods in hospital and has mobility problems. At the moment, he receives the medium rate care component and higher rate mobility component of DLA. Under the PIP assessment, he scored some points in some areas, such as living needs—he needs help using appliances and understanding written communications—but that amounted to only seven points. That means he would not get those benefits and would be £85 a week worse off—£4,400 a year.
Yvonne Fovargue (Makerfield) (Lab)
Does my hon. Friend agree that the changes to the legal aid system whereby access to welfare benefits advice will either be severely curtailed or not available at all will severely affect people’s attempts to appeal against these decisions, which appear perverse?
Sheila Gilmore
As my hon. Friend says, there are considerable problems with people being able to access legal advice on making appeals, but it is extremely difficult to access advice generally, given the cuts. We are certainly seeing that in my city, where the advice shop—one of the main advice centres—cannot see people for two weeks. Consequently, appointments are made two weeks in advance. Following an assessment result, people sometimes get a letter telling them that they have three weeks in which to appeal, yet it is difficult for them to get even basic advice in order to make an appeal. That is the reality that people are facing on the ground, so we need to look hard at the proposed tests.
Another important aspect of this debate—the Select Committee on Work and Pensions draw attention to this, and I hope that the Minister will consider it seriously—is that if we follow the pattern used with the employment and support allowance, people will be tested and re-tested, even though nothing in their circumstances has changed. One of the Select Committee’s recommendations was that limits should be placed on the number of re-tests under the new PIP. That is not to say that people should not be tested, but if they are re-tested constantly we may run into the problem of people having their next test virtually before they have finished their last test or their last appeal. That is not helpful, particularly for people with mental health problems, for example.
Nadine Dorries (Mid Bedfordshire) (Con)
Does the hon. Lady agree that there is a balance to be struck, in as much as those in long-term care—the very vulnerable people she is talking about—should perhaps not be subjected to re-testing in future, whereas the others are entitled to a face-to-face reassessment, and that that is what should happen?
Sheila Gilmore
I do not disagree with the hon. Lady, in the sense that there has to be the flexibility to look at people’s exact circumstances. The point I wanted to make is that we need to impose some limitations, because the stress of having to go through the process is extremely great for some people, and their illness can be made worse.
Although I have taken interventions, and therefore have extra time, I do not want to take up too much time, because one or two other people still want to speak. The Minister who opened the debate would no doubt respond by saying that we are scaremongering—that what we have described will not come to pass under the test and that everything will be fine. Indeed, she has gone further than that. She has said on numerous occasions that one of the reasons for having a new benefit and not simply changing DLA is that people who currently do not qualify—people with communications difficulties, she has suggested, or people with mental health difficulties—will now qualify under the new benefit. That suggests that more people will be entitled to PIP. I want to know how she can square that with making savings of the size that the Government say they want. If more people who do not currently receive the benefit will qualify, that suggests that even more people will claim than at the moment.
The Minister has also said that we should not worry about the tests because they are going to be a “conversation”, and are not really going to be a test. She has also said that we should not worry about the time limits on tests because a test should take as long as it takes. That all sounds wonderful, but I would like to know—the Minister has to answer for us—how it squares with cutting costs. Indeed, it will add to the administration costs, so is that included in the contract with providers? We do not really know what the terms of the contract are, and if those things are not in the contract, they will not happen. Therefore, for all the warm words about having conversations, being relaxed and the tests taking as long as they take, what the Minister has described will simply not happen unless we are given clarity on whether it is in the contract.
Geraint Davies (Swansea West) (Lab/Co-op)
I will be brief. I was out of the Chamber earlier because I was in the Welsh Grand Committee.
People working in Remploy in particular, but also the disabled community generally, feel very much that they have been kicked in the teeth. They feel as if they are having to pay the price for the mistakes of the bankers. We all know that we had a deficit, but we also know that two thirds of it was caused by bankers, with the other third caused by the previous Administration investing more than they were earning at the time to keep growth going—and being successful in that. Now we have got zero growth and the deficit is going up.
Geraint Davies
No, I will not give way. I do not have time.
Let me turn to Remploy, which was set up after the war. When I started becoming actively involved with my local Remploy factory about a year ago, the orders it was receiving were not high enough. I went round to the Driver and Vehicle Licensing Agency, the local health service, the local university, and so on, and now the factory is working flat out, getting more and more orders. That just shows that if the central command in Remploy were more effective, the factories could be successful and could work.
As for the finances, yes, the previous Government closed 29 factories, but they also left a legacy of £500 million to modernise and reinvest. However, we now find that the residue of that—about £320 million—is being put elsewhere. It might be used to get people with disabilities into mainstream work, but that mainstream work does not exist, because of record unemployment and record numbers of people in part-time work, and we now have the Enterprise and Regulatory Reform Bill, which will enable employers to get rid of people who are weaker without tribunals and all the rest of it. It all stinks, to be honest.
In regard to the financial literacy of the arrangements, the average subsidy has dropped from £25,000 to £20,000, and it costs £10,000 in lost tax and benefits to put a normal person on the dole. Lord Layard has just produced a report on the cost of unemployment in terms of mental health, and it is clear that people in Remploy will end up with other difficulties that will put an enormous cost on the health service. There will be no real economic benefit at all.
Alongside that, there is uncertainty about the pension fund, the factories and the assets. The Welsh Government have, in good faith, offered to take over the factories. They have said, “We’ll have the subsidies if you let us use the factories and make this work. Let us use procurement positively and smartly to make it work.” Of course, the offer has been turned down, because success in Wales would illustrate that similar success could have been achieved in England, and the Government do not want to see themselves failing. This is just a case of asset stripping of the most vulnerable people in our society, and it stinks.
John McDonnell (Hayes and Harlington) (Lab)
This has been a helpful discussion about policy, but the best policy is informed by our own experience of what is happening in our own constituencies. I want to put on record what my constituents are experiencing at the moment. In addition to surgeries, we now have an open-door policy four days a week, and in some ways I wish that we had not. Sometimes we want to hide, because we have been inundated with people who have problems with lost benefits.
I also help with disability living allowance appeals. This is not just about legal aid cuts; it is about the cuts overall. We have lost advisers in the area, so I represent people at DLA appeals, and we mainly win. That is not because of my articulateness, as you can tell; it is because once those presiding over the appeal see the people concerned, they can see that they have been wrongly assessed. Another problem is that people’s appeals are taking so long to arrange, once they have lost their benefits. They can wait for up to six months for their appeal, having lost their benefit, which is causing immense problems.
On the work capability test, I opposed the privatisation of the process and the bringing in of Atos, but if we are going to have a private company doing this work, we should at least be able to understand the contract involved. We should at least be given open access to what has been agreed with that company in our name, and be told what level of performance it is supposed to undertake. I am not sure what other Members have found, but when people come to see me, having gone through an Atos assessment, they tell me that they feel degraded, shamed and abused. I raised the point about suicides with the Secretary of State some weeks ago, and I was not exaggerating. Other Members will have experienced this as well. People come into my constituency office and tell me: “I can’t take any more of this. I’ve had enough.” I am really worried by the anecdotal reports of individual suicides, and it behoves the Government to monitor the situation and assess what is happening on the ground.
People have had enough of being called scroungers. We have seen the increase in hate crime towards people with disabilities because of the atmosphere that has been created by the media and by some politicians using loose language on this subject. Those people feel shamed, simply because they are claiming the benefits to which they are entitled. That is the experience in my constituency office at the moment, and it just goes on.
This is carers week. Other London MPs will also tell the House about constituents who have gone on to personal budgets, and that those budgets do not cover the wages of the carers whom we want to care for our people. It is virtually impossible to pay enough to get someone to stay overnight. Most of these arrangements have now been privatised, and people are getting a different carer coming in every day. The relationships with the carers have been broken down by this process.
Respite provision is now critical in my constituency, but what is my local Conservative council doing? It is closing the centres where people used to get respite. This is all part of the modernisation programme. It is closing three centres and modernising one. Of course, two of the centres that are being closed completely are in the most needy area of my constituency; a working-class area. It just goes on.
After the Southern Cross debacle, the company was broken up and some of the residential homes were given back to their original owners. I give this warning now: that arrangement is beginning to break down already, because the management in those individual homes are not competent to manage the process of disaggregation and the long-term planning of care. Why? The local authority role in providing those services has been so undermined and the resources have been cut, even for the management of those individual contracts. We are facing a crisis. A number of people are trapped in this whirlpool of deprivation, and it will be almost impossible to pull them out if we continue with these policies.
I went to the GMB conference last week, spoke to the manufacturing section and met many Remploy workers. They are now absolutely desperate, and they feel completely betrayed. They might not have agreed with the Sayce report, but at least there was a process there that they saw they were working through. That has now been torn up and everything in that report has been reneged upon. They feel absolutely vulnerable, with some saying, “We will not work again.”
In the early 1980s, I sat on the first committee established to remove restrictions against people with disabilities. It was called CORAD— the Committee on Restrictions against Disabled People. I was nominated to sit on it by the TUC. It took us 25 years before we secured anti-discrimination legislation. I congratulate the last Government on achieving that. I was one who wanted to mainstream employment. In fact, I was an ardent advocate of that; over the years, experience taught me that we always need an element of supported employment. That is what Remploy does well. What does it do badly? As my hon. Friend the Member for Swansea West (Geraint Davies) argued, the management have been abysmal. All the workers are saying is, “Listen to us; we can manage these resources more effectively than the current management, but we also need the support of the Government.” As my hon. Friend said, what happened to the commitments about public procurement that we were promised over the last two years? If it had not been for the individual efforts of people such as my hon. Friend and others, as exemplified today, no procurement would have happened because the Government have done nothing.
Finally, the Government should not think that this issue or these people are going to go away because they are not: these people are mobilising. We now have a disability movement in this country of which we have not seen the equal before. Black Triangle occupied Atos offices in Scotland; members of DPAC—Disabled People Against Cuts—chained themselves in Trafalgar square. These people are not going to go away. They will be in our face—and rightly so. I will support them, including if Remploy workers opt to buy their factories.
Mrs Anne McGuire (Stirling) (Lab)
I am delighted to welcome the contributions to this afternoon’s debate of my hon. Friends the Members for Aberdeen North (Mr Doran), for Islwyn (Chris Evans), for Hayes and Harlington (John McDonnell) who just spoke so powerfully, for Wansbeck (Ian Lavery), for Swansea West (Geraint Davies), for Edinburgh East (Sheila Gilmore), for Rutherglen and Hamilton West (Tom Greatrex) and for Westminster North (Ms Buck). They all made their contributions in their own distinctive ways. We have covered some of the areas identified in the motion.
I kick off by talking about the social care crisis, identified by the hon. Member for West Suffolk (Matthew Hancock) and highlighted by my hon. Friend the Member for Westminster North. I hope that we are now at a point in discussion where we can reach a cross-party consensus on social care. Both those Members identified the major difficulties. I think we should remember that it was my right hon. Friend the Leader of the Opposition who invited the Government to come into those cross-party discussions, having had a pretty bruising experience prior to the last general election when we thought we might have had a basis for moving forward. I certainly welcome the fact that we are treating this issue with the seriousness and urgency that it deserves. However, my image of the contribution of the hon. Gentleman is that he goes around working out how much people’s bottoms and legs can be insured for. He is not normally prone to humour, but I thought that was a bit of light-heartedness on his part.
The Minister with responsibility for disabled people paints a picture that, frankly, bears no relation to the reality of the lives of disabled people and their families and carers. When I heard her contribution, I wondered which world she was living in. She is a quiet and impressive speaker, although she showed today that she can sometimes be provoked. She somehow gives the impression that it will be all right on the night and that tens of thousands of people out there can be expected to say, “Well, that’s fine, Minister for Disabled People. We know that we are suffering”—as my hon. Friend the Member for Hayes and Harlington identified—“but we do not know what is in front of us; we have been vilified in the press, not just by media reporters, but by some ill-considered briefings from some politicians.”
The words of the Minister do not chime with the reality of what people are feeling out there. Over the past couple of years disabled people have been undermined and their confidence shattered, and they are living in a climate of fear. There has been an increase in hate crime. According to a recent report by the university of Glasgow for Inclusion London, the amount of negative reporting of disability in the print media has increased dramatically. People out there who are not claiming disability benefits now think that everyone who is claiming a disability benefit is a skiver. I hope that one day the Secretary of State will rebut the comments that are being made in some tabloid newspapers.
Let me dispel one or two of the myths that have been perpetrated here today. One is that lifetime and indefinite awards will never see the light of day again. In fact the lifetime award was replaced in 2000, because we recognised that it conveyed a mixed message. There has also been a dodgy use of statistics on all sorts of disability benefits, particularly by the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling). He said that 75% of incapacity benefit claimants were fit for work, but when the position was examined properly, the figure proved to be as low as 37%.
An image or background has been created to justify a welfare reform programme that is flawed, at least in its implementation. We talk in general terms about disabled people and those who receive disability living allowance, but hundreds of thousands of people who have arthritis, learning disabilities or psychosis rely on the additional cost payment provided by DLA for their everyday lives.
Let me deal very briefly with Remploy, which has already been dealt with extensively today. Yes, we had to wrestle with some of the difficulties—I am certainly not going to run away from that—but the Minister gave only part of the picture. Any Member who was in the House before the last modernisation programme for Remploy knows that we engaged in an extensive and lengthy consultation. All Members of Parliament had all the figures in front of them from the moment that we embarked on that modernisation programme. What we did not do was organise a 90-day consultation involving people who were already feeling vulnerable because of all the other stuff that was going on around them, and embark on a factory programme without building elements of support into it.
Particularly important is the cumulative impact, which has not been addressed today. The Joint Committee on Human Rights said in its report:
“Given the breadth of the current reforms, the Government should publish a unified assessment of the likely cumulative impact of the proposals”.
The Government replied:
“The ability to undertake cumulative analysis is limited because of the complexity of the modelling required”.
So a Government who have tens of thousands of civil servants in the DWP are telling disabled people that, despite all that expertise, they cannot put together a cumulative assessment of what is happening to their lives. I think that it is to the shame of the Secretary of State that he is not prepared to put the big picture out there in front of people. The Joint Committee also said that we were in danger of breaching our commitment under the United Nations convention on the rights of persons with disabilities by posing a threat to their right to independent living.
Let me put a very brief cumulative impact assessment before the House. The DWP’s own analysis concluded that the benefit cap would have a disproportionate impact on households containing a disabled person, which were
“more likely to be affected”.
The Prime Minister has always dodged and weaved on this, but the reality is that the sum will be reduced by half under the new universal credit. The “Counting the Costs 2012” report by Contact a Family found that it costs three times more to raise a disabled child, and 73% of its respondents said they believe welfare reform will make them poorer. Mencap says 32% of local authorities have cut day care services in the past three years. The cumulative effect is growing. Some 57% of people with a learning disability currently receive no services at all, despite being known to their social care departments. Disability Rights UK has highlighted how losing DLA will impact on disabled people’s opportunities to get a job.
Matthew Hancock
The right hon. Lady talks about the need to see the big picture. Will she therefore correct something the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) said in his opening speech? He said unemployment is rising, when today’s figures show a fall in unemployment and a rise in employment, and that should be welcomed.
Mrs McGuire
I know the hon. Gentleman from our days serving together on the Public Accounts Committee, so I know how good he is with figures, and how he can bandy them around. The reality is that £9 billion more will be needed to pay for unemployment benefit. That is the real statistic.
Mrs McGuire
That is the real statistic. We in this House bandy figures around, but the reality is that we are talking about people who are finding themselves—day after day, week after week, month after month—being unable to get a job. That is the reality: 2.5 million unemployed.
Ian Lavery
In my constituency, and in the north-east region, unemployment has increased again, yet the Minister with responsibility for employment did not even turn up to a Westminster Hall debate today to respond to the comments of MPs from the north-east whose constituencies face serious problems. That is a total disgrace.
Mrs McGuire
And that is the issue this Government need to attend to. We have a crisis in social care. The directors of adult social care services have identified in excess of £1 billion of cuts to social care budgets.
What in this motion do the Government disagree with? It recognises there should be reform of DLA. It raises concerns about the WCA. It recognises the role of carers. It promotes independence, choice and control for disabled people. It asks the Department to restore, in writing, its commitment to equality for disabled people. It calls for a full cumulative impact assessment of the effect of what is happening on the lives of disabled people. It asks for reform of the WCA descriptors.
I always think it is faintly amusing that when we talk about disabled people in this House, Cabinet Ministers often find more time to talk among themselves—as some of them are doing now on the Treasury Bench—than to listen to the debate. I hope the Minister replying to this debate will recognise that this is a sensible motion that is looking for consensus, and that he will respond in keeping with that spirit of consensus.
The Minister of State, Department of Health (Paul Burstow)
First, I want to say on behalf of my colleague, my hon. Friend the Member for Basingstoke (Maria Miller), who has responsibility for disabled people, that she has had to attend a Westminster Hall debate to respond to the hon. Member for Sheffield, Heeley (Meg Munn). She would have liked to attend the conclusion of our debate, however.
Last week, the House debated mental health on a Backbench Business Committee motion, and it made a powerful statement about the need to challenge stigma in mental health—a topic we have also touched on today. That earlier debate was made all the more powerful by a number of personal stories told by Members on both sides of the House. It was a debate that will be long-remembered by those who participated, and I know from the many e-mails and letters I have received that it reached well beyond the usual suspects who avidly follow our proceedings. That is also the case in respect of some of the issues raised in today’s debate.
Let me begin by referring to an issue raised in the opening speech by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne). It is an issue very dear to my heart as Minister with responsibility for mental health, and in respect of which the Government will shortly be coming forward with a suicide prevention strategy. I am talking about the issue of concerns that some constituents bring to our surgeries. I cannot talk about the individual case, but I will make sure that a ministerial colleague writes back to him once the details are known. What I can assure him and other hon. Members is that all staff are trained in dealing with vulnerable groups, including those with potential for self-harm. Occurrences of self-harm are rare, as are suicides. It is also worth saying that Atos has appointed mental health and cognitive intellectual champions to provide advice on handling any aspect of these cases, including dealing with cases of potential self-harm and suicide. I wanted to put that on the record because talk about suicide can itself be damaging, and I want to ensure that we address these issues correctly.
Paul Burstow
I have so little time—I have minus 10 minutes, in theory—that I would like to ensure that I respond to the points that have already been made.
Disability living allowance has been mentioned by a number of hon. Members. It is worth saying that Labour left the assessment process as a piece of unfinished business; it did not properly take into account all those with sensory, mental health and cognitive impairments. The move that this Government are making to the personal independence payment gives us the opportunity to ensure that we do take proper account of the impact of mental health needs and fluctuating conditions. The right hon. Member for Stirling (Mrs McGuire) said in her summing up that the Labour Government dealt with the issue of life awards in 2000. Yes they did—they changed the name to “indefinite awards”. Some 70% of those are still on the case load and they have just been given a different name. The reality is still the same.
The hon. Member for Edinburgh East (Sheila Gilmore) talked about PIP assessments, and I want to tell her that the Government are still considering the findings of the consultation on the assessment process. The consultation closed on 30 April and we will be publishing the response to it, along with the current consultation that we are doing on the detailed design, in the autumn, before this House properly debates those matters as part of the regulations.
My hon. Friend the Member for Chippenham (Duncan Hames) talked about Labour’s legacy of subcontracting out to Atos the decision-making process, and fettering, in a way, the way in which decision makers could act. He is absolutely right about that, which is why we have given back flexibility to decision makers. Indeed, we have moved away from the hard, harsh and tough approach taken on work capability assessments by the previous Government. We have taken the recommendations of Professor Harrington’s independent reviews seriously and implemented all of them. We are building on his recommendations, following his engagements with charities, on how we make sure that the assessment process is more accurate and does properly reflect fluctuating conditions and takes into account those with mental health conditions. Again, that point was raised by my hon. Friend.
Paul Burstow
I cannot give way during this debate. A question was asked about whether Professor Harrington will continue to undertake reviews. He will be conducting a third and final review—the legislation commits to two further reviews—but I think that after three reviews he gets time off for good behaviour. The Government are not telling him to go—if he wanted to stay, we would be happy for him to do so. The reality is that he has done a good piece of work on behalf of this Government and we want to make sure that that is followed through.
The hon. Member for Wansbeck (Ian Lavery) asked a number of questions, as did my hon. Friend the Member for Chippenham and others, about Remploy. Let me be clear about the consultation process: the objective is to preserve jobs. We made a number of announcements, on wage subsidies and on the £10,000 to support employee-led bids. We did that in response to expressions of interest that we have already received. Discussions have taken place between Remploy and bidders, as part of the normal commercial process. My hon. Friend asked about social enterprise businesses, and there has been engagement with them. The whole process will run for five and a half months. The previous Government’s modernisation plan was meant to turn this sector around, but we still face a £68 million loss, which is why we are making the changes that we are having to make now. My hon. Friend asked whether the consultation report will be published. Yes, it will. We are also making sure that when individual discussions take place with employees, there is a discussion about the contribution that the £8 million support package constitutes. The hon. Gentleman also asked a question about the accrued rights of existing members of schemes, and I can assure him that those will be protected.
The hon. Member for Aberdeen North (Mr Doran) made a very good point about independent advisory groups, and there will be one to examine all the business plans and advise the Remploy board prior to decisions being made about those plans. I also understand the importance of ensuring that any conflicts of interest are carefully handled, and my ministerial colleagues at the Department are certainly very focused on that.
I am the Minister responsible for social care and so I want to address those parts of the debate. We should be honest: successive Governments have failed to tackle social care. In the past 13 years, in a time of plenty, Labour failed to get a grip on the issue. We have a system in this country governed by laws that were written in the 1940s and look back to Poor Law principles. Social care and social work should enable disabled people, older people and their carers to live the lives they want to and that is why we will shortly set out a comprehensive overhaul of social care law in this country, placing people’s wellbeing at the heart of decision making and focusing on goals that matter to individuals. We will build on the excellent report by the Law Commission on social care law reform to ensure that we have a legal framework that supports a much more personalised approach.
As the Government consulted with charities last year and worked with families, carers and others, we heard many criticisms of the social care system we inherited. We heard a long and deep-seated set of concerns about the variability of quality, about people feeling bounced around different systems and not always getting the personalised support that they wanted, and about the system being focused too heavily on crisis and not enough on prevention. We will address those issues in the White Paper we will publish shortly.
My hon. Friend the Member for West Suffolk (Matthew Hancock) and others spoke about funding reform and we will publish a progress report on that matter. We certainly understand the point made in the debate about the unfairness inherent in the system we have today. The flaws in that system penalise thrift and hard work and lead to people facing catastrophic costs. Those hon. Members who have said that we need a cross-party solution are absolutely right and the Government are committed to talks so that we secure just that.
Some hon. Members have talked about social care funding. The truth is that the Government took some difficult decisions during the spending review, but they were the right decisions and social care budgets were protected through the investment of an extra £7.2 billion up until 2014. It is clear that councils that have broadly the same resources available are making very different decisions. Some are cutting services, but many are being smarter and are working with disabled people, older people and carers to come up with better ways of delivering care and support in their communities. Indeed, the most recent survey of councils by the Association of Directors of Adult Social Services found that councils were getting smarter and finding more efficiencies than they had in previous years, as well as fewer cuts. Indeed, this year 77p in every pound that councils have saved in social care budgets has come from smarter working and greater efficiency.
My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) rightly talked about the need to break down the silos in health, social care and housing and we will break them down to ensure that people are not bounced around the system and are treated with the respect and dignity they deserve.
In conclusion, I want to talk about carers, who have been mentioned—rightly, as this week is carers week—by my hon. Friend the Member for Chippenham and others. It is right that we should pay tribute this week to the immense contribution of family carers, but, as others have said, we need to ensure that we do not focus on carers only in carers week. That is why the Government have committed £400 million through the NHS to provide breaks for carers and it is why we are requiring primary care trusts to draw up the plans to demonstrate how they will provide support to carers. This September, they will have to publish those plans and set out how breaks will be provided for carers as well as how many will be provided. Just this Monday, I had the opportunity to visit Crossroads Care in Cambridgeshire to see for myself the difference that those breaks make. A scheme has been introduced whereby GPs can prescribe carers’ breaks. We have discussed carers staying in employment, and tomorrow we will host with employers a carers summit to focus specifically on how we break down barriers so that we can ensure that carers do not feel tipped into crisis and find themselves out of work as a consequence.
The coalition Government are clearing up the mess left by the previous Labour Government—a huge deficit and an unbalanced, debt-ridden economy, after tough decisions had been ducked time and again. The Leader of the Opposition’s motion lacks vision. It shows Labour running away from its responsibilities and record, but the coalition Government are committed to reforming the way in which the country works so that people are in a situation in which work pays. We will ensure that disabled people are included in society and able to contribute to it, and that social care, after decades of neglect by successive Governments, is at long last reformed.
Question put.
Madam Deputy Speaker (Dawn Primarolo)
I now have to announce the result of a deferred Division on the motion relating to the draft regulations on community right to challenge. The Ayes were 282 and the Noes were 196, so the Question was agreed to.
[The Division list is published at the end of today’s debates.]
Regional Pay
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:58 - The House divided: - Ayes: 226 / Noes: 286 - Question accordingly negatived.
19:11 - The House divided: - Ayes: 286 / Noes: 232 - Question accordingly agreed to.
Madam Deputy Speaker (Dawn Primarolo)
I advise the House that Mr Speaker has selected the amendment in the name of the Prime Minister.
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That this House notes that the national pay review bodies have been an effective way of setting pay while allowing for appropriate regional and local variation consistent with the need to recruit, retain and motivate staff and to keep tight control of public spending; believes that seeking to alter existing frameworks for negotiating and setting public sector pay could increase costs for the taxpayer as well as exacerbating regional inequalities; further notes that unanswered questions about Scottish separation risk uncertainty for the thousands of staff employed in Scotland under UK-wide pay negotiations and bargaining mechanisms; further believes that co-ordinated national negotiations can also reduce uncertainty, help financial planning and reduce costly and time consuming bureaucracy, local negotiations and disputes; and opposes moves intended to weaken or dismantle efficient and stable arrangements for negotiating and setting public sector pay.
We have called this debate today to give Members on both sides of the House an opportunity to raise concerns and ask questions about the Government’s plans for regional pay and to send a message that there is no appetite among nurses, teachers, police officers or, indeed, businesses in our constituencies for disrupting or dismantling the systems we have in place and going down a path that would escalate costs to the taxpayer and exacerbate regional inequalities. We are giving the Government an opportunity to dispel the confusion that they have created, and perhaps to get out of the hole that they have dug themselves into by executing another of the U-turns that have become something of a speciality of late.
Last autumn, the Chancellor announced his desire to make public sector pay
“more responsive to local labour markets”. —[Official Report, 29 November 2011; Vol. 536, c. 802.]
At the time he described it as a “very significant reform”, and one newspaper said that the Treasury regarded it as
“one of the most important measures it can introduce to rebalance the economy.”
The Chancellor’s supporters were excited. The hon. Member for Tamworth (Christopher Pincher) said enthusiastically that
“a truly local…negotiating structure”
would make wage rates in economically depressed communities more competitive.
More recently, there have been signs that the Liberal Democrats and, perhaps, 10 Downing street have become worried about the new mess that the Chancellor has got them into, with signals given out that nothing is decided and, in the words of the Deputy Prime Minister,
“there is no proposal on the table”.
In response, the hon. Member for Cannock Chase (Mr Burley) has called on the Chancellor to “hold firm”, and the hon. Member for South Northamptonshire (Andrea Leadsom) has said that national pay bargaining is the reason why businesses are struggling at the moment.
Kevin Brennan (Cardiff West) (Lab)
My hon. Friend may not be aware of this, but the Federation of Small Businesses in Wales has also come out against the Government’s proposals for regional pay. Should it not be a warning to them that they are on completely the wrong path?
Rachel Reeves
I am not surprised at all, because in reality, if regional pay were introduced and pay were cut in Wales and in other areas of the country, businesses would suffer because people would have less money in their pockets to spend with local companies.
Given the concern that the proposal has caused, the Government have a responsibility today to clarify their position and their plans. Was the Chancellor right when he said that it is a “very significant reform”, or was the Business Secretary right today when he said that there is no question of the Government imposing lower pay on people simply because they happen to live in poorer parts of the country? Those mixed messages have created confusion: confusion about the degree of localisation and variation being proposed; confusion about whether the Government propose to differentiate pay into regions, zones or local markets, which could itself mean many different things; and confusion about whether national bargaining structures would be maintained, replaced with local bargaining processes or dispensed with altogether.
All that we have from the Government is the evidence that the Treasury has submitted, alleging that in many parts of the country public sector workers are paid upwards of 10% more than their private sector equivalents.
John Robertson (Glasgow North West) (Lab)
Does my hon. Friend agree that the confusion being caused by the regional pay strategy, added to the fact that so many people are unemployed—unemployment is growing in my constituency—and that we are trying to get people into work, raises the question, “What are the Government trying to do?”? Do they want to get people into work, or do they want to ensure that people have jobs that they can afford to live with?
Rachel Reeves
I thank my hon. Friend for that intervention. As a result of that confusion, many people who are in work are worried about spending money, because they are not sure what is going to happen to their pay, and that uncertainty is also making economic recovery harder to secure.
Comparing rates of pay in the public and private sectors involves a notoriously complex and controversial analysis. It is difficult to be sure that one is comparing like with like, because the jobs done by teachers, police officers or emergency workers have so few private sector equivalents.
Geraint Davies (Swansea West) (Lab/Co-op)
My hon. Friend may be interested to know that inward investors to whom I have spoken are concerned to have decently funded public services in education and health; they do not want a GP in Swansea, for instance, to up sticks and go to Bristol. Does she agree that in many instances that analysis, concluding that different pay for the same job throughout the country will help the private sector, undermines the confidence of inward investors and is counter-productive?
Rachel Reeves
My hon. Friend speaks powerfully on behalf of his constituents in Swansea. In my area, many people commute from Bradford to work in Leeds and the other way round. Would their pay be determined by where they work or where they live? If the Government say that their starting point is these differentials, they cannot blame people for concluding that their ultimate aim is a reduction of 10% or more in the relative pay of public service workers in some parts of the country.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
When there is regional bargaining, in which I was once involved in a trade union, the complexities mean that there are more likely to be added costs. Indeed, the situation is the opposite of everything that happens as a result of what was created in 1908 by Whitleyism.
Rachel Reeves
My hon. Friend is absolutely right, and I will come on to deal with some of the evidence that backs up his point.
Mr Ben Bradshaw (Exeter) (Lab)
This is not just a cause for concern in Scotland, Wales and the northern regions of England. There is also deep concern in the south-west, where we have the biggest gap between wages and house affordability. Any regional pay structure is bound to involve a huge transfer of public money from regions such as the south-west to the wealthy south-east, and that is exactly the opposite of what the Government should be doing.
Rachel Reeves
I thank my right hon. Friend for that intervention. Indeed, a 1% pay reduction for public sector workers in the south-west would cost that region £140 million a year.
If the Government were to achieve their objective of reducing pay to what they say is the equivalent in the private sector, a real-terms cut in pay, year after year for a decade or more, would be needed. It is no wonder, then, that people are worried and are calling on the Government to come clean on what their plans really are. It is no wonder that people think this is a deliberate attack on public sector workers and on the parts of the country that have already been hardest hit by the recession.
Chris Ruane (Vale of Clwyd) (Lab)
Regional pay was mentioned this morning in the Welsh Grand Committee, when I quizzed the Secretary of State for Wales about it. The terminology that Government Members are using is not “regional pay” but “local-facing pay”. I asked for an explanation of what local-facing pay was, but got no response. Does my hon. Friend agree that if local-facing pay is introduced, there will be sad faces in Wales and happy faces in Buckinghamshire?
Rachel Reeves
The problem is that the Government are being a bit two-faced, with one person saying one thing and another saying something else.
The reality is that we are in a recession made in Downing street and it is hitting some parts of the country particularly hard. I quote from a recent report by the Institute for Public Policy Research on the state of the northern economy:
“The double-dip recession has hit the North hard, with unemployment rising and business confidence falling. This lack of confidence among employers has maintained the hiring freeze across the North, implying that upward pressure on unemployment is likely to continue for the rest of the year.”
The difficulties faced by workers and businesses in many parts of the country as a result of the recession that this Government have landed us in are being made all the more desperate by the Government’s short-sighted decision to dispense with policies and processes put in place by the Labour Government to support more balanced development across the UK. This is a Government who got rid of regional Ministers, shot down regional development agencies, and cut back on vital regional investments such as the loan for Sheffield Forgemasters. The only regional policy that they have left is regional pay, which will take more money out of some of the most deprived areas of the country.
Elizabeth Truss (South West Norfolk) (Con)
In the 1990s, Sweden moved from national pay scales to individual contracts. That was supported by the unions and resulted in a rise in some salaries for jobs where there was a shortage of workers—for example, kindergarten teachers—and it has been very successful. Is it not the case that other countries are moving to more competitive labour markets while we are moving backwards, as we did under the previous Government?
Rachel Reeves
I am sure that the 11,500 public sector workers in the hon. Lady’s constituency will know that she is sticking up for them.
Mike Freer (Finchley and Golders Green) (Con)
If the Opposition are so vehemently opposed to regional pay, will the hon. Lady be instructing Labour London MPs to give up their London weighting?
Rachel Reeves
I will come to the regional flexibility that is already in the system in inner and outer London for teachers and those in the health service. The point is that it is not necessary to dismantle the national system in this way to get the flexibility that we need.
We can imagine the impact that these changes might have on regional economies. If the north-east had a further year’s pay freeze imposed on it next year and the 1% increase that the Chancellor has announced was concentrated in more favoured areas, it would deprive the region’s economy of £78 million a year. If the same happened in other regions, Wales would lose £97 million a year, Yorkshire and the Humber £130 million, the south-west £140 million, as I said before, and Scotland £162 million.
Does the Minister really think that this policy will contribute to economic rebalancing? Is it really the best that the Government can come up with? Their only policy for jobs is to make it easier to fire people and their only policy for the regions is to cut the pay of public sector workers. It is no wonder that we are back in recession. It would be laughable if it was not so depressing.
There is no credible evidence to support the claim that the difficulties faced by the private sector are the result of national pay frameworks in the public sector.
Margot James (Stourbridge) (Con)
On that subject, the hon. Lady may be aware that the difference between private and public sector pay scales is as much as 18% in parts of the country. She talks about money being taken out of the economy, but does she not accept that if the pay scales were not so divergent, there would be additional private sector investment in those areas?
Rachel Reeves
I am sure that the 10,300 public sector workers in Stourbridge will be pleased to hear that the hon. Lady wants their pay to be cut.
Paul Callaghan CBE, the Sunderland technology entrepreneur and owner of the Leighton Group who was recognised in the recent Queen’s birthday honours list for services to the north-east, has said:
“I’m very concerned about the negative impact on the North East economy of regional pay rates.”
He went on to say that the
“freezing of regional public sector pay must reduce demand for local goods and services, further dampening an already depressed economy. I have seen no credible research to show that this move will have anything but a negative impact on both the region’s private and public sector.”
James Ramsbotham, the chief executive of the North East chamber of commerce, has said that
“the Government should be working towards making the economy more equal across the regions and not entrenching further disparity by reducing spending power in the North-East.”
The chief economist of the Welsh Government, in reviewing the impact of public sector pay rates on businesses in Wales, said that
“there is no credible academic evidence or research to indicate that crowding out has been happening in practice.”
Mr Aidan Burley (Cannock Chase) (Con)
I am glad that the hon. Lady read my quotation in The Daily Telegraph this morning. As she has read out a couple of quotations, perhaps I may read one back to her:
“location-based pay systems offer increased flexibility and a systematic approach to addressing recruitment and retention issues at a local level.”
That is from Unison’s policy paper “Location-based pay differentiation”, which was published in September 2011. Does she agree with Unison, which I understand is a donor to her constituency party?
Rachel Reeves
The hon. Gentleman should speak to the 9,500 public sector workers in his constituency. That number is substantially larger than his majority.
What families and businesses in these parts of the country need is not an even tighter squeeze on the wages of the people who are keeping their public services running, but a Government with a proper plan for jobs and growth who will work actively with businesses to get investment flowing into the sustainable, competitive, high-value industries of the future. That is what we need to improve living standards and economic opportunities in every part of the country.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
My hon. Friend has highlighted the enthusiasm of the hon. Member for South Northamptonshire (Andrea Leadsom) for these measures. It may be helpful to share with the House the fact that the same Member is asking for exemptions from the minimum wage for employers. Perhaps that is the real agenda here.
Rachel Reeves
I thank my hon. Friend for mentioning that. That is how the Government will get the economy moving again—by cutting the pay of the most vulnerable workers and introducing regional pay.
Rachel Reeves
It will be interesting to hear what the hon. Lady has to say to the 10,800 public sector workers in her constituency and whether she wants them to have a pay cut.
Andrea Leadsom
I am grateful to the hon. Lady. I was going to say that my 10,500 public sector workers will no doubt agree with me that the way to get our economy going again is by a private sector-led recovery, which requires that businesses begin to thrive. Does she accept that it is a private sector, business-led recovery that will turn around our economy?
Rachel Reeves
Perhaps those 10,500 public sector workers can give their verdict at the ballot box. Yes, we do need a private sector recovery, but we will not achieve that by cutting the pay of the people who deliver our public services.
Phil Wilson (Sedgefield) (Lab)
Can we put to bed the idea that public sector jobs crowd out private sector jobs? Between 2003 and 2008 the number of public sector jobs increased by 4.1% and the number of private sector jobs went up by 9.2%. That belies the case that the Government always make that public sector jobs crowd out private sector jobs.
Ian Mearns (Gateshead) (Lab)
Given the perverse logic that Government Members put forward, will my hon. Friend reflect on the fact that despite the disparity in public and private sector pay rates in the north-east of England, unemployment is going up? We might have thought that investment would be flooding in on the basis of cheap wages in the private sector.
Rachel Reeves
I thank my hon. Friend for that point and look forward to hearing what the Minister has to say in response.
As well as the business people and other experts whom I have quoted, the key stakeholders have made their views clear. Not just the trade unions but employers and independent experts have expressed concerns. For example, NHS Employers notes that employers already have
“the option to pay recruitment and retention premia”—
that is related to the point made by the hon. Member for Finchley and Golders Green (Mike Freer)—
“to address…specific labour market issues.”
It states that a move to local pay bargaining would
“raise issues of local capacity, increase administration costs and risk pay inflation as employers compete directly for staff on pay. Getting rewards wrong could have a significant impact on the quality of patient care and safety.”
The National Employers’ Organisation for School Teachers states that
“the existing four national zones, plus the flexibility to pay recruitment and retention supplements…provide an appropriate balance between national determination and local flexibility…the existing framework provides a reasonable level of autonomy to set pay”.
It reports that 84% of its members
“considered that the number of pay bands was appropriate to reflect local labour market conditions; only 7% thought this was not the case.”
The National Governors Association reports that it is
“not aware of any evidence that suggests making pay locally responsive would improve recruitment and retention.”
It points out:
“Low cost of living indices tend…to be associated with social deprivation; these areas may also…have difficulty attracting the best staff… As the Government is rightly concerned to narrow the attainment gap between those children from disadvantaged backgrounds and those who are not, bringing teachers’ salaries in line with local market conditions…would possibly be counterproductive and create recruitment difficulties that do not currently exist.”
The evidence is clear, and so are the views of the experts, but the Chancellor’s posturing has created real worries for public service workers around the country. Nurses, teachers and police officers are already suffering the effects of the pay freeze and being hit by the sharp hike in pension contributions, and like everyone else they are suffering the effects of the Government’s recession, unfair tax rises and cuts. Now, the Chancellor is threatening to impose policies that for many people in many parts of the country would mean real-terms cuts in their income, continuing year after year. That would force them to pay the price for the Government’s economic failures. The millions of workers who are keeping our public services going in difficult times, the majority of them women on modest wages, deserve better than that.
Alison McGovern (Wirral South) (Lab)
Does my hon. Friend agree that the people who are being hit by the speculation about regional pay are the self-same people being hit by the withdrawal of the regional development agencies and speculation about NHS funding? The total picture created by the Government is the crushing of demand and undermining of confidence in Wirral and Merseyside, the parts of the country that I represent.
Rachel Reeves
My hon. Friend speaks powerfully on behalf of her constituents in the Wirral, and I know they will appreciate that.
Chris Williamson (Derby North) (Lab)
Would my hon. Friend care to comment on the fact that yet again the Chief Secretary to the Treasury has gone AWOL? We have had debate after debate in which the Government have rolled out junior Treasury Ministers, and now he has ceded his responsibility to the Cabinet Office. Can my hon. Friend shed any light on what on earth is going on?
Rachel Reeves
Given that the policies have such big implications for the public purse, especially as anticipated costs go up because of the extra bureaucracy, I would have thought the Chief Secretary had a clear interest in them.
I suggest that Ministers take this opportunity to call a halt to this exercise, end the uncertainty and confusion and put people’s minds at rest. They did that for charities, churches and caravans, and even for pasties. As the Prime Minister has said:
“When you’ve got something wrong, there are two things you can do in government: you can plough on regardless, or you can say, ‘No, we’re going to listen, we’re going to change it’”.
I therefore hope the Minister listens to what Members say in today’s debate and changes course before the Government get into even greater difficulty. Trying to make public sector workers in hard-hit parts of the country the scapegoats for our economic problems is disreputable and divisive, and it is a distraction from the task to which the Government should be giving their full attention—a plan for jobs and growth that can get us out of the recession they have got us into.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“notes the importance of recruiting, retaining and motivating staff and keeping tight control of public spending; further notes that the then Chancellor of the Exchequer, the right hon. Member for Kirkcaldy and Cowdenbeath, first proposed a fair framework for local and regional flexibility for pay in his statement to the House of 9 June 2003; supports the Government in asking the widely respected independent pay review bodies to consider how public sector pay can be made more responsive to local labour markets; and believes the Government is correct in awaiting the conclusions of those deliberations before making a decision on bringing forward proposals in respect of public sector pay’.
The shadow Chief Secretary, the hon. Member for Leeds West (Rachel Reeves), began by quoting the Chancellor, so let me quote the Chancellor a little more extensively:
“I can tell the House that the British economy is…better placed to recognise local and regional conditions in pay”.
He continued that, in future, we therefore plan that
“remits for pay review bodies and for public sector workers, including the civil service, will include a stronger local and regional dimension”.—[Official Report, 9 April 2003; Vol. 403, c. 283.]
That was the Chancellor in 2003, the previous Prime Minister. He set that proposal out at time when his advisers were the current Leader of the Opposition and the shadow Chancellor. I do not know whether the shadow Chancellor wrote that passage for the Budget speech—a lot of the Budgets around that time turned out to be “Balls”. Did he write it? Does he agree with it? If not, what has changed in the meantime? [Interruption.] It was clearly the best the right hon. Gentleman could do at that time. I shall come to the history behind the current Government’s approach, because the idea that it is a dramatic new departure is absurd. There is quite a long history, but we now have the opportunity to explore it.
Mr Maude
I shall get started, but I will give way to the hon. Gentleman in due course.
Let me begin by setting out the Government’s approach to this important issue. First, we believe there is a strong case for looking at introducing local market-facing pay and at how that can be done, but let me say clearly that our approach is not about ending national pay bargaining. Pay can be made more responsive to local labour markets within a national bargaining framework. Any benefits from localising pay can be realised without any need to get rid of national pay bargaining.
Secondly, the proposal is not about making further savings. We will continue to operate within tightly constrained overall public sector pay remits.
Mr Maude
I am going to make a little progress, but I will give way in due course.
Those pay remits are currently set at 1% a year. We need those constraints in order to address the appalling legacy of the biggest budget deficit in the developed world, which was left by exactly the people who now complain about its effects. Our approach is not about making further savings, but entirely about creating greater flexibility within those pay remit constraints.
Thirdly, this is not about cutting anybody’s pay. Even if we wanted to, we would not be legally able to do so.
Huw Irranca-Davies
Will the Minister speculate on why the Chief Secretary to the Treasury thinks the sun shines out the backend of this policy, while the Liberal Democrat leader in Wales has told him to stick it where the sun don’t shine?
Mr Maude
That was about as laboured a joke as I have heard in this place, but we will let the hon. Gentleman know.
Like the previous Government, we have said that it is important to look at the level at which public sector pay is set in each labour market over the longer term, which is why, in the autumn statement, the Chancellor announced that there was a case for considering how local pay could better reflect private sector labour markets. He invited the independent pay review bodies to consider the evidence, which is exactly what they are now doing.
Mr Donohoe
I do not know whether the Minister has ever been involved in wage negotiations, but if he looks at the public sector and then at the private sector, he will see that some multinational companies do national negotiations and do not have local rates. Is that not the case?
Mr Maude
They may well have national negotiations. If the hon. Gentleman had listened, he would have heard me say that our proposals do not involve a change to national pay bargaining mechanisms. Actually, though, plenty of companies have preferential pay rates in different parts of the country, as might well make sense in some circumstances. But he clearly did not listen to what I said earlier.
Pay decisions in the civil service, below the senior civil service, are delegated to individual Departments, so it is for each Department to consider the case as it applies to its own work force.
Bill Esterson (Sefton Central) (Lab)
It has occurred to me that Conservative Members were against the national minimum wage when it was introduced. Will the Minister confirm beyond doubt that this is not the thin end of the wedge and that there will not be any attempt to undermine the national minimum wage through regional pay?
Richard Burden (Birmingham, Northfield) (Lab)
I am trying really hard to understand what the Minister is saying. Will he please tell me whether I have got this right—he does not want to dismantle pay structures or cut pay, but he does want to introduce bargaining and flexibility? Does that mean that there could be no pay cuts for any current or future employee as a result of that flexibility? What would that mean in the west midlands, where to get a house, someone has to raise a deposit of twice the average regional salary? In practical terms, is he talking about those pay levels rising or falling?
Phil Wilson
I think the Minister has been a bit selective in quoting Treasury Ministers in the previous Government. Treasury guidance notes put out by Ministers in 2003 also stated:
“At the extreme, local pay in theory could mean devolved pay…to local bodies. In practice, extremely devolved arrangements are not desirable. There are risks of workers being treated differently for no good reason. There could be dangers of leapfrogging and parts of the public sector competing against each other for the best staff.”
In other words, the previous Labour Government were never going to do what this Government intend to do now.
Mr Maude
Given that the hon. Gentleman has not given me the chance to talk about our plans and approach, perhaps he will be patient and contain himself until that moment.
As I was about to say, nothing has yet been decided. Any proposals for each work force must be based on strong evidence. We want to hear from everyone with a contribution to make, and we are committed to making any future decision on the basis of evidence, which is the right way to approach the matter. That is why we have invited the various pay review bodies to consider the matter on that basis.
However, as I said earlier, we are not the only Government to think that there is a case for looking at this issue. The case was recognised by the last Government, and they gave it, I presume, serious thought. Indeed, in 2003, the then Chancellor announced a stronger local dimension to pay review body remits, noting that there was significant scope to increase the flexibility and responsiveness of public sector pay. He told the House:
“With this national framework for fairness in place, it makes sense to recognise that a more considered approach to local and regional conditions in pay offers the best modern route to full employment”.—[Official Report, 9 June 2003; Vol. 406, c. 412.]
Does anyone on the Opposition Benches disagree with that? It seems a considered and sensible approach to me.
Mr Maude
I will not give way, if the hon. Lady will forgive me, because I need to make some progress and Back-Bench contributions are already likely to be constrained because the debate started rather late.
The then Chancellor also said that pay for the civil service should include a stronger local and regional dimension, while in that year’s Budget he set out
“action to increase regional and local flexibility in public service pay”.
As I have mentioned, the then Chancellor’s advisers included the current Leader of the Opposition and the current shadow Chancellor. It seems pretty opportunistic for Labour, at the 11th hour, to produce this motion, when its own Government took the public sector further down this path than we are at this stage contemplating.
Indeed, Labour did not just talk about localised pay; it actually introduced it. In 2007, the last Government introduced localised pay for civil servants across the courts service. They did so in response to the Treasury’s pay guidance, issued in 2007, at a time when, as far as I can make out, the current Leader of the Opposition was the Minister in the Cabinet Office responsible for civil service matters and the shadow Chancellor was the Economic Secretary to the Treasury. Yet that pay guidance, which went out across the civil service, asked Departments that operated across different locations to differentiate between pay levels across regional labour markets. Following that guidance, which was issued under the aegis of the current Leader of the Opposition and the current shadow Chancellor, the previous Government introduced localised pay in the courts service across the country. That was, if I may say so, a sensible and unusually well-judged move, and it has been successful.
Mr Maude
I am going to make progress now.
That policy was introduced at a time when those who are now on the Opposition Front Bench were intimately involved, so it is worth the House asking itself what happened. Did devilish civil servants somehow slide this wicked measure through, as the attention of the current shadow Chancellor and Leader of the Opposition was elsewhere, no doubt overly occupied in trashing the then Prime Minister?
Why is the shadow Chief Secretary to the Treasury taking up valuable parliamentary time attacking in opposition a policy that her own leaders actively promoted in government? It is not as if the Labour party immediately abandoned the idea in opposition that local and regional variations in the cost of living are important. In January, The Guardian reported that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne)—another previous holder of my post—told a private meeting of Labour MPs that housing benefit
“varies locally and so should a benefit cap”.
In fact, he was reported to have said:
“It makes much more sense to have localised caps…in different parts of the country”.
That revealed that the Labour party still recognises in private the very principle that it is today seeking to oppose. It is humbug, Madam Deputy Speaker. Yet again, the Opposition oppose policies that they introduced in government and that they still support in private.
We know what is behind this. It is the Labour party’s union paymasters who are calling the tune. We know that the Labour party ask their union backers which amendments to vote for and which to oppose. We know that under the current Labour party leader more than 80% of Labour’s donations come directly from trade unions—even more than under the last Prime Minister. No wonder Charlie Whelan boasted that it was Unite that won the current Labour party leadership. Yet again, it is Unison and Unite that are calling the tunes. But even the unions are confused on this matter. As my hon. Friend the Member for Cannock Chase (Mr Burley) said, Unison itself has made the case for local variations.
There is a serious case to be made for local market-facing pay. While private sector pay is typically set according to local markets, public sector pay is usually set on a one-size-fits-all basis at national level. As a result, public sector workers are often paid more than private sector workers in similar jobs in the same area. According to the Institute for Fiscal Studies, the overall gap between public and private sector pay averages 8.3%. However, the gap can be as low as virtually minimal in some places and as high as nearly 20% in others.
Academic research also shows that public sector pay is only 40% as responsive to local labour markets as private sector pay. That has potentially damaging consequences for the public sector and the economy. A one-size-fits-all system for public sector pay could limit the number of public sector jobs that could be supported in lower-cost areas. It militates directly against the relocation of public sector jobs to more deprived parts of the country. Private employers looking for staff to set up or grow their businesses might need to compete with much higher public sector wages. The evidence has yet to be examined, but the public sector could be crowding out the private sector in that way, and holding back the private sector-led recovery that the economy needs. Arguably, this makes private sector job creation less attractive. Importantly, it also makes it less attractive to move public sector jobs out of London and the south-east because, without any differential in pay rates to reflect the differential in living costs, it is much less easy to justify the relocation costs and loss of continuity that relocating inevitably involves.
So this approach is about investigating whether this could be another way of supporting local economies, by helping to provide more public sector jobs for the same level of spending and by helping the local private sector to become more competitive and to expand. This could help poorer areas to grow—[Interruption.] Exactly that point was recognised explicitly by the previous Prime Minister. He made exactly that argument. The hon. Member for Leeds West might want to argue with him, but we think that this is one of the few things on which he was right.
More broadly, this Government are determined to support regional private sector growth. Since the last election and the formation of the coalition Government, 843,000 private sector jobs have been created, and promoting regional growth—[Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. I am sorry, Minister. It is not necessary for Members on either side of the House, especially those on the Front Benches, continually to shout across the Floor. This is an important and heated debate—[Interruption.] I do not know why you are tut-tutting, Ms Bray; you have been doing a fair bit of shouting as well.
Mr Maude
We would have made better progress if, every time anyone stood up, the hon. Member for Leeds West had not recited the number of public sector workers in their constituency. She could just have laid the document before the House and we could have taken it all as read. It was a pretty poor substitute for an argument, but I suppose it was the best that she could do.
We are committed to supporting regional private sector growth. As I was saying, 843,000 private sector jobs have been created since the general election, and promoting regional jobs is at the very heart of our growth strategy. In the autumn statement, we announced an additional £30 billion of investment—
Rachel Reeves
I do not think that the Minister wants to cut their pay. Does he think that teachers in Horsham should be paid more than those in Leeds West?
Mr Maude
Under the hon. Lady’s own Government’s policy of introducing academies, it will increasingly be a matter for the management of those academies to set their own pay rates. So the policy that her Government set in train will, over time, lead to differentials coming into existence. Perhaps she will tell us whether she supports the policy of giving academies more freedom to make their own decisions—or is that another subject on which she is going back to her old, left-wing, statist ways?
Rachel Reeves
The last Labour Government did not give less money to schools in Leeds than they did to schools in Surrey. Is that this Minister’s policy?
Mr Maude
Under the last Government, a lot of schools in a lot of places found they were getting a lot less support than they were in other places—funny, that. The fact is that we announced an additional £30 billion of investment in major infrastructure projects across all regions of the UK, and in the Budget we laid out an additional investment of £420 million to stimulate local economic growth.
We have already taken considerable action to achieve strong sustainable and balanced growth that is more evenly shared across the country, but there is a lot more to do. It is not easy, but we have not shirked our responsibility and we will leave no stone unturned to promote a sustainable balance and fair private sector recovery across the UK. First and foremost, that has meant tackling the record deficit that we inherited, ensuring that the UK remains to the greatest extent possible insulated from the storm that undermines our eurozone neighbours. Public sector pay restraint has to play a vital role in that fiscal consolidation. At the same time, by considering the case for local public sector pay, we can ensure that we continue to have high-quality public services across the entire UK and help to support a private sector recovery. I commend the amendment to the House.
Madam Deputy Speaker (Dawn Primarolo)
Order. A large number of Members wish to participate in the debate, so it is necessary to change the time limit to a maximum of five minutes for all Back-Bench contributions. It might be necessary to review that before the end of the debate and to reduce it further.
Grahame M. Morris (Easington) (Lab)
I was rather perplexed by the Minister’s response. My impression is that if it walks like a duck, talks like a duck and quacks like a duck, it is a duck. The Minister, however, says he is in favour of national pay negotiations, but wants to change how they are delivered regionally. As I say, I am confused about whether this is a U-turn, or is it two U-turns so that the Minister is facing in the same direction? It seems as if that is exactly what has happened.
Any decision to allow regional pay differences for low-paid workers in the public sector would only exacerbate the economic and social north/south divide. In fact, we recently had a Westminster Hall debate in which some of the relevant statistics and factors were put on the record. The announcement in the autumn statement that this was on the Government’s agenda came without any prior evidence base for such a move. When Ministers talk about how public sector pay might better reflect local markets, they mean only one thing—pay less to people in poorer areas such as ours.
Rebalancing our economy for the future and addressing the north/south divide should be a Government priority. However, these proposals for regional or local pay differentials—whatever the terminology—would simply entrench that divide. The north-east is facing a double-dip jobs crisis. Government policies of slash and burn in the public sector are hitting the north-east hardest, and the promised private sector-led recovery was always a Tory mirage. [Interruption.] Let me remind Conservative Members who are heckling from a sedentary position that the figures for the north-east show unemployment now standing at 145,000—up 8,000, providing a regional figure of 11.3%, which is an absolute disgrace. Regional pay in the public sector would only make things worse, turning the north-east, and indeed other peripheral regions, into low-pay ghettos.
David Mowat (Warrington South) (Con)
I thank the hon. Gentleman for giving way, as I have been trying to intervene for a while. He makes a point about the north/south divide, about which many hon. Members on both sides are concerned. Will he concede that in the last year of the previous Government, the gross value added difference between London and the north-east reached the highest level for a decade and a half? I do not think that was due to the present Government, so what was it due to?
Grahame M. Morris
I shall come to that point. Under the last Government, the GVA differential was considerably reduced over 10 years. I do not have much time, but if the hon. Gentleman reads the Hansard report of the Westminster Hall debate, he will find all the information there.
In trying to justify his proposals, the Minister mentioned the evidence base, as did the hon. Member for Stourbridge (Margot James). That worries me. Pay review bodies and police boards oversee a pay bill of about £95 billion, and any changes in the distribution of that money would have major consequences. The reverse multiplier and the taking of moneys from local economies are a huge issue, and the benefit changes have already had a terrible effect on the economy in the north-east.
I refer the Minister and the hon. Member for Stourbridge to the Government’s own evidence to the current review, which includes some key sets of figures that I found intriguing. According to that evidence, statistics from the Office for National Statistics on regional price levels relative to national price levels show that, if London is excluded, price levels throughout the United Kingdom vary by only 5.3%, from 97% in Yorkshire and the Humber to 102.3% in the south-east. In my region, the north-east, the price level is 98.2%. Those figures show the smallest variation in price increases throughout the United Kingdom. If the Government proceeded with their proposal to vary pay levels in the public sector, those in the poorest regions, such as the north-east, would be worse off while the wealthiest regions benefited to the tune of billions.
Ian Mearns
All of us in north-east England are calling for an economic stimulus to create demand and grow the economy. This measure would apply an economic sedative to regions such as ours.
Grahame M. Morris
I agree with my hon. Friend’s analysis.
The other likely negative impact of the Government’s policy is a brain drain from the regions with lower pay to those with higher pay. In my opinion, the Tory party has never understood the values and principles of our public services, which were founded on fairness and equity. What is truly outrageous is that Ministers waste their time targeting low-paid public servants when the real crisis is in the private sector. I believe that those are diversionary tactics, and that, if implemented, they would take more money out of the northern regions, which are already suffering from a lack of demand throughout our economies.
The United Kingdom is crying out for a serious new industrial policy that would reduce regional inequalities and close the north-south divide. A regional pay policy of the sort that the Government propose would only make the position worse, and it lacks an evidence base. Any comparison between public and private sector pay is a very crude measure. There are far more highly qualified workers in the public sector, there is a smaller gap between the top and bottom levels of pay, and there is a smaller gender pay gap. The majority of low-paid work in catering or cleaning, for example, is in the private sector. Similar roles in the public sector are often outsourced, which skews the figures still further.
The hon. Member for Warrington South (David Mowat) asked about figures relating to growth rates and relative performance. Under the last Labour Government, the rate of growth in my region, the north-east, went from being the lowest in any region during the 1990s to being the second highest during the last decade. Between the mid-1990s and the global economic downturn of 2008, employment growth increased by 11.2% in the north-east and by 9.2% nationally. Between 2002 and 2008, private sector employment in the north-east rose by 9.2% while public sector employment grew by 4.1%, a point made by my hon. Friend the Member for Sedgefield (Phil Wilson). Between 1999 and 2007, the number of businesses in the north-east rose by 18.7%, which compares favourably with London’s business growth of 19.6% during the same period.
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Gentleman’s time is up.
Mr Aidan Burley (Cannock Chase) (Con)
First, I want to say how grateful I am to Her Majesty’s Opposition for choosing this topic for debate. Regional pay is an issue that has been swept under the carpet for far too long, and it is about time it was debated in this House. It is an issue that affects many businesses in my constituency, and local business leaders have repeatedly raised it with me since I first became an MP.
The simple truth is that private sector firms have to compete with public sector employers, who in many parts of the country currently offer a comparative premium on salaries, not to mention better pensions and other benefits such as job security. This means competition is distorted and the private sector is stifled because it cannot afford to employ new people or employ the best local people.
There is no way around the fact that private sector pay is, on the whole, set locally, and public sector pay is usually set nationally. It is simply a fact of modern life that public and private sector organisations compete for employees in different markets across the UK. The Opposition and their union supporters are quick to paint regional pay as an attack on the public sector or a race to the bottom, but that is offensive to the millions of people who work in low-paid private sector jobs. [Interruption.] This is not a race to the bottom; it is a race to reality—the reality of what people are paid in the real world. [Interruption.] Opposition Members who are chuntering from a sedentary position should remember that without a flourishing private sector in all parts of our country, there could be no public sector jobs, well paid or otherwise, because without the private sector, there could be no public sector. I therefore say this to Opposition Members: anyone who cares about the public sector should also care about creating the right environment for the private sector. That is why tonight’s debate is so important.
Richard Burden
The hon. Gentleman and I represent west midlands constituencies. Will he answer this simple question: does he want to bring down public-service pay in our region, and if so, by how much?
Mr Burley
I want the private sector in the west midlands to flourish. One of the most astonishing facts I have learned since becoming an MP is that between 1997 and 2007 the number of jobs in the private sector in the entire west midlands region fell. During the boom years of the hon. Gentleman’s Government, private sector employment went down, and I do not want to crowd out private sector growth in the west midlands. That is why this regional pay debate is so important.
I read an amazing article on the ConservativeHome website, with which I totally disagreed. It stated:
“Many Tory MPs with small majorities need to keep as many public sector workers onside as possible in order to keep their seats at the next election…For this reason, expect Lib Dems and low-majority Tory MPs to have grave concerns about any regional pay proposals—and expect the plans to be significantly changed or dropped altogether.”
Well, I am a low-majority Tory MP, and I believe this House is at its best when it is at its boldest, and I would be greatly saddened if everything we did was driven by narrow regard for our own majorities and saving our own skin and seats.
The fact that the shadow Chief Secretary to the Treasury, the hon. Member for Leeds West (Rachel Reeves), read out the number of state workers in each of our constituencies says all we need to know about Labour’s approach: stuff their mouths with gold and buy votes. That is the approach of the Labour party, and the hon. Lady did precisely that tonight.
We must do what is right for the country, and what is right for the country is for the Government to do everything they can to enable the private sector to flourish, so that it can pay the taxes that fund the vital public services that all our constituents rely on, not just fund the pay of the public sector workers who happen to live in our constituencies.
Phil Wilson
What advice would the hon. Gentleman give to his party colleague, the hon. Member for Hexham (Guy Opperman), who has a substantial majority and who has said that there is no economic case for regional pay?
Mr Burley
I am sure we will hear from my hon. Friend in due course, and I will let him make his own arguments, but in the very short time I have left I want to focus on the principle behind this debate, which is whether there are different costs of living in different parts of the country and, if so, whether that should be reflected in state pay. The simple answer to both those questions is yes.
Someone commented in response to the ConservativeHome article to which I have referred:
“Perhaps an experiment over a 2 year period to prove Regional Salaries are such a great idea? Begin with MPs and their staff. No doubt they will jump at the chance to lead by example?”
I propose to do exactly that. I have to hand the Independent Parliamentary Standards Authority bandings for accommodation expenditure—the amount that can be claimed by MPs to live in their constituency. Guess what? Yes, they vary by constituency. As MP for Cannock Chase I could claim £10,950 a year to pay my rent and bills, if I were to claim expenses for living locally, which I do not. The Member for Cambridge can claim £15,150—nearly 50% more than I can claim. The Members for North Somerset and North West Hampshire can claim £13,750, whereas the Member of North Swindon can claim just £12,350. So there we have it: there is regional variation in what MPs can claim to live, based on the cost of living in their area. If it is good enough for MPs, why should it not be reflected in the pay packets of other public sector workers?
Let us examine the arrangements for employing our staff. If I employ a senior caseworker in the London area, I have to pay him £23,000 to £31,000. If I employ him in my constituency, I have to pay him only £19,000 to £28,000. A senior parliamentary assistant can be paid up to £42,000 in London, whereas they can start on just £30,000 in my constituency. So the answer to the blogger is that MPs and their staff are already subject to regional variations in pay and allowances, and are living proof of the established principle of regional pay born out of different regional costs of living.
Let us put it the other way round: if the Opposition truly believe in national pay bargaining and public sector salaries being set nationally, will they intervene on me now to say that my staff in London should have their salaries reduced to match those of my staff in Cannock? Or should I be able to claim as much to live in a house in Cannock as to live a house in Cambridge? Of course not. Today’s debate is about whether public sector pay should be relative to private sector wages, and the simple truth is that it must.
The shadow Chief Secretary to the Treasury has said that regional pay will
“prove costly to the public purse and exacerbate regional inequalities”.
On the contrary, crowding out the private sector in the regions of our country is what will exacerbate regional inequalities, and setting a higher than locally appropriate wage bill means that public sector money is not allocated as effectively as it could be within local areas. I noted that she did not reply to the quote in my intervention, so I will repeat it to her now. Unison has said in its location-based pay differentiation paper of September 2011 that
“location-based pay systems offer increased flexibility and a systematic approach to addressing recruitment and retention issues at a local level.”
Government Members agree with Unison in that analysis, and I shall be interested to hear whether any Labour Members, many of whom will doubtless be taking donations from Unison to their constituency Labour parties, also do.
The Government are right to look at more local, market-facing pay and to end the anomaly of national pay bargaining—
Mr Russell Brown (Dumfries and Galloway) (Lab)
Thank you, Madam Deputy Speaker. I regret that once again in this House I have to make mention of the fact that my constituency is a low-wage economy area. We talk about the “race to the bottom” and my locality does not have far to go in terms of it being a low-pay area. One of the greatest benefits to come to the area was the introduction of the national minimum wage in the late 90s. I sat on that Bill Committee, which sat through the night on more than one occasion. At that time, only one party was saying that we should have regional variations; I look across to the Liberal Benches because that was the case put by Lib Dem Members at that time. I am delighted that some on those Benches have had a change of heart.
Some 11,400 people are employed in the public sector in my area, which is some 28% of those employed in the constituency. We depend on the public sector in rural localities, so much so that there are occasions when we struggle to employ highly skilled people, be that in the NHS or in the local authority. The Government may be looking at reducing people’s salaries, but we already pay golden hellos for people to come to work in my area, such is the difficulty in recruiting quality people to the area.
The public sector pay arrangements support local and regional economies, ensure fairness and transparency, and support the whole concept of equal pay. When we introduced the national minimum wage in the late 90s, the greatest benefit came to those who were employed in the private sector. We went from scurrilously low wages of £1.50, £1.75 and £2 an hour to a wage that was recognised as being absolutely necessary to take people out of poverty. What came off the back of that? Additional money went into the local economy. It was calculated at the time that for every £1 million that went into a local economy, 39 jobs were created. What the coalition Government are considering would reverse that.
The hon. Member for Cannock Chase (Mr Burley) made his case and I would love to hear what he would recognise as reasonable pay for any kind of job. He said that between 1997 and 2007, private sector jobs went down in number. His party recognises those years as the years of plenty, so if such jobs went down in number then, where on earth are we going now? If he is dependent on the private sector to get this country back on its feet, I am afraid that he is living in dreamland.
The debate is about regional variation, so I want quickly to mention Scotland. Although Scottish Ministers set pay policy for devolved bodies, some 30,000 public sector workers in Scotland are employed by UK Departments and could be affected by the UK Government’s policy on regional pay. Furthermore, there are many unanswered questions about Scottish separation risking uncertainty for those thousands of staff employed in Scotland.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I would have liked to have been more supportive of what the hon. Gentleman is saying this afternoon, but I find the language and tone of the last part of his speech very disappointing. Does he welcome the minimum wage of £7.20 an hour that the Scottish Government introduced for public sector workers for whom they control pay?
Mr Brown
I mentioned that I was up through the night when the national minimum wage was introduced, and I must tell the hon. Lady that her colleague, Alasdair Morgan, who was the Member for Galloway and Upper Nithsdale at the time, was in his bed while the rest of us were battling for a national minimum wage in this country. She mentions the wage of £7.20 an hour and I am delighted that the SNP Government have followed the lead of Glasgow city council, which was where it originated.
The TUC has estimated that even a 1% reduction in public sector pay would hit 680,000 public sector workers. In Scotland, that would reduce incomes by £162 million. Again, I tell the hon. Member for Cannock Chase that if we take £162 million out of the local economy that must have an impact on private sector businesses. If we take the money out, the marketplace will collapse around it and further jobs will be lost.
I mentioned the Liberals and I am delighted that the hon. Member for Southport (John Pugh) is in the Chamber today. On 15 January this year, he said in the Financial Times that what the Government were considering was a “deliberate ploy” to fragment the public sector. He said:
“It is an unsound and untested economic theory to suggest that the national pay structure is crowding out private sector employment in the north and north-west.”
That goes for the length and breadth of this country. The proposals are a bad idea, verging on absolute insanity.
John Pugh (Southport) (LD)
I thank the hon. Member for Dumfries and Galloway (Mr Brown) for that introduction; I am not used to it.
The battle over regional and local pay is one, frankly, that in the current circumstances the coalition could do without. It would be a battle—a gruelling, energy sapping and pointless battle between and within parties. Even the Labour party is divided on its proposals for regional welfare. Opposition among the Liberal Democrats to the underlying principle and philosophy behind the suggestions is now widespread. We are not against the collection of evidence, but the evidence means that we are against the proposals. Shortly I and a number of colleagues will submit evidence that we hope will convince further. There was no problem recently getting 22 Liberal Democrat Members to sign a letter to The Times opposing regional pay, and of course those numbers were limited because our ministerial colleagues could not be asked to participate.
The politics of the proposal are lethal and divisive. It pits region against region, abandons the principle of equal pay for equal work, and treats the low-paid and local differently from the high-paid and mobile. The economics of it are nonsense, too, being bolstered largely by clichés and prejudice from the usual suspects—the Institute of Directors to name but one.
Kelvin Hopkins (Luton North) (Lab)
It is refreshing to hear some common sense from the Liberal Democrats. The hon. Gentleman might be aware that a survey reported by the CBI suggests that 94% of private sector employers are concerned, above all, about markets and consumer demand for their goods and services, and the proposal would reduce consumer demand.
John Pugh
That is certainly true, and a lot of UK national firms—building societies, banks and the like—do not have regional pay structures.
No one can dispute that reducing public sector pay in low-wage areas necessarily reduces the money spent, and therefore demand, in those areas. No one can dispute that putting relatively more money into the pockets of public sector workers in high-wage areas increases the money in circulation in those areas, and thus demand. Ultimately, economic division will be cemented in and, frankly, a good reason would be needed for doing that.
Jacob Rees-Mogg (North East Somerset) (Con)
The hon. Gentleman said that no one would dispute his points, but I will. If more private sector employment is created, greater total pay is created in the region, thus increasing demand.
John Pugh
That is my next point, because the only good reason for taking forward the approach would be if it was thought that it would improve private sector job opportunities in the poor regions on the basis that public sector jobs appear to be relatively well paid and crowd out private sector employment. If that is happening, one piece of essential evidence—one killer fact—is needed to show that, but it is not differences in the rates of pay in the two sectors, because that reflects a range of things such as job profiles and qualifications. We need evidence to show that as the number of public sector jobs increased in such regions, the number of unfilled vacancies for comparable employment in the private sector grew. That would be the clinching fact, but there is no such evidence. In fact, vacancies in the public sector in the north take longer to fill, because 50% of them are out for eight or more weeks compared with 15% in the private sector. Jobs that pay a living wage and for which skills exist get snapped up. Vacancies do not abound in the private sector except where there are definite skills shortages, and that is because of unemployment. There is no parallel difficulty with failing to fill public sector vacancies in better-off areas.
In the absence of that one piece of clinching evidence, which simply is not there, one could take a barrow-boy view that one could none the less get away with paying people less in the public sector in less advantaged areas, and especially get away with lower pay for the less well-paid, thus banking a cash saving for the state. I understand that argument, but it would be a wholly inappropriate way for a state to behave. It would be inappropriate for the state to discriminate simply by doing what can it get away with. We do not pay women or ethnic minorities less because they might be willing to work for less. If it was easy to get people to take the king’s shilling in the north, would we offer them sixpence instead?
John Pugh
The special housing problems connected with London have been recognised for about 30 years. No one is arguing about that—it is not what the Government are arguing for, and it is not what divides the House.
I have been in politics for quite a long time and worked hard in my region. I have met oodles of people, worried and fretted about regional regeneration, met industrialists, attended forums and spoken to experts. However, no one outside London has ever said to me, “Do you know what we want in this area? What we really need is regional pay.”
Bill Esterson (Sefton Central) (Lab)
Most business people I know want to pay well because they know that if they look after their staff, their staff will do a good job and help their businesses to thrive. If we apply the same principle to the public sector, paying people well and treating them well are both critical factors in delivering good public services, but undercutting pay, making it easier to fire people, and cutting 40,000 public sector jobs in the north-west are all decisions that sap morale and make people more fearful, making it less likely that services will be delivered well. It is also less likely that people will spend money when they are fearful, and that will harm the private sector businesses whose customers work in the public sector.
Many of my constituents work in the public sector and would like to know why regional pay is being proposed. For staff and their families in the north-west of England, regional pay would most likely mean that they would be paid less than colleagues elsewhere. There would be several consequences of such a change, and I shall explore some of the concerns about a move to local and regional pay.
The likelihood is that we would see regional inequalities made worse. Where unemployment is already high and where the recession has hit communities hardest, the introduction of regional pay would make matters worse. Lower pay in the poorest areas is what regional pay means, and the consequences are that the best performing staff would be able to earn more elsewhere. That means that it would be harder to recruit and to retain staff where they are most needed, unless the Minister wants to tell us that regional pay means higher pay in poorer areas. I do not think that is what we heard earlier.
Lower pay means less money going into the economy, again where it is most needed. Less money from lower pay means less money being spent in local businesses already struggling under the pressure of being in deprived areas suffering from a Downing street-made recession.
Ian Swales (Redcar) (LD)
Labour-led Redcar and Cleveland was one of the councils that failed to implement the April 2011 pay rise for low-paid workers, meaning that their workers are now paid less than those in other localities. Did the hon. Gentleman’s council implement the pay rise? What does he think about councils that did not?
Bill Esterson
The hon. Gentleman represents a Government who have cut the funds to councils in the north of England more than ever in history. Those cuts were front-loaded and we still have not seen the end of them, so he is not in any position to tell people on the Opposition Benches about the way that councils operate.
My hon. Friend the Member for Sedgefield (Phil Wilson) made the point that public sector jobs help to create private sector jobs. Indeed, there is research suggesting that every pound spent on public sector pay generates up to £1.50 elsewhere in the economy. When we consider the implications of regional pay, I start to see it as yet another way for the Government to make matters worse, not better, in the areas that need the most help. It will encourage staff, when choosing where to work, to go to the better-off areas and spend their money in places that have fared rather better in the recession.
I am sure Ministers take an evidence-based approach to their policies, so where is the evidence that a more fragmented system would be more efficient? A national negotiating system means a structured set of negotiations and a co-ordinated approach across regions. What, I wonder, is the analysis by Treasury Ministers of the cost of multiple pay review bodies at a local level? I wonder whether Ministers had made those calculations before they made their commitment in the autumn statement. It seems to me that we would see a complex and bureaucratic process for setting local pay that would take time and resources away from delivering vital public services.
If regional pay is introduced, it will mean lower pay in the north-west. In answer to the hon. Member for Redcar (Ian Swales), 40,000 jobs have already gone in the north-west as a result of cuts in the public sector. The north-west has seen twice the national average in cuts in jobs in the public sector, and any measure that cuts pay in the north-west will depress the economy and hit the living standards not just of the staff who lose pay but of the businesses that rely on them and of the people who work in those businesses too.
Lower pay for poorer regions will make it harder to attract the best staff and to keep them. It will mean less money for the staff and their families in already poor areas, and it will take more money out of the hardest hit local economies. As we have seen, the increased bureaucracy will mean higher costs.
The Government point to a gap between public and private sector pay, but the reality is that cutting public sector pay will make it easier for private sector employers, too, to cut pay in order to maintain the differential. In fact, the removal of money from the economy would put pressure on some private employers to do just that because of the depressing effect it would have on the economy. The Government say they want to rebalance the economy. If pay is cut in the poorest parts of the country for lower-paid and part-time public sector workers, many of whom have already lost their tax credits, the economy will be rebalanced all right, but not in a good way. It will be rebalanced so that it is further away from a fair and equal distribution than ever.
The Government should have nothing to do with regional pay. They should continue to work with the staff who do a good job serving our communities up and down the country. They should support those staff to ensure that they can continue to deliver excellent services, not undermine them by sapping their morale with such crazy suggestions.
Guy Opperman (Hexham) (Con)
My entire career has been spent being part of the national health service. My grandmother was an NHS matron, and I came into politics when the hospital in which I was born and which saved my mother’s life was threatened with closure. In 2011 I was diagnosed with a tumour and spent several weeks in London NHS hospitals. I saw all that was good in those hospitals and literally owe my life to the treatment I received. I will be for ever grateful.
If I took one thing in particular away from that experience, it was an understanding of just how many individuals are involved in making the whole process work. From the porter and the nurse to the physiotherapist, the care lady and the cleaner, everyone is just as important as each other. I think that all Members of the House should remember that when we talk about the public sector, we are talking about not only the unions and Unite but the care lady who looks after our mothers and the dinner lady who keeps our children safe at lunch time and provides them with food. It is much more personal than the dry debates we engage in.
There are two key arguments in the debate, the first of which is economic. Having worked as a legal aid barrister or state prosecutor for 15 years, I should declare that I, like many public sector workers, am still owed money by the state, notwithstanding the fact that I stopped working for the state on a legal aid basis two years ago. It was during that time that I saw the effects of local pay, as it is described, and took into account the argument of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—as usual, he is absent from his place—who first contemplated it in 2003 and then forced it on the courts service in 2007.
As with so many of the right hon. Gentleman’s economic policies, I see little evidence that local pay was a success. I have tried to study the economic argument behind it, which is based on the Heckscher-Ohlin factor proportions theory and various academic studies performed by august institutions such as the London School of Economics. I do not support such arguments, which are obscure at best and have not been shown to work in real terms. Also—surely this is the crucial point—it is not supported by businesses in my constituency, none of which has come to me to press for it.
Andrew Percy (Brigg and Goole) (Con)
I agree entirely with everything my hon. Friend has said so far. The other reason we do not support regional pay is the facts. In my region, the Humber, we cannot get NHS workers to come and work and have to consider paying them more. A few years ago we could not get teachers to teach in the city of Hull and had to give them an enhanced salary to do it. Whatever the economics, the reality is that we cannot get some public sector workers to come to my region. How we would do that if we paid them even less is beyond me.
Guy Opperman
I also believe that regional pay is divisive and manifestly unfair. Members who read The Daily Telegraph today—obviously, that includes many on the Opposition Benches—will know that it has criticised me personally for leading the opposition to these divisive plans. It must be very rare to be criticised by The Daily Telegraph and praised by the hon. Member for Sedgefield (Phil Wilson) all on the same day. I was interested when I read on to find that its argument is that pay distortions are
“economically destructive. They make it harder for businesses in the regions to recruit workers at competitive wage rates and as a consequence they stifle enterprise.”
That is not what individual businesses, whether small or large, in my constituency and elsewhere in the north-east are saying to me, however.
This Government, like previous Governments in 2003 and 2007, are right to look at all potential options for boosting growth, and I have no difficulty with them referring the matter for consideration by the pay review body, but ultimately this will not find business support or create the prospect of business growth in the regions that we represent, and we should not support it if it becomes Government policy.
The majority of public sector workers in my region are doing their bit already. They are hard working, and along with the vast majority of my constituents they accept that the Government are right to reduce the deficit, to cut public sector spending, to reform public sector pensions, to freeze pay in some areas and to eradicate some of the non-jobs and excesses that we saw before 2010. That is accepted.
David Mowat
I agree with the thrust of my hon. Friend’s remarks. He cited the phrase “economically destructive”, but does he agree that what is also economically destructive is average public spending per head in London being 15% higher than in the north-west, and that if we wish to tackle the issue under discussion that would be a place to start?
Guy Opperman
I understand what my hon. Friend says and, to a degree, endorse it, but I do not accept that regional pay will be agreed to or supported by the public sector workers who are already experiencing their fair share of the problems that we all have to deal with.
What public sector workers and businesses want is continued investment in manufacturing, something that fell—effectively halved—under the previous Government; the groundbreaking reform of, and improvements to, our schools, and investment in the next generation; continued Government support for apprenticeships, the number of which in my constituency has doubled over the past year; and the maintenance of the Government’s focus on boosting exports, all of which are happening and making a difference to the regional economy.
I have always said that I will put the north-east first, and defending the pay and conditions of public sector workers in this economic climate is just as important as, if not more important than, building up the private sector. I do not deny that I come to this debate with strong opinions on what is economically right, but on this issue I have engaged with union leaders, businesses and local people, and others would be well advised so to do.
We need to be a one-nation coalition, and our focus should not shine too brightly on London and the south-east. We should represent all the people in our constituencies, from the dinner lady to the gentleman who employs 200 people; it is not an exclusive, either/or matter. On this issue, I look forward to the forthcoming visit to the north-east of The Daily Telegraph, which will doubtless come to question many businesses in my constituency.
I make it clear that I do not particularly support the policy under discussion, but I take no pleasure in these debates. This issue is too important to play politics with, so I hope that my friends on the Opposition Benches will spend more time with me, and with their union colleagues, making the case as to why regional pay is wrong, rather than trying to score cheap political points. This is about people’s jobs and pay packets, and I refuse to play any political games with those.
I will not, however, support the Government today, and if this matter were ever put forward as part of Government business, I would not support it.
Chris Williamson (Derby North) (Lab)
Make no mistake, Madam Deputy Speaker, the proposals for regional pay represent a naked ideological assault on public services and on public service workers. In my constituency, 11,800 people are employed in the public sector, representing more than 26% of its work force. Throughout Derby, 25,000-plus are employed in the public sector, and this is yet another example of the fact that this Government represent and stand up for the rich elite in our country, a Government who are prepared to give tax cuts to millionaires while forcing pay cuts on public sector workers.
I know from what Ministers have said that they want to weaken collective bargaining, but that makes no sense. It would be a wasteful approach to go down the road of regional pay because of all the duplication that would be necessary as a consequence of not having national pay bargaining regimes. It makes no economic sense either. Government Members have said that they see the economic recovery as being private sector led, but that ignores the symbiotic relationship between the public and private sectors. If huge demand is taken out of a local economy, that is bound to have knock-on implications for the private sector. This is a self-defeating proposition, because a private sector-led recovery will not be helped by attacking public service workers and undermining their salaries.
I am reading a book by Paul Krugman, a Nobel prize winner for economics, in which he says:
“disasters do happen; history is replete with floods and famines, earthquakes and tsunamis. What makes this disaster”—
the economic crisis that we are living through—
“so terrible—what should make you angry—is that none of this need be happening. There has been no plague of locusts; we have not lost our technological know-how; America and Europe should be richer, not poorer, than they were five years ago.
Nor is the nature of the disaster mysterious. In the Great Depression leaders had an excuse: nobody really understood what was happening or how to fix it. Today’s leaders don’t have that excuse. We have both the knowledge and the tools to end this suffering.”
I have not finished reading the book, but as far as I can see, he clearly does not recommend regional pay as a way of economic salvation.
I know that Government Members revel in the sobriquet, “Thatcher’s children”. However, back in 1993, when John Major was Prime Minister, the Government of the day considered regional pay but saw sense when the Treasury obtained an advice note about the proposition that said:
“At the extreme, local pay in theory could mean devolving pay…to local bodies. In practice, extremely devolved arrangements are not desirable. There are risks of workers being treated differently for no good reason. There could be dangers of leapfrogging and parts of the public sector competing against each other for the best staff.”
Do we really want a situation where a hospital such as Queen’s medical centre, down the road in my constituency, is competing for staff with the Royal Derby? I do not think so.
Over the past few weeks this Government have developed a penchant for U-turns. I would very much welcome a U-turn on this policy, which will be utterly counter-productive and undermine morale in public services, which has already been terribly undermined by the Government’s economically disastrous policies. It simply will not work. I say this to the Government: listen to Paul Krugman and other eminent economists, do a U-turn, and abandon these ridiculous proposals for regional pay.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To ensure that more Members are able to participate in the debate, the time limit is being reduced to four minutes as from now. I call Jacob Rees-Mogg.
Jacob Rees-Mogg (North East Somerset) (Con)
Thank you, Mr Deputy Speaker. I am sorry that you reduced the time limit just before I got up to speak; I will not take it personally.
We have heard that there is no evidence of crowding out, so I thought that I would provide some from Brian Groom’s column in the Financial Times this week. To be fair, I will give both sides of the evidence that he cites, which comes from a man called Henry Overman of the London School of Economics, who found that
“in 2003-07, each extra 100 jobs in the local authority spurred the creation of 50 additional jobs in private sector services, but destroyed 40 jobs in manufacturing.”
Over the longer period of 1999-2007, however, he found that the 100 extra jobs in the local authority destroyed 80 jobs in manufacturing and did not produce any net increase overall through jobs and services. The focus on public service jobs is destroying private sector jobs. I urge Her Majesty’s Government to go much further and to abolish national pay bargaining altogether.
Ian Swales
I thank the hon. Gentleman for giving way and I am glad to be giving him an extra minute to speak. We are all familiar with the phenomenon of people connecting two disparate sets of statistics. Can he think of a mechanism by which adding 100 local authority jobs would destroy 80 jobs in manufacturing?
Jacob Rees-Mogg
The reason increased employment in the public sector destroys jobs in the private sector is that every public sector job has to be paid for by the private sector. The public sector creates no wealth. It spends wealth that is taxed from the private sector. If it does not come from tax immediately, it comes from delayed taxation through borrowing. That is the connection. Increasing employment in the public sector increases the burden on the private sector and destroys the ability of the private sector to compete globally.
Andrew Percy
I usually agree with my hon. Friend, but will he explain why a schoolteacher in Hull or Grimsby, who faces some of the most challenging schoolchildren in the country and even more challenging parents, should be paid less than a schoolteacher doing exactly the same job elsewhere in the country? That is the problem that my constituents have with this proposal.
Jacob Rees-Mogg
My hon. Friend makes a mistake in assuming that the policy will automatically lead to lower pay. Pay will be set by market forces. If it was difficult to employ schoolteachers in his constituency, teachers in that area would have to be paid more than the market rate until it had the required number of teachers.
Jacob Rees-Mogg
Of course there is not a bigger pot of money, but if we allow competition to work, it will increase the local economy, which means that more money will be gathered in through council tax and the area will have the ability to pay more for the public sector that it needs.
The problem with what we are doing at the moment is that it impoverishes the poor. It keeps the poorest areas of the country poor for as long as possible. I know that Opposition Members and some of my hon. Friends are in favour of the current situation not because they want to keep the poorest areas poor, but for the most noble and romantic of motives. However, their noble approach to this issue is fundamentally wrong. They think that it is fair to ensure that everybody is paid the same, but if by doing that we destroy employment in certain areas and make more people dependent on the state, we are not acting in the broader interests of society.
David Mowat
My hon. Friend’s analysis would be 100% right if there were proof that higher public sector pay was crowding out private sector growth. I have not heard that argument being made.
Jacob Rees-Mogg
I gave a little bit of the evidence earlier, but it is the basic logic of economics that if there is a limited supply of labour and a high price is set for that labour in the public sector, it will be forced into the public sector rather than being available for the private sector.
If we set high wage rates for the public sector in the poorest areas of the country, the most able people will be attracted to the public sector, leaving them unavailable for the private sector, and it will set at an unaffordable level the rate that the private sector must pay to compete. The private sector will therefore move down to the south of England, where it is closer to so much other economic activity. If we want to create employment in areas of high unemployment, we have to make it attractive. It therefore has to be cheap. Otherwise, the magnetic pull of London and the region around it pulls employment down here. Those who really care about creating employment in impoverished areas should be in favour of getting rid of national pay bargaining.
National pay bargaining not only gets rid of competitiveness for the private sector, but pushes up all prices in the area. If there are highly paid public servants in poor areas of the country, the costs of housing and services are pushed up. The money that is spent by those people forces up prices and makes it increasingly difficult for the private sector to compete. That is the basic, unassailable logic of economics, and it will not be overcome by the mush of sentimentalism of those who think it is simply unfair to pay people different amounts. As my hon. Friend the Member for Cannock Chase (Mr Burley) said, we accept that principle in other areas, such as with the London weighting. We need to go much further so that every school and every hospital decides the pay rates that it will give its employees. We should make it as local as it possibly can be, and in that way we will allow the private sector to flourish and bloom, the economy to grow and our overall situation to improve enormously.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
It was extremely interesting to hear the contributions of the hon. Members for Hexham (Guy Opperman) and for Brigg and Goole (Andrew Percy). All that I can say is that there is room for them on the Labour Benches should they wish to come across. We even have our own private section should they wish to make progress.
Tomorrow, the House will pay tribute to Aung San Suu Kyi, and no doubt Ministers and Government Members will be pushing forward to get their pictures taken with her for their press releases. They should remember what she has stood for—fairness for workers, regardless of their social background or where they come from. When Members are speaking to her tomorrow, perhaps they will remember that.
Any sensible, decent Government have a responsibility to promote fair employment, and that cannot be done by paying nurses, teachers, jobcentre staff and so on less to work in poorer parts of the country. Indeed, regional or local pay could mean two workers with the same skills and experience being paid differently in two different places even though they were doing the same job. It could worsen inequalities between regions by making it difficult to attract and retain skilled public sector workers in low-pay regions.
Local or regional pay could also work against equal pay. The gender pay gap is smaller in the public sector than in the private sector, and great progress has been made towards promoting equal pay through measures such as “Agenda for Change”.
Perhaps the Economic Secretary could answer a practical question. If an employee of the Ministry of Defence worked as a civil servant or engineer at Faslane and then was transferred to Portsmouth, would their pay vary accordingly either up or down? Who would pick up the administration costs if that were to happen?
The other major concern that people have is about the minimum wage. The Minister for the Cabinet Office has sought to reassure the House that regional pay will not have an impact on the minimum wage, but we have to remember that there are still Government Members arguing that there should be exemptions from the minimum wage. I am sure that there are a number of unscrupulous employers who will see regional pay as an opportunity to undercut people’s wages and exempt them from the minimum wage legislation.
The case for regional pay is not even backed up by evidence. I have spoken to a number of local employers in my patch, and, in the nearly 10 years I have been here, I have never had one employer come forward to say that the reason they have difficulties employing people is the lack of regional pay. That is a non-starter, so regional pay is not evidence-based at all. Perhaps the Economic Secretary will explain exactly where the evidence has come from.
I know that time is short and other Members want to speak, but I want to say in the nicest possible way to my colleague from the Scottish National party, the hon. Member for Banff and Buchan (Dr Whiteford), that nice person though she is, if the SNP’s ambition and aspiration is to pay a higher minimum wage in Scotland, it has had the opportunity to do so during the time it has been in government. Unfortunately, it has chosen not to do that. It therefore remains an aspiration, because the SNP has not implemented it. The few local authorities that have implemented it have had their budgets cut, which shows exactly what it is all about for the SNP. It does not care for the workers, it does not work for the workers and it very seldom turns up for the workers.
Elizabeth Truss (South West Norfolk) (Con)
Our country’s human capital is becoming more vital to our growth and there is an increasing return to skills in jobs across the world. To have a flexible modern economy, it is vital we have a functional labour market in which there are clear signals about what skills we need and where we need them. The idea, in this day and age, that we can have a one-size-fits-all deal for all locations and all performances across the country is wrong.
We face growing international competition—interestingly, Opposition Members made no mention of what is going on around the world and the competitive pressures we face. Countries such as China, Brazil and India are developing highly skilled people, and the UK’s labour force is already 11% less productive than the G7 average. Western competitors such as Canada, Germany and Sweden are reforming their labour markets. In the 1990s, Sweden abolished national pay scales and gave everybody individual contracts. Salaries in professions that were short of supply rose, so kindergarten teachers’ and tax inspectors’ salaries went up. That did not happen overnight, but the change allowed for the adjustment. Places could get the workers they needed with the skills they needed. The contracts were supported by the unions, even though they had trepidations at first. Once individual contracts were in place, the unions acknowledged that they were a good thing.
There have been extensive labour market reforms in Germany, including the introduction of mini and midi-jobs and exempting small companies from labour regulations. Huge labour market reforms and a highly devolved system of wage bargaining were introduced in Canada in the mid-1990s.
Countries such as Sweden and Canada are not pay-the-bottom-price countries, but countries with highly skilled and flexible labour forces. That is what this country should aim for, rather than a one-size-fits-all model. Under the previous Government, there was greater centralisation, with the exception of academies. There was a national agreement on teachers’ pay and conditions in 2003, which made it much more difficult for schools to organise their work forces. The GP contracts signed in 2004 were disastrous. Such national pay bargaining has made our country’s labour force inefficient and damaged regional economies.
We have skill shortages in key professions. Schools in my constituency struggle to recruit maths teachers. They are subject to national pay scales, so they cannot pay the extra money they need to pay to get the teacher into the school. Therefore, students in my constituency lose out on vital education that they would have were the school allowed to change the wage scales.
My hon. Friend the Member for Cannock Chase (Mr Burley) made a good point about the private sector being crowded out. Paying people over the odds of their market wages in places where we could get better value for money is not the best use of public money. The money is not free; it comes from hard-working people who pay their taxes.
Elizabeth Truss
I completely agree with my hon. Friend. Opposition Members do not acknowledge that this country’s unemployment rates are higher compared with countries that have taken action and reformed their labour markets, such as Germany. Those countries have reduced the differentials between different areas.
Elizabeth Truss
I want to continue because we have only a limited amount of time in the debate.
The Government need to be bold in their approach. We need to move from national wage bargaining to individual contracts, as Sweden did. That change was well received by the unions and public sector workers. We need to move to flexi-jobs, similar to German mini and midi-jobs, which have reduced unemployment by half since 2005. We need seriously to look at exempting small businesses with under 10 workers from some dismissal regulations, as Germany did—the change reduced unemployment. The time to take bold action is now.
Jessica Morden (Newport East) (Lab)
In the short time available, I want to talk about regional pay in Wales and my constituency.
Over recent weeks, we have been led to believe that the coalition is cooling on the idea of regional pay and that we might be heading for another U-turn. I hope so, but I welcome the chance to reiterate just how unfair, divisive and damaging such proposals would be for constituencies such as mine. If there is to be a change of heart, the message clearly has not got through to the Wales Office, which this morning mounted a valiant defence of regional pay in the Welsh Grand Committee, although the Secretary of State for Wales told us off for calling it regional pay; she said we should call it “local market-facing pay”—she had obviously read the crib sheet. Having listened to the Minister’s definition, which was as clear as mud, I am none the wiser.
Whatever it is called, it is fair to assume that it would not be good news for public sector workers. The direction of travel is clearly downwards. The First Minister for Wales, Carwyn Jones, was spot on when he said it was code for cutting pay in Wales. Wales has 399,000 public sector employees, but the Secretary of State admitted this morning that she would not be fighting their corner on this issue, despite the fact that her party opposes it in the Welsh Assembly—in fact, all parties in the Welsh Assembly are united in opposition to it.
Let us not forget that these are nurses, teachers and police officers who already face two years of pay freezes and job cuts and who will have to endure a further pay cut of 1%, not to mention the Government’s pension reforms.
Jessica Morden
We are pushed for time, and if I give way, I will prevent someone else from getting in, so I will kindly say no.
We have had 9,000 public sector job cuts in Wales, and there are 39,000 more to come, according to the TUC. The stock argument for the Government’s proposal is that it would allow the private sector to grow by enabling it to compete with the public sector for staff. This is clearly nonsense in constituencies such as mine, where any move on regional pay would hurt the economy, including the private sector.
Jessica Morden
I will give way to my hon. Friend, because he will not get a chance to make a speech, whereas the hon. Member for Cannock Chase (Mr Burley) has already spoken.
Phil Wilson
I hope that the hon. Member for South West Norfolk (Elizabeth Truss) understands that Opposition Members know about globalisation and its effect on the private sector. Hitachi, a big global company, is coming to the north-east of England, but it is not considering local pay; it is considering sectoral pay rates and skills, and looking across the train-building industry. It is not looking locally.
Jessica Morden
I thank my hon. Friend for his intervention. I am sorry he has not had a chance to make his contribution. He is exactly right.
The TUC has estimated that a 1% reduction in public sector pay could result in £97 million being taken out of the Welsh economy. In constituencies such as mine, the public and private sectors are inextricably linked, and money taken out of the public sector hurts the private sector. Members should not just take our word for it; over the past few weeks, the Federation of Small Businesses in Wales has come out in opposition to regional pay. We saw this firsthand in Newport, when the Government were forced to concede over closing Newport passport office with the possible loss of 300 jobs. The Government conceded then that the closure would have a huge impact on our local economy, and many small local businesses were right at the heart of the campaign to keep the passport office open, because they knew full well that their livelihoods depended on it.
There are 23,000 public sector workers in Newport. It has a lot of public sector jobs precisely because of the previous Government’s policy, following the Lyons review, of moving jobs from the south-east to rebalance the economy. As a result, our major employers, as well as the NHS and the local authority, are the Office for National Statistics, the Prison Service and the Intellectual Property Office, to name but a few. This has been a boost to our city and is a real success story. As an ONS worker said to me recently, however, does paying him less mean that the private sector in Newport will suddenly be clamouring for statisticians? We both thought not.
Of course, regional pay is plain unfair. I have a border constituency. If I have two teachers in my constituency, one working in Caldicot, the other in Bristol, with the same skills and experience but paid differently, that is clearly unfair. Let us remember that these people are not hugely well paid—they are often on wages of about £20,000—and would find it difficult to move jobs if this measure was implemented.
Finally, comparing private and public sector pay is not comparing like with like. There are more people with higher qualifications in the public sector than in the private sector, and women, who make up 64% of the public sector work force in Wales and 87% of part-time workers, have very much benefited from the previous Government’s efforts on equal pay. I ask the Government please not to target these women and roll back progress on them. Regional pay, local market-facing pay, or whatever the Government want to call it, will be a race to the bottom on lower pay, and create higher unemployment and more business failures. It is a real pity that we do not have a Secretary of State for Wales willing to stand up and say that.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have eight Members to call and about 16 minutes left.
Stephen Gilbert (St Austell and Newquay) (LD)
I have struggled with two things during this debate. The first is finding anything that the Minister said earlier that I agreed with; the second is finding anything that the Opposition spokesperson said that I did not agree with. However, you will be pleased to know, Mr Deputy Speaker, that I have managed to resolve both struggles. I do not think it fair or right for our Opposition colleagues, however passionately they care about the issue, to be opportunistic in their pursuit of it. I also found two things that the Minister said that I agree with. First, I am pleased that the Government are clear that no decision has been taken yet on this issue. The second thing I welcome is the fact that any decision the Government take will be evidence-based. Like other hon. colleagues, speaking from all parts of the House today, I am sure that when the evidence is in and the process is complete, it will show that the proposal is not one that the Government should go forward with.
I would welcome local pay bargaining and regional pay if it meant that we were able to pay the hard-working nurses, firemen and policemen in my constituency more money. The reality, as my hon. Friend the Member for Brigg and Goole (Andrew Percy) said, is that there is no extra money around. We know from what the Minister said earlier that this proposal is not a revenue-saving measure. There would have to be a redistributive effect, using what is in the current pot. That means that there would be some winners, often in areas that are already wealthy, and some losers, principally in communities and constituencies such as mine.
Cornwall is one of only four parts of our country that qualify for poverty-related grants from the European Union. My constituents face many significant challenges already, with the decline of traditional industries, high housing costs, high water costs, high fuel costs, a lack of opportunity and too few skilled jobs. It is sad to think that the 57,000 public sector workers in Cornwall could be facing another challenge. These people are valued in our community, and I will not let Members from any part of this House play one part of our community off against another. We must not let this debate come down to a division between the public and the private sectors. For a healthy community we need both, and we need them to be working in tandem.
I do not often disagree with my hon. Friend the Member for Cannock Chase (Mr Burley), but I fear that if we went forward with this proposal, we would see a race to the bottom in Cornwall. That is why I will not support the Government this evening. Indeed, the public sector in Cornwall offers some of the fairest pay available. With five people chasing every job, introducing local pay, regional pay or local market-facing pay—or whatever we are calling it this evening—could, I fear, have not only a damaging effect on our hard-working public servants, but a deleterious effect on the local economy. As my hon. Friend the Member for Southport (John Pugh) said earlier, some people have suggested that as much as £1.7 billion could be lost from the poorest parts of our communities. The money lost would be money that would otherwise have gone into the private businesses that we are also keen to see thriving on our high streets, thereby making recovery and growth in our economy still harder.
I hope that the Minister will be able to shed some light on this point in her closing remarks, but I cannot see how moving to local, regional or local market-facing pay could be less bureaucratic and burdensome than the current arrangements. It seems to me a statement of the obvious that moving to such a system would be more complicated and harder to introduce.
The ramifications of the proposed change for Cornwall are great, and I will oppose it every step of the way.
Alison Seabeck (Plymouth, Moor View) (Lab)
As with so much of what this Government are doing, the proposal that we are discussing is tainted by their incompetence and their inability to think things through and fully understand—or, indeed, accept—the perverse outcomes that will result. We have seen it with council tax benefit, housing benefit changes and the rushed strategic defence and security review.
Despite the view commonly held, the south-west has serious poverty. There was a reason why Cornwall had objective 1 status and is a convergence area. Plymouth had the poorest ward in the country in the 1990s. We may not have the dark satanic mills of the north, but there are certainly massive disparities in wealth, which will be further exacerbated should this proposal be rolled out nationally.
The Minister mentioned the previous Government’s consideration of differential pay rates. Indeed, the coalition seems to be clinging to that argument and using it as a security blanket, an excuse for its attempt to take this proposal further. The idea was not extended beyond the Court Service, and there are clearly good reasons for that.
Alison Seabeck
No, sit down. You’ve had your opportunity.
There are other historical examples of this policy. In the 1990s, the Conservative Government asked the NHS to look into the subject, but after a year’s work, it could find only a 0.1% variation between the regions. That was not the best way for the NHS to spend its time and money.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
Will my hon. Friend give way?
Gemma Doyle
I am grateful to my hon. Friend for giving way. Some Members have had longer to speak in the debate than others. Like her, I am outraged by the suggestion that my constituents should be paid less for doing their job than those in other areas. Does she agree that, if nationalist Members were to get their way, they would achieve overnight what the Tories and Lib Dems are seeking, because public sector workers in a separate Scotland would have no guarantees whatever on their wages?
Alison Seabeck
I thank my hon. Friend for her intervention. She is not going to have an opportunity to make a speech, owing to time constraints, but I am sure that the Scottish people will have heard her comment.
Median pay in the south-west is already £14 a week less than the national average. Many of the public sector workers there have also been the subject of pay freezes, pay caps or pension contribution increases, all of which have reduced their spending power. Plymouth is a city that is heavily dependent on the public sector; the hospital is the largest employer. There is real concern there about the damage that a decision to reduce wage levels in the region, or locally, could have on an economy that is just about keeping its head above water.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
We have heard a lot about the private sector from Government Members, but does my hon. Friend believe that it would be instructive to note that many large national private sector employers have pay bargaining practices that are not dissimilar to those of the public sector?
Alison Seabeck
Indeed; I shall touch on that point briefly later.
More than 18,000 people in Plymouth work in the public sector. In my constituency, a massive 25% of the working population do so—one in four people—and to dampen pay rates could be devastating. The Government’s suggestion that it is easy to compare private sector and public sector jobs is absolute nonsense. In the south-west, large swathes of people work in the hospitality and agriculture sectors, earning very low wages. There is no simple read-across, and I would ask the Government to consider that fact carefully.
Alison Seabeck
No, I am afraid that I cannot. Perhaps one of the hon. Gentleman’s colleagues will allow him to intervene on them later.
In his autumn statement, the Chancellor talked about private sector pay being set in accordance with local labour markets. That is not true. As my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) has just pointed out, some of the most successful companies in the country, including large retailers, banks and telecoms companies, use similar national pay structures.
There is genuine concern among businesses in my constituency that any decision to cap or lower public sector pay will lead to problems for them, in that there will be less demand for their goods and services as families pull in their horns.
Alison Seabeck
I am afraid not; my hon. Friend has only just arrived in the Chamber.
A representative of one business has commented to me:
“As I see it, the lot in power have proved that they don’t get reality.”
Because the south-west is very beautiful, we have a large number of second homes. They push the cost of housing up to levels on a par with those in the south-east, but our salaries are lower and so the mortgage multiplier for our potential homeowners is astronomical. That can be crippling for people desperate for a home; the effect is felt not only in Plymouth but in the rural south-west. That point was well made by my right hon. Friend the Member for Exeter (Mr Bradshaw).
In the South Hams, the house price to income ratio is around 17:1. In the Cotswolds, it is even higher, at closer to 19:1, and those figures were taken at the depth of the recession in 2010. We should remember that many of the public sector workers who work in Plymouth and Exeter live in areas such as the South Hams. They might have struggled to get a mortgage on their dream home in better times, and they will be disproportionately hit by this Government’s proposals on regional pay. The housing market will not allow them to sell their home and move—I am sure that my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) was going to make this point— particularly when new affordable homes are not being built. What are those people to do, when their pay is either cut or frozen and meeting their mortgage payments becomes increasingly difficult? They will stop spending in local shops, hotels and pubs, and on entertainment. That will provide a direct hit on the local economy.
This was a complex matter for the NHS to consider all those years ago, and I urge the Government to be aware of the complexity of boundaries and of the additional costs involved in the work required to ensure that the proposal is consistent and does not lead to poaching or leapfrogging. They are on a hiding to nothing on this one; it will create anomalies and provide yet another example of their incompetence. Every time this happens, however, it is not the Chancellor or the Paymaster General and his mates who are affected, but low-paid working people such as teachers, nurses and midwives.
Guto Bebb (Aberconwy) (Con)
I come to this debate with a question mark over whether I can support this policy. I share my doubts with many Conservative Welsh Assembly Members. However, I shall not support the Labour motion today, as it is, to say the least, an example of double standards that is quite surprising even by this House’s standards. In common with the hon. Member for Newport East (Jessica Morden), I have spent most of today in the Welsh Grand Committee, where we discussed regional pay for a long time. I found the comments of the right hon. Member for Delyn (Mr Hanson), who is not in his place, quite surprising. He was vocal in his criticism of the concept of regional pay, yet when he was a Minister in the previous Labour Government, of course, he was responsible for bringing in regional pay in the courts service.
When I debated the matter with the new shadow Secretary of State for Wales on Radio Wales, the hon. Member for Pontypridd (Owen Smith) said that what was done to the court service was not regional pay, but zonal pay. Zonal pay is clearly acceptable to the Labour party, but not regional pay. It should be noted that the five levels of zonal pay within the service vary by 23% for people doing the same work. I thus find the Labour party’s comments and its anger on this issue surprising, given that it introduced this proposal for the service in 2007. What is more, the Labour Government did the same for Department for Work and Pensions staff back in 2003. That is why I am surprised that Labour Members view these proposals with such horror.
When the hon. Member for Derby North (Chris Williamson) calls on the Government to make a U-turn, I am absolutely staggered. How can a Government make a U-turn on a proposal to consult and to do some research? I would have thought that Members would be proud of a Government who say, “Before we enact a policy, we will do the research and ensure that we come to the table with the facts.” If those facts show a strong argument for changing the current situation, that argument can be made, but to say no to doing the research is, to say the least, extremely surprising.
Other comments made in the debate are worth mentioning. I listened very carefully to my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and I was quite taken by his passionate argument in favour of localised pay. The key question I would ask is this. I have a constituency that depends fairly significantly on the public sector, but one that also has a comparatively low-paid economy in respect of the tourism sector. My concern is the fact that we have open borders for the movement of workers from across the European Union and that what has tended to happen in my constituency is that comparatively low-paid jobs have been filled by people from other parts of Europe who are willing to come into this country to work. I question whether, with those open borders, the expected effect of having a more local pay bargaining structure would work as my hon. Friend envisaged. That is the question I have, but I am sure that the research we undertake will show whether that is the issue or not.
We have heard a lot in the debate about Labour Members’ concern for the lower-paid public sector workers, and I share it. My only question, as someone who sat on the Welfare Reform Public Bill Committee for several weeks and contributed to many of the debates on the welfare reform agenda, is how Labour Members can make so much capital in today’s debate about their support for lower-paid public sector workers, when they were more than happy to argue in debates about the benefits cap for a regional benefits payment structure. If they genuinely support people on lower salaries and lower incomes, I wonder why they did not defend the benefit recipients in my constituency when they were more than happy to defend union members who happen to work in the public sector.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I call Phil Wilson, who has one minute.
Phil Wilson (Sedgefield) (Lab)
Thank you, Mr Deputy Speaker, for that generous offer.
We have heard from Government Members that, on the one hand, we introduced regional pay, yet on the other hand that we have a one-size-fits-all system, making it either one or the other. As far as I am concerned, this is not about public sector versus private sector; it is about what is fair for people in whatever sector they happen to work in. Let us think about the situation in County Durham. Unemployment in Sedgefield has risen by nearly 25% in the last year, and the number of people out of work for more than six months has risen by 100%. Moreover, 120,000 households in County Durham will be hit by benefit changes which will take £151 million from the local economy. The average wage is £418 a week, which is well below the national average. Regional pay will not benefit local businesses, because there will no longer be any drive for people to buy anything that is manufactured or created in the area. As for the idea that there are no national pay schemes in the private sector, Tesco has one and so has Nissan. They will not be looking only at local pay rates; they will be looking at the sector in other parts of the country as well, and also at skills.
I believe that this proposal is ideologically driven, and that it makes no economic sense whatsoever. I agree with the hon. Member for Hexham (Guy Opperman). Early-day motion 55, which I sponsored, was signed by Members on both sides of the House, and it is clear that there is a great deal of cross-party opposition to the measure. I strongly urge the Government to withdraw it and to think about what is fair to not just the public sector but the private sector, because this measure will damage both sectors if it goes ahead.
Margaret Curran (Glasgow East) (Lab)
This has been a lively and revealing debate, in which Members on both sides of the House have made promising speeches. I pay tribute to my hon. Friends the Members for Easington (Grahame M. Morris), for Dumfries and Galloway (Mr Brown), for Sefton Central (Bill Esterson), for Derby North (Chris Williamson), for Paisley and Renfrewshire North (Jim Sheridan), for Newport East (Jessica Morden), for Plymouth, Moor View (Alison Seabeck) and for Sedgefield (Phil Wilson), who spoke with commitment and determination. I shall refer to Government Members later in my speech.
The lines were clearly drawn in this interesting debate. I was reminded of my youth, when I listened to the great Thatcherites on the other side of the Chamber. So much for detoxification: the Thatcherites are back in power, revealing that the main purpose of this policy is to drive down the wages of public sector workers throughout the United Kingdom.
Mr Donohoe
In an intervention I said that Whitleyism was a good thing. I did not realise that John Whitley was one of the predecessors of Mr Speaker in this august body and a Liberal Member of Parliament, and was responsible for the introduction of national wage negotiation. Does my hon. Friend not think that he was right?
Margaret Curran
I thank my hon. Friend for, as ever, making a stunning intervention.
The debate has another Scottish dimension. It is very disappointing that only one Scottish National party Member is present. The point was made earlier that the fastest way to break up national pay bargaining in the United Kingdom is to break up the United Kingdom, and that should be remembered.
Dr Whiteford
We heard this afternoon that the idea of regional pay was first mooted by a Labour Chancellor, the hon. Lady’s friend the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), who, as others have noted, is not present. It is a particular kind of brass neck to rewrite history quite so blatantly.
Margaret Curran
While we are on the subject of party leaders, perhaps the hon. Lady, who is a member of the SNP, will tell us why the First Minister of Scotland is very clear about the levels of corporation tax that will be paid in Scotland and what banks will pay, but never seems to be able to tell us what the level of public pay in Scotland will be. Is it not time that the SNP was clear about that?
The debate has also featured the now predictable undermining of Government policy by the Liberal Democrats—or so it would seem from the outside. We must ask ourselves exactly what is going on in this Government. We have omnishambles and U-turns, splits in briefings, and the announcement of a policy one day only for it to be questioned minutes later. The shadow Chief Secretary to the Treasury and I both have the pleasure of shadowing Liberal Democrat Ministers, both of them Scottish at that, but where are they today?
I have been in the House for only a short time, but I have learnt one thing. When the Minister for the Cabinet Office and Paymaster General is at the Dispatch Box, it is a clear sign that the Government are in trouble , so we have to ask ourselves why the Lib Dems are not prepared to do their job by coming to the Chamber and defending this Government—are they off the hook just because they are Lib Dems?
Margaret Curran
I do not have time.
To be fair, the disagreements over the Government’s approach are not just between Lib Dems and Tories; there are also differences within the Tory party itself, as was made clear by the hon. Member for Hexham (Guy Opperman), in what was a powerful and sincere contribution.
In a recent vote in the Welsh Assembly, the Tories voted against regional pay and pointed out the damage they thought it would do in Wales. Tory Finance spokesperson Paul Davies stated:
“As a group, we have not seen any evidence at all of the benefits of introducing a regional pay system in the United Kingdom.”
In the now-infamous Budget, the Chancellor clearly signalled support for the break-up of the national pay negotiating machinery. Have we now reached a stage where the Chancellor of the Exchequer cannot command support among the Tories in the Chamber, or, indeed, the country?
As we have heard in this debate, there are grave concerns about the real purpose behind the Chancellor’s comments. As many Members have said, it appears that the Government wish to deliver a cut in the cost of public sector employment on the dubious premise that it will produce a private sector recovery and economic growth throughout the UK.
Margaret Curran
I do not have time.
As has been pointed out in the debate, the Government have not produced a shred of evidence that a pay bargaining free-for-all would increase the number of private sector jobs, deliver more vibrant local economies or open up access to jobs or opportunities. In fact, the chief economist of the Welsh Government recently demonstrated that age and gender can be as significant factors as local geography, and that if we were to address regional pay differences, we would need to introduce disproportionate changes and reduce the pay of low-paid women. So much for the Tories embracing gender equality!
Perhaps we can hope that the Government will listen to the sensible calls that have been made on this, so that the U-turn on regional pay that has been hinted at becomes a reality. Perhaps the absence of the two Lib Dem Cabinet Ministers augurs well in that regard. The last thing we need in these very difficult times is to drive down wages even further based on the age-old fallacy that the public and private sectors are always to be in competition with each other.
The hon. Member for Cannock Chase (Mr Burley) implied that public sector workers do not have real jobs. That tells us all we need to know about Tory attitudes to police officers and teachers. I call on the Minister to dissociate herself from those comments.
The Opposition motion should be supported by all Members who do not want to exacerbate the north-south divide, who want to ensure that we maintain fairness in public sector pay, and who want to stand up for the interests of working people from Cardiff to Newcastle to Dundee. They should challenge this Government and support the Opposition motion.
The Economic Secretary to the Treasury (Miss Chloe Smith)
This has been an interesting and lively debate. My hon. Friend the Member for Cannock Chase (Mr Burley) rightly disavowed a race to the bottom and instead seeks a race to reality. On the other hand, the hon. Member for Dumfries and Galloway (Mr Brown) thinks private sector rebalancing is dreamland. My hon. Friend the Member for Hexham (Guy Opperman) made a thoughtful, and personal, contribution. My hon. Friend the Member for South West Norfolk (Elizabeth Truss) raised international examples in a very well-informed contribution. My hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) talked of the need for an evidence-based approach and eschewed opportunistic and divisive debate, hints of which we have heard this afternoon.
We also heard from my hon. Friend the Member for Aberconwy (Guto Bebb), who referred to days that we shared on the Welfare Reform Bill and wondered why the Opposition did not support the idea of capping benefits. Perhaps they may tell us today why they favour regionalising benefits but not pay.
Let me talk about what this Government have done, as I wrap up this debate. As my right hon. Friend the Minister for the Cabinet Office and Paymaster General said, this Government greatly value the work and dedication of public sector staff. However, at a time when private sector workers are living with falling wages and job uncertainty, and given the wider pressures we face on the public finances overall, there is a strong case for public sector pay bill restraint. This is why, at the autumn statement, we announced that public sector pay awards will average 1% for the two years following the end of the current public sector pay freeze.
It is also important to look at how public sector pay is set over the longer term. This is why, at the autumn statement, the Chancellor announced that there was a case for considering how local pay can better reflect private sector labour markets and invited the independent pay review bodies to consider the evidence. They will report back from July, and the Government will then consider their proposals. Nothing has yet been decided, and as my right hon. Friend the Minister for the Cabinet Office said, any proposals for each work force will need to be based on strong evidence.
However, it is clear that there is a case for looking at the issue. The pay review bodies have been asked to consider ways to recruit, retain and motivate suitably able and qualified staff across the UK.
Miss Smith
Perhaps the hon. Lady is going to tell me that she is not in favour of that.
Margaret Curran
Can we make it clear that I do not think the Chancellor was suggesting just that more research should be undertaken when he made his statement? Does the hon. Lady believe that a police officer in Hexham should be paid more or less than a police officer in Norwich?
Miss Smith
I will say, for the hon. Lady’s benefit, what I have already said: I look forward to the results of the research that the pay review bodies will be doing.
The gap between public and private sector pay varies significantly around the country, with the Institute for Fiscal Studies calculating a variation of up to 18%. That situation could needlessly limit the number of jobs, including perhaps those of police officers, that the public sector can support, and therefore the services that can be supplied. In addition, it could lead to unfair variations in the quality of public services through higher vacancy and turnover rates in some areas. Finally, it could also hurt the private sector, which often needs to compete for staff with the public sector. The CBI has said that it is essential to compete and that the Chancellor was right to ask for the exploration of the issue.
The need for pay levels that reflect local labour markets was of course recognised by the previous Government, when they took forward pay reform in the courts service. I will just dwell on that, because it has been discussed this afternoon. I suspect that the hon. Lady is not familiar with the fact that staff were given a choice about whether to opt in or out of that reform at that time, and the opt-in rate rose to 97% over 12 months. That is something to be welcomed. Let me jog memories further. The then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), who is again not in his place, set out plans. He said that in our country
“it makes sense to recognise that a more considered approach to local and regional conditions in pay offers the best modern route to full employment.”
Labour Members will wish to reflect on those words.
Jim Sheridan
May I remind the hon. Lady that the previous Government introduced the national minimum wage? Does she agree or disagree with the hon. Member for South Northamptonshire (Andrea Leadsom), who seeks exemptions for employers to exclude people from the minimum wage?
Miss Smith
I agree with what my right hon. Friend the Minister for the Cabinet Office said earlier, which was that this Government and the Conservative party fully support the national minimum wage.
Miss Smith
Does the hon. Gentleman still think that we are all in dreamland when we seek to support the private sector?
Miss Smith
If I tried to answer that question, I suspect that I would soon end up outside the scope of the debate. It is particularly important to note that we need to consider the evidence, which the Chancellor has asked for by asking the pay review bodies to consider the question. That evidence would come into the answer to the hon. Gentleman’s question.
Miss Smith
I will not give way. The hon. Gentleman should rest his foot, as I had to myself several months ago. I wish him well and a speedy recovery.
It is somewhat troubling that shadow Ministers have not been able to explain whether they think it is good for small businesses in their constituency that the public sector pays 7.5% more overall than the private sector. They have not been able to explain, as I have mentioned, why they favour regionalising benefits and not pay. Perhaps they will surprise us all and stand firm against attempts to appease the unions, wait for the pay review bodies’ reports and take a mature decision based on the evidence available. That is what this Government will do. We do not seek to cave in to those who have given around £15 million to the Labour party in recent times.
The introduction of local and market-facing pay could help poorer regions, which I know Members on both sides of the House would welcome. It could do that by providing more public sector jobs for the same level of investment and by helping the local private sector to become more competitive and to expand. Tonight’s debate should not be about regional pay, about ending national pay bargaining or about cutting anybody’s pay. The Government recognise that public sector pay is a complex issue that varies significantly between public sector work forces.
Margaret Curran
Will the Minister explain at what level market-facing pay would be set for a police officer?
Miss Smith
The motion rests on a misrepresentation of the notion of regional or local, and the hon. Lady is attempting a second misrepresentation by bringing police officers in at this point, when the debate ought to be about the NHS and teachers, and the civil service where pay is under the control of central Government. She should know that.
Let me return to what the Government have done and complete my comments. The Government recognise that public sector pay is a complex issue that requires an evidential approach and varies significantly between public sector work forces. That is why we have asked the independent pay review bodies to consider the issue and why any decision will be based on the evidence. That is why we look forward to the outcome when the review bodies report next month.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Business without Debate
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Community Hospitals (North-East)
(12 years, 5 months ago)
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Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
In December 2011, the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow) told me:
“Local community hospitals provide a vital community resource to support patients in need of rehabilitation, recuperation and respite care”,
and that they support
“a rapid return to independence and good health.”—[Official Report, 12 December 2011; Vol. 537, c. 560W.]
It was a pleasant surprise to find myself agreeing with him. Unfortunately, community hospitals, especially those in my constituency and in the north-east, are facing ever more challenges.
Hospitals such as East Cleveland hospital and Guisborough hospital play an essential role in the communities that they serve. My constituents prefer and would ordinarily choose to receive care near their home and their family, whether it be palliative, minor injuries or maternity care. That is also the case elsewhere in the north-east and north Yorkshire, where my colleagues and local residents have been speaking out to protect and extend the services in their local community hospitals and district general hospitals, which are increasingly under threat.
Demographic change means that we are increasingly dealing with social care. Given that community hospitals tend to be truly local and cherished, and the need for health and social care to be seamlessly integrated, it should be painfully obvious that local community hospitals are able to provide effective liaison between NHS staff and local adult social services, especially when discussing arrangements for the discharge of elderly patients and their continued need for community-based care facilities and services. The Government are, at least nominally, following the previous Labour Government’s good example of recognising the importance of patient choice.
Mr Graham Stuart (Beverley and Holderness) (Con)
The hon. Gentleman is giving a powerful speech that rightly highlights the importance of community hospitals. Does he, like me, regret the fact that more than 3,000 beds in community hospitals were closed by the last Labour Government? Does he recognise that only a huge campaign across this House made them see the error of their ways and reverse their savage cuts to this most vital of local assets?
Tom Blenkinsop
Any intervention in this debate must be put in the context of the fact that more than £600 million from my region is going to be relocated to the south-east. I know that, as a Yorkshire MP, the hon. Gentleman will be concerned about the news of the cuts to Yorkshire’s health care services that came out only today in The Northern Echo. We can talk about the whys and wherefores of that, but there is certainly a kernel of truth in it. Community hospitals and secondary hospitals, such as James Cook university hospital on the border of my constituency, are having to consolidate and centralise their services far more than has been the case before.
Alex Cunningham (Stockton North) (Lab)
I congratulate my hon. Friend and fellow Teesside MP on securing this debate. I know how hard he works on behalf of his constituents to secure access to the services that they need, particularly health services. Is he surprised that there will be more cuts, particularly in the light of the £50 million that it is costing to reorganise the NHS on Teesside?
Tom Blenkinsop
I am not surprised, to be honest. A couple of days ago, the Newcastle Journal reported that a freedom of information request had demonstrated that even after the NHS redundancies that we have seen, which I think cost approximately £60 million, a further 1,000 nurses are set to be cut in the north-east region.
The role of community hospitals is as important as ever. Despite the apparent importance of community hospitals, I fear for the future of hospitals such as those in Brotton and Guisborough in my constituency, the five other community hospitals of the South Tees Hospitals NHS Foundation Trust, and the trust’s district general hospital, the Friarage, which is at the heart of the Foreign Secretary’s constituency. All those hospitals are seeing a reduction in services as a consequence of the Government’s health reforms and austerity package—whether the reduction of minor injuries provision, the closure of the Chaloner ward at Guisborough hospital or the downgrading of maternity and paediatric services at the Friarage, which even the Secretary of State has branded “unacceptable”.
Ultimately, communities, patients and employees recognise that only so many services can be cut before the future of the hospitals themselves is brought into question. They are concerned that the Government are failing to do anything whatever to prevent those reductions in services. [Interruption.] I give way to the hon. Member for Redcar (Ian Swales).
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I suggest to the hon. Member for Redcar (Ian Swales) that if he wants to intervene, it is better if he actually stands up rather than waving his hand?
Ian Swales
Thank you for your advice, Mr Deputy Speaker.
I congratulate my neighbouring MP, the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), on securing this important debate. My daughter was born in Guisborough hospital in his constituency, but that would no longer be possible as the maternity unit closed in 2006. The withdrawal of services from older community hospitals, and the failure to put services into new community hospitals such as Redcar, are top-down decisions. Does he support more locally based commissioning driven by clinicians?
Tom Blenkinsop
I believe in an excellent quality of service, and yes, it was regrettable that the maternity unit at Guisborough hospital was closed. As the hon. Gentleman will know, my predecessor fought to save that service. In fact, there was a wide campaign by the local trust and all local politicians to keep it open. Unfortunately, more people opted to use the maternity services at James Cook hospital, which was part of the choice agenda that all parties believe in. I am sure the Minister does as well.
Jim Shannon (Strangford) (DUP)
Will the hon. Gentleman explain why some Members, when they are outside the House, support petitions to retain hospitals and community services, but in the House vote to stop them?
Mr Deputy Speaker
Order. I allowed the intervention, but I am not sure what the connection is between the north-east and Northern Ireland.
Tom Blenkinsop
The current Prime Minister, when he was Leader of the Opposition, identified Northern Ireland and the north-east as areas where the public service cuts should primarily take place. That is the similarity. Of course, the north-east leads all other regions in the United Kingdom on exports, so there was some smoke and mirrors in that argument. There are indeed a number of Members who are introducing petitions against the closure of health services, including a number who are in the Cabinet.
The centralisation process is well under way at Guisborough hospital, in my constituency, and that is just one example of what is happening across the north-east. The hospital has already been forced to operate a reduced service owing to staffing pressures, opening only from 9 am to 5 pm on weekdays and 8 am to 8 pm at weekends instead of the usual round-the-clock service. The Chaloner ward there is an eight-bed unit providing palliative, post-operative and respite care, with dedicated nursing care for a variety of medical conditions. There is also an out-patient suite and a minor injuries unit. Closing the Chaloner ward could eventually mean the end of the hospital. The maternity service has already been lost, and closing the ward would leave only a residual out-patient service and the Priory ward on the site. East Cleveland hospital, in the Brotton area of my constituency, offers even more limited services than Guisborough, and I have often spoken to constituents who have been forced to seek treatment elsewhere.
My main concern is that hospitals such as Guisborough and Brotton will become marginalised owing to a continuous reduction of funding from South Tees Hospitals NHS Foundation Trust, as more and more services are consolidated at James Cook university hospital. It takes nearly an hour to reach that hospital by bus from Guisborough, and even longer from the more rural parts of my constituency—and that is under the very generous assumption that such bus services will still be available.
It may be politically expedient for some to argue that such decisions are solely the responsibility of the relevant trust and are somehow detached from being the responsibility of central Government, but they are unfortunately a worrying national trend. No one trust can take the blame, and the scrutiny must instead be of the Government who force them into such a position. For example, I have read that in Sutton,
“a cloud has gathered over St Helier”
district general hospital, where accident and emergency services are under threat, to such an extent that the Minister of State, the hon. Member for Sutton and Cheam, has started a petition against the closure in his own constituency, despite the fact that it seems to be part of a broader pattern that is perhaps caused by his own Department’s policies.
Given all the campaigns that are emerging throughout the country to save services at local hospitals, I find myself asking why there seems to be such a decline in the provision of services. Despite the Government’s localism agenda, it appears that services are becoming more centralised to larger hospitals, leaving community hospitals with empty beds and abandoned wards.
Dr Phillip Lee (Bracknell) (Con)
Does the hon. Gentleman agree that the consolidation of acute and emergency services, and the reconfiguration of services in the north-east and across the country, are about not just the cuts and austerity to which he refers—I do not agree with him on that—but the changes in how health care is provided? Does he also agree that the community hospitals that he seeks to support are best placed to deliver chronic care, not acute care?
Tom Blenkinsop
There is an element of truth in what the hon. Gentleman says, but I will come to that when I make suggestions. Community hospitals have a role as part of an overall package, but I have seen an erosion of those services in my locality. The reason I have introduced this debate is that a pattern is emerging in the north-east and across the country in how services are allocated by trusts.
Guy Opperman (Hexham) (Con)
I applaud the fact that the hon. Gentleman has introduced this debate on behalf of north-east community hospitals. I want to address the issue of the quality of the service provided by them. We retain maternity services in Hexham. The service is so popular that Northumbria Healthcare NHS Foundation Trust has said that it is hopeful that more women will choose to have their babies there. Does he agree that that is an example of a community hospital going forward?
Tom Blenkinsop
I praise the hon. Gentleman—it sounds like the services in his constituency are going forward and doing very well—but I am addressing the broader pattern in my local area and elsewhere. Some worrying trends are a symptom of the Health and Social Care Act 2012, which I opposed vociferously—that is on the record.
The future of community hospitals is being plunged into uncertainty because of the 2012 Act. With responsibility for commissioning health care services now falling to clinical commissioning groups, and with primary care trusts being axed, centralisation is a real temptation both for the CCGs and for the foundation trusts that have taken over responsibility for the management of primary care hospitals in Teesside.
Another future scenario for community hospitals is the possibility of privatisation. As cuts are made, commissioning groups could look outside the NHS to provide their services. That happened in Suffolk in March, where Serco won a £140 million contract to manage, among other things, the area’s community hospitals. Neither the public, who cherish their NHS, nor workers, want that, and there is a concern that such deals are made solely to save money and not necessarily to improve patient care. In the north-east, where health inequalities are most pronounced, such moves could lead to a significant decrease in the quality of service offered, and to a loss of any long-term strategic vision that might exist to tackle such deeply ingrained public health problems.
When I challenged the Prime Minister about the future of community hospitals and district general hospitals at Prime Minister’s questions last week, all he did was cite a supposed increase in funding to the “primary care trust” in my constituency—he is so oblivious and out of touch that he failed to realise there are, in fact, two primary care trusts: NHS Redcar and Cleveland, and NHS Middlesbrough.
Regardless of what spin the Government put on the state of the NHS, it is clear that the NHS throughout the country is struggling financially. In GP magazine earlier this week, research collected through a series of Freedom of Information Act requests showed that nine out of 10 trusts find themselves “rationing” care such as cataract surgery and knee and hip operations. If trusts have to do that, there is clearly an issue with funding, despite the Government’s assertions, especially when trusts such as Redcar and Cleveland have to spend tens of millions of pounds to deal with the consequences of the 2012 Act.
I worry that many trusts, when faced with the real possibility of having to reduce clinical services, will turn towards centralising them and taking them away from community and district general hospitals. They will certainly be wary of extending the services offered in such hospitals. Redcar primary care hospital, which is in the neighbouring constituency of the hon. Member for Redcar (Ian Swales), needs such an extension, but the localisation agenda is threatened by the lack of funding necessary to pursue it.
The Health Secretary and Prime Minister need to remember the pledge they made in 2007 to protect district general hospitals, and to listen to what communities, patients and medical professionals are saying about the importance of securing the future of community hospitals. It would take some of my constituents, such as those in Cowbar, 45 minutes by car or around three hours by public transport to reach the large hospital 20 miles away into which services are being consolidated. I imagine the situation is even worse in more rural parts of the north-east and north Yorkshire. That is clearly not acceptable. Individual members of the Government, such as the Foreign Secretary and Minister responsible for care services, have been critical of the effect of the Department of Health’s policies on the provision of services in local hospitals following campaigns by angry and worried constituents, but it is time for the rest of the Government and the other Health Ministers to act. Steps need to be taken, and funding provided, to ensure that patients have the choice to receive as many services as is medically possible in hospitals near their homes, not as a replacement to care at home or in more specialised hospitals, but to complement it.
The Minister of State, Department of Health (Mr Simon Burns)
I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate, and I pay tribute to NHS staff in his constituency, who do so much for the health and well-being of his and other hon. Members’ constituents.
Robust community services are a vital element of emerging models of care, providing treatment to patients closer to home and improving health outcomes. The Government remain committed to extending and improving access to care and treatment in the community and at home. This includes sharing best practice to enable the smooth discharge and transition of patients from acute settings to robust community services, allowing them to be cared for closer to home.
Community hospitals play an important role in that process. The care that Guisborough hospital provides includes rehabilitation and follow-up care in a community setting. Community hospitals have the potential to make considerable efficiency savings in the local health economy by shifting care, diagnostics, minor injuries and outpatient services, among others, from acute hospitals to the community. They provide both planned and unplanned acute care and diagnostics services for patients closer to home, support best practice in reducing the need for admission to acute hospitals and contribute to the local community by providing employment opportunities and support for community-based groups.
Those are a few reasons the community estate is a core part of the NHS. It can help to transform care pathways, moving care from acute settings to community settings. Local investment in this type of facility is part of a dynamic service model that supports health and well-being for the whole community. The hon. Gentleman will be aware that under the transforming community services programme, responsibility for community services was transferred from primary care trusts to NHS and other providers. To this effect, South Tees Hospitals NHS Foundation Trust took over the operation of Guisborough hospital in April 2011.
The transfer of community services enabled the NHS to develop new innovative models of care using local multi-disciplinary, clinically led teams to improve services and health outcomes for local patients, families and communities. This has enabled the NHS to be creative in its approach to delivering community services. However, I fully appreciate the context within which all NHS organisations operate. They have to provide high quality services while remaining sustainable and efficient in making the best use of limited resources. The Government recognise this challenge, which is why we have protected NHS funding and are increasing funding in real terms during this Parliament.
In the hon. Gentleman’s constituency, Middlesbrough PCT will receive an allocation in 2012-13 of more than £299 million, which is an increase of more than £8 million, and Redcar and Cleveland PCT will receive more than £269 million, which is an increase of more than £7 million. Despite this generous settlement, however, the NHS needs to do more. It needs to find up to £20 billion of efficiency savings over the same period to meet the rising demand for NHS services and to continue to invest in new technologies and drugs to help meet these demands.
We will not dictate from the centre how efficiency savings should be achieved. Decisions about local health services should be made as close to local people as possible. Local NHS commissioners are best placed to identify the scale of the financial challenge and the opportunities for making savings, while driving up and maintaining quality. Every penny of those savings can be reinvested in front-line services and health care.
Guy Opperman
An example of that, I would suggest, is Haltwhistle hospital in west Northumberland, which has been rebuilt by the local NHS trust to provide a hospital facility and an integrated care facility. Does the Minister agree that that is a good example of the Department and the trust supporting a community hospital?
Mr Burns
I am extremely grateful to my hon. Friend, because I understand that the campaign for that decision was kept up for more than 25 years. I congratulate NHS North of Tyne, Haltwhistle council and the friends of the hospital, as well as my hon. Friend, for all their work in ensuring that it is finally happening.
Tom Blenkinsop
It is good to hear that every penny saved will go back into the NHS. My main fear is that the new funding calculations that the Secretary of State for Health is proposing will be based not on deprivation but on age, which means that, as shown by studies by Durham university—a fine institution in my region—more than £600 million of the health funding that is currently given to north-east health services would be redirected south.
Mr Burns
I certainly note the point the hon. Gentleman makes, and I have read a number of his local newspapers, in which he and a number of his hon. Friends have been making it too. I am delighted that he accepts my argument that every single penny that is saved from the £20 billion of efficiency savings—which, of course, we inherited from the last Government and accepted, because it was the right policy to pursue—will be reinvested in the NHS.
I think the hon. Gentleman attended Health questions on 12 June, at which the right hon. Member for Newcastle upon Tyne East (Mr Brown) raised the funding formula and the basis for it with me. I explained that a variety of factors, of which health is one, will determine the allocation of funding—just as it was determined under his Government—and that the question was also being looked at by an independent body. I have seen the newspapers, and I fully appreciate that the hon. Gentleman and his hon. Friends are trying to drum up a storm by suggesting that they are going to be hard done by. However, if he reads the answer I gave to his right hon. Friend the Member for Newcastle upon Tyne East in Hansard, I hope it will reassure him, on reflection, about the current situation.
Mr Graham Stuart
The Minister will recognise that community hospitals in the north-east, as well as in Beverley and Holderness, were starved of funding under the last Government. We saw gross distortions in funding, as the formula used deprivation as a way of pouring funding into urban areas, where there were young people who, regardless of their social background, were not in need of health funding. That starved the community hospitals serving ageing populations, which did need the funding. What we need is not reverse gerrymandering, but health funding that follows clinical health need. We did not have that under the last Government, who starved rural community hospitals of funding. I congratulate the Minister on having the courage to face down the vested interests of the Labour party.
Mr Burns
Let me return my hon. Friend’s compliment in kind by saying that I am grateful for the valid points he makes. He knows as well as I do that this Government, under the leadership of my right hon. Friend the Member for Witney (Mr Cameron), are totally committed to community hospitals. I know that he will also be reassured that, unlike with the last Government, there is no question whatever of this Government gerrymandering the funding formula.
I know that the hon. Member for Middlesbrough South and East Cleveland is aware of the scale of the challenge facing his local NHS. Like every local NHS economy, the NHS organisations that commission and provide services in his constituency must take some fairly tough decisions to deliver sustainable health services in future. Let me also say to him—in the nicest possible way, because I respect him—that we are in the situation of protecting the NHS budget and giving it a modest real-terms increase, given our commitment to the NHS, simply because of the economic mess that we inherited, thanks to the actions of his Government, under the stewardship of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). That meant that there was not enough money to sustain the levels of real-terms investment that might have been available earlier this century.
I turn now to Guisborough hospital. I am aware that Chaloner ward, which provided palliative care and rehabilitation, closed permanently in February 2012. I am advised, however, that services were transferred to the hospital’s larger Priory ward, which I am assured has adequate room and staffing to continue to provide high quality care. I understand that the decision to close Chaloner ward was based on the need to deliver services safely, efficiently and effectively, as the ward had been under-utilised and was not making the best use of nursing resources. Staff were engaged on the decision. In fact, they advised closure—I hope that the hon. Gentleman heard that. The staff advised closure, and staff at the ward were redeployed within Guisborough hospital and to the nearby Redcar primary care hospital.
I am also aware that temporary changes were made to the opening times of the minor injury unit at Guisborough hospital. The MIU now opens between 9 am and 5 pm from Monday to Friday, and between 8 am and 8 pm at weekends. I understand that patients requiring treatment outside those hours use Redcar hospital, local GP walk-in centres or the accident and emergency department at the James Cook university hospital. I have been informed that the MIU is staffed by a small team of nurses, and that the changes enabled the unit to continue to provide a safe service for patients. I also understand that the South Tees Hospitals NHS Foundation Trust is looking at whether other staff can provide support to the unit.
I have been informed that, in the longer term, South Tees Hospitals NHS Foundation Trust is reviewing the provision of acute and community services across all its sites, including Guisborough hospital. The review is aimed at ensuring the future safety, quality and sustainability of services. The trust has been working with GPs, commissioners and local authorities to establish models of care that will enable more patients to be cared for at home and avoid unnecessary admissions to hospital—whether at the larger acute hospital, James Cook, or community hospitals such as Guisborough. Once that work is completed, the trust expects to take a more definitive view of the future role of community hospitals such as that at Guisborough. It is not yet clear when the review will conclude. However, I am assured by the local NHS that there are no plans in the near future for further service changes at Guisborough hospital. I hope that that will reassure the hon. Gentleman. Should there be any changes in the longer term, once the trust has completed its review of service provision, local stakeholders and the public will be engaged in this process. He might be aware that my right hon. Friend the Secretary of State has set out strengthened criteria for service changes. Any proposals for major service change need to be assured by the local NHS against the Secretary of State’s four tests for service change and, when necessary, to be subject to public consultation.
I am aware that the hon. Gentleman met the chief executive of South Tees Hospitals NHS Foundation Trust to discuss these matters in February 2012. I also understand that the trust provides him with regular briefings on these issues, and I hope that he finds that helpful and useful in formulating his views on the provision of health care in his area. I hope that being briefed personally by his local health service providers will allow him to have a more open mind in regard to what is actually going on in the NHS, rather than simply accepting the propaganda that all too often distorts his views. I strongly encourage him to continue that dialogue with the trust as it completes its review of service provision.
Question put and agreed to.
Westminster Hall
(12 years, 5 months ago)
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Seasonal Agricultural Workers Scheme
(12 years, 5 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Gordon Henderson (Sittingbourne and Sheppey) (Con)
It is delightful to start the day with you in the Chair, Mr Dobbin.
Agriculture is an important industry in my constituency, which is hardly surprising if we consider that Sittingbourne and Sheppey is situated in God’s own county of Kent. Agriculture will have an increasingly strategic importance nationally. Over the next couple of decades, food security will become a major issue as the world’s population increases and demand for food grows in those countries from which we currently import agricultural products. Britain will have to grow more of its own produce if it is to maintain a plentiful supply of affordable food. Britain’s farmers will become increasingly important to our national economy, and their success in feeding a growing population will depend not only on better use of a shrinking amount of available agricultural land but on having a well trained and willing work force to help harvest the crops.
Kent, which as everyone knows is the garden of England, is renowned for its orchards. Horticulture, which is defined as the cultivation of flowers, fruits, vegetables and ornamental plants, contributes some £3.1 billion to the UK’s GDP. The employment created by horticulture is crucial to many communities, particularly small communities in rural areas for whom other employment is simply not available. It is ironic, therefore, that farmers in recent years have found it so difficult to recruit local labour and have had to rely on foreign workers.
The vast majority of those workers come into the country on the seasonal agricultural workers scheme, SAWS, which is quota based and enables farmers to recruit temporary overseas workers to carry out planting and the harvesting of crops, as well as farm processing and packing. SAWS is an effective scheme controlled by the UK Border Agency and managed by contracted operators. Workers are issued with a work card that gives them permission to work for one employer for a fixed period of up to six months. Those workers must be paid the minimum wage and be provided with accommodation by their employer. The scheme has provided a pool of labour for the horticulture industry for 60 years, and without those workers farmers simply would not be able to survive.
Before 2007 SAWS applied to students from outside the European economic area, but since 2008 the scheme has been restricted to Bulgarian and Romanian nationals, as part of the transitional controls on migration from those countries when they joined the European Union. Those restrictions will be lifted in 2013, and farmers fear that they will have insufficient labour to meet their seasonal demands. One of the reasons why farmers find it difficult to recruit home-grown local workers is the seasonal nature of employment in agriculture and horticulture. The season generally lasts from March to September, with the peak months of employment being April and May. Setting aside the perhaps understandable desire of domestic workers to prefer full-time employment, fewer and fewer local people seem willing to undertake what can sometimes be hard, physical work with early morning starts and long hours.
As a boy growing up in the Medway towns, I remember being taken down to the Sun pier in Chatham by my aunt and cousins to queue up for the lorry to take us for a day’s picking on one of the local farms. I was about nine or 10, but I put in a full day’s work picking fruit, peas or hops—it shows, I know. Those days are long gone, but it would be good to think that we might be able to encourage more young people to spend their summer holidays working in the fields.
Jesse Norman (Hereford and South Herefordshire) (Con)
I thank my hon. Friend for securing this debate on an extremely important topic. In my own county of Herefordshire, we have many visitors who are reliant on SAWS. Farmers advertise scrupulously for local, English labour when attempting to fill such jobs, but often without success. Has that also been his experience in Kent?
Gordon Henderson
Very much so, and I will come on to possible ways to overcome that.
Some would argue that people on benefits should be forced to take the place of foreign workers and, on the face of it, that option is attractive. The problem is that forced labour is not productive labour. We can make people pick fruit, but we cannot make them pick it so as to ensure that it is packed in perfect condition. Bruised apples are no good to anyone, and certainly not to farmers and their customers, for whom quality is important.
Other countries, notably Spain, have schemes that allow those on benefits to retain their entitlement while undertaking seasonal work on a daily call basis. The so-called fixed discontinuous contract allows workers to have an indefinite contract with a farmer, while only being called to work if there is suitable work. On days without suitable employment, the worker may claim unemployment benefit, and a tally is kept of the days worked, not worked or taken off sick. That scheme not only provides farmers with access to seasonal workers, but offers those workers a route out of benefits, the opportunity for training and an increase in self-esteem. The Government should consider introducing a similar scheme here in Britain.
Another option, which could have more long-term benefits, is the voluntary employment of properly supervised prisoners to work on farms. Before I am misinterpreted, let me repeat those criteria: prisoners should be volunteers and they should be properly supervised. The Government have said that they want to see all prisoners working and being paid for that work, and such an arrangement would no doubt be a useful tool to rehabilitate prisoners and prepare them for release back into society. Giving inmates a skill that could provide them with work opportunities when they leave jail could go a long way towards ensuring that they do not reoffend.
Mr Mark Spencer (Sherwood) (Con)
I congratulate my hon. Friend on securing the debate. I hope he recognises that we are not talking about unskilled labour. The dexterity and speed with which some of those people can operate machinery and harvest shows great skill, and such skills would enable people to go on to employment later in their lives.
Gordon Henderson
Absolutely right—and training prisoners to become agricultural workers might encourage them to work on the land when they leave prison, which would solve another problem. One of the problems with getting prisoners to work, however, is that unemployed people who are not in prison resent inmates being given jobs that might otherwise go to them. Encouraging prisoners to take jobs that other domestic workers have turned their backs on, such as those jobs in agriculture, would solve that particular problem.
I have spoken to the governor of one of my three local prisons and he was keen to trial such a scheme. Cynics may say that prisoners would not want to work on farms, but until relatively recently Standford Hill open prison on Sheppey, in my constituency, operated a farm that supplied produce to the prison estate. The workers on the farm were, in the main, inmates and they were bitterly disappointed when the previous Government decided to close the farm down.
Even if such schemes were successful, there would still be a need for more labour than the domestic labour force could or would supply. As I said earlier, the present SAWS arrangements finish in 2013, but the Government have not yet made it clear whether they intend to introduce a successor scheme. I urge Ministers in the Department for Environment, Food and Rural Affairs to press the Home Office to deal with the problem as a matter of urgency, bearing in mind that we are already in 2012. Farmers in my constituency are keen to see a replacement for SAWS in place before the end of this year. They want any new scheme not only to recognise the continued need for a certain number of overseas workers, but to maximise the potential use of local labour.
The National Farmers Union has put together a proposal that includes the following criteria, which it believes are critical to the overall architecture of a new SAWS scheme. Any new scheme should be overseen by the Home Office, as SAWS is now, and be managed by licensed operators, again as now, with an annual quota decided by the Home Office and the Migration Advisory Committee. A new scheme should include a robust system for checking arrivals, departures and return to the home country. It should go back to the origins of the original scheme, as a youth work experience programme. It should require operators to continue to recruit from the European Union in preference to non-EU applicants. However, a new scheme should be available to university-level students of agriculture or agriculture-related subjects from any country, with return arrangements with the UK.
To be consistent with Government policy, the new scheme should be contained within tier 5 of the points-based temporary workers and youth mobility system. As such, it could meet the UK’s cultural and international objectives. It should have a specific set of standards that are subject to an accreditation scheme managed by SAWS operators. Permission to work and to remain in the UK should be via a work card or specific visa category, and restricted to the dates on the work card, with a maximum period of six months.
Under the previous SAWS programme, agriculture students were often set assignments to complete during their placement. That should be encouraged under a new scheme. A more robust educational element could include, for example, the provision of English language lessons and on-the-job training. Growers should be encouraged to provide cultural activities in the local area to enable the community and the workers to experience each other’s culture.
In addition, the Government should try to encourage British citizens to work in the agriculture industry. Changing perceptions and improving the career development and progression opportunities in the horticulture sector are an important part of achieving success. The Government should consider adapting the UK benefits system to allow those on benefits not to lose their entitlement while undertaking work on a daily call basis. I am convinced that that would encourage inactive citizens to take on seasonal work.
Understandably, the employment of prisoners and ex-prisoners is a touchy subject, and employers approach it with a certain amount of caution. I believe that an offer of financial support for employers to train and mentor prisoners and ex-prisoners might encourage more widespread take-up under the scheme. Consideration should be given to a summer programme carrying vocational and academic credits in addition to cash pay. Hopefully, that would attract more students to work in the industry.
I turn to two issues of concern to my local farmers that will have an impact on the future prospects of employment in the agriculture industry in my area. First, reforms to the common agricultural policy are being discussed, and farmers are worried about the way in which the Department for Environment, Food and Rural Affairs seems to be trying to divert funds from pillar 1 direct payments to pillar 2 rural development funding. In particular, the greening component, which represents 30% of the value of direct payments, is conditional on additional environmental action on their land. That includes cultivating a minimum of three crops every year, retaining areas of permanent pasture, and ensuring that 7% of arable land is an environmental focus area.
British farmers believe that such a proposal would put them at a disadvantage because many of them have already adopted additional environmental measures on their farms through agri-environment schemes, and it would be difficult for them to set aside more land to comply with the greening proposal. Farmers believe that greening will reduce their overall competitiveness, making them more rather than less dependent on direct payments. I would welcome the Minister’s acknowledgement of those concerns, and an assurance that they are being addressed.
Finally, my local farmers are worried about the delay in abolishing the Agricultural Wages Board, which they maintain restricts employers by demanding that they pay full wages for 16-year-olds, and which makes it difficult for agricultural workers to get a mortgage because they do not receive a salary. I would welcome an indication from the Minister of the proposed timetable for scrapping the board.
Jim Dobbin (in the Chair)
I intend to begin the wind-ups at 20 minutes to 11 at the latest.
Harriett Baldwin (West Worcestershire) (Con)
I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on his wisdom and prescience in calling for this debate today. I am sure you are aware, Mr Dobbin, that in fact Worcestershire is the garden of England, although the branding needs to catch up a bit. It has a fantastic horticultural industry. Not only are we known for pears—the county emblem includes a pear—but we grow apples, soft fruit, tomatoes, carrots and potatoes. You name it, it is grown in Worcestershire, and it is delicious. I invite you, Mr Dobbin, and other hon. Members to the Worcestershire food day that will be held in Westminster Hall on 27 June, which is one week today. I hope that hon. Members will mark their diaries.
Seasonal agricultural work has been raised with me by farmers in my constituency, and this is a good time for the country to be thinking about it. Despite today’s welcome news that employment has risen by 166,000 in the past three months, 2.61 million people in this country are still not working, and according to the International Labour Organisation’s measure, about 1 million of that 2.61 million are young people under the age of 24. Like my hon. Friend, when I was a student, I earned money by picking fruit during the summer holidays. It is hard work and the hours are long, but it is a good source of income for students. Of the 1 million young people who are not working, about 230,000 are in full-time education, but have signed on because they want to find part-time or temporary work.
We certainly have a pool of labour in this country, yet farmers widely acknowledge that they have relied on seasonal agricultural workers, who since 2008 have come in from Bulgaria and Romania, and that they have used the whole quota. Farmers can provide many case studies and much anecdotal evidence showing what a struggle it is for them to source local labour.
For a number of reasons, it would be wise of the Government—the Minister and his colleagues in the Department for Work and Pensions and the Home Office—to start planning ahead. The seasonal agricultural workers scheme will run to the end of 2013. By the time the 2014 picking season starts and thereafter, there will have been an incredibly important change in the benefits system in this country: universal credit will have come into force. That will do exactly what my hon. Friend described: it will allow people to take on seasonal or part-time work and, in terms of the impact on their benefits, the first few thousand pounds will be disregarded. They will not run into today’s absurd situation of their housing and council tax benefit being withdrawn pound for pound. The benefits system will have changed when we come to the 2014 season, and that will change other things.
Something else that has changed since 2007-08 when the current scheme was implemented is unemployment throughout Europe. At the moment, 20,000 or 21,000 people come here from Bulgaria and Romania under the scheme. Are we really saying that by 2014 we will be unable to find enough people among the 400 million in Europe to pick the crops on our farms? The Government have a political mandate to reduce immigration from outside the EU and to try to create more employment in this country. I take a different view from that of my hon. Friend. I believe we must now make the most of the changes to the benefits system and the fact that we will be able to reward people for such work without them losing their benefits. We must start now to plan for a seasonal agricultural workers scheme for British workers.
The National Farmers Union, which does a fantastic job in lobbying for its members, suggests that as part of this scheme it should introduce education certifications such as level 1 food hygiene certificates and health and safety or first aid qualifications. These are skilled jobs. I will never forget going to the asparagus packing plant at Birlingham in my constituency and finding that, rather than asparagus being bundled with an elastic band, as found in the supermarkets, a £250,000 laser machine sorted the asparagus into 22 different grades to meet contracts from different supermarkets. These are high-tech businesses that require a level of skill. Surely it is not beyond the wit of the Government to work with providers of the Work programme and some of the sector skills bodies to come up with a package that would allow young people in this country to gain work experience, skills, qualifications and, most important, a lump sum of money to take home to their communities in another part of the United Kingdom.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing the debate. I, too, remember picking and gathering fruit, although to look at me one might think I ate more than I put into batches. The hon. Member for West Worcestershire (Harriett Baldwin) mentioned machinery that can perform certain tasks. I find, however, that as well as difficulties with employment, farmers in Northern Ireland and throughout the United Kingdom are finding it difficult to get planning permission to diversify and help them to grow their businesses, which would create more employment.
Harriett Baldwin
I know that farmers across the country share that experience, and I thank the hon. Gentleman for his observation.
The Department for Work and Pensions agreed with the Minister to meet growers from my constituency. As a result of that meeting, we have set up a working group that will plan ahead with the DWP to see how we as a country can create a seasonal agricultural workers scheme for British workers. I look forward to the day when I can go into a British supermarket and put Worcestershire-grown horticultural items in my basket, knowing that those British fruit and vegetables were picked by British workers and that the money they were paid has stayed within Britain.
Mr Mike Weir (Angus) (SNP)
I am pleased to serve under your chairmanship this morning, Mr Dobbin, and to contribute to this important debate. I congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing it.
Kent and Worcester may argue about which of them is the garden of England, but Angus is clearly the garden of Scotland, although my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) may wish to dispute that. Angus sits in the middle of the Scottish soft fruit and potato-growing areas, and I say to the hon. Member for West Worcestershire (Harriett Baldwin) that the best asparagus is produced at Eassie in my constituency. It is absolutely delicious and in season now.
Jesse Norman
I defer to the hon. Gentleman on the matter of soft fruit in Scotland, but not on soft fruit in England, or indeed asparagus. As is widely known, the finest asparagus is produced by Chinn’s in the southern part of Herefordshire.
Mr Weir
It is obvious that all hon. Members are keen to support agriculture throughout the UK, particularly produce from their own areas.
As I said, Angus sits in the middle of the Scottish soft fruit-producing area, and today I wish to concentrate on the employment problems faced by soft fruit growers. When I was growing up—it seems a long time ago now—it was commonplace during the school holidays to pick raspberries and strawberries, and to pick potatoes during the “tattie holidays”, as they are known in Scotland. It was a good way to make money to see us through other parts of the year.
Jim Shannon (Strangford) (DUP)
The humble Comber spud is recognised by and renowned throughout Europe. It is also renowned in Scotland as a superior potato.
Mr Weir
The hon. Gentleman is completely wrong; there is nothing better than Scottish potatoes. Quite rightly, everybody will promote their local produce and it is part of our job to ensure that people know about the delicacies produced in our own areas.
Let me return to my point about soft fruit. Over the years, things have moved on and industry has, I dare say, become more professional and no longer needs to rely on the work of schoolchildren and others. The focus has moved to the employment of more direct seasonal labour, and the spread of cultivation methods such as polytunnels has expanded the types of fruit grown. As well as strawberries and raspberries, we are increasingly growing blueberries in my area. Traditionally they came from Poland, but they are now being grown in Scotland and other parts of the UK. That has led to changes in industry, as have the increasing demands of major supermarkets. The hon. Member for West Worcestershire mentioned the machinery that is now required to meet the huge demands supermarkets impose on industry, which has to produce good quality uniform produce quickly and to the supermarkets’ requirements. Recent trends include increased use of polytunnels for growing soft fruit, rather than open field production.
Horticulture is a vital part of the Scottish economy, particularly in areas such as mine. In total, the horticultural industry—fruit, vegetables and flower production—contributed some £241 million to the Scottish economy in 2010 and, as the hon. Member for Sittingbourne and Sheppey said, it contributes more than £3 billion to the UK. Most growers in my area rely to a greater or lesser extent on migrant labour, particularly people from Bulgaria and Romania who come to work in the UK under the seasonal agricultural workers scheme. It is a huge pity that the issue of young people—principally those from EU accession states—coming to work in the UK agricultural sector has become completely tangled up with the more general issue of immigration. The vast majority of those who come to work in agriculture are in the country for a short, specific period and intend to return to their home nations at the end of their visa period. Unfortunately, as in many other areas, there is often a serious collision between perception and reality.
Under the current scheme, some 21,250 visas were issued last year for workers to come to the UK for periods of between five weeks and six months. Angus Growers, a co-operative that operates 19 farms in Angus and its surrounding areas, tells me that at the peak of the season it employed 2,000 people, the majority of whom were obtained through SAWS. Angus Growers is concerned that the current scheme is guaranteed only until the end of 2013, and it is worried about whether a replacement will be introduced after that. I appreciate that the Minister is in slightly difficult position because although he is responsible for agriculture, SAWS is run by the UK Border Agency, and I assume therefore that the decision on whether the scheme continues will be taken by the Home Office. Nevertheless, I would be interested to hear his perspective from an agricultural point of view.
Let me stress that the use of seasonal workers should not be seen as an example of growers looking for a source of cheap labour. SAWS is a detailed scheme and the minimum wage has to be paid.
Pete Wishart (Perth and North Perthshire) (SNP)
My hon. Friend is making a typically robust and informative contribution. I represent many growers in Perthshire and my farmers report the same range of difficulties and concerns, in particular about SAWS and the fact that the scheme will end in 2013. I hope that we will have a solution.
My hon. Friend makes a good point about the mixture of immigration and work. Growers in my constituency try to make the experience for people who come to our country as positive as possible, because they are the tourists and partners of the future. I am sure he agrees that it is unfortunate to get caught up in the idea of immigrant workers as cheap labour. They have a positive contribution to make, and we should encourage them to have a great time while they are in Scotland.
Mr Weir
I very much agree with my hon. Friend, who makes a point that I was about to come to. This is not just about the experience that workers gain when they go to Scotland. They will be great friends of Scotland and the rest of the UK in the future as their states accede to the EU. I know that some on the Conservative Benches may wish that that were not the case, but there you go. What we are debating is not a new phenomenon. Some of us have talked about how we picked fruit and vegetables in our youth, but I remember that when I was at university way back in the 1970s, many of my friends went abroad to do such jobs—for example, picking grapes in France. There has always been an exchange of young people, particularly students, doing seasonal work across Europe. That has contributed to an understanding and friendships across borders in Europe, and we should not lightly throw it away.
The hon. Member for West Worcestershire talked getting local people to do this work. Many growers have made great efforts to get local people to do the work. It is not as though they are simply relying on migrant labour. In my area, for example, in conjunction with the local authority, they set up the “berry scheme”, with the aim of providing opportunities for the long-term unemployed. It was not, I have to say, particularly successful, but I agree with the hon. Lady’s argument that we must encourage people to consider horticulture as a career, because it is an important industry.
Harriett Baldwin
Does the hon. Gentleman accept that some of the migration that might have to occur might be people moving for a seasonal period from pockets of high unemployment in this country, rather than his local growers and farmers looking exclusively in the Angus area?
Mr Weir
I think there are particular difficulties with that. Under SAWS, the farmer must pay the minimum wage and provide living quarters for the migrant labour. It might be more difficult to do that within the UK because of the structure of the benefits system in the UK, as the hon. Member for Sittingbourne and Sheppey said. Everything is worth looking at, but we must remember that much of the labour in agriculture is very hard and not everyone who is long-term unemployed would be able to undertake it, although undoubtedly some would.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
On that point, I represent a rural constituency that relies heavily on seasonal agricultural labour, but we also have unemployment that is well below the national average. In those circumstances, it is imperative that our farmers are able to recruit the workers they need to keep their businesses going.
Mr Weir
My hon. Friend makes a very good point. The fact remains that whatever the reason, there are difficulties in getting sufficient labour for seasonal work. If growers cannot do so, that could have a devastating effect on the local industry, which, as I said, is an important part of many of our local economies.
I stress—I think the hon. Member for West Worcestershire touched on this point—that it is wrong to regard the horticultural industry as providing work just for seasonal labour. There is a huge infrastructure behind the horticultural industry: there are jobs in administration and marketing, as well as in processing, packing and transporting the fruit, which, because of the nature of the produce, must be done quickly and efficiently. That contributes to many full-time jobs in local economies. Migrant labour underpins full-time jobs for local people. That point must be made strongly. We should not consider this issue in isolation.
I will give an example of what can happen. Earlier this year, daffodil growers in my constituency, who also rely on migrant labour, found that they had a problem. Normally what happens is that the daffodils in England bloom earlier, so daffodils are picked by labour that moves north as the season progresses. However, this year, we had wonderful weather earlier in Scotland when it was less good in England, with the result that the English daffodils were delayed while the Scottish daffodils came out in bloom. The result was that the labour that would normally pick Scottish daffodils in my constituency was not available, as it was still employed in England. It was hard for my daffodil growers to get sufficient labour, with the result that many daffodils spoiled in the field. If we are not careful, that could happen with much of our soft fruit. Growers are very concerned about it happening if they cannot obtain sufficient labour.
The growers and the agricultural industry in general are very much aware of the issues surrounding migrant labour, some of which we have heard about today, but they point out, as I have done, that many of these people come to this country to earn money to continue their studies and to improve their English. As I said, many of them will go back to their home countries having had a good experience and will be friends of Scotland and the rest of the UK for many years to come.
The hon. Member for Sittingbourne and Sheppey gave details of the proposal from the NFU for amending SAWS to continue the use of migrant labour while dealing with some of the concerns that have been raised. The proposal is strongly supported by the growers in my constituency. It would return the scheme to its roots and make it a youth experience programme aimed particularly at agricultural students. As the hon. Gentleman said, the original scheme incorporated an educational element in the placement, and reintroducing that not only could benefit growers in the UK, but is likely to assist the development of agriculture in other nations. I will not go into detail about the proposed scheme, as the hon. Gentleman gave the details and I do not want to repeat what he said. However, the NFU believes that it would work, and it seems to me that such a scheme would strike the balance of fairness between the needs of the agricultural industry and the Government’s concerns.
As I said, I realise that the Minister here today is not responsible for SAWS, but I would be interested to hear his views, from an agricultural perspective, on whether the Government are likely to proceed with the renewal of SAWS post-2013, to give some assurance to horticulture that the Government are behind the industry, recognise its problems and will help it to continue to contribute strongly to both the Scottish and the UK economies.
Huw Irranca-Davies (Ogmore) (Lab)
It is a pleasure to speak under your stewardship of the debate, Mr Dobbin. I begin by congratulating not only the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing the debate—a very good and wide-ranging one—but my opposite number, the Minister, who I understand has just celebrated 25 years in the House. I offer him my sincere congratulations. I do not think that he will get a telegram from the Queen for serving 25 years, but I understand that he has had a pat on the back from the Prime Minister. It is a tremendous track record, so very well done to him.
I thank the hon. Member for Sittingbourne and Sheppey for securing the debate. It is a good opportunity to discuss quite a wide range of issues that affect agricultural workers and employers. He made a thoughtful and, sometimes, provocative contribution. All the points that he raised are worthy of debate. I know that the Minister will want to respond to the serious points that he raised.
Many hon. Members here today have declared their youthful experience of working in the fields up and down the land. I will include myself among them. With my brother, I used to pick potatoes on the fields of Gower. Tremendous potatoes they are, too—but not in my constituency, so I am advertising another’s. It was back-breaking work. So many hon. Members have declared their great experience of doing that and the skills that they developed that, during the summer recess, we might be able to fill the shortages ourselves if we return to the fields.
Many hon. Members have focused primarily on the seasonal agricultural workers scheme. Although discussions are ongoing in his Department and others, has he made an estimate of any shortage post 2013? What will he be doing to avoid such a shortage? Some estimate must have been made to deal with the concerns raised by hon. Members about shortages that will occur if we do not have something in place post 2013. Perhaps the Minister can share that with us, unless he anticipates that, because of measures that are under way, there will be no shortages whatever, crops will not lie in the fields and go to waste across various parts of the garden of England or Scotland and production lines will not come to a standstill, as we fail to sort those products for market.
I was pleased to hear of the meeting that was arranged by the hon. Member for West Worcestershire (Harriett Baldwin) recently. It is good that that has prompted some action. If I understood correctly what she said, the group that has been set up will bring together the Home Office, the Department for Work and Pensions and others, including, I hope, the Minister. Will it be a powerful group chaired by the Minister, or a Minister or senior official? Given its importance to agriculture, I hope that the Minister will do so, although I understand that SAWS is the responsibility of a different Department. Members would welcome the group having a ministerial chair to ensure that it delivers post 2013 and is not left to senior officials, no matter how good they are. I hoped that such a group would be in action, without being prompted by the hon. Lady’s great efforts on behalf of her community, or by the farming unions. The Minister will want to update us on that.
I congratulate James Chapman, the former chairman of the National Federation of Young Farmers Clubs. As the Minister will know, he lost his arm in a farming accident. When he considered what to do in response, he bravely and admirably decided to campaign on farm safety, which we have not yet touched on today. He was recently awarded an MBE in the Queen’s birthday honours list, on which we congratulate him. It reminds us how critical farm safety still is and how much more needs to be done to ram home the message about the need to protect not only oneself, but fellow workers in dangerous agricultural settings.
This week marks the first anniversary of the Farm Safety Crusade. I pay tribute to the work of farming unions and insurers who are promoting farm safety against the backdrop, of which we all know, of a year-on-year rise in the number of accidents and fatalities. NFU Mutual has seen year-on-year increases in serious accidents on the farms that it insures. Shocking statistics from the Health and Safety Executive show that agriculture now holds the unenviable position of being the UK’s most dangerous industry, with 42 people killed in the year to April 2011. Over a 10-year period, more than 435 people have been killed as a result of agricultural work activities. Tragically, that it almost one person every week.
A great deal of good work is going on to turn that around, from the nationwide Farm Safety Crusade to efforts such as the “farm safe” campaign and the annual “efficiency with safety” competition arranged by Cornish Mutual and Cornwall Federation of Young Farmers Clubs. There are many other sector-led initiatives around the country. What efforts are the Government making in Whitehall and across the regions to turn around the rising tide of fatalities and serious injuries in farming and to reinforce the efforts being made in the field by others?
The Minister recognises the criticality of the issue, so I urge him to ask the Secretary of State for Environment, Food and Rural Affairs to focus her mind on it and personally meet the HSE with him to push hard for a solution. I was disappointed to learn in a written answer on 24 November that there had been no recent discussions with the HSE on the safety of agricultural workers because the responsibility fell to another Department. I honestly do not think that that is adequate. I know that the Minister takes the issue very seriously. Will he give an undertaking that he and the Secretary of State will meet the HSE to discuss the problem and see what more can be done? It is not simply something that has happened under the present Government; I have made it clear that agricultural accidents and fatalities have been a rising trend.
The work of the Gangmasters Licensing Authority is of huge importance.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
That is the next debate.
Huw Irranca-Davies
It is indeed, but as I will not be present on the Front Bench for the next debate, I will take the opportunity to comment. The GLA has been commented on by other hon. Members.
The action that the GLA takes to tackle worker exploitation in the agricultural, horticultural, shellfish and food processing sectors is second to none. Its success has been acknowledged by everyone in the House and in wider reports, including those by the universities of Liverpool and Sheffield, the Wilberforce Institute and the Joseph Rowntree Foundation. The Minister and I debated the issue in February, and it will shortly be debated again in this Chamber, but at that time we were still awaiting the outcome of the red tape challenge, so we were a little in the dark.
On 24 May, the Government announced the outcome of the challenge and the changes that they intend to make to the GLA. The announcement included news that the GLA has taken a risk-based approach and will no longer regulate low-risk sectors. That includes apprenticeships, forestry, land agents and voluntary workers. Automatic compulsory inspections of businesses when they first apply will be abolished. The licensing period will be extended from 12 months to two years for highly compliant businesses. There will be a move to allow shellfish farm businesses with exclusive rights to use the seashore to use their workers to grade and gather shellfish stock, without needing to be licensed as gangmasters. There will be a substitution of administrative fines and penalties for low-level and technical minor offences, which we debated in some detail during the last such debate. Alternatives to prosecution when taking enforcement action against a labour-user who uses an unlicensed gangmaster will be explored. There will be a focus on the gross abuse of workers by unscrupulous gangmasters who commit multiple offences, such as tax evasion and human trafficking.
We welcome the Government’s commitment to the GLA. I say that in spite of the appalling Beechcroft recommendation to abolish it—an opinion reflected in some of the responses to the recommendation. It was an unacceptable and dangerous proposal, and I am glad that the Government have said that they will not accept that or other recommendations in the report. The Minister will agree that the bottom line must be that the most vulnerable workers in our society are not abandoned. What impact assessment did the Government undertake—I am sure that they undertook one—before announcing the changes? What will be the impact on protecting vulnerable workers? Where are the areas of risk in this risk-based approach?
Jim Shannon
We have had some success in Northern Ireland, particularly in my constituency, integrating migrant workers into permanent jobs. Examples include Willowbrook Foods and Mash Direct. One employs 260 people and the other just over 100 people—coming from nothing. Perhaps we can use good practice in other parts of the United Kingdom, particularly Northern Ireland, as an example of how we might do things better elsewhere.
Huw Irranca-Davies
The hon. Gentleman knows the area well, and an advantage of the devolution of administration and powers is that we can, and should, learn lessons about differential applications across the UK. We need to do more within the joint committees that bring the devolved Administrations together and in discussions between Ministers, so that those lessons can be learned. He makes a good point. We should not always try to work from a completely blank sheet of paper, but look at what works well elsewhere.
Will the Minister provide us with the timetable for changes to the GLA? His written statement of 24 May was not clear on the consultation timetable or process. Is he in a position to provide us with that now? Will he confirm that the GLA will have the necessary resources to tackle worker exploitation in the relevant sectors, even under the new approach? We all want the GLA, in its revised form, to be lean, mean and effective, but that requires resourcing, so I seek assurances on that. Will he also provide information on how he intends the GLA to work more collaboratively with other organisations, including the Serious Organised Crime Agency?
I want briefly to talk about the abolition of the Agricultural Wages Board, which I have discussed on several occasions with the Minister and other hon. Members. He knows how strongly I and the Labour party feel on the issue. That strength of feeling is shared by some of the farming unions, such as the Farmers Union of Wales, and by farm workers and the Welsh Government. The AWB protects 152,000 farm workers in England and Wales and has mirror effects on others in the sector. It ensures that people working in the countryside, from apprentices to farm managers, get a fair deal. In its 62-year history, it has provided basic pay and protection for fruit pickers, farm labourers and foresters. That covered wages, but also holidays, sick pay, overtime and bereavement leave.
The Minister will no doubt say—we have had this discussion many times—that many farmers pay well above the agreed wage rates; and I do not disagree. He may also say that there is a national minimum wage—so what is the fuss? However, the AWB does far more than set pay minimums, and when it is gone, the pay and other terms and conditions are threatened. The wages of 42,000 casual workers could drop as soon as those workers finish their next job, once the AWB is gone. It is probable that the wages of the remaining 110,000 will be eroded over time. Ministers have said in the past that farm workers will be protected by the minimum wage, but only 20% cent of farm workers are on grade 1 of the AWB. The rest earn considerably more than the minimum wage. The downward pressure on higher grades in economically difficult times will be high. Children who do summer jobs or part-time jobs currently receive just over £3 per hour, but they are not covered at all by the national minimum wage. They will have no wage protection—unless the Minister wants to correct me on that—when they do holiday work, as has been mentioned, or weekend work, after the board is abolished.
Mr Spencer
Does the shadow Minister recognise that agriculture has changed dramatically in the past 20 years? A combine harvester costs £250,000 and no farmer will put an unskilled member of staff in charge of machinery of that value. We have heard from my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about laser machinery for measuring asparagus. The salaries that are now attracted in agriculture are far above those provided for under the Agricultural Wages Board. I wonder whether times have moved on and it is no longer necessary.
Huw Irranca-Davies
Time will tell if we abolish the board. However, not only has the Farmers Union of Wales welcomed its retention in Wales—and discussions are ongoing to see how that can take effect if the AWB is abolished in England; it has said it welcomes the clarity that the board gives on a range of conditions for agricultural workers. That is particularly true for small farmers who do not want to get into endless discussions about individual contracts, with different people on different wages for essentially the same job, and consequent disputes. The AWB provides a very good service for an industry that is often fragmented and disparate. The point that the hon. Member for Sherwood (Mr Spencer) makes about modern technology and food processing is valid for many parts of the industry, but things are not uniformly like that. That is why the Labour party sees the AWB as providing a safety blanket, to ensure that all workers’ terms and conditions are properly protected.
DEFRA’s own figures suggest that the abolition of the AWB will take £9 million a year out of the rural high street through holiday and sick pay alone—that will be £9 million coming out of the rural economy, because it is not going into people’s pockets in one way or another. That is not an insignificant figure, and it is worthy of further consideration. In the 18 months or so since the Government announced their intention to abolish the AWB, a lot has changed. The economy has gone into a double dip recession. The cost of living has risen dramatically. Food and fuel prices have risen well above inflation. Overall unemployment is up, and youth unemployment is chillingly high at more than 1 million. As we watch developments on the continent unfold day by day, it appears there will be no improvement in people’s circumstances for some time yet. A study commissioned by The Guardian and published this week showed that almost 7 million working-age adults are living in extreme financial stress, from pay cheque to pay cheque, one push from penury, despite being in employment and largely independent of state support. Many of those will be agricultural workers in rural communities.
I ask the Minister to think again. Why, against that backdrop, do the Government insist on pressing ahead with the policy, taking money out of the rural economy and the pockets of rural agricultural workers, and making things harder for people, many of whose wages will fall as a result? Those in rural areas already face significant challenges in housing, transport and access to schools. The abolition of the AWB may prove another difficult hurdle to overcome. However, if the Minister is determined to press ahead, I want to ask some additional questions. We are all awaiting an announcement on when the AWB will be abolished, but we have not had that clarity yet. Yesterday evening, I met with the farmers unions—and some farmers unions, of course, support the abolition. They were asking when there would be clarity and a timetable: when will it happen? When does the Minister intend to lay an order before the House abolishing the AWB? Farmers’ patience is being stretched. In the mean time, can he confirm that negotiations with the AWB for the year ahead have been concluded? Will the pending abolition affect those? Has he asked his Department to reassess the proposals in the light of current economic circumstances? If not, why not?
I recently submitted a freedom of information request to the Minister’s Department for the impact assessment of the abolition of the AWB. It was rejected. No doubt he will explain why, and give the normal Whitehall reasons, but his response implied that the assessment would be published soon, so when will we see it? We want to get behind the detail, to see what the effect will be on rural communities. In the absence of the impact assessment, will the Minister guarantee that, on the abolition of the AWB, children will not be paid below the minimum wage, that the wages of workers in AWB pay bands will not be depressed, that rents on farm cottages will not rapidly escalate to full market value, or tenants be turfed out because they cannot afford them, and that when new recruits are taken on it will not be on inferior terms, creating a two-tier work force for the same jobs?
If the Minister doubts that that might happen, and thinks it is only I who say it, I refer him to the Incomes Data Services report for the Low Pay Commission, “The implications for the National Minimum Wage of the abolition of the Agricultural Wages Board in England and Wales”. What does the change mean for the national minimum wage, where the Government’s defence lies— “Don’t worry, the NMW will take care of this”? The report states:
“Once abolished, many of the provisions of the Order will either be only partially covered by other statutory employment legislation, or not at all. Employment legislation does not make any provision for specific rates of pay linked to skills, specific rates of pay for overtime, a minimum rate of pay for workers of compulsory school age, rights to paid training, standby duty and night allowances, entitlement to paid bereavement leave, a birth or adoption grant”
and so on. It also states that
“abolition removes protection for young workers of compulsory school age”
and that
“the statutory minimum rates for both workers aged 16 to 20 and apprentices will be significantly less under the NMW than they currently are under the Agricultural Wages Order.”
Hon. Members have spoken passionately about the need to enhance skills and training in the agricultural sector, but the report states clearly that the wages of apprentices and those learning their skills will be depressed.
The report states:
“There may also be issues around the accommodation offset, whereby in some cases agricultural workers may be worse off under the NMW rules”,
and it explains why:
“There is no such threshold under the NMW”
for workers’ accommodation. It also states:
“The NMW rules on accommodation offset allow deductions to be made even if the worker could have lived elsewhere. This could mean that agricultural workers who are not currently subject to the accommodation offset…could be subject to it in future.”
It continues:
“On piece work, agricultural piece workers are currently guaranteed to get at least the minimum rate appropriate to their grade.”
That is more favourable than the national minimum wage approach,
“where slower workers can earn less than NMW if a properly assessed ‘fair’ piece rate is applied.”
It is not true to say that the abolition of the AWB is not a problem because the national minimum wage will deal with the issues. There is far more to the AWB’s terms and conditions than that, which is why I am asking the Minister to think again.
I thank the hon. Member for Sittingbourne and Sheppey for raising this important debate, and thank all hon. Members for some very good contributions. We want to see a rural economy that works for all working people. It should be fair across the board, as these are tough times for all those who work in agriculture. I look forward to the Minister’s response.
Jim Dobbin (in the Chair)
Before I call the Minister, let me say that I did my fair share of potato picking when I was a mere lad in the wonderfully beautiful scenic centre of the agricultural world, the kingdom of Fife.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
I can add my experience to the debate, Mr Dobbin. I am probably the one who has most recently done such activities, and I am probably the only one who, as a farm manager a long, long while ago, employed such groups of people, which was not always the easiest personnel management issue that one faced.
One advantage of speaking last in the debate is that I can put to rest the argument about which is the most important constituency in the country for the production of fruit and vegetables. Although I might be prepared to acknowledge other constituencies for fruit, I certainly will not do so for vegetables. Cambridgeshire and my fenland constituency are renowned for the production of high-quality vegetables and salad crops. I know that that is a somewhat light-hearted comment, but it means that for 25 years as a constituency member—I am grateful to the hon. Member for Ogmore (Huw Irranca-Davies) for his personal congratulations on my time in this place—I have been involved in many of the problems that my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) raised, because I have substantial growers trying to employ large numbers of people to harvest salad and root crops in my constituency. I congratulate him very much on initiating this debate. I knew his main thrust was about SAWS, because he kindly furnished me with a copy of what he was going to say, but I was not surprised when other hon. Members, especially the hon. Member for Ogmore, used the opportunity to raise other issues.
In 2011, the total UK agricultural work force—a varied work force that includes farmers, business partners, directors and spouses—numbered around 476,000, of which approximately 177,000 were employed workers. Unlike most industries’ balance between employed and self-employed people, in agriculture only about a third of the total are employed. Like other sectors, agriculture requires a reliable source of labour, but perhaps more than other industries it needs flexibility, to meet the peak seasonal demands of planting, harvesting and cropping. Such work is always there but, as shown by this year’s experience of the daffodil crop, recounted by the hon. Member for Angus (Mr Weir), it is subject to the vagaries of the weather. No Government or board can ensure that crops across the country harvest sequentially, which is the ideal for the movement of daffodil pickers from Cornwell to his constituency.
Clearly, we need a constant and ready supply of temporary labour. As every speaker today has said, that used to be provided by students and others. As my hon. Friend the Member for Sittingbourne and Sheppey will know, large sections of the London population used to move down to Kent or Herefordshire for hop picking. Those days are gone, however, and we have seen the advent of the seasonal agricultural workers scheme, which has for a long time played a key role in meeting seasonal demands. Traditionally, as my hon. Friend said, SAWS allowed students from universities outside the European Union to work in the UK agricultural industry for periods of up to six months, and provided an opportunity for students not only to develop skills in agriculture but to learn the English language and experience a different culture and way of life. Of course the EU was much smaller in then; as it has expanded, the role of SAWS has changed.
As several hon. Members have said, the Home Office is responsible for the administration of SAWS. Its assessment of a continuing need for the scheme changed in the light of EU enlargement in 2004 whereby many countries that previously sent students under SAWS did not need to continue to do so because there was free movement within Europe. My own sons used to work in the sector and regularly worked alongside large numbers of Poles and people from the Baltic states in particular. [Interruption.] My Parliamentary Private Secretary, my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), is delighted at the support for Polish workers. In those days of course, the gulf in wealth was such that workers could come to the UK, work for six months and literally go home and buy a house; for them, it was often a major economic contribution to their future life. Obviously, however, once those countries acceded to the EU, the situation changed. The subsequent introduction by the Home Office of the points-based system to manage economic migration closed down low-skilled migration from non-member states.
That brings me to the change made in 2007 by the previous Government to restrict workers from Romania and Bulgaria. Although those countries had acceded to the EU, transition arrangements were put in place. That is consistent with the requirements of the Community preference principle, which states that preference in access to labour markets should be given to EU nationals over workers from third countries. The SAWS quota level for 2012 and 2013 is set at 21,250.
SAWS was due to close at the end of 2011, but following the decision to retain restrictions on labour market access for Bulgarians and Romanians for a further two years, my hon. Friend the Minister for Immigration announced at the end of last year that it would continue until 2013. As I hope hon. Members will appreciate, I am very much aware of the desire to know what is to happen after 2013. I can say that DEFRA is working closely with colleagues from the Home Office and the Department for Work and Pensions on the matter; however, no decision has been taken yet on whether a successor scheme to SAWS will be put in place. We clearly need to look at the evidence—we do not yet have all that in hand—that the sector is unable to meet its seasonal labour needs from the UK and the rest of the EU. In that respect, the Home Office has indicated that it intends to ask the independent Migration Advisory Committee to advise on the case for a future scheme. Obviously, I expect that stakeholders will have the opportunity to provide evidence to the committee.
At this stage, it is important to refer to the comments of my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about the UK labour market and to my own experiences as a constituency MP. In the past, major efforts to bring busloads of unemployed people from centres of high unemployment into Cambridgeshire to do this work have been an abject failure. The bus may come full the first day, but the second day it is half-full and the third day there is only one person on it. People just do not stick it. With the changes that are being made under the universal credit arrangements, which my hon. Friend the Member for Sittingbourne and Sheppey mentioned, we all hope to get a lot of the long-term UK unemployed back to work. That is the objective and we hope and believe that the changes should work, but we do not yet know what their precise consequences will be.
The wider context, which several hon. Members referred to, is the issue of overall migration. I share the view expressed by the hon. Members for Angus and for Perth and North Perthshire (Pete Wishart) that there has been some confusion over the role of SAWS. I fully accept that the history of SAWS is that the vast majority of people who come to the UK under SAWS go home when they are supposed to and that the number of people who fail to do so is minimal—in single figures, I believe. Nevertheless, we must ensure that our overall objective to reduce net migration is not undermined.
The key issue will be whether any new scheme, if there is one, can be effectively managed to ensure the departure of participants who come from outside the EU. To prevent confusion, I should emphasise that people from Bulgaria and Romania will have free access under any new scheme. It is not the case that we are stopping them coming to the UK; they will be able to come anyway, even without SAWS. The end of SAWS will not reduce in any way the potential supply of agricultural labour. Those people who are coming to the UK under SAWS will still be able to come. The issue is whether they will then come for other reasons—for example, to seek other employment—as has happened over the years with people who have come from those countries that joined the EU earlier. Obviously the UK is not alone in using migrant labour; many other countries in the world use it, but given the increased scope for labour migration from within the EU since 2004, we must approach the case for more labour migration from outside the EU carefully and soberly.
My hon. Friend the Member for West Worcestershire discussed whether we should rely on migrant workers to meet the seasonal demands for labour. As she said, the Government are already taking steps to get the long-term unemployed back to work, and agriculture has a role to play in that process.
My hon. Friend the Member for Sittingbourne and Sheppey asked about prisoners. Working outside prison, whether in paid or unpaid work, is an important step towards reintegrating those prisoners who are preparing for release back into society. The Government are committed to expanding the number of opportunities for prisoners to volunteer to work in the community or to work in paid employment. As my hon. Friend recognised, the highest priority clearly has to be public protection, and all prisoners working outside a prison are rigorously risk-assessed. My hon. Friend also referred, quite properly, to the National Farmers Union’s policy paper, “A Seasonal Agricultural Workers Scheme (SAWS) for the Next Decade”, which refers to the employment of prisoners and ex-prisoners. He said that that paper notes there is some caution among employers about employing prisoners and ex-prisoners, and I will not repeat all the points that he rightly made. However, in relation to SAWS, I can assure him that DEFRA is fully aware of the need to ensure that crops are harvested.
As an aside, I should say that one of the very satisfying developments in the past few years has been the reclaiming of the domestic fruit market Domestic producers had lost that market to imports, but now a much higher proportion of fruit consumed in this country is produced here. It would be absolutely tragic if we allowed that trend of increasing domestic production to go into reverse because we were unable to harvest domestic fruit.
My hon. Friend referred to the common agricultural policy, greening and the possible switch between the two pillars of CAP. Let me try to explain the present position, although I will not go into detail because, as hon. Members know, the CAP is so complicated that I could use the next few debates trying to explain it in full.
We are now at the end of the Danish presidency of the EU and in the Agriculture Council on Monday we took stock, with a paper from the presidency about where negotiations and discussions have gone. Under the greening proposals, the European Commission is suggesting that 30% of direct payments should be conditional on achieving an element of greening in pillar one. The British Government’s position is quite clear: we believe that greening is ideally dealt with under pillar two, where it is possible to make more effective targeted payments and achieve better value for money. However, it looks as if greening will be dealt with under pillar one; if so, we will have to accept that. We are therefore in discussion with many other countries about how we can adapt the Commission’s “three-legged stool” to which my hon. Friend referred—the three criteria—to ensure that British farmers, particularly English farmers in stewardship schemes, are not disadvantaged by those criteria.
I have already said, and I emphasise again now, that if people sign up to a stewardship scheme and subsequently find that they are seriously disadvantaged, they will have the option to leave the scheme. I do not want that to happen and we are working very hard to try to ensure that membership of a stewardship scheme is somehow reflected in meeting the criteria of the greening proposals. I cannot prophesy what the outcome will be, but I assure hon. Members that that is the objective. I guess it is an objective shared by all hon. Members that our farmers should not be disadvantaged. The Commission has referred to our farmers as champions of the environment, and that should be reflected in their ability to access payments.
On the widest aspects of the CAP, we want to see better value for money and a reduction in the overall CAP budget. We do not see why the CAP should be immune from the immense pressures facing the whole of the EU—not just the pressures arising from the euro crisis, but the overall pressures on the economies of member states. We believe—it says that in my brief, but I passionately believe it—that the day will dawn when subsidies and direct payments will disappear. I have believed that for a very long while. I want those involved in the CAP to face up to that and to begin to plan for it. It will not happen today or tomorrow, or in the current seven-year time scale, but I believe that it will happen; and not only do most people believe that it will happen eventually, but they want it to happen. For example, most of the younger generation of farmers want it to happen. We should be planning for that day.
What we need to be doing and what we want to see from the CAP is the introduction of measures to encourage the agriculture industry to become far more competitive, market-oriented and innovative. Given the global changes in the food market, those in the industry would consequently be able to achieve their necessary income from that market and from the increasing demand for food from across the globe.
We do not believe that changes to the CAP will have a significant impact on agricultural employment. The Scenar 2020 study prepared for the European Commission suggests that changes in employment are largely being driven by wider developments in the economy and improved efficiency in the sector. According to its own analysis, which was based on there being no reform of the CAP and no further trade liberalisation, the Commission expects a 25% fall in the agricultural work force across the EU by 2020.
To encourage employment rather than subsidise it, we need to make it easier for farm businesses to take on workers, which brings us, inevitably, to the concerns expressed by the hon. Member for Ogmore about the Agricultural Wages Board. I do not think that the Government have ever said, and I hope that I have never said it, that the minimum wage provisions entirely replaced the wide range of provisions under the Agricultural Wages Board. I am not surprised that the hon. Gentleman could read into the record a long list of statements made by the board. Self-evidently, the AWB does not want to be abolished, so it is hardly surprising that it said what it has. I have certainly never suggested that all the measures the board provides will be replicated by the minimum wage.
Huw Irranca-Davies
I simply want to put on the record that it was not the Agricultural Wages Board that made those statements. I was reading from an independent report for the Low Pay Commission that was commissioned from the independent consultancy Incomes Data Services, Thomson Reuters. The report runs to about 100 pages, and I read from the conclusions, which are specific and evidence-based.
Mr Paice
I am grateful to the shadow Minister for his clarification, and I am happy that the record has been corrected.
The key point, however—my hon. Friend the Member for Sherwood (Mr Spencer) really touched on it—is that we are talking about modernising an industry, and the fact that only 20% of the work force are on the basic rate makes the case for not needing it, and does not, as the shadow Minister suggested, somehow undermine it. The reality is that the vast majority of people are above the basic rate, and I emphasise that no one already employed in the industry can lose out, because they are protected by their current contracts. Of course some criteria are not included, but there used to be a plethora of such wages boards and councils—largely set up by Labour Governments—and many dealt with bits and bobs such as holiday pay and so on. We need to recognise, however, that in 13 years of the previous Labour Government, in which the hon. Gentleman served, not a single one of them was brought back. If it is so important that workers are covered by all those other arrangements, he needs to explain why the Labour Government did not bring back any of them back.
The hon. Gentleman asked about the timetable. I can tell him that the Government are determined to abolish the Agricultural Wages Board. Negotiations with the Welsh Assembly Government are ongoing, as he said, but I cannot tell him exactly when the board will be abolished. We intend to do it, but there are the negotiations and discussions to go through. As said said, the board has concluded the next round, and that will come into play. I am advised that the IDS report to which he referred gave scenarios, but that the Low Pay Commission concluded that it was too early to judge what the full implications of the board’s abolition would be.
I fully understand why the hon. Gentleman used this opportunity to talk about gangmasters, but as my hon. Friend and constituency neighbour the Member for North East Cambridgeshire (Stephen Barclay) is about to open a debate on that topic, I intend to reply to the points the hon. Gentleman raised in my response to that debate. If he wants to stay and listen, I am sure that you, Mr Dobbin, or a successor Chair, will allow that.
I will end by talking about safety, which is of such great importance. I do not know whether the hon. Gentleman was just being kind or whether he knew about this, but I feel passionately about safety because within a fortnight of joining the agricultural work force at the age of 17, I witnessed a fatal accident in which someone of my age was killed within a few feet of me. That has had a lasting effect on my attitude to farm safety. I was a victim of a considerably less serious accident myself and I still bear the scars, so I take second place to no one in my concern for farm safety.
I am proud that a long time ago I won a Farmers Weekly competition on farm safety—that proves my credibility on the subject. The hon. Gentleman is absolutely right that the industry’s record is horrendous and we should do everything we possibly can to remedy that. I cannot speak for the Secretary of State, but I happily assure the hon. Gentleman that I will speak to the Health and Safety Executive. He should not take from the fact that the meeting to which he referred has not taken place that there is any less enthusiasm or commitment to safety. I cannot repeat often enough that farms are not playgrounds. There is a place for young children—sadly, many of the accidents involve young children—but, in today’s world, that place is not in a farmyard.
The other factor affecting safety is that farming is often a lonely, remote activity, and people who might otherwise be saved die in accidents because of the distance from help or the inability to get help. I am pleased that there are now many technologies whereby people can call for emergency help—a bit like what we might find in sheltered housing, but much more sophisticated. That is good, but none of us can be too intense in our desire to drive down the scale of farm accidents. It is important to note that when I set up Richard Macdonald’s task force, I deliberately placed on it the health and safety representative for agriculture so that we would not be increasing any farm risks. That is hugely important.
I think that I have addressed the various questions—
Huw Irranca-Davies
I thank the Minister for his reassurances about health and safety. I do not doubt his personal commitment, or that he will meet with the Health and Safety Executive.
Is it too early to ask based on the evidence and the Minister’s privileged position of involvement in discussions with ministerial colleagues, whether DEFRA has a preference for something to replace the seasonal agricultural workers scheme post-2013, and whether there is any difference in stance between DEFRA and the Home Office or any other Department? Does the Minister have a preference to replace SAWS with another scheme?
Mr Paice
The hon. Gentleman uses his delightful, gentle style to try to tempt me into doing something he knows full well from his own ministerial experience is verboten in ministerial circles—commenting on relationships with other Departments. I have no intention of being dragged into the trap.
As I quite properly said, we do not yet have all the information with which to form a judgment, but that is being worked on. I have described how the Home Office will ask the Migration Advisory Committee to look into the matter. Clearly, we will study the figures and assessments and talk to the Department for Work and Pensions and the Home Office about the future work force, but I will not be tempted into any debate about what other Departments, or indeed my own, are considering.
Huw Irranca-Davies
I understand the Minister’s reluctance, but may I ask when we are likely to see any progress in the ongoing discussions, so that Parliament can also contribute to the debate post-2013? Will it be by the summer, or by the early autumn—September or November? Early autumn could become January.
Mr Paice
The hon. Gentleman pushes and pushes, which is remarkable given that I have already taken nearly half an hour to respond to the debate. I cannot give him a timetable. I fully appreciate the concern about the industry. I have had my—I had better be more precise: I have had representations made to me by the industry, by my constituents, and obviously by Members this morning. I fully accept that the industry needs to know where its future work force will come from. We are working with other Departments to try to ensure that, but I am not in a position to make an affirmative statement at this moment.
I hope that I have picked up the majority of the points raised. I again congratulate my hon. Friend the Member for Sittingbourne and Sheppey on securing the debate. I should have also joined in the congratulations to Mr James Chapman, who I know, as the shadow Minster said. He has been a marvellous example of how people can use their own tragedies to help others.
Jim Dobbin (in the Chair)
Shadow Minister, I assume that you are waiting for the next debate. I have to explain to you that Opposition Front-Bench spokespeople cannot intervene in a half-hour debate.
Huw Irranca-Davies
Indeed. Thank you very much for that clarification, Mr Dobbin. That is why I raised the matter of gangmasters earlier.
Gangmasters Licensing Authority
(12 years, 5 months ago)
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Stephen Barclay (North East Cambridgeshire) (Con)
Thank you, Mr Dobbin, for the opportunity to speak in this debate.
I want us to pause, and for Members, in their busy lives, to picture waking up in a crowded room—with several other people sleeping nearby and without any space to sit down for breakfast—leaving before dawn in an old, rickety minibus to work a 12-hour day in the cold, windswept fields and fens and, at the end of a hard week, finding that most of their wages have been taken from them in spurious charges. Moreover, if they complain, they risk being thrown out without a job, without a home, and being on the streets with no money, in a foreign land and not speaking the language, a long way from home.
That is not a picture of some foreign country; those difficult-to-imagine working conditions are here in Britain today. Just last month, a report by the Joseph Rowntree Foundation found that many migrant workers continue to live in a climate of fear, with the reality of poverty and subject to inhuman conditions. Such issues are becoming more important. A report due out shortly by Durham university academics suggests that between 2,000 and 5,000 people experience the worst manifestations of illegal gangmasters in the UK. It is a pressing issue for people who are legally in this country—they are here to work and not for benefits—and that alone should justify there being action.
There is also a wider impact on those living next door to the people I am talking about, in houses in multiple occupation, because antisocial behaviour has a social impact. In my surgery only last Saturday, a constituent came in to complain about someone urinating in the street outside their house. That behaviour arises from the dehumanising and squalid conditions in which those people have to live, and it often manifests itself in the form of large groups of young men, without much money, drinking from shared cans in the street, which can intimidate the local population. Another impact is that many constituents, in all constituencies I think, have expressed concern about the pace and scale of immigration. Legally, Ministers can do little in relation to eastern European migration, which is movement within the European Union. However, I want to highlight the opportunity that the Government now have, through taking action with the Gangmasters Licensing Authority, to show that they are tackling some of the worst abuses associated with that migration.
The purpose of this debate is not to criticise the many legal gangmasters, who are an important part of the agricultural labour force. We must distinguish between them and the many illegal gangs associated with the abuses and criminality that blight some of the most vulnerable workers in my constituency and those of many other Members. Having established why the issue matters and why we are having this debate, I want to focus the Minister’s attention on five areas in which action is now required: resource allocation, the introduction of civil penalties, sentencing guidelines, repayment orders and more effective multi-agency working.
I am not saying that the Gangmasters Licensing Authority has had a negative impact. Since it was set up, following the tragic Morecambe bay cockle pickers disaster, it has made an improvement. I welcome the Minister’s decision to retain it, but I signal to him that its status at the moment is somewhat in limbo: it has not been adequately resourced to be effective, but nor has it been scrapped and merged with another body.
David Morris (Morecambe and Lunesdale) (Con)
My hon. Friend and I go back a long way—back to Lancaster days. As everyone knows, I represent Morecambe. Does he agree that any legislative measures to curb red tape should not impede the safety of the cockle pickers and shell fisheries industry? It must always be borne in mind that any future changes should enhance protection powers and not detract from them.
Stephen Barclay
I thank my hon. Friend for his contribution, and he is right. I will come on to how we can make improvements without their being a bureaucratic imposition on firms. I should point out that I am talking about tackling illegal gangmasters, not the legal ones who already adhere to the rules.
My first point is about resource allocation. At the moment, 12 counties across the eastern spine of the country are covered by only six inspectors from the Gangmasters Licensing Authority. That is equivalent to Cambridgeshire and Norfolk being covered by just one inspector. My right hon. Friend the Minister is my constituency neighbour. He will know, as I do, how much time is taken only by travel; let alone by dealing with translation, illegal gangmasters, intelligence gathering and the many other issues that an inspector has to address. I simply do not think it realistic to expect one inspector to cover 3,500 square miles. I accept and, as a member of the Public Accounts Committee, I very much recognise the difficulty of asking for more resource. However, I urge my right hon. Friend to look at resource allocation across his Department and agencies to see whether resource could be redeployed from other areas to what is a pressing community need.
The second issue relates to penalties. We need to have new civil penalties, rather than to rely on criminal charges. That is accepted by most of the experts in the field I have spoken to—the Gangmasters Licensing Authority, the Joseph Rowntree Foundation and others. I urge the Minister to consider the wider use of civil penalties. Civil fines should be available not only for technical breaches, but for all gangmaster-related offences, and they should apply to both gangmasters and those who are unlicensed. Although criminal powers exist, there have been only 11 prosecutions in two years. It is therefore clear that the difficulty of getting vulnerable workers to give evidence in court and the high threshold for prosecution—the burden of proof required for criminal prosecutions—mean that that is not working as an enforcement tool. There is a problem with the tool that is currently available to the GLA, and I welcome the positive soundings in the Minister’s recent statement.
The fact that the GLA has issued 300 warning notices makes it clear that some issues are not being addressed. I therefore urge the Minister to consider the example of the UK Border Agency, which can impose fines of £10,000 on those employing illegal immigrants, as a model that could be applied to the GLA. If the UKBA can do that, I question why such powers are not place to deal with those who illegally employ agricultural workers. The point is that those committing such crimes are motivated by greed. Therefore, having civil penalties that hit them in the pocket would be far more effective.
In its correspondence with me, the Joseph Rowntree Foundation stated that
“all our evidence would support beefing up the powers of the GLA. It’s clear that bringing prosecutions is complex and difficult, and that tackling the problem of forced labour cannot solely depend on the existence of the criminal offence. So looking at civil penalties is an entirely appropriate and welcome policy”.
I urge my right hon. Friend the Minister to respond to that. Even when criminal prosecutions are made, the fine imposed by the court is often negligible. In a recent case in Nottingham, both the court and the council urged the provision of sentencing guidelines.
Thirdly, we should have sentencing guidelines to give courts the clarity that they themselves would welcome. Such cases are relatively rare, and it is even more important to have good guidelines, given that there are few criminal prosecutions. Fourthly, I want to flag up the need for repayment orders. One of the deterrents within the regulatory toolkit that could be imposed is to ensure that those who have committed offences have to recompense those deprived of their wages. I return to my original example of people having worked all week in the field, only for them to be deprived of their wages. We need to find a way of ensuring that those who are in future held to account—currently, they are not—are also forced, through repayment orders, to compensate those they have exploited. Those are the financial drivers that would address the exploitation currently taking place.
The fifth and final area I want to flag up to is the need for far more effective multi-agency working. Illegal gangmasters deprive the Exchequer of significant tax revenue through the non-payment of pay-as-you-earn and VAT. Will my right hon. Friend the Minister hold discussions with the Treasury on whether any potential savings made from addressing tax loopholes or the non-payment of tax could be used to help address the resource issue and funding challenge that I have highlighted?
Could my right hon. Friend the Minister provide reassurance that there will be more multi-agency work between the Home Office, police, UKBA and local councils? Houses in multiple occupation need to be registered only if they have three floors, but most of the houses in the fens, as he knows, have two floors, so they are not registered and are falling through the gaps between different agencies. Likewise, where criminality has taken place, it is essential that those responsible be deported.
Finally, it would be useful if we demonstrated the effectiveness of a multi-agency taskforce via an urgent pilot programme. The fens and my constituency of North East Cambridgeshire in particular are well placed to take part in such a programme. Perhaps my right hon. Friend the Minister—as I said, he is my constituency neighbour—and I could discuss over the next few weeks how we could bring together the Home Office, UKBA, the local council and the police to run a pilot programme that shines a light on some of the worst abuses that are taking place in our country and depriving people working in tough jobs in our fields of the wages they are due.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
I not only congratulate my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) on securing this debate, as is the convention, but thank him, because, as he has rightly said, I have a similar constituency interest to his. Moreover, as good fortune has it, this debate follows on from a relevant debate about agricultural employment. I have spent a lot of time on many of these issues over the years, trying not only to achieve satisfactory terms and conditions for those who work predominantly in the fruit and vegetable industry, but to ensure that there is a sufficient supply of competent people to do that work and that they are all suitably managed. This debate is extraordinarily timely, because it follows on, as my hon. Friend has said, from my statement in March.
I should explain to my hon. Friend that the shadow Minister, the hon. Member for Ogmore (Huw Irranca-Davies), raised in the previous debate a number of issues about the GLA, but I flatly refused to answer him, on the basis that I hoped to address the issues in this debate. Otherwise, I am sure that we would all congratulate the hon. Gentleman on his diligence in sitting through another debate, and one to which he is not even allowed to contribute.
As the hon. Gentleman and others rightly said during the previous debate, the GLA has been subject to a number of reviews, including those by the farming regulation taskforce and the forestry regulation taskforce; the ongoing workplace rights compliance and enforcement review; and, of course, the red tape challenge. It is, therefore, fair to say that the GLA’s role and scope have been considered and debated by a wide range of interested parties, which have had the opportunity to present their views via calls for evidence and other mediums.
All that has shown that the GLA is regarded as having brought significant improvements to the treatment of the most vulnerable workers in the area that it regulates. As my hon. Friend the Member for Morecambe and Lunesdale (David Morris) has said, it originated from an unbelievable tragedy that horrified the whole country. That does not mean that there is not room for improvement or change, or room to make the GLA a much more modern enforcement agency that targets criminal activities, while applying a light touch, using risk assessment, to those who comply fully—I believe them to be in the majority—with the letter and the spirit of the law and regulations. The GLA’s own experience of operating under the terms of the original Gangmasters (Licensing) Act 2004 suggests that there is room for modification.
I assure my hon. Friend the Member for North East Cambridgeshire and others that this is not about removing protection for vulnerable workers. The GLA is there to provide that protection, and it should concentrate entirely on doing that and on detecting problems and enforcing legislation. I will return to some of those points later. This is about ensuring a framework that safeguards workers’ rights, while reducing unnecessary or onerous demands on business. That is as it should be.
It is important that the GLA continues to be supported by industry—not just by farmers, but by retailers, because they want to maximise the assurance about the proper employment of the people who pick their products. It also needs to be supported by the labour providers—the legal, honest and straightforward gangmasters and others—who need to operate on a level playing field. We do not want them to be undercut by unfair or illegal practices.
One factor that faces the workers—my hon. Friend touched on this—is that they often have no fixed abode, because they are moved as gangs around the country to do the work that needs to be done. They are often located in difficult-to-access settings. My hon. Friend referred to workers—I am not sure whether this was a mistake—as being here legally, but I am afraid that that is not the case. Many of them are not here legally, so they are often undocumented and sometimes unsupervised. They are often low-skilled and, as my hon. Friend said, have little or no working knowledge of English. Moreover, if they have no fixed abode, they are dependent on the gangmaster for the provision of accommodation.
Stephen Barclay
My right hon. Friend the Minister is right that, as with all factors relating to immigration, the issue is multifaceted. There are, of course, people here illegally, which is why we need a multi-agency approach, but that is not happening in my constituency at the moment. That is one of the issues that is driving community tension. Coupled with that, people who are here legally are being stigmatised. Although they have come here within the law and are working, they are not getting the benefits, because they fall within the criminality of illegal gangs. That is what I was trying to highlight.
Mr Paice
I am grateful to my hon. Friend for that clarification. I was trying to make the point that he rightly referred in his opening remarks to some of the social problems from which my constituency and his suffer as a result of migrant workers. Many of them, as I know full well from my own constituency, are not only here perfectly legally, but operating under licensed gangmasters and earning an income that allows them to buy cans of beer that they then consume outside somebody else’s house. They do not always fully understand British culture and ways of life.
I have announced a package of proposed changes to the GLA, including removing from its scope low-risk areas as far as worker abuse is concerned, streamlining the licensing process, and—this was my hon. Friend’s key point—looking at the scope to use civil penalties. He is right that, at present, the GLA board has very few enforcement weapons, other than its ultimate weapon, which is to withdraw the licence. He is right that we need a tier of measures for it to utilise. The proposed changes also include changes to the GLA board’s governance and structure.
During the earlier debate, the hon. Member for Ogmore referred to some of the issues that are being removed from the scope. I nearly responded to him then, but decided to leave it until now. On cultivated shellfish, let me be clear that we are removing the use of directly employed workers so, if anybody who cultivates shellfish lawfully on land for which they hold title directly employs workers, they will not be covered. If they use a gangmaster, they will still be covered. I just wanted to make that clear. Overall, the changes will ensure that the GLA is better able to concentrate on where it really matters.
Jim Dobbin (in the Chair)
When the hon. Gentleman intervenes, will he clarify what capacity he is speaking in?
Jack Dromey
I am speaking not on behalf of the Opposition, but as someone who chaired the coalition that established the Gangmasters Licensing Authority in the first place.
Jack Dromey
Thank you, Mr Dobbin. I am grateful to the Minister for giving way. I chaired the coalition that brought into being the Gangmasters Licensing Authority—from plough to plate, from the National Farmers Union to the supermarkets—and was one of those who appointed the first chairman of the GLA. Does the Minister accept that the GLA has been a great success, that it is efficient and effective in stamping out modern-day slavery and that it is now tackling the growing scandal of trafficking? Will he give an assurance that there is no question of the GLA’s vital work being compromised or undermined?
Mr Paice
There is a slight trap in what the hon. Gentleman asks me, because if I were to say yes to the first part of his question, he would immediately react by saying, “Well, why make any changes?” I cannot agree that everything the GLA has done has been perfect. We do not think that, which is precisely why we have reviewed it and are making changes. However, I can give him the assurance he referred to. That is why we have gone against recommendations, as the hon. Member for Ogmore pointed out in the earlier debate, to get rid of the GLA. We want to protect the most vulnerable workers, but we believe that it is time to refocus the GLA’s work precisely on that, rather than perhaps dissipating some of its efforts on much lower-risk sectors such as forestry, where there is no evidence of it being necessary whatsoever. I can give him that assurance.
Overall, the changes being made will ensure that the GLA is better able to target what we mean by suspected serious and organised crime, and that evidence of worker exploitation leads to successful investigation and prosecution of organised crime. As the hon. Member for Birmingham, Erdington (Jack Dromey) mentioned, that includes the increasing problem of trafficking.
I can assure my hon. Friend the Member for North East Cambridgeshire, who I know has had a meeting with the chairman of the GLA—I am conscious that she is observing these proceedings—that the intention to work across multi-agencies is to be enhanced. He talked about a number of illegal gangmasters. I do not know whether they are illegal. He might well be right, but I am not in a position to judge. However, the GLA needs that intelligence, which is why it needs to work with other enforcement bodies—whether in terms of immigration, the UK Border Agency, the police, the Serious Organised Crime Agency or whoever—to put all this together to ensure that they can combat trafficking and illegal activities across the piece.
We will remove an estimated 150 licence holders from the scope of the GLA, which will obviously save some money and bureaucracy. However, I certainly do not believe that that will in any way dampen the GLA’s effectiveness. The GLA will still regulate all licence holders and potential licence holders in the areas for which it is responsible. As I said, it can therefore concentrate on the worst abuses and examples of exploitation. On 1 June, the chief executive of the GLA, Ian Livsey, said on the “Farming Today” programme:
“This is all about risk and resources. People that apply for a licence will actually be checked. The checks that we will do though will be risk based so we’ll be using information that we have ourselves and information from other Government departments. It’s not true that people won’t be being checked when they make an application.”
It is very important to emphasise that.
The issue is not generally those who make an application. As my hon. Friend implied, the issue is often those who do not apply and have not got a licence. We need the criminal intelligence on that. The chair of the GLA, Margaret McKinlay, to whom I have referred, is also clear that there is room to improve the way in which the GLA operates, communicates and manages relations with those it regulates. In that, she has the benefit of positive working with the highly committed staff of the GLA.
It is fair to say that, after six years of the GLA’s existence, there is a much better understanding of the areas where the greatest risks to vulnerable workers lie. Conversely, given the unique features of the workers whom the GLA regulates in the sectors that it covers, we do not support any extension of the GLA’s scope or remit. The issue is not about extending the scope of the GLA either to construction or other sectors; it is about focusing the authority’s activities where its input is most needed to tackle worker abuse and exploitation. We also need to improve its processes, so that those who are compliant are not burdened and we can ensure that it is effectively positioned within the Government’s wider employment law framework.
Stephen Barclay
Given the fact that, over the past two years, there have been just 11 criminal prosecutions and that 300 warning notices have, in essence, had no bite, because no action flows from them, how will we measure the success of the changes that the Minister intends to make? What will be the outcomes? Will success be measured through an increased number of prosecutions? How will we judge success in two years’ time?
Mr Paice
I have to be honest with my hon. Friend: there is no precise way of doing that. We could argue that if there are no prosecutions, the GLA is failing. On the other hand, we could say that that is happening because there is no criminality. We cannot make that judgment. The issue is to ensure that the GLA is working as effectively and efficiently as possible and that the leads—the intelligence—that it is getting reduces, over time, any illegal activity. This is obviously a very subjective statement, but the general perception should be that the problems are diminishing.
Very quickly, I want to pick up on a couple of the specific recommendations made by my hon. Friend to which I have not referred. He mentioned the need for sentencing guidelines. I can assure him that I am happy to refer that to my right hon. and learned Friend the Secretary of State for Justice. With that, I will refer the issue of repayment orders as part of the debate over civil penalties. That is a very valid point.
On my hon. Friend’s point about social housing, I must confess that it had not occurred to me that there was an issue surrounding three floors, two floors or, as he rightly said, in many of our constituencies, only one floor. However, I am happy to confirm that I will look into that.
Let me conclude by trying to reassure colleagues that the changes are about focusing the GLA’s resources where they really matter: on tracking down illegality and situations where workers are being abused, exploited or having money unfairly confiscated from them. The changes are about working with other enforcement agencies to ensure that the joint forces are brought together to deal with what we all agree are the unacceptable and sometimes tragic consequences of such illegal action. That is what the GLA is there for, and that is what it will do. The rest of the industry, which is operating perfectly compliantly and responsibly, should have no fears from the GLA, but it will still need to comply with the legislation, as it should. More than anything else, the changes are about improving efficiency. In the light of that, I hope that I have allayed my hon. Friend’s concerns.
Unemployment (North-east)
(12 years, 5 months ago)
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Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Brooke, and I hope that your foot is feeling a lot better. May I also take this opportunity to thank Mr Speaker for allowing me to secure this debate? I have been trying to secure a debate on unemployment in the north-east for some time, because it is the most important and pressing social, political and economic issue facing my constituency and the wider region. I would therefore be grateful, Mrs Brooke, if you passed on my sincere thanks to Mr Speaker.
I welcome the Whip, who will be responding to the debate. I do not doubt the integrity and commitment of the hon. Member for Preseli Pembrokeshire (Stephen Crabb) in any way, shape or form, but it is deeply contemptuous to the people of the north-east for the Department for Work and Pensions not to have deigned to provide a Minister to respond to my concerns and those of my hon. Friends.
The Whip may expect me to unleash a torrent of negativity and pessimism about the situation—notwithstanding what I have just said—and to come with a begging bowl, asking for help and handouts on behalf of a declining and failed region. That is far from the case, because the north-east is far from being a failed region. It is true that we have struggled to adapt to the changing economic and industrial fortunes of the past 30 years or so, particularly in finding a new economic role following the closure of many heavy industries. I have to say that that task was not helped by the Administrations of the 1980s. Indeed, it was made much worse by the decisions they made and the priorities they set.
However, the north-east, the region that was the centrepiece of the workshop of the world in the 19th century, has the capacity, capability and ambition to become one of the major contributors to a modern global economy, and we have the work force to match. If the Government are serious—I hope that they are—about rebalancing the economy in terms of sectors and geography to make us less reliant on a few sectors and on London and the south-east, they have to see the north-east as a growth area and make us a priority.
There are sectors that have the scope to take advantage of Britain’s current competitive advantage and lead the world in the next few years—advanced manufacturing, chemicals, pharmaceuticals, automotives, higher education, renewables and the low-carbon economy, energy and tech companies. If we also think about the firms in the supply chain that will assist those industries, particularly such vital industries as the steel industry and the construction industry, the north-east must have a key role to play.
Alex Cunningham (Stockton North) (Lab)
My constituency enjoys some of the best industrial riverside frontage in the country. It was once home to a thriving shipbuilding industry, and then North sea-related activity. There is now the potential for real jobs and growth in the green industries, building monopiles and other components for wind farms. Does my hon. Friend agree that it is time for the Government to clarify their position on support for wind farms, and encourage developers of wind farms to buy their gear in the north-east, rather than from somewhere in Europe?
Mr Wright
My hon. Friend is absolutely right. Just further up the coast in Hartlepool, we have a thriving renewable energy industry with great firms, such as JDR Cable Systems and Heerema Hartlepool, which can supply a lot of offshore wind turbine components. However, investors are crying out for certainty from the Government. They need policy certainty to allow them to invest for the long term. The Government are failing spectacularly on that.
Mr Campbell
Of course, we have Narec. One of the things that disappointed me was that companies coming to the north-east to look at the Tyne and the port of Blyth—I am sure Hartlepool and the Tees, too—have moved up to Scotland because they were getting more encouragement, more money and more funding. That is no good to us, because we need them to come to the north-east. That policy needs to change.
Mr Wright
I absolutely agree with my hon. Friend. I mentioned the fantastic facilities and the great companies we have in my constituency. Gamesa, a Spanish wind farm manufacturer, was hoping to relocate to the UK. It looked at Hartlepool, but chose to go to a Scottish port precisely for the reasons set out by my hon. Friend. We need to come to terms with that and ensure that we have a Government who are fighting our corner in the north-east. I am not convinced that we have that at the moment. We do not even have a Minister to respond to the debate. That is deeply worrying and shows contempt for the people of the north-east.
Despite the huge potential in my constituency and the wider north-east, the unemployment situation is bleak. I know that in his response, the Whip will cling to the argument, like a dying man to a life raft, that today’s statistics show that employment in the north-east has increased by 3,000 on the previous quarter, and that unemployment in my constituency is down by 15, month-on-month. That is welcome news, but I would never say, as the Secretary of State for Energy and Climate Change did on a recent visit to Newcastle, that the unemployment rate was not as bad as it could be, or as it seemed. Again, that is deeply insulting to everyone in the north-east who has lost a job and is desperately looking for work. It shows a Government who are grossly out of touch with what the people of the north-east want and need.
Mr Kevan Jones (North Durham) (Lab)
Does my hon. Friend think that that is in stark contrast to 2009 and 2010, when, because of the economic stimulus introduced by the Labour Government following the economic crash, employment in the region actually rose by 24,000 in one year?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I congratulate my hon. Friend on securing this debate on an issue of such great importance to the north-east, even if it is of less importance to the Government. Newcastle has seen its unemployment rate go up by approximately 20% in the past year. In addition, its national unemployment ranking has gone up by 30 places. A year ago, it had the 76th highest unemployment rate in the country; now it has the 47th highest. Does that not suggest that the Government’s measures are feeble and are leaving the north-east and Newcastle behind?
Mr Wright
I absolutely agree with my hon. Friend, and I will go on to mention some job losses that her constituency is facing. The region still, and by a considerable margin, has the highest unemployment rate in the country at 11.3%. The figures published today show that unemployment has increased by 8,000 in the past quarter, to 145,000 in the north-east. The number of people claiming jobseeker’s allowance has increased by 900 on the previous month. In Hartlepool, the number of people unemployed stands at 4,612, a rate of 11.6% and the 30th highest of all the UK constituencies. That jobless figure of 4,612 is more than 10% higher—503 higher—than it was a year ago.
Today’s statistics also show that the number of people who are economically active in the north-east has gone down, from 75.4% to 75.2%, as has the proportion of the adult population in employment, from 66.6% to 66.5%, whereas the national rate for England is 70.8%. On unemployment and economic prospects, the gap between the north-east and the rest of the country is getting wider and should be a huge cause of concern for the Government. From their actions—or rather, the lack of them—and from the priorities we have seen today in their not sending a Minister, I do not get the sense that that is the case at all.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
I congratulate my hon. Friend on securing this important debate. Does he share my concern about the rising level of female worklessness in the north-east? Many women have been forced out of work because of Government cuts and cuts to tax credits. My concern is that the evidence shows that stronger economic growth is associated with higher levels of female employment—growth that we desperately need in the north-east and in the wider economy.
Mr Wright
My hon. Friend is absolutely right. She has been a strong champion in this regard, both in this House and beforehand, standing up to make sure that women have the rights they require to fulfil a vital economic role. In our region we certainly need female, and part-time, workers.
I want to mention the loss of jobs in recent months. Between June 2010 and December 2011, the latest period for which figures are available, the north-east lost 7,000 manufacturing jobs and 84,000 construction jobs. According to statistics obtained by the TUC, in the north-east nine jobseekers are chasing each job vacancy. In contrast, in Oxfordshire there are just 1.8 jobseekers for every vacancy. It is therefore more than five times more difficult to find work in my constituency than in Oxfordshire. It is not that the people do not want to find employment or are workshy. There are no jobs to fill.
I could mention statistics until I am blue—or red—in the face. Many people will gain some comfort from statistics, large numbers or percentages. However, behind every statistic lies a human story of a person who is made redundant and is worried about how they will pay the bills and put food on the table, or of someone rejected after making their umpteenth job application and fast losing hope and sense of self-worth, or of a parent worried about how their son or daughter will get a job or career without any experience.
Mr Stephen Hepburn (Jarrow) (Lab)
My hon. Friend has made some telling points. Is it not important to stress that unemployment, especially among young people, is not an easy option? The unemployment benefit for people under 24—their dole—amounts to £8 a day. Without parental support or friends, they have to feed and clothe themselves and pay their utilities from that sum. It is not an easy option.
My hon. Friend rightly mentioned the serious issues in south Tyneside. In Jarrow, an extra 200 young people went on to the dole last year. With 15 people chasing every job, there is little or no prospect of their getting one.
Mr Wright
My hon. Friend is right. I will come to the terrible issue of youth unemployment in a moment. Let me just mention further unwanted, gloomy news on the jobs front in recent months.
The closure of the Rio Tinto Alcan plant, with the loss of 515 jobs directly and the threat to 3,000 jobs in the supply chain, is a major blow to the economy of south-east Northumberland. My hon. Friend the Member for Blyth Valley (Mr Campbell) is in attendance and I have spoken to my hon. Friend the Member for Wansbeck (Ian Lavery) today, who wanted to attend, but is hoping to catch Mr Speaker’s eye in the debate on Remploy.
The closure of the BAe factory on Scotswood road in the constituency of my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) brings to an end a century of remarkable industrial innovation on the banks of the Tyne. The factory was started by that astonishing, underrated Victorian entrepreneur, William Armstrong. However, far from looking to the past, the closure undermines the vital links between British military capability and manufacturing and industrial capacity.
The growth in long-term unemployment and youth unemployment is of particular concern. I have mentioned that to hon. Friends. The north-east has far too often been permanently scarred by people being on the dole for many months and years, or by young people leaving school or college unable to find work. That was so in the 1980s, when the closure of the steelworks, shipyards and coal mines left an unwanted and enduring legacy of poor health, lower life expectancy, poverty and family breakdown, making it more difficult for the economy to bounce back into prosperity once the recovery starts.
The longer a person is out of work, the easier it is for them to lose skills and experience, and the more difficult it is to get back into work. That is especially true when more and more people have more recently lost their jobs, and therefore have more recent experience in the job market.
In Hartlepool, the number of people who have been claiming JSA for more than 12 months has risen in the past year by more than 245%. One in four young men under the age of 24 are out of work in Hartlepool. Such figures are not sustainable economically, socially or ethically. I fear that we are repeating the policies and mistakes of the 1980s and that there will, once again, be a lost generation of young people unable to fulfil their massive potential, believing that the only way they can get a proper career is by leaving the north-east altogether.
We have had good news. Only this week a new retailer announced the creation of 150 jobs in Hartlepool, but overall the job situation is gloomy and set to get worse. The Centre for Economics and Business Research forecasts that unemployment in the north-east will rise to 12% this year and to 13% by 2016, largely as a result of further and deeper public sector redundancies.
Government policy is making the unemployment situation in the north-east much worse. The Government’s insistence that public sector redundancies are necessary and that private sector employment will somehow bloom in the face of these cuts is naive and economically ignorant at best, or is cynically and deliberately driven for ideological and political purposes. If Ministers—or Whips—genuinely believe that the public and private sectors are separate and distinct entities, and never the twain shall meet, that shows a profound misunderstanding of how the modern economy works.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
My hon. Friend makes a compelling argument. In my area of the north-east, in Teesside and East Cleveland, three areas worry me: cuts in Army, Navy and Royal Air Force troop numbers—mine is a big recruitment area for them—the three-year zenith in the contraction of manufacturing, which affects the north-east more than other regions, and public sector cuts.
As my hon. Friend just mentioned, the Government’s ideological view that there is a private sector and a public sector goes against every piece of economics since Galbraith in the 1960s and undermines any economic recovery that we have desperately fought for.
Mr Wright
My hon. Friend is right. I know that he remembers Galbraith in the ’60s.
Some 84,000 jobs have been lost in the construction industry, in part due to stopping the schools building programme, road schemes and social housing, which were all socially and economically necessary, because they boost productivity, efficiency and economic capability in the long term and, in the short term, in the worst and most severe global financial crisis ever, help to provide skills and capacity in the construction sector.
The Government fail to accept the basic economic point that, for every £1 of public money spent on construction activities, almost £3 of private sector money is generated back into the local economy, in terms of jobs, the supply chain and construction.
Phil Wilson (Sedgefield) (Lab)
My hon. Friend has made a compelling argument for a Labour Government. I congratulate him on securing the debate. Does he agree that there is one task that the Government ignore all the time? The only way that we can secure real growth is by the public and private sectors working together in partnership.
Mr Wright
I pay tribute to my hon. Friend, who does not get enough recognition for the enormous amount of work that he has done on two fronts: securing the work for Hitachi trains in our area and ensuring that Durham Tees Valley airport can be a catalyst for economic growth and connectivity—a word that I cannot stand—so that we can compete and sell our goods and services and get them to the rest of the world.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I have a certain amount of sympathy with what the hon. Gentleman is saying. He mentioned schools. The Duchess community high school in my constituency was constantly excluded from Labour’s school rebuilding programme. Now, three high schools in Northumberland will be rebuilt under this Government’s programme.
Mr Wright
There seems to be no connect between public and private sector and no connect or coherence between Departments. The Department for Communities and Local Government demands local authority cuts of 20%, which is having a profound impact on unemployment, not just directly in terms of council jobs.
Hartlepool borough council cut its bus subsidy, so Stagecoach has stopped operating bus services early in the morning and late at night. People are unable to travel to early shifts or late periods of work in the night-time economy. They are less likely to go out for a meal or to the town hall theatre or the borough hall, or to the pub for a few pints, so there is less economic activity and fewer jobs. The reality is stark: a lack of joined-up thinking in the Government is increasing unemployment in my area. What can the Whip do about it?
Mr Kevan Jones
Does my hon. Friend agree that there is also a great disconnect between what Liberal Democrats say at Westminster and what they are saying in the north-east? In the House, they are quite happy to vote with the Conservatives for some of the most drastic cuts that we have seen for generations in the north-east; but in the regions, they are somehow trying to explain to or convince the public that that has nothing to do with them.
Mr Wright
I am sure that we will see a “Focus” leaflet in due course saying that everything in the garden is rosy and that the Liberal Democrats are fighting hard. The reality—my hon. Friend is right—is that where they can make a difference by going through the right Division Lobby, they are failing to stand up for the north-east and for the people who need jobs and investment in our area.
The Government’s determination to depress demand before the economy has had a chance to recover from the global financial crisis is wrong. The effects of such a policy are a double-dip recession made in Downing street and an increase in unemployment. The Federation of Small Businesses in the north-east told me that the ability of small business to offer jobs is suffering directly because of falling sales, as the public sector reduces investment, confidence collapses and firms sit on cash. It is clear, as businesses recognise, that the Government’s policies are making matters worse. Does the Whip not understand that? Can he not see that if the Government pursued a more active role on jobs and growth, there would be more people in work, paying taxes, more companies paying corporation tax, a reduced benefits bill and the deficit being paid down faster. By sticking to an economic plan that is not working—that is clear to all and sundry—the Government must borrow £150 billion more than originally anticipated.
Helen Goodman (Bishop Auckland) (Lab)
We have commented on the position of Liberal Democrat Members from the north-east, but has my hon. Friend noticed that Tory Members from the north-east have not even come to the debate?
Mr Wright
I am grateful to my hon. Friend for highlighting that point. I had noticed that the hon. Members for Stockton South (James Wharton) and for Hexham (Guy Opperman) have not bothered to turn up for the debate, which shows the importance that they attach to economic enterprise, growth, jobs and unemployment.
Alex Cunningham
My hon. Friend is one neighbour, but if my Conservative neighbour, the hon. Member for Stockton South, was in his place today, he would point to our enterprise zone and our local enterprise partnership, which have been introduced by the Government. Yet despite their best efforts, unemployment in my constituency is nearly 4,200, up 400 on last year. Does my hon. Friend not lament, as I do, the loss of real investment that we had in the days of One North East?
Mr Wright
I should declare an interest: One North East used to employ me—that is one of the reasons why the Government wanted to get rid of the regional development agencies. I absolutely agree that a compelling economic vision helped by an RDA that can set strategic priorities is vital. My hon. Friend mentions the hon. Member for Stockton South who is, as far as I am aware, although I might be corrected, one of the only people in north-east and Cumbria not to have come out against the ludicrous proposal on regional pay, which is what I want to turn to.
The House is considering regional pay this afternoon. At a time of depressed demand, eroding confidence and rising unemployment, it seems economically ludicrous for the Government even to contemplate such a policy. The TUC rightly estimates that regional pay could take £500 million from the north-east’s economy precisely when we want consumer confidence to increase to allow people to start buying things and creating jobs. Does the Whip think that taking £500 million from the north-east will increase the number of businesses and employment?
Instead of continuing with failed economic policies that are increasing unemployment in the north-east, the Government should listen to regional businesses, which are asking for a cut in national insurance contributions to incentivise them to take on extra workers. The Government should consider a temporary cut in VAT to allow confidence to emerge. They should use the power of the Government’s buying position to use procurement to invest in the regional supply chain, to increase the number of apprenticeships and to give a chance to local firms. They should reintroduce the future jobs fund, which helped many hundreds of young people in Hartlepool and throughout the north-east during the worst times of the global financial crisis. Most of all, the Government should be pursuing an active industrial strategy, working with productive businesses to embrace the competitive sectors of the future. They have done that to some extent with Nissan and the automotive industry, by carrying out what the previous Labour Government were doing, but they should step up a gear with the low-carbon economy—as my hon. Friend the Member for Blyth Valley said—chemicals and advanced manufacturing.
If the north-east is given the tools by the Government, it will deliver for its people, its communities, its businesses and the rest of the country. I ask the Whip to help us to unlock the huge potential and end the human, economic and social waste of unemployment in the north-east.
Annette Brooke (in the Chair)
Order. At this stage, I shall not introduce a time limit, but I ask Members to be aware of the number of others who want to speak.
Ian Swales (Redcar) (LD)
It is a pleasure to serve under you today, Mrs Brooke, and to see you back in the House, almost fighting fit.
I congratulate the hon. Member for Hartlepool (Mr Wright) on securing the debate and on the 150 new jobs in his constituency announced this week. Unemployment remains my No. 1 priority. The north-east is indeed bottom of the unemployment league and has been for many years, including in 1997 and 2010. With £1 in every £4 of public spending being borrowed, we sadly inherited an economy built on sand. Clearly a lot had to change.
Ian Swales
I have hardly started. I will give way in a moment, when I have got further into my speech.
Solutions to the problem have to be bottom-up and top-down. My local council—before an Opposition Member points it out, it is a Labour council—deserves praise for its infrastructure work, adding new seafront work and leisure investment to the huge Environment Agency spend on flood defences, as well as the Government investment in MySpace, which is going on in Redcar. It was good to see the Association of North East Councils visiting Redcar a few weeks ago to see what is happening. However, it is disturbing how many of the construction jobs are not going to local people. I have raised that with the council, because it is important for the north-east to help itself as much as possible and not to have such jobs going to people who travel into the area. My local council is taking a high risk, however, because the Audit Commission says that at the end of the work it will have the highest debts in the country for the size of the council, but at least it is doing something.
I praise the Government for investment in local infrastructure, in the Teesside railway system and, in particular, the recently announced refurbishment of stations, including all six in my constituency. House building is obviously a good option, but in areas such the one I represent the population is static or declining. We need to upgrade our housing stock. That is true throughout the north-east, but as I keep reminding my council, if we do not plan for the overall stock we get market failure. That has already happened in three parts of my constituency: South Bank, Grangetown and West Dormanstown.
We need a lot more focus on enterprise by our councils. I cannot speak for other areas, but my local council of Redcar and Cleveland often proves to be difficult to deal with. We recently lost 200 jobs when a potential new investor simply gave up and went somewhere else. I welcome the new enterprise zones, including three in my constituency, which are already attracting interest. I hope that we will prove to be easy to deal with and get companies into those zones.
These debates always lead to a lament for the RDA at some point, and the hon. Member for Hartlepool has already touched on that. It is interesting to note that, in a sense, RDAs were not a regional policy; they covered the entire country and all got large sums of money. I salute the bravery of the present Government in supporting only projects in hard-pressed areas such as the north-east with the regional growth fund. That is one reason why the north-east is getting a large share of the regional growth fund money.
Chi Onwurah
The hon. Gentleman says because all the RDAs were abolished, the abolition of One North East was not a regional policy. As a member of the Liberal Democratic party, however, does he not agree that his party stated specifically that One North East would be saved, because it was admired by both public and private sectors? Its demise has been regretted ever since its abolition.
Ian Swales
That was never party policy, but it was a remark made by the Business Secretary. I think everyone recognises that One North East was the best of the regional development agencies. My point was that giving money to every region will not rebalance the economy. I salute the bravery of our Government in not giving money to regions that do not need help.
A month or two ago, I said in this Chamber that in the two years before the general election, the RDA approved 96 projects, worth £148 million, in which One North East directors had to declare an interest. Of those, only eight projects and £6 million related to the Tees valley. The Tees valley got a poor deal from One North East. Experian assessments place Hartlepool, Middlesbrough, Redcar and Cleveland in the weakest 10 economic areas of the country, so I welcome the local enterprise partnership and its work.
The LEP is doing a lot of good work, part of which is defining clusters—we have process industries and automotive clusters, and we are now developing a steel cluster. The welcome news is that Sahaviriya Steel Industries has bought the Redcar steelworks, and is now producing; Tata is still in the area, and opened a new research centre just two weeks ago, which had some Government support; Siemens has its worldwide centre for steel processing development in Stockton; and Teesside university is opening up a new department, so a good cluster is developing there. We also have clusters in green technology, and I welcome new initiatives in renewables, with the industry forming the Energi Coast group—20 companies getting together to exploit the new market jointly—and Narec has been included in the new technology innovation centre for renewables. Clusters attract like-minded companies. Global Marine Systems has just relocated from Essex to Middlesbrough, and last month it hired the Riverside stadium to recruit people.
Manufacturing is having some success in the area. International trade is booming with record exports— the best ever—from the region during the 12 months to March, including 20% growth in exports outside the EU. Jonathan Greenaway, a partner at PricewaterhouseCoopers in Newcastle, recently reported those successes and said:
“This is a great time of opportunity for manufacturers, and…UK companies are really rising to the challenge.”
We have some problems with the public sector, to say the least, with job losses and so on. I believe that taxpayers expect efficiency in public services and that they do not see them as job creation exercises, but there has been a worrying trend of relocation of jobs, certainly out of the Tees valley. Under the previous Government, the ambulance service was lost—it still baffles me that an area of 750,000 people is not deemed capable of running its own ambulance service, but that was moved out of the area. We also lost the office of Her Majesty’s Revenue and Customs in Middlesbrough, and thus 400 jobs. There are other potential problems, such as the Insolvency Service office in Stockton. I urge the Whip to reverse that trend and to move jobs to hard-pressed areas in the north-east such as Teesside.
I note that some agencies are looking at Yorkshire and the north-east as a region. I point out to them that the Tees valley is exactly the midpoint—I measured it this morning—and an ideal location for headquarters. The regions are massive, however: Sheffield in South Yorkshire is as close to Southampton as it is to the constituency of my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith).
For 13 years, the north-east had a Labour Government—almost all MPs and councils were Labour—but between 1997 and 2010, the number of unemployed people in the region went up by 7,000, and the rate remained approximately the same, despite the unprecedented amount—
Mr Kevan Jones
The hon. Gentleman is being selective. I was going to say that it is a pleasure to hear him speak, but he seems to be saying that everything in the garden is rosy. In fact, between 2009 and 2010, 24,000 extra jobs were created in the north-east, and over the longer period from 1997, unemployment went down, not up.
Ian Swales
I checked the figures with the Library this morning, and 7,000 more people were unemployed in 2010 than in 1997, despite the unprecedented amount of grants and unsustainable borrowing that were pumped into the area.
Big problems remain. Unemployment is way too high, especially in constituencies such as Redcar, and it remains my No. 1 priority. The hon. Member for Hartlepool said that the north-east was once the workshop of Britain. It can be again, and in fact already is to some extent—even today, it is the only region with a positive trade balance—but a lot more can be done. I agree with the hon. Gentleman that we need a clearer industrial policy. We also need consistency on renewables and public procurement. There are opportunities for further investment in infrastructure—I do not want to steal the thunder of my right hon. Friend the Member for Berwick-upon-Tweed, because I am sure that he is about to give an example.
I welcome the Government’s attention to the north-east. We have a regular troop of Ministers coming through, and it is good to hear that the Employment Minister will be meeting the Teesside business community on 10 July. I look forward to hearing the response from the Whip today.
Annette Brooke (in the Chair
The wind-ups will start at 3.40. I remind hon. Members that I have not put a time limit into operation, and it is entirely up to them whether that becomes necessary.
Grahame M. Morris (Easington) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Brooke. I congratulate my neighbour, my hon. Friend the Member for Hartlepool (Mr Wright), on securing this debate, whose importance is illustrated by the number of Labour Members who are present. I was going to try to be good and not lampoon—sorry, lambast—the coalition Government, but I cannot allow some of the comments made by the hon. Member for Redcar (Ian Swales) to pass with no response.
The hon. Gentleman’s suggestion that the regional growth fund is an improvement in regional policy is completely incorrect. Any region can apply for funds, not just the most disadvantaged regions. I cannot understand why Easington, with an unemployment rate of 11.3%, is denied an enterprise zone and support from the regional growth fund, when affluent areas such as Oxford, Cambridge and Kent have enterprise zones and their companies are supported by the regional growth fund. Surely if the Government’s policy is to address regional imbalances, that is a good starting point.
Grahame M. Morris
The hon. Gentleman would not afford me that courtesy, but in the spirit of debate I will give way to him.
Ian Swales
I apologise to the hon. Gentleman for not giving way. Perhaps I was in full flight, and did not see him seeking to intervene. Does he know how many projects in London and the south-east have been awarded regional growth fund money?
Grahame M. Morris
I do not, but I know that in my area I have lobbied hard on behalf of a number of companies that could bring substantial benefits to a hard-pressed area, and we are still waiting for decisions. That aspect of Government policy needs to be addressed.
The other issue that I am worried and upset about is that a Liberal Democrat occupies one of the highest offices of state, and the hon. Gentleman mentioned that Ministers often visit the area. They do not afford me the courtesy of saying when they are coming. When the Secretary of State visited my constituency, I was not advised in advance and I was not in a position to lobby him with bids from my area. However, I have taken that up separately. I will now try to make progress because I know that many hon. Members want to contribute.
I remind hon. Members that unemployment in my region is up by 8,000 to 145,000—a rate of 11.3%, which is higher than the national average. Under the Labour Government, the gap between the economy of the north-east and those of other regions was closing, with private sector business growth and employment. The Member for Redcar quoted some figures. In fact, after 10 years of Labour Government, the unemployment rate in the north-east was 5.7%—Labour came to power in 1997, and in November 2007 to January 2008 it was 5.7%—which was only 0.5% higher than the UK average. Now, though, it is 11.3%, which is 3.3% higher than the national average.
I did want to start on a positive note—[Laughter.] I am sorry about this, Mrs Brooke. I wanted to welcome the invaluable contribution that Nissan has made to our regional economy. Nissan is located in the constituency neighbouring mine to the north, represented by my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). Nissan’s presence has some benefits for the supply chain in east Durham. I commend Nissan for its tremendous commitment to our area. It is a shining example of what the north-east is capable of achieving with the right support from local and national Government. As hon. Members will be aware, the two new car models that are to be built will create more than 3,000 jobs across the UK over two years. Some 600 of those will be at Nissan’s Sunderland factory, with the remainder in the supply chain. I do not wish to criticise that success story.
I am looking to the Minister—[Hon. Members: “The Whip.”] Well, I will afford him the courtesy of calling him Minister. Welcome though they are, those new jobs do not come close to countering the job losses in my constituency. Over the past few weeks, I have referred to the haemorrhaging of private sector jobs in east Durham. That should be a real concern—it certainly is for me and all those who are affected. I cannot remember so many job losses in my constituency since the pit closure programmes, which is indicative of the desperate situation faced by many constituencies such as mine.
The Government’s Work programme does nothing to address the fact that unemployment is often focused in communities with the weakest local economies. The problem in the north-east is not so much one of joblessness as one of worklessness. My hon. Friend the Member for Hartlepool mentioned the ratio of the number of people out of work and the number of vacancies, which is limited. I refer the Minister to an excellent report on that subject published by Sheffield university, which makes some positive suggestions about what could be done.
The Work programme has been in operation for one year, during which time the number of people in Easington claiming jobseeker’s allowance has risen by 20%. About 1,000 job losses have been announced in the past month, and that will affect my constituency, where 3,195 people are out of work. Companies closing down include Cumbrian Seafoods, JD Sports, Dewhirsts, Reckitt Benckiser and Robertson Timber. Some of those companies—all private sector—are closing as a consequence of the decline in the building and construction industry, but mostly it is a consequence of a reduction in demand.
There is yet another side to the story. Easington has a strong manufacturing tradition, with companies such as NSK, Caterpillar, GT Group, Actem UK and Seaward Electronic. Those companies are looking to the RDA replacement bodies and the Government for signs of support that will enable them to take on more workers. There are some large-scale private sector regeneration projects in the offing, but again we need leadership and support from the Government, because many of those programmes are suffering unjustifiable delays.
I will not embarrass the Government by mentioning the centre of creative excellence that could have created 500 jobs south of Seaham, but I will mention retail developments such as a new Tesco supermarket on the former site of East Durham college. That would create 400 new jobs and a new library—a much needed community facility at a time of spending restraint in the public sector.
Dalton Park phase 2 also offers a glimmer of hope for my constituency. Once the development is complete, it will support more than 100 construction jobs and 450 new retail jobs. It will provide new facilities that will greatly benefit the local community such as a new supermarket, hotel, cinema, and associated leisure facilities. Such planning applications are often controversial, but—incredibly—this one received the unanimous support of the local authority, as well as massive support from the local community and other county MPs, and I am thankful for that support. The development was also passed by the Secretary of State for Communities and Local Government. It is a rare phenomenon in that everybody seems to support it, but it is being delayed as the result of an application for a judicial review by Salford Estates, which owns Peterlee town centre. As I understand it, the founder of Salford Estates is a tax exile based in the tax haven of Monaco.
My point is that the communities in the north-east continue to be hit the hardest by Government policies that are driving down demand across the region. The promised private-sector led recovery has simply failed to materialise in our region, and the austerity and cuts agenda is taking money out of our local economies and making any potential recovery harder to realise. A decade of progress made under Labour to reduce the north-south divide is being reversed.
Mrs Jenny Chapman (Darlington) (Lab)
Is my hon. Friend alluding—perhaps not this explicitly—to the fact that problems of entrenched unemployment are very hard and take an awfully long time to fix? The north-east probably knows that better than any other region. The problem is not only worklessness but crime, mental ill health, homelessness and all the other associated problems that we know occur when there are high levels of unemployment.
Grahame M. Morris
Absolutely. My hon. Friend makes an excellent point much more forcefully and directly than I could, and I completely agree with her.
It is up to this Government to learn lessons from those things that worked in terms of regeneration and growth and saw our region prosper in sectors such as exports over the past decade. I find it quite offensive when members of the governing coalition denigrate Labour’s efforts over the past decade, as if that Government produced no overall success.
I did not intend to quote statistics, but I shall put a couple on the record. Based on gross value added per head, the rate of growth in the north-east went from being the lowest of all regions during the 1990s to the second highest during the past decade. Let me also put to bed another myth propagated by the Tory party which claims that our public sector was squeezing out the private sector. That is just not true. As other hon. Members have indicated, in our view the public and private sectors are not mutually exclusive but mutually supportive. Between 2003 and 2008, private sector employment rose by 9.2% in our region, while at the same time public sector employment grew by only 4.1%. Between 1999 and 2007, the number of businesses in the north-east rose by 18.7%—a huge increase that compares favourably with London’s business growth of about 19.6% over the same period.
Bridget Phillipson
May I give one example from my constituency to illustrate the link between public sector investment and private sector job creation? A local electrical company, Alex Scullion Electrical Contractors, carried out a lot of work with contracts to renovate social housing, apply the decent homes standard and build new social housing through labour investment. Now, however, times are difficult because that investment has dried up. That company played an important role in securing private sector jobs and supporting apprentices, and there are clear linkages between money that the Government spend and the creation of jobs in the private sector.
Grahame M. Morris
Absolutely. That is a terrific point and there are many similar examples. In my constituency, Carillion was involved in infrastructure projects including Building Schools for the Future and hospital building programmes. I did not mention it earlier but that company has announced 130 redundancies.
There is no doubt that the north-east was hard hit by the global downturn of 2008, but the policies of this Government are entrenching a north-south divide. To quote a Nobel prize-winning economist, Paul Krugman:
“The urge to declare our unemployment problem ‘structural’—a supply-side problem of some kind, not solvable by the ‘simplistic Keynesian’ notion of just increasing demand—has been quite something to behold. It’s rapidly entering the category of a zombie idea, which just keeps shambling forward no matter how many times it has been killed.”
The problem is that demand has been depressed. We need to stimulate demand in the economy. Quite simply, communities and areas such as mine throughout the region cannot pull themselves out of the mire without Government support. Targeted support and intervention are what we need.
Annette Brooke (in the Chair)
Order. I propose a time limit on the remaining speeches, initially of five minutes. Each of the first two interventions accepted will stop the clock and give the hon. Member who gives way another minute; but clearly there will be reductions in the time limit if that happens. The Clerk will ring a bell when a Member has one minute left.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I am glad to follow the hon. Member for Easington (Grahame M. Morris), who always manages to sound a little more cheerful than some of his colleagues in his constructive contributions. I congratulate the hon. Member for Hartlepool (Mr Wright) on introducing this timely and necessary debate. I have a lot of regard for him, but he and his colleagues must face the fact that if they were in power now they would be making substantial public sector cuts. Their own spending plans demonstrate that. We would all be facing the same problem of a shrinking public sector, which has a particular impact in an area with high public sector employment.
The Berwick constituency is a large one, and includes the area around the Lynemouth smelter, whose closure has already been mentioned, as well as what were in my time four working pits. We have lost a lot of jobs in the mining industry. Yet the constituency is 404th for unemployment levels. That still represents more than 1,300 unemployed claimants, but the fact that the constituency has managed not to be among the worst hit owes something to the current stability of agriculture and the associated trades, and also to the fact that we have a large proportion of economically inactive—retired—people. Among the economically active, unemployment is hitting significantly.
We were hit, of course, by the Alcan closure, which had a direct impact on my constituency. Following that I worked a great deal with my right hon. Friend the Chief Secretary to the Treasury on the extension of enterprise zones. The area identified was in the constituency of the hon. Member for Blyth Valley (Mr Campbell), because there are sites around the port of Blyth that are potentially attractive. Getting the enterprise zone extended was part of the strategy. We need the capital allowances that must go with it, and that is partly a decision for the local enterprise partnership. If projects come along that need those capital allowances, and they are not in the original LEP area, I want the LEP to make sure that they go to any good new business that comes into the extended area. If that means that the amounts are used up, we will get some more out of the Treasury; I am confident that we shall be able to do so.
The north-east region is enjoying significant business success—the highest value ever in exports. However, it is heavily dependent on public sector jobs. A good friend of many of us, John Mowbray, who is currently chairman of the chamber of commerce—incidentally, he was recognised in the honours list last week, which we are delighted about; we look forward to congratulating him, probably this evening—said:
“The onus has been placed on the business community to pick up the slack from these cutbacks and while we have had a great deal of success across the private sector in the past 12 months, it is almost impossible to keep pace with the impact of what has been happening across public organisations”.
There is a major task to undertake. If I ask business men in Northumberland what the obstacles are to their creating more jobs—what three things that are somewhere in the grasp of Government, because, obviously, they will mention the international economic situation, which is beyond Government’s control—they will refer to the difficulty in getting capital from banks, the infrastructure problems in our area, and skills shortages.
Grahame M. Morris
All Members have had discussions with companies and industrialists, and the issue that comes through to me is lack of demand and consumer confidence. It is not so much the impact of the eurozone, and so on—it is lack of domestic demand. Government policy is exacerbating that.
Sir Alan Beith
That is partly true, particularly in retail and parts of the construction industry. It is not true in some of our exporting industries, which are still finding demand and achieving sales in many parts of the world. Clearly, we want to increase demand. What we cannot do is simply pump more and more money—because we do not have it—into the economy.
I want to refer to some of the ways in which we must tackle the three weaknesses I mentioned. One, of course, is bank lending. My right hon. Friend the Business Secretary has devoted a lot of effort to trying to get banks to lend to small business. However, he has met resistance and difficulty, and the Governor of the Bank of England has announced new measures, which I hope will take us further. The regional growth fund supplements the availability of capital, and I particularly welcome the efforts of the Newcastle Journal to bring together smaller businesses to create a bid to become eligible for the regional growth fund. It was successful the first time round, and I hope it will be a second time. The banks need to lend to small businesses on reasonable terms that recognise the viability of the projects that are being brought forward.
We have a pretty obvious candidate for infrastructure spending, where we can clearly show that there would be a benefit to the economy, and that is investment in the A1. It is seen as a handicap by many businesses when they are trying to attract other businesses into the area. If we think that Scotland and the UK benefit from being in the Union, surely we must link up effectively with Scotland.
Finally, for the development of skills we are very dependent on Northumberland college, which serves my area as well as those of neighbouring MPs. It has had something of a crisis of governance lately and gone through a difficult period. I am glad that the Further Education Minister has shown a willingness to help the college. We need it to expand its activities generally out into the areas that are closer to the homes of young people, who cannot be expected to travel 30 or even 50 miles each way to get further education. The Government are doing practical things—and they need to do more of them—to tackle those problems, which we all agree need to be addressed.
Phil Wilson (Sedgefield) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Brooke. I congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing an important debate. I welcome the Liberal Democrat Members for north-east constituencies. It is a disgrace that the Conservative Members are not here to speak up for the north-east on the issue.
I want to be quick, and make some general points. In Sedgefield, unemployment has gone up by nearly 25% in the past 12 months. The number of people who have been out of work for six months or more has gone up 100% over the same period. There is something I would like the Government to do; I do not know whether the Whip is also the Whip at the Department for Transport, but areas such as County Durham and Darlington have a big issue with buses. People might wonder what that has to do with unemployment, but it is about getting to work. The cutting of subsidies from public bus services means that I have constituents who cannot get to work, and who must consider packing in their jobs. Secondly, Jobcentre Plus says it has funds set aside to buy bicycles for people, so that they can get to work. A bit of joined-up thinking is required between Departments.
The question of demand in the economy, to grow the private sector, has been touched on in the debate. The average wage in County Durham is £418, whereas the national average is £503. Cuts in benefits—and we know that welfare benefits are going to be reformed—will affect 120,000 households in County Durham. That is half the households in the county. About £150 million will be taken out of the local economy. That is something to bear in mind if we want the private sector to grow.
I want to refer to the same speech that the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) quoted, by John Mowbray. I congratulate John, as well, on being made an OBE in the honours list. In the same speech he went on to say that the public sector has been hit incredibly hard by the Government’s austerity purge. We must say that is true.
The way to get the private sector to grow is through the private and public sectors working together. I want to draw hon. Members’ attention to two initiatives in my constituency. One is the Hitachi factory, which will create 500 jobs, with thousands in the supply chain, the vast majority of which will be in the private sector, obviously. However, that would not have come about if it were not for public sector procurement.
The other initiative involves Durham Tees Valley airport. As Tees valley Members of Parliament will know, things have been difficult for the airport in recent years. The number of passengers using it has gone down from just under 1 million to about 200,000. Peel Airports has gone to the regional growth fund in the new round for a grant of some £60 million. It wants to invest over time some £60 million in developing the airport. It wants to develop the freight and logistics side of it, to the south of the airport. That requires the input of some £60 million of taxpayers’ money. That is the public and private sectors working together.
I want to quote from the assessment that Durham Tees Valley airport has pulled together of the impact that the development could have. The impact assessment states:
“Once fully developed and occupied, alongside the current operation of the airport, the whole DTVA site has the potential to support around 3,650 gross FTE jobs, supporting approximately £220m of gross direct GVA for Tees Valley each year…2,420 of these are net FTE jobs and these could be taken by Tees Valley residents.”
That is very good news for the Tees valley. All MPs in the north-east should get together to ensure that the project works.
The final thing that I want to mention is regional pay. As I said, the average wage in County Durham is £418. I ask the Whip this: how low does he think that pay should be in County Durham? I keep asking that question, but I never get an answer. Regional pay will suppress the economy in areas such as the north-east of England. The hon. Member for Redcar (Ian Swales) and I agree on regional pay; we have both signed early-day motion 55.
Annette Brooke (in the Chair)
Order. I call Mr Kevan Jones, with a time limit of four minutes.
Mr Kevan Jones (North Durham) (Lab)
I congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing the debate. I would like to pick up on a point that the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) made about the lending by banks. The Government’s approach is somehow to reduce the size of the public sector and to grow regional businesses, but as has already been said eloquently by many hon. Members, the two are interlinked.
I will give a specific example from my constituency. A company called Ambic is based in Chester-le-Street, on the Stella Gill industrial estate. It is run by a very dynamic and clever individual, David Potter, who is an engineer by trade. The company produces very high-quality furniture for schools. Clearly, with the downturn in the budgets of schools, it has seen demand drop. It had been a profitable business until the downturn in 2009. In the following year, it made a loss. By changing the way in which the business is marketed and run, it has slowly increased its profitability again.
Three years ago, just before the recession, the company moved into a brand-new factory. It took out a loan from the Bank of Scotland/NatWest for the expansion of the business. It has been successful, in that it has employed some 40 people locally, including apprentices; it is run by an individual who is strongly committed to the local community. But, lo and behold, two weeks ago it received a letter from the bank saying that, because it had revalued the property, which it says now is worth not £1.2 million but £750,000, the company’s borrowing rates will now be between 6% and 15%. That means that any profit that it makes will be wiped out overnight.
I have written to the Secretary of State to raise the matter. It is a good example: if someone wants to kill off a business, that is the way to do it. The company owner is quite angry about the situation. Like me and others, he thinks that this is a bank that has received billions of pounds of public money. If he has to, he will just shut up shop, but that will be 40 jobs gone from the local community, which will cost the taxpayer a hell of a lot more and ruin a very successful business. It has never been late in paying for any of its borrowings and, as I said, is committed to the local community.
I ask the Whip to respond to what I have said. I have not had a response yet from the Secretary of State. I have raised the problem with him personally in the Tea Room and asked him to look at it. If it is not sorted out soon, the business will have to close, which will cost the taxpayer more and is not in line with the Chancellor of the Exchequer’s argument that we are trying to grow and support local businesses. That is an example of a bank that will cripple and close a very successful local business. That would be a shame not just for the individuals involved, but for Mr Potter, who is committed not just to Chester-le-Street but to the region and to developing a small business and employing local people.
Helen Goodman (Bishop Auckland) (Lab)
It is a pleasure to see you in the Chair, Mrs Brooke.
I congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing this extremely important debate. I am beginning to think that this Government have adopted a Marxist attitude to the unemployed. They are the reserve army to be marched on to the pitch at a moment that is convenient and off at a moment that is inconvenient. They seem to subscribe to the lump-of-labour theory: this is the lumpen proletariat, there to be used and abused. What that demonstrates is a moral failure and an economic failure.
It is a moral failure because no account is taken of the individuals who are unemployed—the level of unhappiness, the level of stress, the level of anxiety. A young man came to my surgery recently. He used to hold down perfectly good jobs. He has now been unemployed for 12 months. He is being driven crazy—literally crazy. He is suffering from mental illness. He shouts at everybody—he shouts at my staff; he shouts at the jobcentre staff—and who can blame him? He is 30, living at home on £56 a week and the vacancy to worker ratio is 1:9. He does not have a realistic chance of getting a job.
It is an economic failure because we are wasting people and wasting people’s skills. One of the worst things is the constant denigration of unemployed people—not just cutting benefits, but treating unemployed people as though they are workshy. Nothing could be further from the truth. In my constituency, 2,920 people are on jobseeker’s allowance, but the statistics show that there are 6,400 people who want a job. That tells us that there is a huge need and a mismatch.
We have to ask ourselves: who are the people who are unemployed? They are not a great lump. Not only are they individuals, but they fall into particular categories. One thousand of them are young people; they do not have experience, so it is very difficult for them to get jobs that require experience. Five hundred of them are over 50; where are they supposed to gain new skills when we see the increases in tuition fees and the cuts to adult education? There has also been a massive increase in the number of women who are unemployed—up by 25% in the past year.
That has come about because the Government are putting cuts before everything else. When they do that, it leads not just to spin-off problems for the private sector, but to a complete skills mismatch. Someone who has been working in the public sector in a service job cannot simply be shoved into a manufacturing job and the assumption made that they can do it. Of course they are not qualified to do it.
We need a strategic approach from the Government in both skills and finance, as my hon. Friend the Member for North Durham (Mr Jones) said. When we had a regional development agency, we had not only a strategy, but a source of finance. I think we need some new sources of finance. When we have a Labour Government again, it would be fantastic if we had an RDA that did not just provide grant financing, which is what we had under the previous Government; there should also be some loan financing. Then, small firms like the one described by my hon. Friend could be confident of getting reasonable treatment.
Stephen Timms (East Ham) (Lab)
I, too, congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing this important debate. I also congratulate the hon. Member for Preseli Pembrokeshire (Stephen Crabb) on being hauled in to answer it. Having heard the speeches that my hon. Friends and, indeed, Lib Dem Members have made, I can well understand why the Minister responsible for employment has chosen to leave the country rather than answer the debate.
There has been some effort today to derive optimism from the unemployment figures, but the fact is that according to the figures published today, the claimant count nationally and the number of people who are long-term unemployed have gone up. My hon. Friend the Member for Sedgefield (Phil Wilson) rightly made those particularly important points. The number of people working part-time who want to work full-time is at a record level—it has never been as high as the number announced today. Youth unemployment remains above 1 million, and, as we were reminded, unemployment in the north-east has risen.
There are not many grounds for optimism in today’s figures, except that they are slightly less bad than the figures we have seen in the past few months. I am afraid the picture will not change until the Government’s economic policies change and they think again about the strategy that they have been pursuing, which has choked off demand, crushed confidence and sent us into a double-dip recession. My hon. Friend the Member for Hartlepool set out Labour’s alternative plan, and there is growing recognition—not in the Government yet, but certainly elsewhere—that we need to change course if we are to change the bleak picture of unemployment that we have heard about this afternoon.
In 1999, the unemployment rate in the north-east had risen to more than 10%, but successful initiatives reduced it to 6% in January 2008, before the global financial crisis hit. After the election, we were told by the Government that their policies would renew private sector confidence and that aggressively tackling the deficit would cause a surge in confidence, investments and new jobs. Instead, since the election confidence has collapsed and the number of unemployed in the north-east has risen by almost a quarter to 145,000. The unemployment rate is now 11.3%, including an increase of 0.5% in the past three months alone.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I apologise for not being here for the beginning of the debate, but I was in the meeting with the Dalai Lama, which was an excellent experience.
According to National Audit Office figures, the number of young people in my constituency who have been unemployed for over a year has gone up by 950% since last year. The hon. Member for Preseli Pembrokeshire (Stephen Crabb) looks confused, but the number has gone up from 20 to 210 in a year. Does my right hon. Friend not agree that that shows how damaging the double-dip recession created in Downing street is and why we need action from Ministers to create jobs and growth in the north-east?
Stephen Timms
Yes, I agree completely. It is long-term youth unemployment that will have the most damaging long-term effects on the economy. We know from the last time we had a lost generation how damaging it is for the life chances of the individuals affected, and now we see it happening again. We need a change of policy and a change of course to avoid the frightening figures on the rate of growth of long-term youth unemployment to which my hon. Friend draws attention.
I imagine that the hon. Member for Preseli Pembrokeshire will tell us about the Work programme and present it to us as the panacea for the problems. It struck me that the Work programme did not get a mention in either of the speeches from coalition Back Benchers, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) and the hon. Member for Redcar (Ian Swales). I suspect that that reflects the reality of the Work programme’s impact.
The hon. Member for Preseli Pembrokeshire will not be able to tell us a great deal about the Work programme, because it is a secret. Members who have been to see the Work programme prime providers in the north-east, Avanta and Ingeus, will have found out from them that they are not allowed to provide any data at all on how they are getting on—no data or numbers about their performance. The Minister responsible for employment, who we understand has left the country, imposed a contractual ban on the publication of any data on the Work programme. He said in January, under pressure in the Chamber, that he would lift the ban and would in future allow prime providers to publish some data about their own performance, as of course they all used to do—under the flexible new deal, they published the numbers on how they were doing, because they wanted to compare how they and others were getting on.
Since then, however, the Minister of State has got cold feet, so the ban remains in place. One is bound to ask: what exactly are Ministers trying to hide? Why do they not want anybody to know what is going on in the Work programme? One consequence is that Jobcentre Plus managers do not know what is going on. If one speaks to one’s Jobcentre Plus district manager, one finds that they do not have a clue what is happening in the Work programme. Nobody has told them how many people have got jobs through it. We understand that Ministers want to avoid potentially embarrassing questions being put to them, but the consequence of the ban has been a destruction of the trust on which such initiatives depend, and a reduction in performance.
We have managed to glean very limited data from the providers’ trade association, the Employment Related Services Association, and it is no surprise that the numbers suggest that the Work programme is performing no better than the flexible new deal that went before it. That is after the Government spent more than £60 million buying out all the flexible new deal contracts to introduce it. They had not tried their programme out anywhere; they just launched into it in June last year, with no piloting or testing at all. We have seen a very disappointing performance, which we will eventually get some figures on, but we should have heard about it long before now.
Youth unemployment has been an important feature of the debate. The Government’s answer to the problem has been the youth contract, but that is smaller than the future jobs fund, to which my hon. Friend the Member for Hartlepool referred, and is dependent on take-up. Given the effect on regions that suffer particularly high unemployment, I again ask the Government to reconsider their decision to put all the funding into a national pot, available on a first-come, first-served basis to those Work programme providers that ask for it. If a Work programme prime provider in an area with relatively low unemployment sees a way of getting a subsidy to push a young person who might have found a job in that area anyway into a subsidised role, it can do so, but that will be done at the expense of young people in areas such as the north-east, for whom the case for support is much stronger. Work programme providers agree. It would make much more sense to ring-fence the available youth contract funding, to ensure that it is used where it is needed, rather than squandered elsewhere.
As we have heard, we need a more active industrial strategy. That is key to reducing the problem of unemployment in the north-east. I very much agree with the tributes paid to One North East, which co-ordinated such an industrial strategy before the election. We see the benefits of it now in the announcements, which hon. Members have mentioned, on the car industry, the progress with electric vehicles and so on. That is all being lost. The RDA was scrapped in favour of the fragmented, piecemeal local enterprise partnership.
It was pleasing to hear the hon. Member for Redcar say something positive about the regional growth fund—a rare event indeed. The NAO pointed out that so far under the regional growth fund, the cost per job is more than it was with the RDAs. The whole point of the changes was supposed to be to save money; it is not working. The regional growth fund is proving to be very expensive. It is ironic that the Government accused the RDAs of being too centralised and bureaucratic, but have replaced them with one fragmented and divided scheme that does not have enough clout and another run from Whitehall, and not run very well at that.
We heard about the proposed move to regional pay bargaining, and will discuss it in on the Floor of the House this afternoon. It will certainly threaten the economy of the north-east. There have been hints of a U-turn here, and the people of the north-east would very much welcome that, if it were to be the outcome.
We need a change of course on economic policy. My hon. Friend the Member for Hartlepool set out a compelling five-point plan. We need the problems in the Work programme sorted out—frankly, we need some daylight in the Work programme. It has been secretive so far and has had a blanket thrown over it. My fear is that we will not get those changes from the Government; we need a different Government to make the changes required.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I pay tribute to the hon. Member for Hartlepool (Mr Wright) for securing this debate; we do not get enough opportunities in the House to debate regional issues. As a Member of Parliament for Wales, I do get such opportunities when the Welsh Grand Committee meets, which it is doing this afternoon. Unfortunately, other regions of England do not have the same opportunities.
I was disappointed that the hon. Gentleman started off on a slightly discordant note, by mentioning the absence of the Minister.
Stephen Crabb
No, it is not a fair point. What the hon. Gentleman did not say was that his Front-Bench team, in a rather cack-handed way, managed to timetable a debate in the main Chamber, requiring a Department of Work and Pensions Minister at exactly the same time as his own important debate this afternoon. If he does not think that the presence of the Employment Minister at the European employment summit this afternoon is critical given everything that is going on in Europe, I do not know what is—perhaps spending time with the Dalai Lama.
Stephen Crabb
As the ministerial Whip for the Department, it is entirely appropriate that I respond to this debate, given that the other Ministers are tied up in other debates in the House.
The hon. Gentleman spoke well about the impact of unemployment on families and communities; that was one of the best parts of his speech. Like me, he comes from a part of the country where, historically, unemployment has been a blight on the community. He and I both have the privilege of representing constituencies in which we have grown up, and we understand the issues well. He powerfully explained the negative effect that unemployment has on communities.
Let me assure the hon. Gentleman and all colleagues in the Chamber this afternoon that the ministerial team at the DWP shares a passion and commitment for tackling unemployment. There is absolutely no complacency whatever within the departmental team about this issue. We recognise that unemployment, especially youth unemployment, is one of the biggest challenges that faces the Government.
Ian Mearns (Gateshead) (Lab)
I apologise for turning up late to this debate. I have been meeting a construction company from my constituency that is considering laying off 200 to 300 members of its work force—something that would be catastrophic. The hon. Gentleman correctly mentions the fact that there is little regional consideration of this whole matter. Therefore, there is no differentiation in approach across England in dealing with it, so while unemployment across England goes down, it goes up in the north-east.
Stephen Crabb
I dispute that. The Government are trying to move away from the one-size-fits-all policies of the previous Administration. We are looking at locally and regionally tailored solutions, where appropriate.
Several hon. Members mentioned today’s labour market figures. I am not as gloomy as the shadow Minister about them. There are reasons for a measure of optimism. Nationally, employment is up by more than 400,000 since 2010. Private sector employment has gone up by 843,000, since 2010, and it has gone up again in the past month. In the past 12 months, in the north-east region, employment overall has gone up by 10,000 and private sector employment has increased by 17,000, which more than offsets the drop in public sector employment. That counters the point that the Opposition made about the drop in public sector employment being a driver of overall unemployment in the north-east region.
Those are encouraging signs, but we recognise that unemployment remains too high. It is true that unemployment in the north-east remains higher than in other parts of the country. Several Members have referred to the fact that it has the highest unemployment figures of all the UK regions.
Long-term unemployment affects only a minority of people, but it is a particular concern because it brings with it the risk of detachment from the labour market and people losing the hope of finding work again or finding that the skills that they had are diminished or outdated.
In the north-east, more than 24,000 people have been claiming unemployment benefits for more than 12 months. That figure is much lower than it was 25 years ago—the hon. Member for Hartlepool referred to the 1980s—but it is still too high, and we are not complacent.
One of the groups that has been hardest hit during the last two years of recession is young people. We have seen encouraging signs recently that youth unemployment might be starting to come down. Excluding unemployed students, it fell by 23,000, to just over 700,000 in the most recent quarter. That still leaves almost 50,000 16 to 24-year-olds unemployed in the north-east, so there is clearly much more to be done.
In April, we announced an additional £1 billion package of support for young people through the youth contract. Very few Opposition Members mentioned the action that is taking place and the fact that, in the past year, some 7,000 young people have benefited from the work experience scheme in the north-east. Nor did they mention the fact that there are 30,000 additional apprenticeships in the north-east, more than 1,000 of which are in the constituency of Hartlepool. It is not surprising that they do not want to talk about it. As Labour Members elsewhere have mentioned, one of the big failings of the previous Labour Administration was that they did not recognise fully the importance of apprenticeships and the link between high-value apprenticeships and upskilling in the economy.
Helen Goodman
Surely, the hon. Gentleman is aware that the number of apprenticeships increased tenfold under the Labour Government.
Stephen Crabb
In the last 12 months, 67% more apprenticeships were created than in the last year of the previous Labour Government.
Ian Swales
I support the Government in their hard work on apprenticeships and report that the number has doubled in my constituency and in many other constituencies in the north-east.
Phil Wilson
The hon. Gentleman is right to say that the number of apprenticeships has gone up. The biggest increase is for those over the age of 25. However, the massive increases are not in engineering, where the number has gone up by 29%, but in education and training, which has gone up by 373%, in arts, media and publishing, which has gone up by 134%, and in health, public services and care, which has gone up by 104%. Where we need the growth in high-value jobs, the apprenticeships are not coming through as quickly as they are in other sectors.
Stephen Crabb
The hon. Gentleman seemed to downplay a 29% increase in engineering apprenticeships. More than a third more apprenticeships in engineering have been created, which is quite a success story, and I am grateful to him for highlighting it this afternoon.
We have heard useful contributions from my hon. Friend the Member for Redcar (Ian Swales) who recognised the importance of a sensible regional strategy. He talked about the benefits of the local enterprise partnerships in the north-east and in the Tees valley. He also drew attention to the fact that the north-east has recently achieved record exports. We believe in rebalancing the economy, and we want to see a more balanced export-led recovery. With its record exports, the north-east is well placed to take advantage of that.
Several hon. Members have referred to the excellent John Mowbray, who is the president of the north-east chamber of commerce. Last week, he talked about the importance of the north-east as a potential driver for an export-led recovery. I am really disappointed that Labour Members have not recognised that and are not sharing the ambitious approach of the north-east chambers of commerce. John Mowbray said that what the north-east really needs is a united front. Labour Members have turned up in force this afternoon not to show an ambitious united front or a positive approach—[Interruption.]
Annette Brooke (in the Chair)
Order. May I suggest that Members make a formal intervention, rather than engaging in this rather poor behaviour?
Stephen Crabb
Let me reiterate that the coalition Government have two parties working together to fix the legacy of a broken economy left to us by the Labour party. We are doing it in a way that fully recognises the importance of protecting regions such as the north-east of England, of seeing them reach their potential and of seeing unemployment brought down as quickly as possible.
Health and Safety Executive
(12 years, 5 months ago)
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Meg Munn (Sheffield, Heeley) (Lab/Co-op)
Thank you very much, Mrs Brooke, for calling me to speak. I am delighted to have secured this debate on the remit of the Health and Safety Executive, and I am also delighted to see the Minister in her place. She is having a busy afternoon, so I am grateful that she is here in Westminster Hall to respond to the debate.
The Health and Safety Executive is an important organisation in today’s society, stating clearly that its role is
“to prevent people being killed, injured or made ill by work.”
The HSE has a great website where people can look up information by topic or industry, and obtain advice and guidance about health and safety at work. However, there is one huge gap in the HSE’s work, and it relates to driving for work purposes. HSE guidance for work-related road safety points to the Health and Safety at Work etc. Act 1974, which
“requires employers to take appropriate steps to ensure the health and safety of their employees and others who may be affected by their activities when at work. This includes the time when they are driving, or riding at work, whether this is in a company or hired vehicle, or in the employee’s own vehicle.”
However, the HSE has no responsibility for enforcement of the legislation. In October 2008, the Transport Committee’s 11th report of the 2007-08 Session of Parliament stated:
“It is anomalous that the vast majority of work-related deaths are not examined by the Health and Safety Executive, purely because they occur on the roads. The Government should review the role of the Health and Safety Executive with regard to road safety to ensure that it fulfils its unique role in the strategy beyond 2010.”
A Department for Transport booklet signposted on the HSE’s website sets out basic steps that employers should take, but it does not provide the kind of excellent advice that is given for other workplace situations. Deaths and injuries in other workplaces are properly investigated by the HSE, and what is learned is made available to other organisations. That does not happen for work-related deaths and injuries on our roads.
A report by the HSE in March 2012, entitled “Health and safety in road haulage”, does not discuss issues relating to sleep or fatigue, or vehicles on the road. It focuses on manual handling and workshop safety, which, although important issues, are not the key one of work-related deaths on our roads.
In response to a recent question from my hon. Friend the Member for Sheffield Central (Paul Blomfield),the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning) provided statistics about the proportion of work-related road deaths and injuries. He said that some of those deaths and injuries involved journeys
“where the journey purpose was known and recorded as ‘part of work’.”—[Official Report, 15 March 2012; Vol. 542, c. 391W.]
He said that 24% of serious injuries and 30% of road deaths in 2010 could be linked to work-related road traffic accidents. As there is no requirement to report work-related deaths, that is likely to be an underestimate. Even using those figures, we are talking about, on average, 11 deaths and 105 serious injuries every week.
Employers have a responsibility to report work-related injuries to the HSE under the Reporting of Injuries, Disease and Dangerous Occurrences Regulations 1995—RIDDOR—but that does not include a responsibility to report work-related road traffic accidents. Why are deaths and injuries resulting from those accidents not counted as workplace deaths and injuries? The Institute of Occupational Safety and Health argues that all work-related accidents, even those on public roads, should be included as a reporting requirement under regulations. It has repeatedly called for work-related road traffic accidents to be reportable and to be investigated by the HSE under RIDDOR.
The HSE recorded the number of workplace fatalities in 2010-11 as 171. However, those fatalities exclude fatalities of workers travelling on a public highway—in other words, fatalities in road traffic accidents. The HSE says:
“Such incidents are enforced by the police and reported to the Department for Transport.”
Using DFT statistics, “such incidents” equate to more than 550 work-related road traffic deaths in 2010, which is three times more than all the other deaths at work recorded for the most recent period.
The UK is rightly proud of the work that it has done to reduce deaths at work. The HSE’s website shows the steadily declining incidence of such deaths, which we should all welcome. However, because the fatal accidents being recorded exclude road traffic accidents, a full picture is simply not being provided. We do not know enough about why and how people at work die on the road, or how many members of the public are killed by people who drive for a living.
I became aware of this gap in the HSE’s coverage through an interest in the identification of obstructive sleep apnoea, particularly in lorry drivers. Some years ago, I was contacted by a constituent following the death of his 25-year-old nephew, Toby Tweddell, who was killed in 2006 by a lorry driven by somebody with undiagnosed obstructive sleep apnoea.
Joseph Johnson (Orpington) (Con)
Will the hon. Lady join me in congratulating one of my constituents, Carole Upcraft of Orpington, for her tireless and much-needed campaign to alert us to the dangers of undiagnosed obstructive sleep apnoea, and to the need for early identification screening of drivers, particularly heavy goods vehicle drivers? We need to raise awareness of this condition in the haulage industry, and Mrs Upcraft’s campaign is performing a vital public service.
Meg Munn
Indeed. I have had the pleasure of meeting the hon. Gentleman’s constituent, Mrs Upcraft. Along with members of others families who have been affected by this condition—such as my constituent, Seb Schmoller, his brother-in-law, Nick Tweddell, who is Toby’s father, and the rest of the Tweddell family, as well as Toby’s fiancée, Jenny—she has been involved in this campaign. These people are all determined that other people should not suffer in the way that they have suffered.
The link between untreated obstructive sleep apnoea and road traffic accidents is well established. Someone with that condition experiences repeated episodes of apnoea, whereby breathing is temporarily suspended because of a narrowing or closure of the airway in the upper throat during sleep. It results in episodes of brief awakening to restore normal breathing, of which the person may or may not be aware. The sustained failure to get proper restful sleep night after night means that the affected person is constantly tired and liable to fall asleep during the day.
Obstructive sleep apnoea affects many people, but despite it being a common, identifiable and treatable condition, knowledge of it among primary care practitioners remains poor, which means that the diagnosis rate is very low. It is estimated that 4% of men and 2% of women have the full syndrome—the symptoms of sleepiness I have described—and that up to 80% of cases may be undiagnosed.
The rate of obstructive sleep apnoea among lorry drivers is significantly higher than it is for the general population. There is a high correlation with being overweight, and the sedentary lifestyle of many who drive for a living increases their risk of developing it. According to medical experts, it is likely that between 10% and 20% of lorry drivers are affected by sleep problems. There are 400,000 large goods vehicle drivers in the UK, which means a minimum estimate of 40,000 affected drivers.
The Driver and Vehicle Licensing Agency estimates that 20% of serious road traffic accidents on major roads are caused by sleepy drivers. Clearly, the danger and damage caused by a heavy lorry crashing will be much greater than that caused by a car crashing, making sleep apnoea a significant health and safety at work issue. A 40-tonne lorry travelling at its maximum speed of 58 mph that fails to brake because the driver has fallen asleep, and that hits a queue of stationary vehicles, will crush at least the first car and its occupants. If it collides with the central reservation, it will probably flatten it, before continuing into the opposite carriageway, with all the consequent problems—even disaster—that that will cause. The number of road accidents, with the resulting deaths and serious injuries, can be substantially reduced by increasing the number of drivers who are diagnosed and successfully treated for this condition.
Obstructive sleep apnoea can be relatively easily diagnosed, with most sufferers being easily treated. In just two weeks, the benefits can be felt. Screening drivers within the workplace would be a significant contributor to the health and safety of lorry drivers and other road users. Some companies, such as Allied Bakeries, are taking that approach seriously, promoting awareness of the condition with their drivers and arranging to screen them. Some drivers describe the resulting treatment as life-changing. So far, 3% of approximately 1,000 of Allied Bakeries drivers have been successfully diagnosed with obstructive sleep apnoea and, following treatment, continue to work in the company.
Continuous positive airway pressure—or CPAP—treatment equipment costs less than three new lorry tyres or one tank of diesel fuel. That is a relatively small price, compared with the £1.5 million that the Department for Transport estimates to be the average cost of a fatal lorry collision, excluding the costs of any long-term health care, loss of income and insurance compensation for death and injury.
The British Lung Foundation is leading a major campaign to raise awareness of obstructive sleep apnoea, to improve diagnosis and treatment. It advises companies that employ drivers to encourage their staff to take part in screening programmes, while providing reassurance that people with sleep apnoea can, and do, continue in their jobs, if treated successfully.
Businesses in the UK sometimes complain that there is a complex regulatory environment—I should perhaps say “often complain”—but few argue with the important work that the Health and Safety Executive undertakes.
Gloria De Piero (Ashfield) (Lab)
I wanted to come in at this point to congratulate the Health and Safety Executive on its investigation, which this week has led to fines for a manufacturing firm in Derbyshire, where two teenagers from my constituency nearly lost their lives at work.
Meg Munn
My hon. Friend makes an important point. That situation will be properly investigated and whatever was wrong put right, which is exactly what the Health and Safety Executive does, and does extraordinarily well. That is something of which we should all be proud.
Many of our major companies take great pride, not just in reducing accidents to a minimum but in seeking to carry out their business without any accidents at all. That is not just good for their employees but saves on business costs, making sense for everyone. Unfortunately, that approach does not extend sufficiently to those who employ drivers for a living. Astonishingly, when I first wrote to the Secretary of State for Work and Pensions about the matter, he replied that obstructive sleep apnoea in lorry drivers was not a health and safety issue. When I wrote again, he replied in more detail:
“medical fitness to drive is a matter on which the DVLA rightly takes the lead...HSE generally maintains that meeting DVLA requirements will satisfy the test of what is reasonable”.
I do not accept that meeting Driver and Vehicle Licensing Agency requirements is enough to meet the Health and Safety Executive’s aim of requiring employers to take steps to reduce risks to as low a level as is reasonably practicable. In addition to the work that the DVLA and the police do on road safety, the Health and Safety Executive has an important role to play in influencing more employers and trade union safety representatives not only to be aware of the dangers of undiagnosed sleep apnoea, but actively to encourage screening.
I suspect that the Minister will tell me that the police, the DVLA, the Department for Transport and the Vehicle and Operator Services Agency adequately ensure enforcement of the legislation, but I do not accept that. Given the cost of driving accidents, in lives and money, I ask the Minister to take this matter to her Department and look at it again.
Currently, employers have the legal responsibility, and I will continue—with, I am sure, Members such as the hon. Member for Orpington (Joseph Johnson)—to press more companies voluntarily to adopt the approach of Allied Bakeries, but the Government can make a positive change and ensure that the Health and Safety Executive’s expertise is brought to bear.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Lady on bringing this matter to Westminster Hall. Does she feel perhaps that the findings of the report that she has presented today should be made known to the devolved Administrations, for example the Northern Ireland Assembly, where the matter is a devolved one? The findings of the report would be important for those Administrations, so that they could also bring, or enable, legislative change, to prevent such tragedies.
Meg Munn
The hon. Gentleman makes an important point. Nowadays, lorry drivers increasingly drive not just in their own countries but abroad, and we know that the European Union has been considering this matter. It is absolutely right that the devolved Assemblies should consider the issue in their Parliaments and ensure that they, too, address it.
Before I allow the Minister to respond, I want to make my fundamental point, which is that the Health and Safety Executive is a great body, which does a good job. It could do so much more in addressing the nearly two thirds of fatalities at work that happen not in the areas that the executive currently covers, but on the road.
My strong representation is that although other organisations, the police, the DVLA and the Department for Transport consider certain aspects of the matter, no one is doing the kind of proper forensic investigation of such accidents that would mean that information could be fed back into guidance and really begin to make a difference. The consequences of lorries crashing into people are horrific, as our constituents would testify, and I would like the Government seriously to consider the matter. I do not expect the Minister to wave her magic wand today, but I urge her to go back to her Department and have a good look at this.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
It is a pleasure to serve under your chairmanship, Mrs Brooke, for what I think is the first time. I thank the hon. Member for Sheffield, Heeley (Meg Munn) for introducing such a thoughtful debate today and commend her on her incredible work on road safety, which is something that I, too, have a passion about, so I hope that we can work on it together. I particularly commend her on her work on raising awareness of obstructive sleep apnoea, the effects that it can have on drivers and the tragic impact of accidents that result from tiredness. I have listened carefully to the points that she has made. We all know that any loss of life in a road accident is a tragedy, and the Government are committed to making transport safer.
There were 1,850 deaths on the roads in 2010, and 22,660 people were seriously injured. Although that is the lowest number of deaths since records began, each death or injury on the road, or at work, is a waste of human life and many of them are preventable. The hon. Lady is right to say that some 25% to 30% of road fatalities in 2010 were in accidents that involved someone at work.
Many medical conditions can already lead to the suspension of a driving licence, including obstructive sleep apnoea and changes in eyesight. Such suspensions are revoked only when it can be demonstrated that the treatment of the condition makes it safe to do so. Failure to report a medical condition to the Driver and Vehicle Licensing Agency is a criminal offence, and other restrictions include limitations on the hours that a heavy goods vehicle driver is allowed to work and the regime for monitoring tachographs to ensure compliance. Such measures have contributed to the reductions in deaths and injuries on the roads.
The Health and Safety at Work, etc. Act 1974 is key, as it places duties on both the employer and the employee to ensure that members of the public are not exposed to risks that can cause death or injury as a result of work. As the hon. Lady rightly says, health and safety at work are important, and the Health and Safety Executive has an extremely wide remit, with the potential for involvement in a broad range of issues; it is absolutely sensible, therefore, to draw up some pragmatic boundaries for its operations.
The HSE takes action when workers or members of the public are put at risk, except when more specific regulations already exist. For example, it would not normally act in cases of clinical or medical negligence, or aircraft incidents, for which there are other more directly relevant regulators or legislation. The situation is the same on the roads, where the Road Traffic Act 1991 applies and the police have primacy.
Maria Miller
To take up where I left off, alongside the police, a number of agencies also have an interest, including the Vehicle and Operator Services Agency—VOSA—and the DVLA, each of which has a clearly defined role.
The DVLA rightly takes the lead on medical fitness. It issues driving licences based on assurances from drivers that they are fit to drive. People with vision problems or any other medical condition therefore need to consider whether changes to their condition impact on their ability to drive, and they must report any such changes to the DVLA. Indeed, as I am sure the hon. Member for Sheffield, Heeley knows, one of those notifiable conditions is OSA. For drivers of heavy goods vehicles and passenger service vehicles, the law is more stringent. They must cease driving on diagnosis, and they cannot resume driving until the DVLA has received confirmation from a specialist that their condition is controlled.
As hon. Members would expect, the Government want to look at how we can prevent accidents. We always need to do more to prevent them and to ensure that employers and employees take their responsibilities seriously. The HSE, with the Department for Transport, produces guidance to help companies whose staff drive to work. That guidance, “Driving at Work: Managing work-related road safety”, spells out the need for employers to be satisfied that their drivers are fit and healthy, so that they drive safely and do not put others at risk.
The HSE also established the road distribution action group, which was a partnership between employers’ groups, trade unions and regulators, whose aim was to improve health and safety at work and to reduce accidents and ill health in the road haulage and distribution industry. The group produced guidance for the distribution industry on managing driver fatigue.
The Freight Transport Association also produces a monthly update on health and safety issues, which regularly includes information on driver fatigue, and the Driving for Better Business website provides advice on road safety issues.
Most cases of OSA go undiagnosed, so we need to consider that one of the most effective and realistic ways to reduce road accidents that result from the condition is to encourage all drivers not to drive when tired. I am sure that the same signs, electronic or otherwise, are put up on the motorways in the hon. Lady’s area as in mine. The Department for Transport issues such advice through its “Think!” campaign on fatigue, which was given a national award by Brake, the road safety charity. I am sure that many hon. Members will have seen the campaign on motorways such as the M3, which goes through my constituency.
Meg Munn
I of course welcome anything that draws people’s attention to the issue, but the problem with obstructive sleep apnoea is that people who have it feel tired all the time and often do not know the reason why. They do not therefore think that that message is as applicable to them as it is to someone who has had a long day or who was up late the previous night. It is an important message, but it is not sufficient.
Maria Miller
I understand the hon. Lady’s point. That is why there is a clear responsibility on employers and employees to think more generally about their health. That is as it should be, because we have to remember that drivers can experience a broad range of health conditions that could affect their capabilities. They might, for example, suffer from diabetes, heart conditions or migraines, to name but a few. Drivers and employers need to think broadly about health issues, including sleep apnoea, on a continuing basis. An individual process for each condition might not be manageable, but we have to make sure that employers and employees think about health issues. It is also important that they keep track of innovations in relation to our understanding of different conditions and how they can affect people, particularly in the workplace.
Given the broad range of health issues involved, it is difficult to set out a definite requirement for each one. We have to remember personal responsibility and the fact that the legal and moral obligation of all drivers to drive safely and to report any health condition to their employer exists in law. OSA is treatable when identified, and we need to ensure—the hon. Lady is doing an extremely good job on this—that employers are aware of the condition and that they have processes in place to monitor all sorts of health conditions, including OSA, in employees who drive as part of their work.
By calling for this debate, the hon. Lady has shown what Members of Parliament can do to highlight and underline such issues and to ensure that not only Ministers, but other organisations and employers keep abreast of what they should take into consideration with regard to the health of employees. I will use this debate as an opportunity to discuss the issue with the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who sends his apologies for not being able to attend, because he is on Government business in Europe.
I will also bring the hon. Lady’s good work to the attention of the FTA, the DFT and the road distribution action group. I want to ensure that important groups take on board the importance of monitoring the scale of road accidents at work and to press home the importance of continuing to work to make our roads as safe as possible.
Hospitals (Sussex)
(12 years, 5 months ago)
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Stephen Lloyd (Eastbourne) (LD)
It is an honour to serve under your chairmanship, Mrs Brooke.
I am grateful that Mr Speaker has given me an opportunity to address an important local issue—the proposed reconfiguration of my local Sussex NHS trust, the East Sussex Hospitals NHS Trust. A number of reconfigurations have already taken place in Sussex, such as the transfer in March of in-patient elderly care and orthopaedics in the Western Sussex Hospitals NHS Trust from Southlands hospital to Worthing hospital. It appears that the latest direction of travel for Southlands is to become a day surgery and out-patients-only hospital, with which I expect few local residents would agree.
Let me give the Minister the details of the proposed changes to my local trust and hospital, Eastbourne district general hospital. Four or five years ago, the trust board wished to downgrade maternity at the DGH while maintaining consultant-led maternity at our sister hospital in the trust, Conquest hospital in Hastings. There was a substantial campaign against the proposals in which all parties were involved, and eventually the matter was referred to the Independent Reconfiguration Panel for consideration. It found against the proposals, and the trust-proposed strategy was sent to the then Secretary of State for a decision. I am glad to say that he backed the IRP and our campaign to retain consultant-led maternity on both sites.
As I am sure the Minister is aware, there was a number of reasons why the IRP found against the trust, but essentially the main reason was the poor road link between Hastings and Eastbourne, which would have meant a blue-light ambulance potentially taking upwards of 50 minutes to travel from hospital to hospital. From a patient safety perspective—for example, for a mother facing a complicated birth—that was considered far too long. Hon. Members can imagine my surprise to find out a few weeks ago that the new trust board is recommending a similar change—to be precise, that there should be a consultant-led maternity unit on one site and a midwifery-led unit on the other site. For the record, the road links between the DGH and the Conquest are even worse than they were five years ago, when the IRP found in our favour.
Henry Smith (Crawley) (Con)
I congratulate the hon. Gentleman on securing this debate. The story elsewhere in Sussex has been similar. A decade ago, we lost maternity services from Crawley hospital, which was a very retrograde step. Mothers now have to travel long distances and a difficult journey to East Surrey hospital for maternity services. The proximity argument is important.
Stephen Lloyd
I thank the hon. Gentleman for that important intervention, not least because he demonstrates that if the proposed downgrades go through, the backlog will be even worse. Patients coming from his constituency would have an even longer wait, which an expectant mum with a complicated birth cannot afford.
Along with maternity, the proposed clinical changes recommend significant further reductions to trauma and orthopaedics, general surgery, stroke, emergency care, acute medicine, cardiology, paediatrics and child health provision. I am no medical expert, but even I can see that if some of the proposals are carried through, they will lead to a substantial downgrade of core services at Eastbourne district general hospital. We are talking about a possible downgrading of a much loved hospital in one of the fastest growing towns in the south-east, where the fastest growing age group is the 25 to 45s. I am simply not prepared to stand idly by and allow that to happen. The people of Eastbourne and the surrounding area are not prepared to do so, and none of the local political parties is prepared to accept the proposals.
On that note, I am grateful to the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), who is here supporting me in this debate, as he has done throughout the past few years. He was very heavily involved five years ago, when we won the last campaign. I also acknowledge the support I have received from the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), the hon. Member for Hastings and Rye (Amber Rudd) and the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker). They send their apologies for not being here, but they are very supportive of what we are trying to achieve. The local business community and the voluntary sector are also not prepared to stand by while our hospital’s core services face such a proposed downgrade. We will all fight the proposals vigorously and tenaciously. I cannot emphasise that strongly enough to the Minister.
Why are we so determined to fight? Let me flesh out just a little of what we believe the consequences will be if the proposed clinical strategy goes ahead. The first issue is travel distance. The travel time between Conquest and the DGH is 50 minutes. Even when the planned Bexhill-Hastings bypass is built, in however many years’ time, that journey time will be reduced by only five-and-a-half minutes. That is still way outside the guidance from the Royal College of Midwives on mothers giving birth safely. The IRP and the Secretary of State agreed with us on that five years or so ago.
Secondly, although I wholly accept that very specialised procedures—for instance, children’s cardiac surgery or even specialist oncology and cancer—are better in the fewer, larger specialist expert centres, the vast majority of Sussex patients also need good-quality local care for simple conditions. Why would the Department of Health encourage care closer to home and then sanction the massive movement of patients, which would be an inevitable consequence of some of the proposed changes?
Thirdly, there will continue to be two hospitals admitting medical emergencies, as there are too many patients to move them all into one giant hospital. The reality is that it is often difficult to make a diagnosis for elderly people, but the proposals mean that one unit will have a surgeon on call and one will not. An elderly person admitted to a hospital with no surgeon who proves to have a burst appendix or to be bleeding internally will have to travel from the DGH to Conquest. That simply cannot be safe.
Fourthly, both hospitals fix fractured bones, but under the proposed strategy, if someone has a fracture, they will have to travel. The number of elderly and frail patients with hip fractures having to travel will increase exponentially. It will take longer for them to get an operation, and the inherent delay will lead to worse outcomes. In addition, there is likely to be a longer waiting period to sort out social services, and the individual patient will have to be sent home from a greater distance. Surely that cannot be better for the patient. In fact, pretty much anyone with a broken arm, leg or hip that needs fixing will have to travel further. The service will not be better quality, Minister; it will just be slower.
Let us take a look at the nearby trusts that will, apparently, take up the slack. This is patently absurd. Brighton more often than not has huge waits, and Pembury is full, so that is no answer. In stroke care, elderly patients will be moved, making it doubly hard for their similarly-aged husbands and wives to visit. Is that good practice for the patient? I do not think so. There is more, but I am that sure the Minister gets my drift. If he does not, let me draw his attention to the contents of a very important letter that was leaked to me a couple of weeks ago—I am happy to share the contents of the letter with him afterwards.
The letter was sent to the trust board from the consultant advisory committee that represents the most senior clinicians at Eastbourne district general hospital, following a meeting that 63 consultants attended. I quote:
“The main body of Consultant Opinion expressed little or no confidence in significant elements of the strategy… Concerns repeatedly expressed (by the Consultants) were that proposals would not advance the desire for improved access and quality of care for patients in East Sussex”.
These are direct quotes. The letter continues:
“There was frustration that clinical input from the majority of CAC members into the strategy has not been taken into account. Furthermore, concern was expressed that although Management has described the strategy as clinically led, this has been by a few invited individuals and the majority Consultant opinion expressing concerns regarding many aspects of the strategy has not been adequately expressed… the clinical strategy as explained and understood by the CAC does not deliver clear benefits to patients and therefore cannot be supported in its current form”.
The CAC letter further states:
“our local population rightly expects key services should be maintained at both sites and that these include stroke care, orthopaedics and trauma, general surgery and other core services. The strong recommendation of the CAC was that both sites should be developed to improve quality of care, training issues and access for local patients”.
I shall conclude my speech, because I am very keen to listen to the Minister’s response. Time precludes me from going into detail about the cross-party “Save the DGH” campaign group, which has been working together for years. It succeeded five years ago and has come back together stronger than ever. Time precludes me from talking about the fantastic work that has been done by our chair, Liz Waike, the strong determination in my constituency to protect core services at the DGH, and the important support provided by our local paper, the Eastbourne Herald.
I also do not have enough time to talk about the details of the utter financial shambles. The trust has been under successive managements since it was merged with the Conquest more than 10 years ago. I am well aware that, like me, the Minister has a business background. The financial inefficiency of the trust for many years has been mind-blowing. I would be happy to give the right hon. Gentleman more details at another time.
Time precludes me from giving details of the severe morale challenges felt by community nurses, who face reductions while at the same time being told ad nauseum that they must keep people in the community, so as not to take up expensive hospital beds. Time precludes me from telling the Minister of the sheer frustration that my constituents and I feel as we have to fight a similar battle around maternity all over again, despite the IRP’s clear conclusions five years or so ago.
Time precludes me from presenting details of how, if necessary, we should seriously consider de-merging the trust and setting Eastbourne DGH up as a separate foundation trust. We have been doing this work for many months now, as we suspected that proposals to downgrade DGH core services from the current trust board were in the pipeline. I have even had a number of key people in the DGH campaign visit an equivalent sized trust in Yeovil in the west country. We came back from that visit with some very useful data and plans for if we were to de-merge.
As time is an issue, I will finish with a direct quote from our mutual friend and colleague, the Under-Secretary of State for Health, my hon. Friend the Member for Guildford (Anne Milton), who wrote in a letter that I received yesterday:
“The Government has said that, in future, all service changes must be led by clinicians and patients”.
The clinicians, as I have already reported, have profound concerns. I can assure the Minister of State that patients—former and future, from Eastbourne, Willingdon, Lewes and beyond—also have profound concerns about the proposed clinical strategy currently presented by East Sussex Hospitals NHS Trust managers.
I ask the Minister to take on board our concerns, to do what is necessary to address them, and to ensure that our hospital, Eastbourne DGH, is continues to perform as a fully functioning district general hospital for many years to come. Eastbourne is a growing town—in many ways, we are bucking the economic trend—and I am working closely with business and the council. We are rolling up our sleeves up in this difficult economic climate. I have already mentioned that the fastest-growing demographic in my constituency is the 25-to-45 age group. I need a proper hospital for Eastbourne. I need a district general hospital for the long term. I would welcome any comments that the Minister has to make.
The Minister of State, Department of Health (Mr Simon Burns)
It is a pleasure to serve under your chairmanship, Mrs Brooke. I congratulate the hon. Member for Eastbourne (Stephen Lloyd) on securing the debate on an issue that I know is of considerable concern to him and his constituents, and to other hon. Members attending today.
Before I address the issues raised, I would first like to pay tribute to all those who work in the national health service in Eastbourne, whose dedication, determination and commitment provide first class care to the hon. Gentleman’s constituents and those of other hon. Members. I know the hon. Gentleman is committed to ensuring that his constituents have access to high quality health care whenever and wherever they need it. I also appreciate that when any changes to local services are mooted, people can become anxious and feelings can run high.
As lifestyles, society and medicine change, the NHS must continually adapt. The NHS has always had to respond to patients’ changing expectations and to advances in medical technology. Reconfiguration is about modernising the facilities and the delivery of care to improve patient outcomes, to develop services closer to home, and, most importantly, to save lives. The Government are very clear that the reconfiguration of front-line health services is a matter for the local NHS. Services should be tailored to meet the needs of local people and to provide them with the best possible outcomes. That is why we are putting patients, carers and local communities at the heart of the NHS, placing decision making as close as possible to individual patients by devolving power to professionals and providers, and liberating them from top-down control.
Those principles are further enshrined in the four tests introduced in 2010 by my right hon. Friend the Secretary of State. Local reconfiguration plans must demonstrate: support from GP commissioners; strengthened public and patient engagement; clarity on the clinical evidence base; and support for patient choice. Our reforms allow strategic decisions to be taken at the most appropriate level. We are enabling clinical commissioners to make the changes that will deliver real improvements in health outcomes, and we will provide incentives to providers to deliver higher quality and more efficient services.
We are also aware that the reconfiguration of services works best when there is a partnership approach between the NHS, local government and the public. That is why we are strengthening local partnership arrangements, under the Health and Social Care Act 2012, through health and wellbeing boards. They will provide a forum where commissioners, local authorities and the local HealthWatch can discuss and plan the future shape of services to meet the health requirements of the local health economy.
NHS Sussex and local clinical commissioning groups, such as the commissioners of East Sussex Healthcare NHS Trust, have been working with NHS South of England, with support from the National Clinical Advisory Team, to ensure that there is full and proper scrutiny of the proposals to reconfigure some services. That has included assessing the readiness of the local NHS to go out to formal consultation, including reviewing the case for change and understanding whether the four tests, as laid down by my right hon. Friend the Secretary of State, for service change have been met.
The services under consideration for reconfiguration at the trust’s two acute sites at Eastbourne District General hospital and the Conquest hospital, Hastings are: orthopaedics, higher risk and emergency surgery only; general surgery, higher risk and emergency surgery only; and stroke, hyper-acute and acute only. Those are the only services being consulted on under the proposals. The local NHS agrees that hyper-acute and acute stroke services, all emergency and higher risk elective general surgical procedures, and all emergency and higher risk elective orthopaedic procedures can no longer be provided at both of the trust’s acute hospital sites. I understand that the proposed changes were approved on 30 May by the two local clinical commissioning groups—Hastings and Rother; and Eastbourne, Hailsham and Seaford. NHS South of England strategic health authority formally reviewed those proposals and assured itself that the Secretary of State’s four tests have been met and will continue to be met. The trust will now look to launch a 14-week public consultation exercise, which it anticipates will commence on 25 June, or shortly thereafter.
The hon. Gentleman raised concerns about maternity services, and I will seek to reassure him. For the sake of clarity, the current proposed consultation will not include maternity services. I understand that maternity services will be included in a separate programme known as Sussex Together, which is still being developed. That will look at maternity services across the county as a whole. The proposals are focused on enabling the local NHS to deliver directly clinically safe and sustainable services for patients, now and into the future. I am sure the hon. Gentleman agrees that this is something we all want and expect from the NHS.
A great deal of work is taking place to develop a local clinical strategy, one that will ensure the future sustainability of health services in the county and the best possible outcomes for local patients. The clinical strategy centres on eight areas of care, described by the trust as primary access points, covering 80% of service delivery. They are: acute medicine; cardiology; emergency care—A and E; general surgery; maternity; musculoskeletal, trauma and orthopaedics; paediatrics and child health; and stroke. For each one, a report on current challenges, the case for change and the proposed option has been produced.
With those plans, the local NHS in Sussex wants to achieve greater integration across health and social care services, to provide more care within communities, together with, where appropriate, shorter stays in hospital and better support when patients leave hospital, to provide care that continues to meet national clinical standards and best practice, to improve patient access to clinical experts at the earliest appropriate opportunity and to deliver the best outcomes for local patients.
Stephen Lloyd
I appreciate what the Minister says. I share his belief that the broader we go on the consultation, the better it will be. I support the health and wellbeing boards, introduced under the Health and Social Care Act 2012, because they are a good idea and will have some clout under the legislation. Does he agree that as the ESHT goes through the consultation, our new health and wellbeing board should be part of that consultation?
Mr Burns
Yes. Anyone and anybody should contribute to the consultation on any proposed reconfiguration. A key role of the health and wellbeing boards, particularly when fully established and operating in their own right, rather than in their shadow form at the moment, will be to ensure that the interests of the local health economy and patients are met. I would be surprised if the health and wellbeing boards did not show an interest in any reconfiguration, whether affecting the hon. Gentleman’s constituency or elsewhere. I am sure that they would form a view about any proposals.
The plans have been developed by local clinicians, including input from local clinical commissioning groups, with involvement from patient representatives, local people and other stakeholders, taking into consideration national best practice. Local clinical commissioning groups are also working alongside NHS Sussex to lead work on assuring the plans. The local NHS says that it believes that the majority of the changes required can be achieved by redesigning services and introducing greater integration and productivity within and between services. The proposed changes should enable the trust to deliver best practice, such as early access to senior clinicians, dedicated units, with specialist support staff and facilities, and improved multi-disciplinary teams.
Under the preferred options, surgery and orthopaedic services would be provided from the same site to support trauma unit designation. However, stroke services would not necessarily have to be on the same site as those services.
As I have said, reconfiguration is a matter for the NHS locally. I hope that the hon. Gentleman accepts that it would be inappropriate for Ministers to intervene in local due process, because the ethos of NHS reform is to put an end to the constant interference and micromanagement of the day-to-day running of the health service by Ministers like me or civil servants in the Department of Health in Whitehall. The nub of our reforms is that decisions on local issues—the local provision of health care—should and must be determined locally within the local health economy.
Stephen Lloyd
I appreciate where the Minister is coming from. Again, I genuinely and profoundly agree with him. That is why it is so significant that the majority of senior clinicians, as well as the public, are singing broadly from the same hymn sheet. The significance of the changes in the Health and Social Care Act 2012 is, as our colleague the Under-Secretary of State for Health says, that they must be led by clinicians and patients. That is why I made the point in my speech. I am gratified that the Minister has reiterated that.
Mr Burns
Let me mention something that will be of some comfort to the hon. Gentleman when the proposals get to the appropriate part of the process. The local authority health overview and scrutiny committee, which comprises democratically elected members of the council, has powers to refer a service reconfiguration to my right hon. Friend the Secretary of State if it is not satisfied that the proposals are in the interest of the health service in the area and in line with the content of the consultation or the time that has been allowed for it and that the consultation has been conducted appropriately.
As this consultation has not yet even begun, the HOSC has obviously not yet had the opportunity to make any such decision on whether it has been conducted appropriately. I therefore encourage the hon. Gentleman, his constituents and other interested parties who may be affected by the proposals to engage fully in the consultation when it commences to ensure that their views are fully taken into consideration.
If a decision flowing from the consultation does not find favour with the overview and scrutiny committee, it will be open to that committee to write to my right hon. Friend the Secretary of State to express its concern and dissatisfaction with the process, the decisions taken and the conclusions reached and to request that he refer it to the independent reconfiguration panel. That is a number of stages down the road, because we have not yet even commenced the consultation.
I urge the hon. Gentleman and every other interested party in East Sussex and even further afield if they might be affected by this reconfiguration to engage fully in the process, so that their views and concerns and their ideas of the best way to provide local health services are met.
Question put and agreed to.
Written Ministerial Statements
(12 years, 5 months ago)
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Anti-avoidance
(12 years, 5 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are committed to tackling tax avoidance to ensure the Exchequer is protected and fairness is maintained for the taxpayer.
Anti-avoidance provisions in clause 208 of the Finance Bill 2012 are being introduced to close tax avoidance schemes involving arrangements to acquire interests in offshore “excluded property” trusts, which are not subject to inheritance tax (IHT) charges. The schemes take advantage of this special treatment with the effect that UK domiciled individuals avoid IHT charges which would normally be due when they transfer assets into trusts.
Clause 208 may not be fully effective in deterring some variants of these schemes, particularly those involving arrangements using onshore vehicles. It may also inadvertently apply to some arrangements not made for tax avoidance purposes, especially those entered into prior to its introduction.
I am announcing today that amendments will be introduced at Report with the aim of ensuring that the new provisions: do not affect existing arrangements and are effective in stopping avoidance schemes involving the acquisition of interests in settled property; target the intended schemes correctly; and protect significant amounts of revenue. The amendment and provisions in clause 208 will have effect from today.
Details of the amendment are being published on the HM Treasury website today.
Double Taxation Convention (United Kingdom and the Principality of Liechtenstein )
(12 years, 5 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
A new double taxation convention with the Principality of Liechtenstein was signed on 11 June 2012. The text of the convention has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs’ website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
Greenhouse Gas Emissions
(12 years, 5 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
Following the public consultation last year, I can announce today that the Government will introduce a regulation requiring reporting of greenhouse gas (GHG) emissions by quoted companies in April 2013. Mandatory reporting of GHG emissions by all quoted companies will provide transparency enabling investors to see how listed companies are managing their carbon liabilities. This is essential information for investors who wish to assess medium to long-term risks. Business groups have called for regulation to create a common standard on GHG reporting and a level playing field, and to create transparency for investors and wider stakeholders.
We will collect evidence from the first two years of reporting by quoted companies and take a further decision in 2016 on whether the reporting requirement should be extended to all large companies.
This decision meets the requirement in section 85 of the Climate Change Act 2008 to make regulations under section 416(4) of the Companies Act 2006 requiring the directors’ report of a company to contain such information as may be specified in the regulations about emissions of GHG for which a company is responsible. A report to Parliament was laid on 27 March 2012 to conform with the Climate Change Act.
Hillsborough Independent Panel
(12 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The Hillsborough independent panel has today announced that its disclosure to the Hillsborough bereaved families will be on Wednesday 12 September in Liverpool. The Government are fully supportive of the work of the independent panel chaired by the Bishop of Liverpool. The panel’s work has been detailed and complex, but the Government are pleased that it will complete its work by the autumn as it made clear earlier this year. The Government will ensure that further progress on the work of the panel is reported to Parliament as the panel brings its work to a conclusion.
Public Guardian Board (Annual Report)
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
The Public Guardian Board has provided me with a copy of its annual report on the Public Guardian for the year 2011-12. A copy of the report has been deposited in the Libraries of both Houses. Copies of the report are also available online at: http://www.justice.gov.uk/about/opg/pgboard.
House of Lords
NHS: Liverpool Care Pathway
(12 years, 5 months ago)
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Baroness Knight of Collingtree
To ask Her Majesty’s Government whether use of the Liverpool care pathway in NHS hospitals is consistent with the outcome of parliamentary debates and votes on euthanasia.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the Liverpool care pathway is an internationally recognised framework to guide the delivery of high-quality care for people in their last hours or days of life. It is not a means of euthanasia and is therefore entirely consistent with the outcome of parliamentary debates and votes on the subject. The Liverpool care pathway helps to ensure that people die with dignity, respect and minimum distress.
Baroness Knight of Collingtree
My Lords, is my noble friend aware, however, that although the Liverpool care pathway is certainly not intended to be a tool for euthanasia, that is what a growing number of people now believe it to be, judging by their own experiences? Is he aware that consultants are not always informed that their patients have been put on this pathway, and that invariably neither those patients nor their relatives are told? Will he look into what is happening, since the very name “pathway” indicates that they are shortly to face induced death, as indeed they do?
Earl Howe
My Lords, I recognise that some people who have been on the Liverpool care pathway have received poor care. The pathway is not of itself a guarantor of best-quality care. It has been consistently made clear in the guidance for the implementation of the Liverpool care pathway that it is in no way a replacement for clinical judgment and should not be treated as a simple tick-box exercise. Rather, it should be seen as a useful framework to guide the delivery of care in a way that complements the skill and expertise of the practitioner using it.
Lord Hunt of Kings Heath
My Lords, I refer the House to my health interests in the register. Does the noble Earl agree that the noble Baroness, Lady Knight, has done sterling work in bringing to the attention of Parliament issues to do with the appropriate feeding and nutrition of patients in hospitals, but that on this issue she is wrong? Will he confirm that the national care of the dying audit shows that in fact the vast majority of patients on the care pathway in the last 24 hours of their life were reported to be comfortable and receiving good clinical care, and that his department will continue to recommend the care pathway as good practice?
Earl Howe
My Lords, we will continue to do so. The Liverpool care pathway has sometimes been accused of being a way of withholding treatment, including hydration and nutrition. That is not the case. It is used to prevent dying patients from having the distress of receiving treatment or tests that are not beneficial and that may in fact cause harm rather than good. The noble Lord was right that the recent national care of the dying audit of hospitals, run by Marie Curie in collaboration with the Royal College of Physicians, notes that in 94% of documented cases discussions explaining the use of the LCP were held with relatives or carers. That audit process gives clinicians an opportunity to feed in their views about how well, or not so well, the pathway is working in practice.
Baroness Finlay of Llandaff
My Lords, given that the Government have recognised that the Liverpool care pathway has been designed to bring the best of hospice care into other care settings, such as hospitals, nursing homes and patients’ own homes, and that it is a tool—and a tool is often only as good as the person using it—will the Government ensure that Health Education England includes in its remit comprehensive education around the appropriate care of dying patients?
Earl Howe
Yes, my Lords. To ensure that it is used properly, the Liverpool care pathway emphasises the importance of staff receiving appropriate training and support in its use as well as accessing relevant end of life training and education programmes. A range of activity has been undertaken to support staff education and training and end of life care by the national end of life care programme and others. That includes the development of an extensive package of e-learning, which is free to access for health and social care staff.
Baroness Browning
Will my noble friend tell the House whether there is ongoing monitoring of patients who are sedated but not hydrated? Looking at people who are dying can take a long time. My noble friend mentioned a few hours or a few days. If you are not hydrated for days on end, inevitably death will come. What analysis is there?
Earl Howe
My Lords, one key feature of the Liverpool care pathway is regular monitoring of the patient—every four hours at a minimum, I believe. That regular monitoring process gives clinicians and nursing staff an opportunity to reassess the patient’s condition to see whether they are in fact responding to treatment, whether they require a different form of treatment or whether the treatment they are being given is unduly burdensome. That regular monitoring should, I think, take care of the point my noble friend raises.
The Lord Bishop of Liverpool
My Lords, I have some contact with the Liverpool care pathway in Liverpool. Does the Minister agree that not just palliative care professionals but all healthcare professionals should receive education and training in caring for dying patients? Would he also agree that in the relationship between the two, trust is paramount?
Earl Howe
My Lords, the right reverend Prelate is absolutely right. Audits that have been carried out, particularly the recent audit published in December last year, provide us with important information about the current quality of care provision. The recent audit makes a series of recommendations, including mandatory training in the care of the dying for all healthcare staff involved and a seven day, nine to five, face to face palliative care service.
Baroness Crawley
My Lords, is the Minister aware that my own dear mother spent her last days on the Liverpool care pathway? Is he further aware that our family experience was of extraordinary care and sensitivity on the part of all the healthcare professionals involved, enabling us to be with my mother peacefully at home at her death? Confusion reigns over the title. A family friend, hearing that Mum was on the Liverpool care pathway, thought that a miraculous recovery had taken place and that she was taking a leisurely stroll in one of our great northern cities.
Earl Howe
My Lords, I am pleased to hear that the noble Baroness’s mother was well looked after with the benefit of the Liverpool care pathway. I take the point about the name. Indeed, the noble Baroness, Lady Finlay, can probably give us some instructive examples from Wales, where the word “pathway” has not been adopted and the process has, I believe, been refined.
Baroness Masham of Ilton
My Lords, is the noble Earl aware that some relatives and loved ones have to fight to stop their loved ones being on the Liverpool care programme? Can he think of anything worse than dying of thirst?
European Court of Justice: Jurisdiction
(12 years, 5 months ago)
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Lord Vinson
To ask Her Majesty’s Government whether they will exercise their right, as agreed in the Lisbon Treaty, to opt out of the extension to the United Kingdom from December 2014 of the jurisdiction of the European Court of Justice over crime and policing laws.
The Minister of State, Home Office (Lord Henley)
My Lords, the Government are considering carefully the many different factors involved in this decision and its implications. I am aware of the level of interest in the decision, which we have to make by the end of May 2014. We want to ensure that both Houses of Parliament have the opportunity for a full debate and vote on the issue.
Lord Vinson
I thank the Minister for his considered reply. However, does he agree that we now have the opportunity, at this critical time for the EU’s future, to confirm our opt-out from the EU’s overall control of our policing and justice system? I am sure he appreciates that to opt in would be the final surrender of our sovereignty. Our Ministry of Justice would become largely redundant as the ECJ became our supreme court. We would effectively become a province in the republic of Europe. Will the Minister confirm that the Government are well aware of the severity of this choice for our nation and will inform the wider public accordingly?
Lord Henley
My Lords, as I said in my original Answer, we are committed to making a decision by May 2014. It is a very important decision and we understand its severity. That is why we have committed ourselves to a debate in both Houses of Parliament, followed by a vote. In the end, the decision will be based on what is in the interests of the United Kingdom. My right honourable friend has given that assurance.
Lord Hannay of Chiswick
My Lords, the Minister will recognise that in January 2011, when committing the Government to a vote in both Houses on Protocol 36, the Minister for Europe said in another place:
“The Government will conduct further consultations on the arrangements for this vote, in particular with the European Scrutiny Committees, and the Commons and Lords Home Affairs and Justice Select Committees and a further announcement will be made in due course”.—[Official Report, Commons, 20/1/11; col. 51WS.]
Will the Minister say what sort of consultations they have in mind and what their timing will be? Does he agree that all these consultations need to take place in a deliberate and fully transparent way if the subsequent vote in both Houses is to be conducted on a sound evidential basis?
Lord Henley
My Lords, the precise words that the noble Lord used about the Government conducting further consultations—I could go on—are in front of me in my brief. I agree with them and that is what we committed ourselves to in January 2011. How we conduct those arrangements will be a matter for discussions in the appropriate place at the appropriate time between the European Scrutiny Committees and the Commons and Lords Home Affairs and Justice Select Committees. We need to discuss these things with a number of different committees. I make it clear to the House and the noble Lord today how seriously we take this and why we think it vital that we eventually have that debate and vote in both Houses.
Lord Anderson of Swansea
My Lords, when the Government come to make this important decision, will they recognise that ordinary British citizens are less inclined to be concerned about abstract notions of sovereignty than about the ways in which they will be protected when they are in other European countries? There are very cogent arguments in favour of European harmonisation in these areas.
Lord Henley
My Lords, there are arguments and ordinary citizens would accept some of them. However, ordinary citizens would also accept that some things are better looked after by our own Parliament back in the United Kingdom. That is why we will make the appropriate decision at the appropriate time, after we have listened to both Houses and voted on the matter.
Baroness Hamwee
My Lords, does the Minister agree that there is a great deal of and a great variety of cross-border crime? If he does, does he also agree that it is important that the UK puts itself into a position where we have most influence and the greatest opportunity for leadership?
Lord Henley
My Lords, again I totally agree with my noble friend on that matter. But it means that we have to make very difficult decisions at the time about what is precisely in the United Kingdom’s national interest. We will not make a decision on all 133 measures before that. There might be individual measures, as my noble friend will be aware, on which we might have to make a decision before then. But as a totality we will leave this to 2014.
Lord Dubs
Will the Minister confirm that the Government have no intention of opting out of the European arrest warrant, which, for all its faults, is still the best way to ensure that criminals—some of whom commit very serious offences, including terrorism —are brought to justice in this country?
Lord Henley
My Lords, the European arrest warrant was one of those matters agreed to before 2009. Therefore, it is covered by what we are discussing today. As I have said, we will make our decision at the appropriate time in 2014. It might be that we feel that in the national interest we do want to opt out of it; it might be that we do not. But I think that we will leave that to another day.
Lord Pearson of Rannoch
My Lords, of the 133 measures mentioned by the noble Lord, which were still outstanding before our opt-out last December, does he accept that the Government have already opted in to eight of the most important? Can he therefore give the House an assurance that the Government will not opt into these measures one by one so that there is very little to opt out of when we come to the end of May 2014?
Lord Henley
My Lords, as I think I made clear, I do not want to go through all 133 measures at this stage. The House would not like it at Question Time and it would not be an appropriate use of the limited time I have. We will make appropriate decisions on some of them beforehand if it is appropriate but the larger number is a matter for 2014.
Lord Deben
My Lords, will the Minister confirm that there is more than one view on this side of the House and that the way in which we should discuss this should be as unemotional and as factual as possible, and that we do not help the argument by bringing what can only be called extreme views into the discussion?
Lord Henley
My Lords, to put it very simply, I agree with my noble friend that there is more than one view on this side of the House. There is possibly more than one view on the other side of the House and more than one view in all corners of the House. I agree with every aspect of what my noble friend has said.
Wales: Barnett Formula
(12 years, 5 months ago)
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Lord Wigley
To ask Her Majesty’s Government what representations they have received from the Welsh Government concerning the reform or replacement of the Barnett formula.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, bilateral discussions between the Government and the Welsh Government on all proposals arising from the Holtham commission, including funding reform, are continuing. To repeat what I have said on a number of previous occasions, as set out in the coalition programme for government, while the Government recognise concerns expressed over the Barnett formula, they believe that at this time the priority must remain the reduction of the deficit.
Lord Wigley
My Lords, is the Minister aware that in regard to the funding needed to maintain the level of public services in Wales up to the UK average, last year the Holtham report indicated an underfunding of some £400 million? Figures released yesterday indicate that by 2010-11, based on Treasury outcome figures, that had increased to an underfunding of £540 million. Is he further aware that when the Secretary for Wales addressed the National Assembly on 23 May, she said that,
“everybody knows that the Barnett Formula is coming to the end of its life.”?
When will it be buried and replaced by a needs-based formula?
Lord Sassoon
My Lords, first, on the numbers, which the noble Lord, Lord Wigley, quoted, when the Holtham commission reported to the Welsh Assembly in July 2010, it claimed that Wales had a £300 million funding shortfall. I do not recognise the new figure put out by Plaid Cymru yesterday but the point is that Wales has received nearly £500 million additional funding in the current spending review, SR10. In 2010-11, funding in Wales was running at some 15% above the level in England, so we need to keep the numbers in perspective. As I have said previously, yes, we recognise the significant issues that there are with the Barnett formula.
Lord Barnett
My Lords, as the noble Lord knows, a powerful Select Committee of this House unanimously recommended major reform, which would help not only Wales but every other part of the UK, particularly Scotland, where there needs to be reform. I gather that, subject of course to the Scottish people sensibly voting against separating from the UK in a referendum, the Government have in mind a major financial reform in Scotland, probably well before the time that the Minister has always mentioned. In those circumstances, would not then be a good time for Scotland to make that piece of essential reform?
Lord Sassoon
My Lords, we are straying a bit from Wales, but I am very happy to talk about Scotland. Of course, we recently passed through this House the new Scotland Bill, now an Act, which made some very significant changes resulting from the Calman commission recommendations. In respect of the eponymous formula of the noble Lord, Lord Barnett, the difficulty that we have among others is that there is no consensus across the UK on what could replace it. Since 1978, it has stood the test of time, and it is very difficult to find a better basis.
Lord Roberts of Conwy
Would my noble friend agree that ideally what is required is a formula that is adaptable to the special needs of Wales, Scotland and other national regions?
Lord Sassoon
Yes, indeed, I would agree with my noble friend that that should be the objective of any replacement for the formula.
Baroness Hollis of Heigham
My Lords, the Minister said that his priority was to seek to reduce the deficit. Given that under the Barnett formula, which has not stood the test of time, Scotland is over-funded by £4 billion at the expense of English taxpayers, would that £4 billion not be a useful contribution to the deficit—or is the Minister so casual about our finances?
Lord Sassoon
No, my Lords, the Treasury is not remotely casual about the national finances, and what the noble Baroness says about the Scottish funding situation might well be challenged by others in other devolved parts of the nation.
Lord Forsyth of Drumlean
My Lords, it would not be challenged by me—and, indeed, the Select Committee came to that unanimous view. But what is the difficulty with finding an agreed needs-based formula for funding when the money that Scotland receives is distributed to health and local authorities using precisely a needs-based formula for funding? Surely it is time to deal with a matter that is creating division in the United Kingdom at a time when we need unity.
Lord Sassoon
My Lords, one difficulty is that there is no consensus on the appropriate way in which to measure needs for any replacement. As the previous Government said in response to the Select Committee report,
“the Barnett formula has a number of strengths, among them the merit of allowing the devolved administrations to determine their own assessment of needs and priorities in devolved areas”.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, tomorrow we have a Question on the behaviour of the House, and I would not want to use this as a bad example. We have time for one more Peer, and I think that it should be the noble Lord, Lord Richard.
Lord Richard
My Lords, I am obliged to the Leader of the House. The Minister says that there is no consensus in the United Kingdom about the Barnett formula, but there is a great deal of consensus that it does not operate fairly. The Select Committee was unanimous in that opinion, taking a great deal of evidence on it and coming to that conclusion. For the Minister to come along parroting, as he does every time the issue is raised, that we cannot do it now because of the deficit, is frankly unworthy of the subject. It is totally dismissive of the decision that the Select Committee took.
Is it not also true that there is a perfectly practical alternative to the existing Barnett formula to which the noble Lord, Lord Forsyth, referred—a needs-based formula? The Select Committee was set up to look precisely at this issue, which it did, and now it is time that the Government did.
Lord Sassoon
I simply refer the noble Lord, Lord Richard, to my first Answer.
Schools: Curriculum
(12 years, 5 months ago)
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Baroness Jones of Whitchurch
To ask Her Majesty’s Government whether they will publish the names and qualifications of all those who advised the Secretary of State for Education on the content of the recent curriculum review proposals for the teaching of primary school mathematics, science and English; and what international comparisons were used to inform the proposals.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, the Government are happy to publish a list of those who were consulted to inform the development of the draft curriculum documents published on 11 June, and we will do so shortly. The review has drawn on a wide evidence base, including an analysis of the English, mathematics and science curricula of high-performing education jurisdictions, which was published on 19 December 2011. I will send the noble Baroness copies of both documents.
Baroness Jones of Whitchurch
I thank the Minister for that reply, particularly for offering to send me the specifics of the international comparisons on which the proposals have been made. However, is he concerned that three of the four members of the expert panel set up to advise the Government on the curriculum review are reported to be deeply unhappy with the proposals now announced by Michael Gove, which they describe as too narrow and overprescriptive? Is he also concerned about their allegation that the proposals are not drawn from the best available international evidence? Does not Michael Gove’s throw-away response to these concerns in the Commons on Monday, when he said that,
“advisers advise but Ministers decide”,—[Official Report, Commons, 18/6/12; col. 603.]
give weight to the view that the expert panel’s evidence has been disregarded in favour of a small Gove clique of advisers in his own department?
Lord Hill of Oareford
First, a number of recommendations made by the expert panel were accepted by the Secretary of State. Secondly, although it is true that there were differences of opinion between some members of the expert panel, and between some of them and Ministers, a difference of opinion between Ministers and expert advisers is scarcely unheard of. However, Ministers ultimately have to take responsibility for their decisions. I think most of us in this House think that that is the way it should be. However, the key point of the proposals that the Government have brought forward is that we are trying to raise ambition and standards in our primary curriculum, particularly as a gap in attainment has opened up between the UK and other international jurisdictions and we are keen to try to narrow it.
Baroness Walmsley
My Lords, the reference to international comparisons reminds me that in foreign countries children often start learning languages at primary level, something in which the Secretary of State is very interested. Given the difficulties with the lack of teachers and the fact that many secondary schools have dozens of feeder primary schools, all of which might have taught a different language, will my noble friend the Minister look into language appreciation or language taster courses so that children get a foundation in foreign languages but do not study for too long a language which they may not be able to carry over to secondary level?
Lord Hill of Oareford
My Lords, as my noble friend will know, one of our proposals for the primary curriculum is to make the teaching of foreign languages compulsory at key stage 2. Those proposals are out for consultation. There is clearly an important question to be addressed about the quality of teachers and how to teach languages, because we have fewer than we need and there has been a drift away from modern languages in recent years. One of the things on which we will welcome views to the consultation over the next few months is how we can make sure that teachers have the support they need to ensure that languages can be taught at primary and secondary school.
Lord Quirk
Given the centrality of English in the whole of education, is the Minister aware that many in the profession are delighted with the steps taken to create a key stages 1 and 2 curriculum that meets our present and future needs? Can he therefore assure us that the Government will do their utmost to ensure the enthusiasm and competence of the teaching body to deliver this most promising curriculum?
Lord Hill of Oareford
My Lords, I am very aware of how important the whole issue of language development is to the noble Lord. I agree with him, and one of the things that we are seeking to emphasise in the new curriculum is the importance of the use of language and language development all the way through. I am grateful for his support for the changes that we are trying to make. As I have said, we will now consult on those proposals and we will certainly do all we can to make sure that teachers have the support to deliver this more ambitious curriculum.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I am sorry to intervene again but we cannot have the noble Baroness and the noble Lord both trying to speak at the same time. One of them needs to decide who is going to give way. It looks as if the noble Lord, Lord Winston, has given way.
Baroness Billingham
Michael Gove’s somewhat bizarre curriculum review has achieved the stunning result of uniting the whole teaching profession, most academics and even his own advisers against his proposals. Precisely how many hours of physical education will remain within the curriculum in all primary schools? Is it mandatory? I ask the Minister that question against the background of an Olympic legacy that we have promised to the nation. If we do not have sport in schools, the legacy will be in tatters.
Lord Hill of Oareford
I do not agree with the noble Baroness’s basic premise on the nature of the response to the curriculum. As the noble Lord, Lord Quirk, has just demonstrated, many applaud what is in it, including many teachers who are already delivering such an approach. I agree that sport is important and it is remaining a compulsory part of the national curriculum. We will shortly publish the programmes of study that we propose will go alongside that requirement.
Refreshment Committee
The Chairman of Committees
That a Select Committee be appointed to advise on the refreshment services provided for the House, within the strategic framework and financial limits approved by the House Committee;
That, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:
L Colwyn, B Doocey, L Elder, B Gale, B Gould of Potternewton, B Henig, L Howard of Rising, B Jenkin of Kennington, L Mawson, L Newby, L Palmer of Childs Hill, L Skidelsky;
That the Committee have power to send for persons, papers and records;
That the Committee have leave to report from time to time.
Lord Palmer
My Lords, bearing in mind the extremely heavy workload of the conscientious noble Lord, Lord Sewel, as Chairman of Committees, would it not make sense to appoint to this very important committee a chairman who has first-hand catering experience?
The Chairman of Committees (Lord Sewel)
Well, I do have some first-hand catering experience. I remember spending many hours happily working in various bars during my period as an undergraduate. The point is that at this stage, in my first year as Chairman of Committees, it is important that I have direct experience of the issues confronting all the domestic committees. After that has been achieved, which may take some time, the situation could well be reviewed—but not until then.
Broadcasting (Local Digital Television Programme Services and Independent Productions) (Amendment) Order 2012
Baroness Garden of Frognal
That the draft order be referred to a Grand Committee.
Armed Forces Act (Continuation) Order 2012
(12 years, 5 months ago)
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Community Right to Challenge (Fire and Rescue Authorities and Rejection of Expressions of Interest) (England) Regulations 2012
Baroness Hanham
That the draft regulations laid before the House on 30 April be approved.
Relevant document: 1st Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 13 June.
Local Government Finance Bill
Baroness Hanham
That it be an instruction to the Grand Committee to which the Local Government Finance Bill has been committed that they consider the Bill in the following order:
Clause 1, Schedule 1, Clause 2, Schedule 2, Clauses 3 to 5, Schedule 3, Clauses 6 to 9, Schedule 4, Clauses 10 to 19.
Financial Services Bill
(12 years, 5 months ago)
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Lord Sassoon
That it be an instruction to the Committee of the Whole House to which the Financial Services Bill has been committed that they consider the Bill in the following order:
Clauses 1 to 3, Schedule 1, Clause 4, Schedule 2, Clause 5, Schedule 3, Clauses 6 to 10, Schedule 4, Clauses 11 to 13, Schedule 5 Clauses 14 to 20, Schedule 6, Clauses 21 to 27, Schedule 7, Clauses 28 to 32, Schedule 8, Clauses 33 and 34, Schedule 9, Clause 35, Schedule 10, Clause 36, Schedule 11, Clauses 37 and 38, Schedule 12, Clause 39, Schedule 13, Clauses 40 and 41, Schedule 14, Clause 42, Schedule 15, Clause 43, Schedule 16, Clauses 44 to 90, Schedule 17, Clauses 91 to 95, Schedules 18 and 19, Clauses 96 to 100, Schedules 20 and 21, Clauses 101 to 104.
Directors’ Pay
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
With your Lordships’ permission, I should like to repeat a Statement made by my right honourable friend the Secretary of State for Business, Innovation and Skills in another place today.
“I welcome this opportunity to set out the Government’s proposals on directors’ pay. This follows extensive consultation with business and investors.
Since I first addressed the House on this issue, the Government have initiated a broad, national debate about shareholder activism. This has encouraged shareholders to become more engaged as owners of their companies during the so-called ‘shareholder spring’. We have also seen many companies engaging constructively in the face of this opposition. This is an important step for encouraging improved pay discipline.
As I said then, there is compelling evidence of a disconnect between pay and performance in large UK-listed companies. It is right that the Government act to address this clear market failure. Today, I can therefore announce a far-reaching package of reforms that will strengthen the hand of shareholders to challenge excessive pay while not imposing unnecessary regulatory burdens.
We will give shareholders new powers to hold companies to account on the structure and level of pay, and make it easier to understand what directors are earning and how this links to company strategy and performance. Shareholders will have a binding vote on a company’s pay policy, including their approach to exit payments. Rather than being a one-off vote, for the first time this will be a real, lasting and binding control on pay. A company will be able to make payments only within the limits that have been approved by a majority of shareholders. This binding vote will happen annually unless companies choose to leave their pay policy unchanged, in which case the vote will happen at a minimum every three years. This will encourage companies to set out and stick to a clear, long-term pay strategy, and it will help to put a brake on the annual upward pay ratchet.
The policy should explain clearly how pay supports the strategic objectives of the company and include better information on how directors’ pay relates to that of the wider workforce. This includes increased transparency on employee pay, including information that will show the difference between rises in directors’ pay and those of the employees. Employee views on pay are important. That is why I am proposing that companies report on whether they have taken steps to seek the views of their workforce.
As part of their policy, companies will have to spell out their approach to exit payments. When a director leaves, the company must publish a statement explaining to shareholders exactly what payments the director has received. Companies will not be able to pay more than the shareholders agree.
Alongside the binding vote on policy, there will, as now, be an annual advisory vote on how the policy has been implemented, including all remuneration paid in the previous year. If a company fails the advisory vote, this will automatically trigger a binding vote on policy the following year. Both the binding and advisory votes should be as strong as possible to keep up pressure on companies. I therefore welcome the CBI’s call for the Financial Reporting Council’s corporate governance code to be updated to codify the current best practice that companies make a statement when a significant minority of shareholders vote against a pay resolution. This would publicly hold directors to account. Pay reports will be clearer and more transparent for investors. Companies will have to report a single figure of the total pay that directors received for the year, details of whether they met performance measures and a comparison between company performance and chief executive’s pay.
The Government will bring forward amendments to the Enterprise and Regulatory Reform Bill shortly to introduce these reforms. In tandem, and as good policy-making requires, we will publish, for comment, revised and simplified regulations setting out what companies must report on directors’ pay. Lasting reform is dependent on both business and investors maintaining this activism and developing and adopting good practice.
The best companies and investors are already leading the way and acting as early adopters of these reforms. We welcome the close engagement of institutional shareholders and their willingness to use their voting powers. We want this to be sustained and shall continue to monitor disclosure levels. Evidence suggests that more institutional investors are disclosing their voting records and that up to three-quarters of those investors are now disclosing their votes. We will consider further action if the number of investors volunteering to disclose their voting records does not continue to increase.
This is a strong package of reform. It builds on the United Kingdom’s status as a global leader in corporate governance; it commands wide support from investors and business; and it addresses public concerns about directors’ pay. These proposals restore a stronger, clearer link between pay and performance; reduce rewards for failure; promote better engagement between companies and shareholders; and, overall, empower shareholders to hold companies to account through binding votes. We look forward to discussing these proposals further with the Business, Innovation and Skills Select Committee on 28 June and in the Public Bill Committee that will consider the Enterprise and Regulatory Reform Bill”.
My Lords, that concludes the Statement.
Lord Stevenson of Balmacara
My Lords, I thank the Minister for repeating the Statement made earlier in another place. In January this year, the Prime Minister said on the Marr programme:
“it’s the excessive growth in payment unrelated to success that’s frankly ripping off the shareholder and the customer and is crony capitalism and is wrong. And it’s also—I think a key point—payments for failure, those big rewards when people fail, I think make people’s blood boil and again is actually taking money from the owners of the company, the shareholders and everyone with a pension in Britain … I think you know what we should be doing here is what are the best market tools to try and correct this market failure and I think transparency is a key tool, so we can all see what’s happening, and then clear votes so you’re empowering the shareholder”.
In March, the Secretary of State for Business, Innovation and Skills announced in a Written Ministerial Statement a public consultation,
“that provides more detail on a model which will give shareholders greater influence on the issue of executive remuneration. The main components of this are … An annual binding vote on future remuneration policy … Increasing the level of support required on votes on future remuneration policy … An annual advisory vote on how remuneration policy has been implemented in the previous year … A binding vote on exit payments over one year’s salary”.
We supported this initiative, building as it does on work done by the previous Government in 2002. So, today, we are happy to confirm our support for much of what is in the Statement, including the binding shareholder vote on exit payments, the measures to simplify pay reports to increase transparency, and an annual advisory vote on how remuneration policy has been implemented in the previous year.
What has happened to the brave new world outlined by the Prime Minister in January and echoed by the Secretary of State in March? In March, an annual binding vote on future remuneration was one of the “main components” of the Secretary of State’s plan to give shareholders greater influence. This has been watered down to one vote every three years, unless during that three years there is a change to the policy. But will that not simply incentivise boards to draft policy as broadly as possible so as to avoid anything more than a triennial vote? Who will be the arbiter as to whether there has been a change of policy in each company—the board or the shareholders? Bureaucracy has been raised as an objection to an annual vote, but given that there will still be annual advisory votes on the implementation of remuneration policy in the previous year alongside other annual votes such as the election of directors, surely that objection simply does not hold water.
Secondly, the Government proposed to increase the majority required for the pay policy to be approved, but in the Statement the Government have reverted to a simple majority. We believe that they should have gone for a 75% threshold; as Dominic Rossi, the chief investment officer of Fidelity Worldwide Investment has said, such a threshold would ensure that companies consult widely with shareholders prior to a vote and give companies a clear mandate, and the need for a clear majority would also encourage all shareholders to express their views. Why did the Government not take heed of this advice?
Thirdly, the Statement says that,
“employee views on pay are important”.
If that is the case, why has the proposal been limited to companies reporting,
“on whether they have taken steps to seek the views of their workforce”?
Will the Minister explain why the Government have not introduced the requirement for employee representatives to sit on board remuneration committees?
In the accompanying Directors’ Pay: Guide to Government Reforms, published today, the Government say:
“Over the last decade, directors’ pay in the UK’s largest listed companies has quadrupled with no clear link to company performance. Business leaders and investors now agree that this is a problem. Key stakeholders have spoken out in favour of action”.
Sir Roger Carr, president of the CBI, is quoted as saying in May 2012:
“In the way we pay ourselves … now is the time to be more transparent, more responsible and more accountable. High pay must be for exceptional performance, not mere attendance”.
Simon Walker, director-general of the IoD, is quoted as saying in March 2012:
“The level of executive pay at the UK’s largest companies has become unjustifiable over the last decade and it’s right that the Government recognises that it is shareholders who have the power to control it”,
and Otto Thoresen, director-general of the ABI, is quoted as saying in April 2012 that,
“the days of gold-plated payouts for failed leaders are coming to an end. We have the chance to agree a new set of rules focused on greater simplicity, greater transparency and genuine reward for performance. It is an opportunity we must take”.
Those are powerful comments, made by key stakeholders, and the Government should take careful heed of what is being said.
I note that the Government are claiming credit for a growth in shareholder activism. Indeed, “success has many fathers”. In the so-called shareholders’ spring, shareholders have been flexing their muscles and exercising their current, albeit restricted, rights with some verve this year. That is very welcome. Change and reform must be shareholder led—it is they who own our businesses—and surely we in Parliament should do what we can to empower and encourage them as much as possible.
There is the whiff of a U-turn in the air. The Government have talked up what they were intending to do in this area, but in the event they have failed to deliver, as the final proposals are, to be frank, a bit limp. They are certainly not the strong package of reforms, but they could become that. As the Statement indicates, this is not the last chance we will have to discuss these topics. We look forward to debating the amendments to the Enterprise and Regulatory Reform Bill, which will give these proposals legislative effect, in your Lordships’ House in the not too distant future.
Baroness Wilcox
My Lords, I thank the noble Lord, Lord Stevenson, for his support for some of the things that we have done. Obviously he feels that we have not gone far enough, which is what I expected him to say. Of course, that allows me to say that in all the years that his Government were in power, they did not do any of this. Therefore, I hope that he will feel that we have at least made a decent start and will encourage us as much as he can.
I will answer some of his questions. We consulted extensively with business and investors. The Association of British Insurers today said that the package was practical and workable, and would help investors tackle excessive pay. I know Sir Roger Carr very well. I was on the board of Cadbury Schweppes with him, and we were also—I think—on the Audit Committee and the Remuneration Committee at the same time, so he and I have some history, and I am sure that we will agree over the years.
The noble Lord asked why we had gone for a binding vote and why we had changed the time period from three years. Shareholders will get a binding vote on a company’s pay policy, as we said, including on exit payments. This binding vote will happen annually unless companies choose to leave their pay policy unchanged, in which case the vote will happen at least every three years. The idea on consultation was that it would encourage companies to set out long-term pay policies clearly linked to company strategy rather than short-term, one-year pay policies. We hope that it will put a brake on continuous upward pay ratchets. However, we will watch and see whether it succeeds.
On employee representation, we have acknowledged that employees’ views on pay are important. That is why I proposed that companies should report on whether they have sought the views of the workforce. We will monitor this very carefully. As for employees on boards, nothing stops companies doing this already, but we are not saying that it should be enforced—we do not believe in mandating this across all firms. We hope that the things that we put forward today will give people confidence to go forward, and certainly will give confidence to employees, who have a lot of powers that they have not yet used, which are similar to those of shareholders who have gone forward and said, “Enough is enough”.
Earl Attlee
My Lords, perhaps I may remind the House of the benefit of short questions to the Minister, in order that she may answer as many as possible.
Lord Razzall
My Lords, I thank the noble Baroness for introducing this important Statement. I have three questions. First, does she accept that the Statement applies almost entirely to companies owned and run with employees in the UK? What is her view on the large number of FTSE 100 companies that have shareholders and employees primarily outside the United Kingdom? The Statement says that there has been a broad national debate about shareholder activism. Has any consultation taken place with companies run from Kazakhstan or the United States that are UK FTSE 100 companies? How does she think these proposals will go down with them?
Secondly, I will touch on the question of exit payments that was raised by the noble Lord, Lord Stevenson. I support and understand the Government’s position that they do not wish shareholders to have the right to veto the individual contracts of people who are taken on for employment, but I am not entirely sure that that should apply to exit payments. Contrasting the Statement in my left hand with the Explanatory Notes in my right, there seems to be a slight confusion. The Statement says that on exit payments, companies will not be able to pay more than shareholders agree. Will the Minister confirm that that is not exactly true? The proposal is that the company will say something like, “We will never pay more than two years’ salary in an exit payment”, or, “We will never pay more than the contractual entitlement of the employee”, or, “We will reward performance but not lack of performance”. Does the Minister agree that the Statement is slightly misleading in suggesting that shareholders have a right to veto exit payments?
The third point is slightly facetious, and the Minister may well have answered it already. As we know, her Secretary of State has been described in the Daily Telegraph by Mr Adrian Beecroft as a crypto-socialist. The criticism that the noble Lord, Lord Stevenson, has made has probably proved that that is not the case. Will the Minister confirm that, as far as she is aware, the business community broadly welcomes these Statements and regard them as coming from a Secretary of State who is significantly pro-business?
Baroness Wilcox
In answer to my noble friend’s first question, company law captures only UK companies. However, overseas companies must comply with the listing rules. We will work with the FSA to consider how the listing rules need to change in view of these reforms. I hope that is a helpful answer. In answer to his second question, companies will be able to make exit payments only within the envelope that shareholders have approved and it will be up to the shareholders to agree.
I cannot imagine that my Secretary of State was ever called a crypto-socialist by anybody—was he? I know that business very much welcomes what we are doing at the moment. Shareholders and business welcome it, and it is with them that we have been talking and negotiating to make sure that we can put this into the Bill that is coming up and that we can introduce secondary legislation so that we can get this moving as soon as possible. Everybody seems to agree that things must change.
Lord Tomlinson
My Lords, did the Minister hear the discussion on Radio 4 this morning in which one company chief executive reminded us of the fuss there was 10 years ago when the salary of the chief executive of British Gas reached £460,000? Is she surprised that, 10 years later, when FTSE chief executives have an average salary of 10 times that amount, this Statement smacks somewhat of closing the door after the horse has bolted? It is not sufficient just to deal with the present problem because the proposals that are being made build in the inequity that exists at the present time.
When the Minister talks about pay, precisely what is she talking about? Is she talking about total emoluments, of all sorts—pay, share options, shares, accommodation provided; the whole gamut, everything included—and will that be made absolutely transparent? Can she give us that assurance at least to make sure that there is no progress on the inequity?
Baroness Wilcox
I am very happy to reassure the noble Lord that we mean pay—all of it—and that is why we said in the Statement that there would be one figure. One figure means you do not have to work your way through myriad figures and arrangements, et cetera, so that it will be clear to everybody exactly what that person is getting.
I did hear the interview this morning. It was with two businessmen; one from a FTSE 100 company and the other one from a company that was never listed on the Stock Exchange. If you talk about closing the door, in the short time that we have been in government, we have now opened the door—a door that we feel should have been opened a lot longer ago, but we were not in government then.
Baroness Sharples
Does my noble friend agree that small shareholders will take considerable encouragement from this Statement?
Baroness Wilcox
My noble friend is right. We are very keen to make sure that shareholders feel that they are getting a fair deal. It is very useful for the very big shareholders to be able to get in and take on the companies for these pay arrangements. I have sat in FTSE 100 company meetings when the room is absolutely full of people who have only got a few shares. Up go all the hands for the vote and we add them up: 1,800 for, 246 against; and then of course we have the other votes that have come in, that are not in the room at the time: 45 million say this, and so on. So yes, the small shareholder will feel that he is in the room, and it is very important that we start to see the dividends grow, if we can, for small shareholders too. We want more shareholders. I thank my noble friend for the question.
The Lord Bishop of Durham
My Lords, since the 1980s the multiple between the average earnings in FTSE 100 companies and the earnings of top executives has risen from about 29 times to at least 140 times. If we do not see any improvement in these differentials, they will prove dangerous to social cohesion, as has been widely seen across Europe. Will the Minister be reviewing measures to see if greater effect can be brought to bear?
Baroness Wilcox
The right reverend Prelate is right; one of the big worries is the great differential which has gradually opened up between the top pay and that of other employees in the company. As we said in the Statement and as I am happy to repeat now, we will be making sure that companies are looking at the increments and the pay rises that are happening at all levels. I know the right reverend Prelate was in business and it is very nice to have a Bishop in the place who knows something about business.
Lord Myners
My Lords, this is the minimum necessary response to a situation in which company directors seem to see their role as driving the cost of everything down except their own remuneration. This is not a strong Statement. The Minister is wrong to suggest the previous Government did nothing. They introduced the Companies Act 2002 which increased disclosure; they introduced obligations for institutional shareholders to publish their votes; they also promoted the Higgs and Walker reviews. So the Minister is simply wrong to say that the previous Government did nothing on this issue. Paragraph 7 of the Secretary of State’s Statement shows that the Government’s policy is both voluntary and binding. When I suggested that earlier this week, the noble Lord, Lord De Mauley, who is in his place, said that he could not envisage a situation which was both voluntary and binding.
However, to questions. First, the Minister says that these reforms will strengthen the hand of shareholders. Can she explain why shareholders could not have introduced these requirements themselves through amendments to the articles of association? I suggest that these reforms do not strengthen the hand of shareholders at all. They already had that power. Secondly, the right honourable Secretary of State said these proposals were introduced in the face of opposition. Can the Minister tell us the opposition to which the Secretary of State was referring in making that comment in paragraph 2 of the Statement? Finally, in her earlier answer the Minister said that employees already have powers to influence company remuneration. Can she tell us what these powers are?
Baroness Wilcox
We have engaged extensively with businesses and investors to come up with a robust, workable and enduring package that helps shareholders to sustain the increasing activism which we have seen.
Baroness Wilcox
I read that to make sure I was absolutely correct because the noble Lord has been quoting paragraph numbers. I would not like him to say that I had made a mistake or moved a comma. Perhaps he will forgive me on that.
It is a radical package. For the first time companies will be bound by a policy approved by shareholders. As to why shareholders did not do more and do it on their own, as the noble Lord knows very well, changing articles is complicated so we wish to help shareholders on their way. The noble Lord is shaking his head vigorously. He has been a Member of this House and has sat on the Labour Benches a long time. He has also been a Minister. During all that time none of this, no matter how frail or small it seems to him now, was done by his party or by him when he was sitting in this position. Let us be clear; one year ago there was not the same level of recognition on the issue of pay. Now business accepts that there is an issue and has been very good in coming forward to have the conversations with us.
Lord Renton of Mount Harry
My Lords, I for one on these Benches was very pleased to hear the Secretary of State’s announcement today. The noble Lord, Lord Myners, had a point when he said that shareholders can already veto executive pay. One of problems is that many shareholders are directors themselves and therefore have some considerable interest in seeing that salaries are up there rather than down there. It would be very helpful if it were possible to use the ordinary employees of a company more widely as a blanket on what is finally resolved. The Government should consider how employees who are not at the top of the pay scale can be brought more into the picture. I take it that what is being suggested today applies not just to directors but to executives as well. An executive is not necessarily the chief executive. What he or she is earning will also come under close survey.
Baroness Wilcox
The answer to my noble friend’s last assumption is yes. When it comes to employees getting their voices heard, we encourage them to make more use of the tools that they already have, and to which I have already referred, in airing their views on pay, for example. Existing information and consultation arrangements are a potentially powerful mechanism for employees and have been underutilised to date. We will now watch carefully what companies say in directors’ remuneration reports about whether employees’ views have been sought. I agree with my noble friend that we need to hear the views of employees. We want boards to encourage them to use the mechanisms available to them so that we can hear more of what they say.
Lord Haskel
Does the Minister agree that this is another small and welcome step towards implementing a long-term stewardship code? It is a journey which the previous Government started and which I hope this Government will continue. The Minister spoke about institutional investors, pension funds, insurance companies, active shareholders, savers and investors, all of whom will of course take an interest. However, we are told that these are a minority of shareholders. We are told that short-term traders, overseas investors with different objectives, private equity, hedge funds and those who borrow shares are now in the majority. Will they simply not bother to vote and so render this scheme useless?
Baroness Wilcox
Gosh, that is dreary. Private equity is something else again. We have promoted long-term stewardship and continue to do so today. I would not like to give the impression that the previous Government did nothing at all; they did what they could to try to change things. However, in the past few years, it has become increasingly obvious that the stretch of pay across a company has become too much to bear. From the Statement that I have repeated today, I hope that your Lordships will see that we are keen to monitor how our proposals are being implemented. We leave ourselves the opportunity to keep a watching brief, as is right, but not to interfere in companies’ day-to-day workings or set remuneration. Shareholders are becoming more engaged, as results from recent annual general meetings show. Reforms will encourage shareholders to engage by giving them stronger tools that require companies to sit up and take notice. This will help shareholders sustain the increasing activism that we have already witnessed this year and to which the noble Lord referred.
Lord Tugendhat
My Lords, I congratulate the Minister on the robustness of this Statement. I was disappointed when there was nothing in the gracious Speech on this subject but what she has announced today was well worth waiting for. I cannot help feeling that some of the contributions from the party opposite are redolent of foxes being shot. This makes a very important start on what is an important issue and I congratulate the Secretary of State and the Minister in this House on this Statement.
Baroness Wilcox
I thank my noble friend very much indeed. I am very glad that somebody thinks we have done the right thing today. I hope we will keep it up and that he will continue to be pleased with us.
Lord McFall of Alcluith
The Minister, as a former non-executive director, is very much aware that the business model is the key to understanding companies, both in good and bad times. More than anything, it is the professionals—the auditors—who understand the business model. Will the Minister ensure that the Government mandate auditors to talk to shareholders, so that they begin to understand the company? If they do, they can then request a seat on the remuneration committee, along with other stakeholders such as employees, so that we blow open the cartel that is at present called the remuneration committee.
Baroness Wilcox
I assume the noble Lord is talking about outside auditors, not the internal audit committee. I do not have an answer for him immediately but I will certainly go back and find out what we are thinking in respect of auditors. I think I have an Oral Question next week on auditors so that might be worth listening to. I apologise that I cannot answer that right now.
Baroness Buscombe
Will the Minister explain what she meant when she said that private equity is “something else”?
Baroness Wilcox
This is to do with the FTSE-100 companies as opposed to private equity, which is a completely different discipline.
Lord Roberts of Conwy
Will my noble friend the Minister confirm that the substance of this Statement will reappear in the form of clauses or amendments to the Enterprise and Regulatory Reform Bill, so we shall all have a further opportunity to examine the various issues?
Baroness Wilcox
The answer is yes. Amendments will be laid to the Enterprise and Regulatory Reform Bill. Next week, or soon afterwards, the draft regulations will be published.
Crime and Courts Bill [HL]
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Smith of Basildon
My Lords, this is one of a number of amendments that we have put forward regarding the framework document. Although we do not have a copy of it, a number of questions still need to be addressed.
The Government are getting a bit of a reputation for having a cavalier attitude to the reform of some of the institutions of this country and for bringing forward legislation before the fine details have been worked out, which would enable this House properly to scrutinise the Bill and its implications. The Health and Social Care Bill saw quite an axe being taken to the whole landscape of the NHS before the details were worked out, which started even before parliamentary approval had been obtained. The detail was not ready when the Welfare Reform Bill came before Parliament. With this Bill, not only do we not have the framework document but the Government are still consulting on the plans for community sentencing. We hope that we can recommit the Bill into Committee at the end of the Committee stage and, outside the normal order of amendments and clauses, put another new Clause 23 into the Bill at the end.
The Government announced their intention to create a National Crime Agency around two years ago but we still do not have the document that tells us what the organisation will do and how it will do it. That document will set out the detail of how the agency will be arranged. It is clear that there will be specific operations. One of the most important things in that document will be the relationship with other sections of the police service. Unfortunately, we do not have the strategic policing requirement. The Government say that that will set out a clear framework for how PCCs and chief constables relate to the NCA and, crucially, how they balance local against national priorities.
Looking around your Lordships’ House, I see that I am a relatively new Member of this fine institution—for just under two years—but it has been clear to me from when I first entered your Lordships’ House how seriously the House takes its scrutiny role. Not to have so much information to assist us in discussing the detail of the Bill is pretty shoddy and not the way that we ought to legislate.
Even in this Bill, I am prepared to think the best of the Government and assume that they must have worked out some of the detail of the architecture, even if the document itself is not ready. I do not believe for one moment that the Government came to this House with a Bill not understanding what it will look like at the end when they create a new agency. It would be helpful if, even without the document, the Minister could give the House more detail about what it will contain. Amendments 28 and 29 place a requirement on the Secretary of State to produce the framework document by statutory instrument. That is not ideal, because having that document now would inform the rest of our discussion, as several noble Lords have said. The noble Baroness, Lady Hamwee, at our previous session in Committee, raised issues that should be in the document. Our discussion then was hampered because we did not have it. In the absence of the document being available for scrutiny at this stage, the Home Secretary should place the document before Parliament as an order. That will enable at least some proper scrutiny by both Houses.
Baroness Hamwee
My Lords, I did indeed raise questions about the contents of the framework document. Before we started our debate on Monday, when I was going through the amendments and got to this pair of amendments, I put a tick against them. I have deleted the tick for reasons which will not be very welcome to my noble friend. I am not convinced that an order would allow us to debate the framework document in the way that we would like to see. We need a lot of detail about it. As we all know, the drawback with an order is that we cannot amend it. Methods of operation, methods of exercising functions and administration, including—I have already questioned this—governance and finance, are very big issues.
I therefore hope that the Minister will, if not today, soon be able to tell us that his “due course”—not just his, I am not impugning him—arrives soon, so that we can understand a good deal more. Although I well understand the approach that the noble Baroness has taken, I am not entirely sure that it takes us as far as many of us would like to go.
The Minister of State, Home Office (Lord Henley)
My Lords, I understand what the noble Baroness is getting at and how she wants to provide for the framework document to be subject to some parliamentary procedure —for it to be laid before Parliament. She went on almost to suggest that there was some conspiracy by the Government on this Bill and others in the lack of framework documents and how late they were coming. I think I made it quite clear back on Monday—it seems a long time ago now, having gone through another Bill, as the noble Baroness and I and the noble Lord, Lord Beecham, have done—that we very much hope to get at least an outline of the framework document in front of the House before we come back to the Bill at Report. It is important to point out that that is quite an early stage in the passage of this Bill as, unusually for important Home Office Bills, it is starting in this House. We cannot even claim to be the revising Chamber on this occasion because we are getting it first. We are dealing with it relatively slowly because of the delay we are having over certain items which we want to debate in early October, so that I can miss the Conservative Party conference. After that, it also goes on to another place so there will be considerable time for this House and another place to discuss these things in some detail.
Perhaps I may set out what the framework document is designed to do and what we think ought to be in it. The purpose of the document is to set out clearly and transparently how the Home Secretary and the director-general will work together—it is between those two—and the ways in which the NCA is to be administered. It is expected to include the agency’s corporate governance arrangements, the high-level arrangements for financial accounting and reporting, and how the agency will discharge its duty to publish information and promote transparency, including the classes of information which it will publish. It will obviously be a very important document, dealing with how the NCA is to operate, but it will also build on and be clearly subsidiary to the clear foundations set out in the Bill. As we have already debated, the Bill establishes a clear governance model for the NCA; namely, as a Crown body with an operationally independent director-general at its head, appointed by and accountable to the Home Secretary for delivery against the Home Secretary’s strategic priorities for the agency. The agency will be under the direction and control of the director-general and its functions and powers are, again, clearly set out in the Bill.
We have provided in Schedule 2 for the framework document to be laid before Parliament, the Scottish Parliament and the Northern Ireland Assembly, as the NCA will cover all parts of the United Kingdom. We believe that, given the nature of the document, this is the appropriate level of parliamentary procedure. The Delegated Powers and Regulatory Reform Committee made no comment on these provisions so, on that basis, we are on relatively firm ground in assuming that it was content with laying that procedure. Finally, as I think I suggested earlier, the Serious Organised Crime and Police Act 2005 did not even provide for a framework document, let alone one subject to an affirmative procedure, so this provision is an important advance on what has gone before in relation to the Serious Organised Crime Agency.
I appreciate that the noble Baroness would like it to be produced by statutory instrument and produced, as I think my noble friend put it, in due course. I came under a suggestion of pressure that I ought to define what “due course” meant. It is always difficult to define that. I am sure that the noble Baroness will probably remember promising things, when she was a Minister, “some time in the future”, “in due course” or whatever. We have all done this—I remember promising something “later in the spring” and being faintly embarrassed that that turned out to be July. I think most noble Lords understand what I am getting at. I am trying to promise her that we will get at least an outline of this by Report but, as I said at the beginning, I stress that that is an early stage in the process that this Bill is going through. It is starting in this House and still has to go through another place, so we have considerable time. Both Houses of Parliament will get a chance to look at that outline document. I hope therefore that the noble Baroness, who has an understanding of what “in due course” or “shortly” might mean, will feel able to withdraw her amendment.
Baroness Smith of Basildon
My Lords, I appreciate that the Minister is trying to be helpful, but that was an extremely unsatisfactory answer. I hope I misunderstood him when he said that he hopes to have an outline of the framework document by Report. I think he misunderstands the point that I am trying to make. I am not merely making the point that we want the document to have parliamentary scrutiny, important though that is, but that the framework document will inform our debate on the rest of the Bill. Not having it hampers our debates and our ability to scrutinise. This is not an isolated point about parliamentary scrutiny. Had we had the document here now, as we should have, our discussions on other aspects of the Bill would be easier and better informed because it seems to me that a lot of the information that the framework document contains is relevant to the discussions we are having. I hope the Minister understands the point I am making.
I take on board the comment by the noble Baroness, Lady Hamwee, about an order being inadequate. I entirely agree with her, but I think that anything that we are able to do at this stage is wholly inadequate because we want to have the document with us now. It is not good enough for the Minister to say that we will have an outline for Report. I do not think that we can pray in aid that this is an early stage of the proceedings and that the Bill is going to go to the House of Commons. This House has a duty to do its job, which is to scrutinise legislation. It is being hampered in doing so by not having the documents. The fact that they will be available to the House of Commons is not enough. I appreciate that the Minister has tried to be helpful, but he has not satisfied me on this point. I shall not press this matter to a vote today, but the Minister will recognise that there is unease around the House, not just on our Benches, on this point.
Lord Henley
I appreciate that the noble Baroness feels that it is important that there should be an order. Should we accept her amendment and have an order, it would not produce the framework document, or even an outline, any earlier. I am saying that we will get that outline during the passage of the Bill. If the noble Baroness were purely to rely on her amendment, she would not get it until after the Bill. That is my understanding of how her amendment works. I have given her an assurance from the Dispatch Box that we will get an outline by Report that will assist our discussions later on. I hope that is hopeful to the noble Baroness and I appreciate that she is going to withdraw her amendment. It would at least allow her, with luck, to discuss these matters on Report.
Baroness Smith of Basildon
Again, I think the Minister is trying very hard to be helpful. I think I said that any proposal we put forward at this stage is inadequate. I withdraw the amendment at this stage, but this is a subject to which we will be returning.
Baroness Smith of Basildon
We return to the framework document. This paragraph is a puzzle to me. This brief amendment deletes the requirement for the Secretary of State to obtain the consent of the director-general before issuing the framework document, because I am unclear why the Secretary of State would need to depend on the consent of the director-general in order to publish the document. It would seem to show greater courtesy and concern for the views of the director-general than for Parliament. There is no provision for parliamentary oversight at this stage. It is right and appropriate that the Home Secretary should consult the director-general, but if I understand the purpose of the framework document correctly, looking at Schedule 2, it is ultimately about the detail of the architecture of the National Crime Agency. It is not about operational matters, and it does not seem appropriate for the director-general to have a veto. I return to the point I made in earlier discussions about the blurring of the line between what is operational and what is strategic. The framework document is a strategic document. This is a probing amendment to see whether the Minister can explain why the director-general should have a veto over the Secretary of State publishing the framework document. I beg to move.
Baroness Hamwee
My Lords, I am glad that the noble Baroness tabled this amendment. It took me back to reading the paragraph and realising that I did not fully understand it. I am sorry that I have not been able to give the Minister notice of my question, which is: can he in some way translate paragraph 4, particularly sub-paragraph (2)? Does it mean that the framework document takes precedence over the annual plan? Paragraph 4(2) says:
“The Director General’s duty to have regard to the annual plan … does not apply in relation to functions under sub-paragraph (1)”.
Those functions are about being consulted on, and giving or withholding consent to, the framework document. It is a little difficult to understand how the two work together. It may be that we are being told that one is more important, or simply that one is more overarching—which the framework document should be, I guess—than the other. The relationship between the two will obviously be important and not only because there are different consents and consultation arrangements for the different items.
Lord Henley
My Lords, I will deal first with the various points raised by the noble Baroness, Lady Smith, and then move on to the rather more complicated question about paragraph 4(2) of Schedule 2 and its relationship to sub-paragraph (1), as raised by my noble friend who, as always, bowls googlies of a sort that are designed to get behind one.
The amendment of the noble Baroness, Lady Smith, would remove the requirement for the Home Secretary to obtain the consent of the director-general of the NCA before issuing the framework document. I am faintly unclear as to why she seeks to remove this provision. Does she want that framework document imposed on the director-general? That is what would happen under the amendment—there would no longer be that consultation. As I have indicated, the framework document will set out the relationship between the Home Secretary—
Baroness Smith of Basildon
I apologise for intervening. The noble Lord said that my amendment would result in there being no consultation. I am not trying to prevent consultation. Paragraph 4(1)(a) says:
“The Secretary of State must … consult the Director General”.
I am entirely happy with that; it is completely appropriate. It is the reference in paragraph 4(1)(b) to obtaining the consent of the director-general that I am concerned about. I am sorry if I was not clear.
Lord Henley
Therefore, there would still be consultation but there would be no need for consent. However, as I said, that would imply that the Home Secretary could impose that on the director-general. We believe that the document is designed to set out the relationship between the Home Secretary and the director-general and, as I said on an earlier amendment, how the NCA will operate, including its governance, management and transparency arrangements. Therefore, the director-general will have a proper interest in making sure that it reflects his or her operational view of the NCA. Since the director-general will ultimately be accountable to the Home Secretary for delivering the NCA’s priorities, it is absolutely right that his consent should be gained to crucial decisions about how the agency is administered. It is right that we should stick to that process. I hope that the noble Baroness will agree that the framework document should be agreed between the two, with both consultation and consent.
I turn now to the trickier question—the googly that I referred to—that my noble friend asked as regards paragraph 4(2) of Schedule 2, which states:
“The Director General’s duty to have regard to the annual plan in exercising functions does not apply in relation to functions under sub-paragraph (1)”.
I think that that is relatively clear, although my noble friend obviously does not. All it does is remove the director-general’s duty to consent from those under paragraph 1(1)(a), which refers to,
“ways in which NCA functions are to be exercised (including arrangements for publishing information about the exercise of NCA functions and other matters relating to the NCA)”.
I could go on with the rest of that paragraph. I am hoping for advice to come through at this stage.
The important idea to get over is that the framework document and the annual plan are different and have to be dealt with in different ways. The framework document sets out the relationship between the Home Secretary and the director-general of the NCA. The annual plan allows the director-general to set out the activity planned for the year ahead and must take account of the arrangements set out in the framework document. Therefore, in his role in respect of agreeing to the framework document, he cannot have regard at that stage to the annual plan, which comes out later. I hope that that makes matters clearer to my noble friend. I see a faint degree of nodding from her as well as a faint smirk on her face. I hope that it is a smirk of agreement. I will sit down and hear whether my noble friend agrees with what I have said.
Baroness Hamwee
It was not a smirk but possibly mild hysteria. The Minister has confirmed that, to the extent that the two documents have any relationship to one another, the framework document is the primary document. He is nodding at that. I apologise because my point was not intended to be a googly. Anyone who knows me will know that the high point of my sporting career at school was questions such as, “Sally dear, can you see the ball?”. I really am not trying to be difficult. I am grateful to the Minister. I will read it again several times.
Lord Henley
From my noble friend’s confession, I think that her sporting career at school was possibly somewhat similar to mine in terms of its disastrous nature but I shall leave that as another matter. I am grateful for her acceptance. I think I got that right and that I have satisfied the point that she makes. Therefore, I await to see whether the noble Baroness, Lady Smith, wants to withdraw her amendment.
Baroness Smith of Basildon
My Lords, I suspect that I had a slightly more successful sporting career at school than either noble Lord; many an ankle has been bashed with my hockey stick.
I remain puzzled on this matter. The Minister has said several times that the framework document sets out the relationship between the Home Secretary, the Secretary of State and the director-general. But nowhere in the schedule does it say that about the framework document. In part, our discussions are hampered by not having the document, which we look forward to seeing in due course.
The Minister made the point about the relationship between the framework document and the annual plan and how the framework document came first. However, it might not always come first because, under paragraph 2 of Schedule 2, the Home Secretary can reissue a framework document at any time, in which case the annual plan may already exist when a new framework document is published. It could get even more confusing. I shall take this away and ponder, as I think the noble Baroness, Lady Hamwee, will equally do.
I still do not accept that it is appropriate for the Secretary of State to seek consent. Consultation, if it is genuine and takes note and not just an exercise for the sake of it, would be the adequate and proportionate way forward. But I beg leave to withdraw the amendment.
Baroness Hamwee
Baroness Hamwee
In moving Amendment 32, I shall speak also to Amendment 33. The first deals with the framework document and the second with the annual report. In both cases, my amendments would delete the words relating to publication,
“in the manner which the Secretary of State considers appropriate”.
I wondered whether those were intended to be qualifying words. They clearly are qualifying, but they suggest a limitation. I simply look for assurances that the spirit of what we would all understand by “publication” includes something energetic and proactive and that that will be reflected in the practical arrangements that will be made. So this is really only a probing amendment in both cases. I beg to move.
Baroness Smith of Basildon
My Lords, I had some interest in the amendment that the noble Baroness, Lady Hamwee, has proposed. There is some question mark over why there is discretion in this regard, and it would be helpful to hear from the Minister on that. The Minister will understand my concern that there is a growing acceptance these days that everybody has access to the internet and that everything can be obtained from the internet. A large number of people in our population do not have access to the internet. More than that, as the Minister knows, the Home Office website is extraordinarily difficult to access. So I would have great reluctance in seeing a measure go through that gives discretion to the Home Secretary to publish on a website that most people cannot access most of the time.
Earl Attlee
My Lords, the Government are committed to publishing the NCA framework document and annual report so that all those with an interest in the work of the agency have ready access to them. That is indeed the spirit intended. The provisions on publication in Schedule 2 are directed to that end. I assure my noble friend that there is nothing sinister in the words,
“in the manner which the Secretary of State considers appropriate”.
They are just a recognition of the fact that it must be for the Home Secretary and the director-general, as the publishers of the framework document and annual report respectively, to determine how best to publish these documents. It is only sensible that the person publishing the document should be empowered to choose the most appropriate means of doing so.
We would expect that, in practice, both documents will most likely be released via the NCA or Home Office website. My noble friend Lord Henley says that he will shortly be writing to the noble Baroness on problems with that website. Whether it is a good use of resources also to print and publish thousands of hard copies of these documents must be left to the judgment of the Home Office or the director-general, as the case may be.
With the assurance that we want these documents to be made freely available, I hope that my noble friend will feel able to withdraw these amendments.
Baroness Hamwee
My Lords, I shall certainly do so, but I have two comments. First, I thank the Minister for confirming the point about the spirit, which I am glad to have confirmed from the Dispatch Box. On another more general point, each Bill seems to be thicker than the last. A few years ago, it would have been adequate to say, “The Secretary of State shall publish a document”. Now we have to say, “The Secretary of State shall publish a document in the manner in which she deems to be appropriate”. The officials will understand why we probe some of these words more often than just from time to time.
Lord Hunt of Chesterton
I was a civil servant in the Met Office and used to visit other agencies. The variability in the publication of annual reports is quite extraordinary. A Minister visited the National Physical Laboratory and asked, “Why do you publish all these annual reports?”. I am glad to say that the Met Office continues to publish annual reports and they are still very valuable and people refer to them. Therefore, I was very surprised by the Minister’s insouciant response to this whole issue of the publication of reports. As the noble Baroness said, the relevant information is very unsatisfactory. Are the Government looking into this more broadly?
Earl Attlee
My Lords, in days of old there was only one way of publishing a report, which was in hard copy. Today we can publish on the internet. We can also issue a CD and issue hard copy on a limited circulation. The provisions in the Bill take account of the various ways of releasing the information without being too prescriptive.
Baroness Hamwee
My Lords, I do not think that I should take the time of the Committee by pursuing the issue but I suspect that the same question will come up more than once during the rest of this Session, as it comes up on almost every Bill. I am grateful to the Minister and beg leave to withdraw the amendment.
Lord Rosser
“( ) Before making a request under subsection (1) the Director General must consult the Police and Crime Commissioner responsible for the totality of policing in that area.”
Lord Rosser
My Lords, the two paragraphs of Clause 5 to which these amendments relate provide for a chief officer of a UK police force or a UK law enforcement agency to perform a task if the director-general of the National Crime Agency requests, and for the director-general of the National Crime Agency to perform a task if requested to do so by a chief officer of a UK police force or a UK law enforcement agency. In respect of the references in the two paragraphs in question to,
“the chief officer of a UK police force”,
there is no reference to any requirement at all for the elected police and crime commissioner for that police force to be consulted by the person requesting that a task be performed, whether it be the director-general of the National Crime Agency or the chief officer of the commissioner’s own police force. So far there has been no explanation of or justification for this omission despite the fact that under the Police Reform and Social Responsibility Act 2011 a police and crime commissioner for a police area has a statutory duty to secure the maintenance of the police force for their area, ensure that the police force is efficient and effective and hold the chief constable to account for a wide range of duties and responsibilities, including the effectiveness and efficiency of the chief constable’s arrangements for co-operating with other persons in the exercise of the chief constable’s functions.
The police and crime commissioner will also be responsible for issuing a police and crime plan, which is a plan that is required by law to set out a number of matters, including the policing of the police area which the chief officer of police is to provide. Yet it would appear as though it is possible under the terms of the Bill for the director-general of the National Crime Agency to come to an agreement with the chief officer of a UK police force for that chief officer to perform a task on behalf of the director-general, and a task of unspecified magnitude, scope or significance in relation to resources or impact; or, alternatively, for the director-general of the National Crime Agency to perform a task on behalf of the chief officer of a UK police force—once again, of unspecified magnitude, scope or significance—without any apparent duty in either case to consult the elected police and crime commissioner despite the significant statutory responsibilities the police and crime commissioner has in relation to their police force. If the director-general of the National Crime Agency was requesting the chief officer of a UK police force to carry out a task which could well have an impact on the efficiency and effectiveness of the police force in question, or on the ability to deliver or adhere to the police and crime plan, one would have thought that it was a matter on which the director-general of the National Crime Agency should be required to consult the police and crime commissioner.
Likewise, if the chief officer of a UK police force found it necessary to request the director-general of the National Crime Agency to perform a task on behalf, or in support, of that police force, there should be a duty on the chief officer to consult the police and crime commissioner, who might want to satisfy himself or herself that this was not a task that their own police force should be competent and capable of performing and that the request to the director-general was not in reality seeking to cover up a weakness in the performance of their police force. In this context, it is worth pointing out, for example, that Part 4 of Schedule 3 to the Bill provides for the director-general of the National Crime Agency to make arrangements with the elected police and crime commissioner for the NCA to use facilities made available by that police and crime commissioner’s police force. In addition, the Secretary of State will also be required to consult PCCs in determining the NCA’s strategic priorities, and a similar requirement is placed on the director-general of the NCA in preparing its annual plan. However, there is apparently no requirement for the director-general to notify or consult PCCs on voluntary agreements with chief constables or before using their powers to direct chief constables.
I will obviously await the Minister’s response to all the points that I have made. I suspect he is not going to say that I have drawn attention to gaps in the Bill that the Government now intend to address. However, I wait to see whether the argument will be that responding to requests referred to in Clause 5 is, for some reason, nothing whatever to do with the elected police and crime commissioner, or whether the Minister is going to say either that there are other provisions in the Bill that would require the police and crime commissioner to be consulted—or his or her consent sought—or that there are provisions in the Police Reform and Social Responsibility Act 2011 that would require the commissioner to be consulted, or his or her consent sought, such as in paragraph 7 of Schedule 2 to that Act, which states:
“A chief constable may do anything which is calculated to facilitate, or is conducive or incidental to, the exercise of the functions of chief constable”,
and,
“That includes … entering into contracts and other agreements (whether legally binding or not), but only with the consent of the relevant police and crime commissioner”.
Alternatively, perhaps the Minister is going to say in response that the points I have raised will be covered in the elusive framework document that he has so far been unable to produce. I await his response. I beg to move.
Lord Thomas of Gresford
These amendments concern something I raised at Second Reading—the relationship between the National Crime Agency, the police commissioner and the chief constable of a police force. I still do not understand just how that is to be worked out. We tabled amendments suggesting a protocol, which we dealt with in Committee on Monday, and learnt that a protocol is something to be discussed as an operational matter once the Bill is in force. Does the police commissioner come anywhere within the architecture of the Bill, or is the commissioner in an outhouse? I just do not understand where he is.
Lord Harris of Haringey
My Lords, it is not very often that I agree with the noble Lord, Lord Thomas of Gresford; in fact, I try to make it a general principle to disagree with him. However, on this occasion he has put his finger on an extraordinary gap in the Bill, and I can only assume that Home Office Ministers do not have the courage of their convictions.
We spent many happy months debating the principle of electing police and crime commissioners and we were told what significant individuals they were going to be. They were going to hold to account the chief constable and police service for all that went on in their area. Now, under the arrangements in this Bill the director-general of the National Crime Agency can say to any chief constable, “I would like the following resource from you dedicated to a particular operation”, but there is no requirement at all to inform the elected police and crime commissioner about that. Surely at the very least there should be a recognition that the police and crime commissioner might consider this matter important.
I am not a candidate to be a police and crime commissioner, but if I were in some remote part of the country outside London and had run on an election campaign saying that I wanted to see the police of my county devoted to the rural villages, the town centres or whatever, and I then discovered that behind my back the director-general of the National Crime Agency had said to my chief constable, “We’ve got to have this chunk of your resources and use them for a particular operation”, I would find it extraordinary that I had not even been told that that was happening and that my position as the directly elected police and crime commissioner, with a remit from the people of my area, was being undermined. I assume that this is an error in the drafting of the Bill.
I thought that my noble friend Lord Rosser was extraordinarily generous to the government Front Bench in offering two or three arguments as to why these amendments might not be necessary. However, unless the Minister is prepared to stand up and say, “Yes, of course, this was a drafting error. We did intend that police and crime commissioners would be informed”, the Government will be undermining what was apparently a flagship policy for this Administration.
Why might such a provision not be included in the Bill? The suggestion that this is a potentially trivial and merely operational matter that should not worry the police and crime commissioner is, frankly, nonsense. These are precisely the sorts of issues that will exercise local communities. Some of your Lordships may remember that at the time of the riots and disturbances last August one chief constable, quite properly, responded to a request to send a substantial number of police officers to London in support of ensuring that the streets were under control only to find that there were then disturbances in his own patch. He was then subject to all sorts of criticisms for having agreed to release those officers. What would the position be in very similar circumstances, although perhaps not a visible riot, in which the director-general of the National Crime Agency requested the movement of police officers for a particular operation and that then left the force concerned short? The police and crime commissioner would have to justify that this had been allowed to happen, even though he had not been informed in advance that such a request had been made. What would happen if the police and crime commissioner took a different view from that of the chief constable about whether this request was reasonable or justifiable? This is not an ordinary operational decision by the chief constable. The chief constable is not deciding within the framework of what is going on in that area how to deploy his or her resources; it is a decision to deploy them and to take them out of that area. That is precisely the area where the police and crime commissioner may say, “I want all the resources of my force kept in this area”.
So what is the justification for not having these provisions in the Bill? I hope that the Minister will tell us that he will adopt the amendments of the noble Lord, Lord Rosser, and incorporate them in the Bill, if not today, on Report. If he is not prepared to say that, I hope that he will give us a real explanation and reaffirm that, as far as the Home Office is concerned, the police and crime commissioners really matter, otherwise we spent three or four months in this Chamber debating the police and crime commissioners for no purpose whatever. They will be elected officials with no significant function.
Lord Henley
My Lords, I wish to say how sad I am that the noble Lord, Lord Harris, will not be a candidate for a PCC. We understand that there is already a PCC for London and the noble Lord would have to move out of his own city in order to stand as a candidate. He might want to consider that in due course and I am sure that he would make a very fine PCC, should he wish to do so.
Sadly, I was not involved in what the noble Lord referred to as those happy months debating the Police Reform and Social Responsibility Act. I was then involved with another department but I was very grateful to my noble friends for the way in which they took that Bill through and discussed those matters.
The points put forward by the noble Lords, Lord Rosser and Lord Harris, and my noble friend Lord Thomas seem to imply a misunderstanding of the role of the PCCs and seem to suggest that PCCs should be involved in operational matters. I hope that I can explain why that will not be the case.
First, I shall speak about the policing protocol which was mentioned and which, I stress, has already been laid before Parliament. It outlines how the new policing governance arrangements established in the Police Reform and Social Responsibility Act will work and it clarifies the roles and responsibilities of police and crime commissioners, the Mayor’s Office for Policing and Crime in London, chief constables, police and crime panels and the London Assembly Police and Crime Panel. It outlines what those bodies are expected to do and how they are expected to work together to fight crime and to improve policing. It also underlines the Home Secretary’s role as being ultimately accountable to Parliament and charged with ensuring the maintenance of the Queen’s peace with all force areas, safeguarding the public and protecting our national borders and security.
I do not think that directed tasking by the director-general in anyway undermines the police and crime commissioners in fighting serious and organised crime. It is a shared concern for the NCA and the PCCs. The tasking to the NCA from a police force in England and Wales would be used to fight cross-boundary serious and organised crime which police forces and PCCs must already have regard to in strategic policing requirements.
I believe that the noble Lord, Lord Rosser, was right to draw attention to those voluntary tasking arrangements between the NCA, all United Kingdom police forces and other enforcement bodies. Those two-way tasking provisions closely reflect the operational reality of how police forces and law enforcement agencies already work together and are the central, but co-ordinating, efforts against serious and organised crime.
Amendment 34 places a duty on the director-general of the NCA to consult the relevant PCC, prior to requesting its chief constable to perform a task under the voluntary tasking arrangements.
I want to emphasise to the noble Lord that the NCA will have a key relationship with the PCC in the fight against serious and organised crime. For example, police and crime commissioners will be consulted when the agency determines its strategic priorities and an annual plan respectively.
However, the tasking—I emphasise that word—of police forces by the agency and the tasking of the agency by chief constables are operational matters, where command and control of an operation is transferred to the organisation being tasked. Given the operational nature of tasking, I am certainly not persuaded of the case for the consultation and notification requirements set out in Amendments 34 and 35 tabled by the noble Lord for debate today.
Placing a duty on the director-general of the National Crime Agency to consult the relevant PCC before entering into a voluntary tasking arrangement risks blurring the line between operational independence and political accountability.
Moreover, imposing such a duty could disrupt a time-critical operation. For example, the director-general of the agency may need to task a specific police force to take the lead on a time-sensitive interdiction, such as a stop, arrest or search, in a long-running operation. Although a duty to notify, as provided for in Amendment 35, is less objectionable, again I remain to be persuaded of the case for including this in the Bill for the same reasons. As I have previously outlined, tasking arrangements ought properly to be left to an operational determination rather than imposing a uniform obligation of notification in England and Wales, irrespective of the nature of the tasking request.
Tasking of the National Crime Agency may also need to take place in time-critical situations. For example, a chief constable may request the director-general of the agency urgently to take the lead on activity where a resident in their police area has been kidnapped and their location is unknown in the United Kingdom. Under such circumstances, there may be operational consequences if executive action were to be delayed because the relevant PCC could not be contacted or notified in time—the individual may not have been available, had their mobile turned off, or whatever. A whole host of reasons might have made that difficult.
That is not to say that a PCC would not be notified of a tasking request by their chief constable. I would expect that a chief constable would notify their PCC as soon as it was feasible, practical and sensible to do so, if not beforehand. But formal, statutory notification prior to every tasking request would not be appropriate.
I trust that the party opposite is as committed as are the Government to protecting the operational independence of the director-general of the agency and chief constables, and to ensuring that swift action can be taken during time-critical operations. On that basis, I hope that those explanations deal with the points that the noble Lord raised, and having listened to what I had to say, he will feel able to withdraw his amendment.
Lord Harris of Haringey
My Lords, I am slightly confused by the response from the noble Lord, Lord Henley. He implied that this group of amendments is designed to undermine the operational independence of the chief constable. But this is not about an operational decision. This is not saying that the police and crime commissioner must approve. It is simply saying that before making a request to use the resources that are properly the responsibility of that police and crime commissioner —the resources for which that police and crime commissioner is answerable to the public and the police and crime panel and so forth—as a minimum, the police and crime commissioner should be informed. This is not saying that the police and crime commissioner will then interfere in the operational judgment of the chief constable as to whether those resources can be released and what the implications of that are. Let us not pretend that this is not potentially hugely significant. As my noble friend Lord Rosser pointed out, there is nothing that prescribes the size or scale of these requests, so they could be enormously significant.
Lord Henley
The noble Lord protests too much. I will not go back to the various remarks he made about the police and crime commissioners. That is an argument that we had in another place—dare I say it, in another country—a long time ago. It has been dealt with. That is what Parliament has agreed.
Lord Henley
No, no, the noble Lord can intervene after I have dealt with the points about his amendment. The noble Lord objects to what is happening, and apparently supports Amendments 34 and 35. Interestingly, he did not put his name down to them, but that is possibly why he made a speech of that sort—because he knows that the amendments go too far. He knows perfectly well that the amendments say “must”, which is why I talked about time-sensitive problems and said that it was not appropriate that the director-general “must” always consult the police and crime commissioner or, in Amendment 35, that,
“a chief officer of a UK police force must notify the Police and Crime Commissioner”,
because these things are not practical in those circumstances. That is what I dealt with in the amendment and in my answer to the noble Lord, Lord Rosser, who will respond in due course.
We all welcome the chance to listen to the noble Lord, Lord Harris, yet again making one of the speeches that he no doubt made during the passage of the Bill, which sadly I was not able to take part in but which my noble friend dealt with so well. I hope that my explanation of why the word “must” is not appropriate in Amendments 34 and 35 is satisfactory and that the noble Lord, Lord Rosser, will feel able to withdraw his amendment, as I suggested earlier.
Lord Harris of Haringey
My Lords, I hesitate to correct the Minister, but if he checks back on the speeches I made during the Police Reform and Social Responsibility Bill when it was being considered in your Lordships’ House, he will see that I was not a particular supporter of the concept of police and crime commissioners. What I am doing today is fighting on their behalf for them to be given the information to enable them to do their job. They should be allowed to be the police and crime commissioners that the Conservative Party envisaged when it put this measure before Parliament.
If we are now being told that the only reason for rejecting this amendment is the word “must” because of the implications of urgency, as I said in my previous intervention, that is very easily remedied. If the noble Lord is saying that he is happy to table these amendments on Report with an urgency exclusion, obviously I cannot speak for the opposition Front Bench but I am sure we would think that progress had been made.
Lord Henley
My Lords, I am always happy to look at further amendments to amendments. Similarly, I am happy to think that one of the things I could do in the long summer months when the Olympics are on is read some of the noble Lord’s speeches on police and crime commissioners. Those will no doubt provide me with a great deal of pleasure and possibly put me to sleep. They will be great speeches and I will read them just as I will listen to the noble Lord.
What the noble Lord, Lord Rosser, does with his amendments is a matter for him. I was responding to the specific amendments that were put before me. The noble Lord, Lord Harris, can add his name, if he wishes, to the amendments that the noble Lord, Lord Rosser, might bring forward in due course.
Lord Rosser
My Lords, this has certainly been an interesting debate. It seems to have created a certain amount of disagreement and passion. I think I heard the Minister say that my amendments would call into question the operational independence of chief constables. I find that rather odd coming from the government Front Bench since the reason for our opposition to police and crime commissioners in the first place was that that was one of the things that it would cause, so to have it thrown at us that we are putting forward amendments that would put at risk the operational independence of chief constables frankly seems a bit rich.
As my noble friend Lord Harris of Haringey said, it is not clear whether the Government’s principal argument is the use of the word “must” in the amendments. The Minister has said that if there had to be consultation with the police and crime commissioner, that would cause delay, and it might be an emergency. However, am I not right in saying that if the director-general approached a chief constable for a voluntary agreement and could not get it, the director-general would then have to go to the Secretary of State to get a direction authorised? Future amendments will tease out whether that is the case, but if it is, that would certainly cause a delay, which is apparently of concern to the Minister.
If there were provision for consultation with the police and crime commissioner, it might help the situation—although I do not think that this has occurred to the Minister—in that the police and crime commissioner might step in if there was any doubt or difficulty over the chief constable coming to a voluntary arrangement with the director-general.
I mentioned that there could be reasons why the police and crime commissioner might want to know, or why there should at least be a requirement for the police and crime commissioner to be consulted, if the chief constable wanted the director-general of the National Crime Agency to perform a task on their behalf, because there could be a difference of view with the police and crime commissioner about whether it was a matter that their own police force should be competent to deal with or whether it was helping to cover up a failing in their own police force. I notice that the Minister declined to address that point.
My noble friend Lord Harris of Haringey pointed out that if the difficulty is the use of “must”, one could produce wording that made it clear that if there were difficulties over time constraints, that requirement would not be there. I got the impression that when my noble friend put that point directly to him, the Minister rather backed off from the argument that there might not be time to consult a police and crime commissioner.
The whole basis of the Government’s approach appears to be as it was during consideration of the 2011 Bill, now an Act: that is, a belief that there is some clear guideline distinguishing what is operational—which in the Government’s view is the responsibility of the chief constable—and the powers of the police and crime commissioner. I am afraid that we did not think during the passage of the Bill, nor do so now, that this clear guideline, which it is obvious the Minister still believes in, exists. There will be grey areas as to whether a matter is solely operational or whether it impinges on the police and crime commissioner’s responsibilities, which are fairly wide-ranging. They include issuing a police and crime plan, which is required by law, to set out a number of matters relating to the policing of the area which the chief officer of police is to provide, and a duty to ensure the effectiveness and efficiency of the chief constable’s arrangements.
I also made the point, picked up on by my noble friend Lord Harris of Haringey, that the tasks that the director-general might require or ask a chief constable to perform are of unspecified magnitude, scope or significance in relation to resources or impact. I note that the Minister did not seek to assure us in his response that these tasks would be minor and would not have an impact on resources. I therefore assume that the point that I made is valid: that these are tasks of unspecified magnitude, scope or significance in relation to resources or impact. To believe that a chief constable could come to an arrangement with the director-general to perform a task that had a significant impact on resources without any consultation with his or her own police and crime commissioner being required in the Bill seems, as my noble friend said, to denigrate the position and authority of a police and crime commissioner.
I have made the points that I wish to make to the Minister. I hope that, despite his response, he will reflect further on our debate and ask himself whether it is really impossible to write into the Bill a provision that there must be—or if he does not agree to “must”, that there will in normal circumstances be—consultation with the police and crime commissioner. If he was prepared to consider that, the Government would save themselves potential difficulties in the relationships between a police and crime commissioner, the director-general of the National Crime Agency and chief constables.
Lord Rosser
Lord Rosser
My Lords, the amendment would delete the requirement on the director-general of the National Crime Agency to seek the consent of the Secretary of State before issuing a direction to the chief constable of the British Transport Police, as set out in Clause 5(9). There does not seem to be, in Clause 5, a similar requirement for the director-general to seek the consent of the Secretary of State to a direction to perform a task that is given to the chief officer of an England and Wales police force, as opposed to the chief constable of the British Transport Police.
Schedule 3(8) provides for the director-general of the National Crime Agency to direct, among others, a chief officer of an England and Wales police force, and the chief constable of the British Transport Police, to provide specified assistance to the National Crime Agency, subject to the appropriate consent being given to the direction—meaning that of the Secretary of State in relation to the chief officer of a police force. However, Schedule 3 appears to remain silent on whether the consent of the Secretary of State is required for the director-general of the National Crime Agency to give a direction to provide specified assistance to the chief constable of the British Transport Police—unless of course the chief constable of the British Transport Police is included within the reference to a “chief officer of” a “police force”.
I accept that we may not have correctly understood the wording in the parts of the Bill to which I have just referred. I am sure that if we have not, the Minister will point that out. However, if we have understood it correctly, can the Minister explain the significance or otherwise of the necessity for the director-general of the NCA to obtain the consent of the Secretary of State to give a direction only to the chief constable of the British Transport Police appearing in Clause 5, when that clause also deals with directions being given to the chief officer of an England and Wales police force; and the significance or otherwise of the necessity for the director-general of the National Crime Agency to obtain the consent of the Secretary of State to give a direction only to a chief officer of an England and Wales police force appearing in Schedule 3, when that schedule also deals with directions being given to the chief constable of the British Transport Police?
Why is the necessity for the director-general of the National Crime Agency to seek the consent of the Secretary of State to the giving of a direction to both a chief officer of an England and Wales police force, and the chief constable of the British Transport Police, not dealt with in the same place in the Bill, whether at Clause 5 or Schedule 3, instead of being split, as appears to be the case at present? I accept that Clause 5 and Schedule 3 may address different circumstances, hence the difference in wording. Such a distinction between Clause 5 and Schedule 3 does seem to be drawn in Part 5 of Schedule 3, addressing the issue of payments. No doubt the Minister will clarify the position in his reply.
Amendment 39 would remove the requirement for the consent of the Secretary of State to be given. The Minister’s response to these amendments may address some of the points we wish to raise under Amendment 39.
Finally, as we are dealing with the issue of directions being given by the director-general, the Minister said at Second Reading that the Bill provides that the director-general should, in exceptional circumstances, be able to direct police forces in England and Wales. Can he tell us where in the Bill it states, “in exceptional circumstances”?
Lord Harris of Haringey
I see the noble Earl, Lord Attlee, readying himself to answer on this amendment. Perhaps he can answer my simple question. We listened to the protestations of the noble Lord, Lord Henley, that the amendments that we just considered were completely unworkable because of the use of the word “must”, and that there would be circumstances in which urgent matters and urgent operational needs had to be dealt with. Why do we now find a clause in the schedule which says that before you can get the British Transport Police to do anything, the prior approval of the Secretary of State has to be obtained?
When the noble Earl reads his note, perhaps he could also say whether a fine distinction is being drawn between a direction and a request? If so, perhaps he could also tell us what is the status of the British Transport Police Authority. Does it have no say in the matter? Is it simply for the Secretary of State? I assume that we are here talking about the Secretary of State for Transport, although I understand that there is always a fiction in our legislative process whereby Secretaries of State are indivisible. I assume that, before a direction can be given, the Secretary of State for Transport must be found, diverted from whatever consideration she or he might be giving to high-speed rail, airports or whatever, and told that there is an urgent operational direction needed by the British Transport Police. How is that really meant to work?
Earl Attlee
My Lords, in responding to the amendment, I start by emphasising that in almost all cases, tasking will be voluntary, based on strong relationships and mutual co-operation, exploiting intelligence and building on existing arrangements. If not, surely something is going badly wrong, so of course such circumstances will be exceptional. In answer to the noble Lord, Lord Rosser, about “exceptional”, there are already strict legal tests in the Bill to prevent misuse of the directed tasking powers.
In order for the director-general of the agency to use those powers, a threefold test must be met. The performance of the task would be to assist the NCA to carry out its functions; it would need to be expedient for the directed body to perform the task; and satisfactory arrangements could not have been made, or made in time. A further safeguard is that the director-general must personally exercise the power and may delegate it in his absence only to a senior NCA officer, who would be nominated for the purpose. Directed assistance powers would also be subject to a threefold test. There would have to be a special need for that assistance; it would need to be expedient for the directed body to provide assistance; and voluntary assistance could not have been made, or made in time. In addition to that threefold test, any directed assistance to the NCA would require consent from the relevant Secretary of State. Separate arrangements are in place for Northern Ireland.
The noble Lord, Lord Harris, asked about the term “Secretary of State”. He will know very well that it is a legal term.
I was asked about the difference between tasking and assistance. “Tasking” means that the responsibility for the direction and control of the operation goes to the agency being tasked. Examples are that the NCA may task a specific police force to take the lead to disrupt a human-trafficking gang that is predominantly based in that force area but impacting across the UK, or that a police force could task the NCA, subject to the NCA’s agreement, to take the direction and control in an operation to disrupt that organised crime group’s overseas financial infrastructure by using its specialist cybercapabilities and overseas liaison officers. Under assistance, resources transfer from the operational command of one organisation to another. One example is that if a specific police force is faced with a local kidnapping case, the chief officer could maintain direction and control but request some assistance from the NCA’s specialist kidnapping unit. In the case of a co-ordinated day of national action against the smuggling of rhino horns, the NCA could request assistance from UKBA specialists on the Convention on International Trade in Endangered Species of Wild Fauna and Flora to assist with identifying seized ivory.
The powers in respect of directed tasking are a necessary and sensible backstop to enable the National Crime Agency to fulfil its role of ensuring that there is a co-ordinated national response to serious, organised and complex crime. In particular, directed powers could be vital in time-critical situations where arrangements need to be made quickly and there is not time to establish satisfactory voluntary arrangements. The question that the noble Lord, Lord Rosser, has quite reasonably posed is: why is it necessary for the Secretary of State to consent before the director-general can direct the British Transport Police to perform a task yet there is no equivalent consent requirement when one of the 43 territorial forces in England and Wales is subject to such a direction?
The British Transport Police is different from police forces in England and Wales for three reasons. First, it is not a Home Office police force but a special police force, ultimately accountable to the Secretary of State for Transport under the Railways and Transport Safety Act 2003. Secondly—
Lord Harris of Haringey
Can the noble Earl explain how that accountability differs from the accountability that a Home Office force has to the police and crime commissioner?
Earl Attlee
My Lords, I will go on to say that but what is particularly important is how the British Transport Police is funded. Secondly, unlike police forces in England and Wales, the British Transport Police has a national remit which includes jurisdiction across the railway network in England and Wales—and in Scotland, where policing in the latter is otherwise devolved to the Scottish Government. Thirdly, the British Transport Police is primarily contracted and funded by providers of railway services—the train operators and Network Rail—applying the “user pays” principle. Railway service providers are required to enter into a police services agreement with the British Transport Police as a condition of their licence to operate. Home Office forces have no such contractual or financial relationship with industry of day-to-day significance.
Taking into consideration these difficulties, a direction to the British Transport Police is so significant in regards to the potential impact on accountability, devolved policing arrangements with Scotland and arrangements with industry that it requires a Secretary of State to affirm that the issue is of sufficient national interest. I would also be very surprised if my right honourable friend the Secretary of State did not want to be aware that agreement could not be reached. It would be a very serious matter. On that basis, I hope that the noble Lord will be prepared to withdraw his amendment.
Lord Berkeley
While the noble Earl is quite right about the funding, if the direction to the British Transport Police involves large expenditure, will that come with a cheque or a commitment to pay the extra cost or is the industry to be expected to pay it?
Earl Attlee
My Lords, in all these arrangements assistance is quite often provided under the old pals Act and they do not worry about the expenditure. However, if specialist resources were required—perhaps a mobile crane or a digging machine—that extra expense would have to be recovered. It is inevitable that agreement would be reached. However, the British Transport Police would not have that sort of equipment available. It would normally be used to intercept someone on the transport network.
Lord Harris of Haringey
Perhaps the noble Earl could also address this point. I understand the point about the different funding arrangements for the British Transport Police, which is extremely significant, but the funding is therefore coming not from the Government but from the transport operating companies. Those companies are engaged through the British Transport Police Authority so why does this clause not therefore relate to that authority, to which the chief constable is accountable, where the funders, who may feel that they have an issue at stake, would be represented? Would that not be a better arrangement?
Perhaps the noble Earl will respond to the question about the terrifying cases of urgency that the noble Lord, Lord Henley, worried us with on the previous group of amendments. How are they going to be dealt with with this requirement for the prior approval of the Secretary of State?
Earl Attlee
My Lords, in a terrifying case of urgency, it is in my opinion inconceivable that the British Transport Police would not agree to assist.
In answer to the noble Lord’s question about the British Transport Police Authority, he is right to point out that the chief constable of the British Transport Police is accountable to the British Transport Police Authority in the same way that chief constables of police forces in England and Wales are accountable to their respective police and crime commissioners. However, in the case of a directed tasking to the British Transport Police, the Secretary of State for Transport is ultimately responsible for the security of passengers and staff on the national rail network and on underground and light-rail systems. It is therefore right that she should have the ability to consent to direct tasking of the British Transport Police at the national level aimed at tackling serious and organised crime.
Moreover, tasking by the National Crime Agency may need to take place in time-critical situations. Members of the British Transport Police Authority meet six times a year to set British Transport Police targets and to allocate funds for its budget. It may not be possible to clear consent with the British Transport Police Authority in time for the necessary executive action to take place. This is not to say that the British Transport Police Authority would not be notified by its chief constable of a direct tasking request. I have no doubt that the chief constable of the British Transport Police would notify the British Transport Police Authority of direct tasking as soon as it was feasible to do so. Noble Lords have not convinced me that a situation would arise where the British Transport Police would refuse to provide assistance voluntarily.
Lord Rosser
If the Minister believes that there are no circumstances in which the British Transport Police would fail to provide the assistance required, why does he need directions in the Bill at all on the basis that, presumably, any police force would provide the assistance required?
Earl Attlee
As I said, it is to provide a necessary backstop. When two negotiating parties know that one party will win at the end of the day, it is amazing how agreement is reached quite quickly.
Lord Rosser
I think the Minister has answered the point that I made. If he is arguing that about the British Transport Police, he does not need the provision in the Bill for any police force.
I want to clarify that I have understood correctly what has been said. What I have inferred—and I would be grateful if the Minister would confirm that I have understood it correctly—is that if the director-general makes a direction under Clause 5 that would require a chief officer of an England and Wales police force to perform a task, that direction does not require the consent of the Secretary of State, albeit that it would if it was in relation to the British Transport Police. Likewise, Schedule 3 provides that the director-general may,
“direct any of the following”,
including the chief officer of an England and Wales police force and the chief constable of the British Transport Police,
“to provide specified assistance to the NCA”.
While the approval of the Secretary of State would be required for a direction to a chief officer of an England and Wales police force, it would not be required for a direction to the chief constable of the British Transport Police. I simply want the Minister to clarify that I have understood what he said and that that is the distinction between Clause 5 and Schedule 3. I see the noble Lord, Lord Henley, nodding so I take it that what I have just said is a correct understanding of the position that the Minister explained.
I listened—frankly, I will wish to read it in Hansard—to the distinction between performing a task, which is referred to in Clause 5, and the director-general directing,
“any of the following to provide specified assistance to the NCA”.
Bear in mind that from the director-general’s point of view, if he can satisfy himself—or herself—that he requires a task to be performed by the chief officer of an England and Wales police force, he does not need the consent of the Secretary of State. Therefore, it might be quite tempting for a director-general to try to make sure that any direction that he gives comes under the heading of “performing a task”, rather than “providing specified assistance”. That is also what I have inferred from the Minister’s answer.
Earl Attlee
My Lords, I hope the noble Lord is not suggesting that the director-general would base an operational decision on bureaucratic convenience.
Lord Rosser
I am sure it would not be based on bureaucratic convenience. If he could satisfy himself that he was asking for a task to be performed, there would be less bureaucracy as he would not have to get the consent of the Secretary of State. Once again, I fear that there may be a view that there is a very clear divide between what could be defined as performing a task and what might be deemed to be providing specified assistance. I suspect that there will be grey areas over that in at least some cases.
I pointed out to the Minister that it was said at Second Reading that,
“the Bill provides that the director-general should, in exceptional circumstances, be able to direct police forces in England and Wales”.—[Official Report, 28/5/12; col. 974.]
I asked where in the Bill it says “exceptional circumstances”. I take it from the noble Earl’s answer that he agrees with me that the statement that the Bill provides for the director-general to be able to direct police forces in England and Wales in exceptional circumstances is not correct. Such wording does not appear in the Bill, although this was implied at Second Reading. In the light of that, I beg leave to withdraw the amendment.
Earl Attlee
Earl Attlee
My Lords, these are purely drafting amendments to the provisions in Schedule 3 relating to the exchange of information between police forces and the National Crime Agency. Paragraphs 3 and 4 of the schedule apply these provisions to each UK police force and the British Transport Police. However, the British Transport Police is already covered by the definition of a UK police force in Clause 16. Consequently, it does not need to be separately listed. The amendments therefore remove the superfluous paragraphs 3(1)(b) and 4(1)(b). I beg to move.
Baroness Smith of Basildon
My Lords, we can see that this is a drafting amendment. I must admit that when I first saw the clause I wondered what had happened to the Civil Nuclear Constabulary and the Ministry of Defence Police, which also should have been covered if it was necessary to include the British Transport Police. I think that the Minister has been able to give me an assurance for each of those special police forces, which, as the definitions on page 12 indicate, are UK police forces. They would have the same relationship as regards having to be notified and the disclosure of information as all other police forces in the UK. It is a helpful amendment that clarifies the existing position.
Earl Attlee
Lord Rosser
Lord Rosser
In relation to a previous amendment, I mentioned that we had put down Amendment 39 and that the discussion on Amendment 36 might clarify the issue that I wanted to raise on Amendment 39; namely, the distinction between the wording in Clause 5 to “perform a task” specified in the direction and the wording in paragraph 8 of Schedule 3 about providing,
“specified assistance to the NCA”.
I asked the Minister if my interpretation of what he had said was correct and he indicated that it was.
Baroness Hamwee
Baroness Hamwee
I shall speak also to Amendment 41. There are three further amendments in the group in the names of the noble Baroness, Lady Smith, and others, all of which deal with payments. My two amendments concern the paragraph in Schedule 3 which deals with what is the “appropriate amount”. Paragraph 29 of Schedule 3 deals with what is to be paid under paragraphs 26 and 27 by the director-general and the police in the different circumstances. My amendment would extend that to payments under Part 1 of Schedule 1, including paragraph 4, which states:
“The NCA may charge a person for any service provided at the person’s request”.
I am not necessarily suggesting that this is the right way to go about it but I am probing how that charging should be dealt with.
Amendment 41 suggests that there is a way other than an amount agreed or an amount determined by the Secretary of State; that is, to provide for a scale or a formula in advance to be applied generally. As I understand the arrangements for mutual aid between police forces, there are governing scales and arrangements. It seems to me that it would be much better to have these things sorted out in advance rather than to have any sort of haggling being applied at the time. I certainly do not imagine that it would leave people with anything other than a rather sour taste if the Secretary of State had to step in and determine the amounts. I beg to move.
Baroness Smith of Basildon
My Lords, our amendments on this issue perhaps come from a different direction but they still try to address a similar concern that we have. We are looking at different ways to resolve this. The noble Baroness, Lady Hamwee, is right that if an agreement on payment cannot be reached between two parties, to seek resolution or determination by the Secretary of State does not seem the correct way to behave. Throughout this Bill, we have sought to remove the Secretary of State from day-to-day operational issues and this proposal would bring the Secretary of State back into those kinds of issues.
There is also a conflict of interest or at least a divided responsibility. There is a concern that one thing that will happen with the NCA and the charges and costs involved is that, given that funding may not be adequate to the task, particularly with additional responsibilities coming in, some extra funding or support may be sought from police authorities, particularly in cases such as this. The Home Secretary has a direct responsibility for the funding of police forces across the country. It seems somewhat difficult, therefore, if there is a disagreement between a local police force and the NCA, that it should be the individual who has responsibility for funding local police forces who should seek a determination on that. The noble Baroness, Lady Hamwee, said something about that creating a bad feeling or some difficulties, and I certainly think that it would in this case.
The noble Baroness and I may not have found exactly the right format here. We are suggesting an advisory body, but I am not wedded to any particular way of doing this. It seems inappropriate for the Secretary of State to be making those decisions. To labour a point made by the noble Baroness, Lady Hamwee, about a protocol in the framework document, that may be what the Minister is considering—but we do not know, because we do not have the framework document. It is clearly inappropriate for the Secretary of State to be the arbiter. We would like to see some other way to resolve difficulties or disputes and we are suggesting an advisory board.
Earl Attlee
My Lords, this group of amendments all relate to the provisions in Schedule 3 regarding payments for tasks, assistance and facilities. Amendment 40, in the name of noble friend Lady Hamwee, seeks in effect to bring the provisions relating to charging in Schedule 1 into line with those in Schedule 3; namely, that they must be agreed by both sides.
I put it to my noble friend that this amendment would conflate two quite separate charging regimes. The charging provisions in paragraph 4 of Schedule 1 enable the National Crime Agency to provide particular services, whether to another law enforcement agency or to any other person. They are not about the provision of assistance or facilities under Schedule 3 or the tasking arrangements in Clause 5. Such services might include, for example, the provision of training, crime operational support or the services provided by the Specialist Operations Centre. Charging for these services, which are provided on request, will normally have to be on a cost-recovery basis in line with the Treasury’s guidance on managing public money. In other words, these services cannot be made under the old pals act; they have to be properly accounted for.
Amendment 41 seeks to provide for a protocol which sets out the appropriate amounts to be paid for tasks, assistance or facilities performed or provided under the provisions of Clause 5 and Schedule 3. I can certainly support the spirit of this amendment. The National Crime Agency will need to agree policies for cross-charging with the police service and other law enforcement partners that are equitable, practical and help to support the co-ordinated effort to tackle serious and organised crime. However, I do not think the amendment is necessary as the existing schedule already allows for the appropriate amount to be agreed through a broader policy or protocol. The key point in Schedule 3 is that payments for tasks, assistance or facilities, if any, must be agreed between both sides. It does not specify how that agreement must be reached or that it must be done on a case-by-case basis.
Finally, Amendments 42 to 44, in the name of the noble Baroness, Lady Smith, seek to replace the Home Secretary’s role as final arbiter with an independent advisory panel on payments. I would argue that creating another quango is not a good way to provide value for money or to secure the simple and speedy resolution of disputes over charging arrangements. Indeed, I hope that there will be few disputes, and I imagine that both parties would be reluctant to involve the Secretary of State.
In addition, the approach to cross-charging in Schedule 3, including the role of the Secretary of State, broadly mirrors the Serious Organised Crime and Police Act 2005. The previous Administration did not see the need for creating a separate body to decide on appropriate amounts for payments in the absence of agreement, and neither do this Government.
Amendment 43 would remove any role for the devolved Administrations in setting appropriate amounts if agreement cannot be reached. As the budgets for these law enforcement bodies in Scotland and Northern Ireland are devolved, it is right that the devolved Administrations have a role to play in ensuring that payments are fair in situations where either a Scottish or Northern Irish body is involved.
I would hope and expect that the cross-charging arrangements for tasks, assistance and facilities will be agreed amicably between the NCA and its partners. It is right that the Bill includes backstop arrangements for resolving any disputes. The arrangements provided for in the Bill broadly mirror those for SOCA, and there is no good reason why we need to adopt a different approach for the NCA. Accordingly, I would invite my noble friend Lady Hamwee to withdraw the amendment.
Baroness Smith of Basildon
My Lords, I wonder sometimes whether the noble Earl lives in a slightly different and more benign world than I do. Several times during the course of today’s debate, whether it has been on the power of direction and payments, he has said, “We hope that it will be okay, we can’t see ourselves using this power, things should work out okay”. Real life is not like that; disputes occur. This idea of having a backstop and saying that it does not matter if it is not perfect and not okay because it will hardly ever be used is not really good enough. We need to have some kind of process. I do not know whether the noble Earl took on board what I said. I am not wedded necessarily to an advisory board, but I think that we need a process that is not the Secretary of State or, as the noble Earl calls it, a backstop.
There will from time to time be disputes on payments and the power of direction, and we need to have a process that this House is confident can deal with any of those problems that occur—and not just think that it will be okay because it will not happen very often. I think that we will pursue this at a later stage. There may be further discussions in Committee, but at this stage I am happy not to press my amendment.
Baroness Hamwee
My Lords, I share the noble Baroness’s concerns about this. I wrote down “amicable?”. The noble Earl referred to a backstop, but the point of providing a very clear framework—although I do not want to use that term—and making clear provisions is that they are clear and, if things are not amicable, one knows where to go. It had never occurred to me until an earlier group of amendments that the old pals arrangement might apply to anything under this Bill—but perhaps I am just too cynical.
On Amendment 40, as I understood the noble Earl’s remarks, the NCA will be subject to certain formal Treasury guidelines. He is nodding at that, but I wonder whether he might share those with Members of the Committee after the debate. It may not be appropriate to go into all the detail now, but it would be very helpful to be clearer about this before we return to the matter, as I suspect we will.
Earl Attlee
My Lords, I was referring to the Treasury guidance on managing public money.
Baroness Hamwee
Let us see how the Treasury website operates and whether we can get into it.
On Amendment 41, the noble Earl argued that what is provided in paragraph 29 is not on a case-by-case basis but is an overall principle. I do not read it like that, because paragraph 29 refers to a provision requiring,
“one person (“R”) to pay the appropriate amount to another person (“P”)”.
The only way in which I can construe that paragraph is that we are talking about the particular “R” and the particular “P”, not anyone who might come under “R” or “P” in a range of different situations. Perhaps that is something that we can seek to understand rather better after the Committee stage. I beg leave to withdraw Amendment 40.
Lord Henley
“(4A) Subsection (4) authorises an NCA officer to disclose information for the purpose of the exercise of—
(a) the functions of the Lord Advocate under Part 3 of the Proceeds of Crime Act 2002 (“PCA 2002”), or(b) the functions of the Scottish Ministers under, or in relation to, Part 5 of PCA 2002,only where the information has been obtained by the NCA in connection with the exercise of a function under PCA 2002 (other than a function under Part 6 of that Act).(4B) Where information has been obtained by the NCA in connection with the exercise of a function under Part 6 of PCA 2002 (revenue functions), subsection (4) does not authorise an NCA officer to disclose the information.
(4C) But an NCA officer may disclose the information if the disclosure is—
(a) to the Commissioners for Her Majesty’s Revenue and Customs,(b) to the Lord Advocate for the purposes of the exercise by the Lord Advocate of the Lord Advocate’s functions under Part 3 of PCA 2002 (confiscation: Scotland),(c) to any person for purposes relating to civil proceedings (whether or not in the United Kingdom) which relate to a matter in respect of which the NCA has functions, or(d) to any person for the purposes of compliance with an order of a court or tribunal (whether or not in the United Kingdom).”
Lord Henley
In moving Amendment 45, I wish to speak also to Amendments 59 to 63. I offer a brief apology to the Committee if it appears that I have been moonlighting and leaving too much work for my noble friend to do. However, I can give an assurance that I will be responding to the next half-dozen amendments. I congratulate the Committee on the extraordinary speed with which we are dealing with the Bill. That is refreshing and encouraging.
These amendments make a number of technical changes to the provisions in Clauses 7 and 12 and Schedule 7 which deal with the disclosure of information. I imagine that we will deal with that in greater detail when we get on to the clause stand part debate relating to Clause 7.
Amendments 45 and 61 relate to the disclosure of information obtained under the Proceeds of Crime Act 2002. The amendments address a lacuna in the drafting of paragraph 6 of Schedule 7, which inadvertently prevents the onward disclosure by an NCA officer of information obtained under the Proceeds of Crime Act other than information obtained under Part 6 of that Act, which relates to sensitive personal tax information and is therefore subject to specific restrictions. The default position is that information obtained by an NCA officer should be capable of being further disclosed for a permitted purpose; for example, the prevention and detection of crime.
In the case of information obtained under Part 6 of the Proceeds of Crime Act, Amendment 45 also creates a separate gateway for the onward disclosure of such information, but only to specified persons such as the Commissioners for Revenue and Customs. In substance, the new provision is designed to achieve the same end as paragraph 6 of Schedule 7 which it replaces.
As these provisions in respect of information obtained under the Proceeds of Crime Act primarily seek to authorise the disclosure of information rather than apply restrictions to such disclosure, we have taken the opportunity to move the provisions to Clause 7, as we believe they sit better there.
Amendment 59 to Clause 12 clarifies the relationship between the powers as to the disclosure of information and the restrictions on disclosure set out in Schedule 7. Clause 12 specifically provides that a duty to disclose information has effect subject to Schedule 7. This amendment simply applies the same principle to any power to disclose information.
Amendment 60 is a drafting amendment in respect of the definition of a relevant authority in paragraph 2(3) of Schedule 7. Amendments 62 and 63 clarify the rules governing the onward disclosure of information provided by an NCA officer where such information is in a public document. Our intention, for obvious reasons, is that there should be no restrictions on the onward disclosure of information contained in a public document issued by the NCA: for example, information contained in the annual plan or report, or in the framework document, or which has otherwise been made available under the duty to publish information provided for in Clause 6. The new paragraph 9A of Schedule 7, as inserted by Amendment 63, sets this out in clearer terms than is the case with paragraph 7(2)(a) which it replaces.
I hope that that brief explanation is sufficient and that the letter which I think I sent detailing these matters assisted noble Lords opposite. I beg to move.
Lord Harris of Haringey
My Lords, I seek clarity from the Minister. This is a genuine attempt to secure information. Clause 7(1) states:
“A person may disclose information to the NCA if the disclosure is made for the purposes of the exercise of any NCA function”.
I seek to clarify whether this is as broad a statement as I think it may be. Does it mean that any person may choose out of sheer devilment to ignore any other requirements to which they may be subject under the Data Protection Act or anything else to disclose information to the NCA because they think that it may be useful for the purposes of the exercise of its work? I am trying to get at who determines whether the disclosure is for the exercise of the NCA’s functions. Could I as a private individual who holds some privileged information decide that I think the NCA ought to be interested in the information because I think it relates to serious crime, and therefore I may decide to ignore the legal obligations on me not to disclose that information and pass it to the NCA? I could understand it if the wording was, “The NCA may require me to disclose the information because it is investigating something and gets the necessary permissions to override it”. I may be completely misinterpreting Clause 7(1) but I would be grateful for clarity on that point.
Lord Henley
I am sorry but I am slightly confused by the procedure that we are adopting. My understanding was that the noble Baroness, Lady Smith, was going to oppose the Question that Clause 7 stand part of the Bill. The noble Lord has intervened at this stage to ask a question about Clause 7. Does he want to wait for the general debate that we are going to have? However, the noble Baroness seems to be implying that there will not be a—
Lord Henley
I am distraught. There I was expecting a major debate and the noble Lord asked me only about Clause 7(1), who the relevant person may be and whether it was any person. I would have thought the simplest way of dealing with this matter is the way that I was taught many years ago—the noble Lord, Lord Beecham, will remember this from when he first trained as a lawyer—namely, that you look at what the words on the face of the Bill say. We hope that the Bill will become an Act when we have finished dealing with it and it has gone through all its stages. The Bill states:
“A person may disclose information to the NCA if the disclosure is made for the purposes of the exercise of any NCA function”.
I would have thought that that is fairly straightforward. That is what the Bill says. My advice suggests that one need not go beyond that. The words “A person” imply that any person can disclose information to the NCA,
“if the disclosure is made for the purposes of the exercise of any NCA function”.
The noble Lord will now come back to me, because he always does, and I enjoy our debates. This statute is relatively simple to interpret. We know that that is not always the case and that great complications can arise in the interpretation of statutes. However, I should have thought that the words we are discussing are as simple as you can get.
Lord Harris of Haringey
My Lords, perhaps I did not make myself as clear as I should have done. If I am a data controller in an organisation and I have certain obligations placed on me not to disclose information, does Clause 7(1) override my normal duties as a data controller under the Data Protection Act and allow me to decide whether certain information looks as though it ought to fall within the remit of the NCA, and therefore enable me to disclose it to that body? That is my simple question and, even though I am trying to behave as though the words on the paper mean what they seem to mean, I am simply trying to understand whether this is as broad a “may” for the persons concerned as I think it is.
Lord Henley
I was probably not as clear as I ought to have been. Obviously, the persons would be subject to any other enactment, which would include, as the noble Lord said, the Data Protection Act. One could also mention the Regulation of Investigatory Powers Act 2000. They would be covered by the provisions of those Acts. The situation is as it states on the package, but subject to other statutory provisions.
Lord Harris of Haringey
I really do not wish to prolong this, unless the noble Baroness, Lady Hamwee, is about to explain what the words mean. What is the purpose of having this provision at all? If all that it is saying is that I, as an individual person, may do something that I am not prohibited from doing, what is the point of even putting it in the legislation in the first place? If the subsection is merely saying, “I have a bit of information that I am not prohibited from passing on, and I may decide to pass it to the NCA”, it seems to be completely unnecessary. It clearly means something, and I think that it means rather more than, “I can provide information without being constrained by, say, the Data Protection Act”. Unless the noble Baroness, Lady Hamwee, is going to provide some insight on this point, it may be something that the noble Lord can write to us about.
Baroness Hamwee
I am not sure that it is insight, but the noble Lord is right to raise the point. I hope that he will at least feel that I can intervene on that basis, even if we are without insight. Schedule 7 states that this part of the Bill does not authorise disclosure in contravention of the Data Protection Act or the Regulation of Investigatory Powers Act. If there are other general statutory provisions that would override the situation that the noble Lord is talking about and would always apply, it needs to be made clear that someone may disclose, subject to other statutory provisions. I do not know whether what I have said takes the matter any further but I, for one, am now convinced that there is an issue.
Lord Henley
I am sure that there is no issue here and that the noble Lord, Lord Harris of Haringey, is not suggesting some conspiracy theory that these words mean something different from what I suggested they mean. That is why I said that one should look at what is there on the packet. However, I suspect that the best thing to do would be for me to write to the noble Lord and make sure that that is copied to his colleagues on the Front Bench and my noble friend Lady Hamwee; and if there is any problem, we can deal with that in due course. I am sure that there is no problem, and that the matter is straightforward and can be quickly resolved. Does the noble and learned Lord agree? Perhaps I can call him the noble and learned Lord, because he is so good at these drafting matters that I will elevate him on this occasion. If he is happy with that, I will leave it to the Committee to accept Clause 7.
“( ) The command of the NCA with main responsibility for discharging functions listed under subsections (1) and (2) shall be the Child Exploitation and Online Protection Centre (CEOP).
( ) CEOP shall be accountable to the NCA Board but shall operate independently of the direction of the Board.
( ) Any funds delegated by the NCA to CEOP shall be reserved for that purpose.”
Baroness Smith of Basildon
My Lords, I hesitate slightly because I know that as soon as there is an amendment that mentions an NCA board, as the amendment does, the Minister will say, “If we haven’t agreed to a board, I don’t have to answer the question”. As he said earlier, I have been on that side of the Chamber—albeit another Chamber—with the same kind of file as the one he possesses now, but I ask him to put that to one side. Although he might not agree with some parts of the amendment or its architecture, he will understand the substance of what I am proposing and the reasons why this matter has been put forward. I hope that he can address my points.
In our proceedings on Monday, the noble Lord, Lord McColl of Dulwich, raised the issue of the Child Exploitation and Online Protection Centre. It was generally felt around the House that it is an enormously successful body that is held in high regard. If we look at some of the figures, we see that between 2006 and 2011 more than 1,000 children were protected or safeguarded as a direct result of CEOP. There were 1,644 suspects arrested and members of 394 high-risk sex offender networks were arrested. CEOP is one of those organisations that we know is making a difference and wants to continue to do so.
CEOP has pioneered a model of multiagency partnership work that has brought together child protection and law enforcement in a way that has led to the organisation being recognised internationally as a centre of excellence for protecting children from sexual abuse, both physical and mental. Many noble Lords will have an idea of what we are talking about when referring to sexual abuse of children; however, I shall expand our thoughts on that slightly. I do not know if noble Lords had the opportunity to see an article—I cannot remember whether it was in this weekend’s Sunday Mirror or Monday’s Daily Mirror—telling a shocking story about access to internet porn by young people. It referred to quite shocking internet porn that would turn the stomachs of most people. It is not physical abuse, but one had only to read what those young people said to know that that was mental abuse, and it was certainly sexual abuse that had an impact on them. Some of the things that they themselves went on to undertake perpetuated that abuse. Sexual abuse of young people comes in many forms and can often lead to further sexual abuse of other young people.
CEOP deals with an area in which the more successful you become, the less possible it is to pull back, because you have to continue with your activity. You cannot reduce it at all. There are two crucial issues—the expertise and specialist knowledge that have been built up, and the partnerships that CEOP has managed to build with other agencies. The range of organisations and individuals that CEOP works with are interesting, and include children and young people. It has worked successfully with law-enforcement agencies. The public have also played a role—certainly in providing information and intelligence. Charities and voluntary and community groups have come on board, as have industry and international partners.
Since it was first mentioned that CEOP could be absorbed into the NCA, concerns have been mentioned at very senior levels. I said at Second Reading that the head of CEOP, Jim Gamble, resigned as a result. I can see possible great advantages in CEOP having a close relationship with the other commands in the NCA, because there are often links between organised crime, and intelligence can help bring together a picture or put in place the missing part of a jigsaw puzzle that helps lead to a prosecution or arrest. However, I am not convinced, and neither are many others, of the necessity to absorb CEOP into the NCA. That is where the concern arises.
I and the various organisations involved, including the NSPCC, as well as individuals, have welcomed the Government’s strong support for CEOP and its work, and the assurances that they have given—and I thank them for those assurances. However, they must clarify and put on the record—and in statute—the commitments that have been made. That would provide the reassurances that are sought. I appreciate that the noble Lord has sought to do that and has written to noble Lords, and the Home Office has produced another factsheet on the kind of things that CEOP would do within the NCA and how the Government are determined not to see a dilution of its work.
However, perhaps I may raise a couple of points. CEOP must retain its operational independence. On that matter, we seek an assurance that specialist staff will not be pulled off child protection work due to staff shortages or emergencies in other areas. CEOP staff do highly specialised work using the knowledge they build up. If that were to be lost, even for a short time, the gaps in the operation of CEOP within the NCA could be quite damaging.
Another aspect of the amendment is the wish to see authority for its budget clearly delegated—in effect, for its budget to be ring-fenced. One thing at which CEOP has been very successful is raising money from outside sources. I think that it would be very difficult for it to continue doing that if its funding were not ring-fenced, as people contribute money for that particular area of work. If they felt that the money was being diluted across an organisation, they might be less likely to contribute. Therefore, I seek an assurance that the budget will be ring-fenced, together with any money raised by a CEOP organisation within the NCA.
Lord Dear
My Lords, I fully endorse what has been said about the work of CEOP. We have referred to this organisation many times over the past year or so in your Lordships’ House. It is a highly successful organisation but it is only really beginning to identify the tip of an iceberg. We are just beginning to understand exactly how much crime in that area is committed. It has already been said today that there is a crossover with people trafficking, and in fact child trafficking comes very much within CEOP’s remit. People trafficking in general is a highly organised crime.
It seems to me that the question is: should CEOP come within the remit of the NCA at all? Personally, I think that it should, given the seriousness of what it deals with, the revulsion that all right-minded people feel about this crime and the way in which CEOP’s work interfaces with highly organised crime. The one thing that I am concerned about is the suggestion in the amendment that CEOP should be accountable to the NCA board, accepting that it is part of its remit, but should operate independently of the direction of the board. If that were to appear in the Bill, there would be considerable confusion. It seems to go against logic and against all tenets of management. “One man, one boss” is often used as shorthand for that. If CEOP is one of the four pillars of the NCA—as I believe it should be—not only should the board oversee the operation but it should be responsible for it, and CEOP should not be allowed to operate independently.
I take the point that, in a strange sort of way, CEOP is outside the normal remit of much of mainstream policing because it has a multiagency dimension. I understand that. In fact, I remember back in the 1970s piloting the first multiagency approach that attacked what was then called “baby battering”, then shorthanded as “child abuse”. That approach was highly successful and was rolled out right across the country from Nottinghamshire, where I was then serving. At that time it became the model of how best to approach this sort of problem. Therefore, I understand the particular sensitivities of multiagency approaches. Notwithstanding that, I would be unhappy to see CEOP operate independently of the direction of the board because I think that it would lead to confusion.
Baroness Hamwee
My Lords, the noble Lord, Lord Dear, has expressed very well my concerns about the second paragraph of the amendment. He has also said very clearly exactly what I would want to be said right around the Committee and to be on the record concerning the value of CEOP’s work. Like those of the noble Lord, my comments are in no way directed at criticising CEOP, not valuing its work or not wanting to see it continue as successfully as it has done.
Perhaps I may add a query about the third paragraph of the amendment. First, I am a little unclear about what is meant by the delegation of funds within an organisation, as would be the case if CEOP were part of the NCA. What exactly is meant by delegation? Secondly, for what purpose are the funds reserved? If funds are identified as being needed for CEOP’s operation, are they not for the whole of its operation, or is there something specific that the funds are intended to be reserved for?
I am sorry to appear to be taking apart an amendment on this matter. Like others, I feel that what has been said about the importance of CEOP’s work is absolutely undoubted, and my questions about the amendment are genuinely probing.
Lord Mackay of Clashfern
My Lords, can my noble friend deal with the point about funding? At the moment, to what extent does CEOP get outside funding to help it with its work? What safeguard is there? Will CEOP continue to get that money for its work as a result of the Government’s proposals?
Lord Harris of Haringey
My Lords, when my noble friend Lady Smith introduced the amendment, she made it clear that there was not necessarily a desire to stick to the wording before us: rather, that what we are having at this stage is very much a probing discussion. All your Lordships in this Committee support the work done by CEOP and we all want to see it succeed. Given that the Government intend to put CEOP within the National Crime Agency—for which there are some very strong arguments in favour but also some arguments against—the question is how one preserves the integrity of CEOP’s work and makes sure that the work continues and is seen to continue.
The amendment is partly about safeguarding the funding streams, as well as the external funding, and it is partly about ensuring that the existing partnership structures with CEOP, which are reflected in the current board structure of CEOP, are continued. Although the wording of my noble friend’s amendment does not necessarily resolve all these issues, it gives us an opportunity to highlight the concerns.
The principles are clear: we want to see CEOP’s work continue; we want to see it protected; and we want to see the retention of the partnership structure, which involves not only bringing in resources from outside but ensuring that those who provide the resources have confidence that the public contribution is retained and remains transparent. We want to ensure that in the operation of the agency there is a genuine partnership that involves different parties working together to achieve a common end.
We look to the Minister for some account of how the benefits of that separate entity, which is currently CEOP, can be preserved within a new structure. This is not a new concept. The presence on the government Bench reminds me that we had a very similar debate about the creation of Healthwatch within the Care Quality Commission; and there, completely erroneously of course, the Government’s objective was to create something that was independent and that had its own income flow and governance structure that was different from the rest of the Care Quality Commission. Although I do not think that the solution that the Government adopted in that particular model was perfect, it demonstrates that a number of models are available that try to achieve the objective of preserving this continuing area of activity, preserving the partnership structure and preserving the funding and independence of that funding for the future. I hope that the Minister can respond in those terms.
Lord Henley
My Lords, again, I regret that I missed the debates on the Care Quality Commission. I shall spend the summer reading those as well as the other ones. In response to the speech from the noble Lord, Lord Harris, I make it clear that I fully understand that his noble friend’s amendment is probing and seeks reassurances about what CEOP does and how it works. I shall not dismiss it purely on the grounds of its wording, nor shall I say that it is merely a fantasy amendment because we do not yet have the NCA board that she was looking for, as that was dealt with at an earlier stage. I accept that this as a probing amendment and that there is a need for reassurances from me and the Government about the future of CEOP and what will happen under the new arrangements.
I pay tribute to the work of CEOP, which I saw when I visited it, as I am sure other noble Lords have done. We should all be very grateful that that child protection work will continue through the work of the agency. Since its creation, it has been a significant success story. It is important that I remind noble Lords that it has not previously had a statutory basis that is distinct from that of SOCA, and that has had no detrimental impact on its operational independence. It has worked perfectly well, and the six principles, to which I shall turn later, that underpin CEOP will continue to underpin it on the transition to the NCA.
Before I go through what I want to get on the record as an assurance, perhaps I may respond to my noble and learned friend Lord Mackay on the funding of CEOP and the fact that it can receive funds from outside sources. At the moment its existing funding model allows it to charge, for example, for training services that are provided mainly to the police, teachers and child protection workers and to raise income or support in kind through sponsorship and corporate arrangements. We certainly want those arrangements to continue with the NCA; there will be no change to that.
I assure the Committee that child protection will run throughout the National Crime Agency. CEOP will still exist as a part of that as a separate command within it, but we would not want to see it silo-ised—an inelegant word—within the department. It is important that its work runs throughout the agency. As well as building on CEOP’s existing role as the national centre dedicated to working with others to protect children from sexual exploitation and sexual abuse, the NCA will also be subject to a new statutory duty, which in essence is to safeguard and to promote the welfare of children. That means that the agency will give appropriate priority to children when it comes into contact with them and that it will share early concerns about the safety and welfare of children, ensuring preventive action before a crisis develops.
Those requirements will be part of the training that each and every NCA officer will receive. I emphasise the point that CEOP will be a separate command within the NCA; we do not want to see these matters silo-ised. Contrary to the noble Baroness’s amendment, it is imperative that the responsibility to discharge that duty remains with the whole of the National Crime Agency and not just with CEOP.
Baroness Smith of Basildon
I am grateful to the noble Lord. That is a very helpful and constructive answer. I think I have now convinced him that it would have been better to have the framework document before the House began to consider the Bill, as I may not have had to raise this issue at all.
On the issue of retaining operational independence, I ask the Minister to look further, because what he has said so far about putting this in the framework document largely addresses the issues. However, operational independence is about maintaining the specialist staff of CEOP within the CEOP command. Could the Minister explore whether that is the case when he looks at the framework document? Operational independence can mean different things to different people, but I am broadly content with what he had to say. I look forward to the framework document and beg leave to withdraw the amendment.
Baroness Hamwee
Baroness Hamwee
My Lords, in moving this amendment, I will also speak to Amendment 46C. I hope that I can be brief.
These are both probing amendments. The first relates to the paragraph in Schedule 4 headed: “Liability of NCA for unlawful acts”. It states:
“In any of the following cases, the NCA is liable in respect of unlawful conduct of a person”.
I suggest changing,
“In any of the following cases”,
to “including in the following cases” in order to understand whether paragraph 2(1) is exclusive of all other cases and in particular how it relates to paragraph 2(7), which states that,
“the liability of the NCA for the conduct of NCA officers”,
is not affected by this paragraph. The first amendment is about the inter-relationship of those words with paragraph 2(7).
Amendment 46C is an amendment to paragraph 4, which is headed: “Application of discrimination legislation to secondees: Northern Ireland”. It is a rather similar amendment to add “including” before the list of the provisions in respect of which an NCA secondee is to be treated as being employed by the NCA. Again, the amendment seeks to understand whether what is listed is exclusive of other provisions. It occurred to me only after tabling the amendment that there might be something specific about Northern Ireland legislation that is required to be set out. I beg to move.
Lord Henley
My Lords, first, I apologise to my noble friend. I think I have the gist of what she was saying about Amendment 46B, but I have to confess that there was a brief conversation between me and my noble friend the Chief Whip, which meant that I might have missed some of the points she made. I hope that I still grasped what she was saying and that the response I am able to give her will be sufficient. If not, I will have to write to her.
On Amendment 46B, as an employer, the National Crime Agency can be held to account for any unlawful conduct by its employees during the course of their employment. That does not therefore need to be set out in the Bill. The NCA will be liable for its specials actions in the same way that it would be liable for the actions of any other NCA officer. Given that the NCA will not operate in isolation and will be tasking and co-ordinating wider law enforcement, having clear lines of accountability for the NCA and its partners is important.
Paragraph 2 of Schedule 4 provides important clarity as to exactly when the NCA will be held to account for the unlawful conduct of a person who is not employed by the agency but is carrying out NCA-related activities. Unless my noble friend wants to come back to me after I sit down, I hope that that deals with her particular points.
I will say a word about Amendment 46C because we want to take that away and have another look at it. National Crime Agency officers will benefit from protection against discrimination in the UK. It is intended that secondees to the NCA will benefit from the same protections. Having looked at that and having looked at my noble friend’s amendment, further consideration is required to ensure that particularly secondees, including police constables, are properly covered by the relevant legislation. I want to come back to my noble friend on that in due course. If there are any other queries, I will write to her in due course.
Baroness Hamwee
My Lords, I think that the penny has just dropped on paragraph 2, so I thank the Minister for that. On Amendment 46C, I am beginning to feel that I am beginning to do myself out of a job. This is the third time the Government have said that they will look at something again. I spoke on one for less than two minutes, on another for less than one minute, and on this one the Minister did not quite hear what I had to say.
Lord Henley
I think it was my noble friend Lord Attlee who recommended that brevity often yielded much greater results in this House. He commended it to my noble friend.
Baroness Hamwee
I had better not say any more other than I beg leave to withdraw the amendment.
Baroness Smith of Basildon
My Lords, in moving this amendment, I will also speak to Amendments 48, 49, 50 and 51.
This is another set of probing amendments, as I am sure the noble Lord has understood. It follows on from earlier amendments when we talked about a National Crime Agency board. It is about making sure that the Secretary of State has a strategic rather than an operational role. I hope that noble Lords will bear with me as I switch pages.
I am slightly puzzled by this group of clauses. It seems convoluted for the advisory panel to make recommendations to the Secretary of State about the operational powers that the director-general shall have and then the Secretary of State must give effect to those recommendations. It would make more sense for the board responsible for the director-general to make such proposals. But I find myself completely puzzled because the Secretary of State is responsible for operational powers designation, which is in Part 2 of Schedule 5 and in Clause 9.
Part 2 of Schedule 5, says:
“The Secretary of State must appoint an advisory panel (to enable recommendations to be made as to the operational powers which the Director General should have),
but that contradicts the original clause relating to operational powers.
Paragraph 4 of Schedule 5 says:
“The Secretary of State must appoint an advisory panel”,
but that is then qualified by,
“whenever there is an appointment of a Director General”,
or,
“when the Secretary of State considers that it is appropriate to do so”.
So it seems that they can appoint an advisory panel at any time. That also implies that it is not a permanent body. Surely such a panel, set up to advise a Secretary of State on the operational powers of a director-general, would want to gain expertise and knowledge, but according to how the schedule is worded, a new panel would be appointed each time a director-general was going to be appointed. That means it would be an ad hoc panel, which seems rather strange.
Lord Henley
My Lords, Part 2 of Schedule 5 relates to the director-general and designation under Section 9. The first four amendments in this group relate to the NCA board, which I think we dealt with earlier. What I really want to address on this occasion is the principal amendment, Amendment 51, which proposes leaving out paragraph 5 of Schedule 5 on page 54, on the question of there being no advisory panel.
As I think I made clear earlier, the director-general is an operational crime-fighter appointed by and directly accountable to the Home Secretary. A bespoke designation process is required to ensure that he holds the operational police, customs and immigration powers that he needs. The designation process for the director-general provides a clear and independent mechanism for providing him with operational powers. The advisory panel will be a small, focused body of experts established for a specific purpose and then dissolved.
I appreciate that the noble Baroness’s amendment is probing and that she might want to come back to it in due course. The amendment would remove paragraph 5 from Schedule 5. In other words, it would remove the ability of the Home Secretary to set out in regulations the circumstances in which the advisory panel would not need to be convened for the purpose of designating the director-general with operational powers.
The ability to make regulations does not contradict or undermine the important role of the advisory panel. It is simply a recognition that a newly appointed director-general may already have the necessary training to enable him or her to exercise those operational powers. In the absence of that regulation-making power, it would still be necessary to go through the process of appointing an advisory panel—to no good end, if he or she had all the necessary training. That does not sound like an efficient or effective process to me. I would even go so far as to suggest that the removal of the regulation-making power risks turning a clear, independent and streamlined process into a cumbersome and rather bureaucratic one that is not fitting of the type of responsive crime-fighting agency that we are trying to create.
I recognise that this is a significant regulation-making power to the extent that it would disapply the advisory panel process, and that is why we have made the regulations subject to the affirmative resolution procedure. It is right that the circumstances under which the advisory panel would not be required are subject to an appropriate level of scrutiny by both Houses, and we have already provided for that. I hope that that explains matters. Obviously, I want to get this right and, if necessary, I will write to the noble Baroness if she has any further questions on it, but I hope that that deals with Amendment 51.
As I said, I do not think that I particularly need to address Amendments 47 to 50, which relate to the noble Baroness’s board. We discussed that earlier. I think it is a matter that she wishes to come back to, but I do not think it is appropriate to discuss it now.
Lord Mackay of Clashfern
I wonder if my noble friend can help me. I am trying to follow what he is saying about this. Is this advisory panel to be charged with advising in connection with the first arrangements for the new principal officer? And once that is done, has the panel finished, leaving the Secretary of State to do it himself? Is that the idea, or is the advisory panel to continue and be consulted only when the Secretary of State feels that he requires some extra independent and expert advice since he does not feel able to completely decide for himself?
Lord Henley
My Lords, if I can assist my noble and learned friend, the point we were trying to get over is that the actual designation of the director-general is a matter for my right honourable friend the Home Secretary. She will make an assessment of the director-general’s suitability and capability to exercise the operational powers in any given case. It might be that the advisory panel, through its chair, could then assess whether the director-general was adequately trained to exercise those operational powers and if, as experts—as we hope they would be—they were satisfied that the director-general met the requirements for exercising his designated duties. But it might be that the Home Secretary was satisfied about the director-general’s suitability and capability to exercise those powers, in which case there would be no need for the board.
Baroness Smith of Basildon
I appreciate that the noble Lord was trying to be helpful but I am now more puzzled than ever. He has spoken to the confines of my final Amendment 51 and yet the reason for putting forward all these amendments is a broader issue. If it helps the noble and learned Lord, Lord Mackay of Clashfern, the advisory panel would be set up whenever there was to be an appointment of a director-general. That is where this clause is so confusing. The panel’s chair decides the question of the adequacy of the director-general’s training. I can fully appreciate that a new director-general might not have the expertise in all the areas dealt with by the National Crime Agency. I do not have an issue with that part. It then says:
“produce a report containing recommendations as to the operational powers which the Director General should have”.
That implies that the operational powers change depending on who the director-general is. Surely what we expect the director-general of the National Crime Agency to do should be set in stone. You cannot keep changing the operational powers of somebody in this kind of role depending on who applies for the job. There have to be certain criteria for key operational powers that have to be undertaken. I do not understand that part of the clause at all.
On the issue of there being an advisory panel, the reason for taking out paragraph 5 in Part 2 of Schedule 5 is that if paragraph 4 says that the Secretary of State must appoint an advisory panel, clearly there is good reason for doing so. Given that the panel reports on the adequacy of training and the operational powers, why would we then have a paragraph which says that the Secretary of State does not need that? I cannot understand under what circumstances a Secretary of State or an advisory panel would say that a particular director-general would not have full operational powers or that this one will not have the operational powers undertaken by a previous director-general. If we are saying that the operational powers of a director-general are flexible, we are talking about a very different kind of organisation. My understanding was that the framework document would set out exactly what the National Crime Agency would do, what was expected of it and how it would be run. Now we find we have a degree of flexibility in what the agency does because of a panel of experts advising the Secretary of State on what the director-general does.
The noble Lord is looking through his folder, as I have done on occasion. If he is fully honest with me, I suspect he is thinking, “Give me a note quickly. I seek inspiration”. It may be that inspiration on this one does not come to him quite quickly enough this evening, but I think this is a matter we want to pursue. It is a bit odd because the Government have already appointed the first director-general without the advisory panel so presumably they know what operational powers that director-general will have. However, I find this situation completely unsatisfactory as it stands.
Lord Henley
The noble Baroness is an old hand, as I am. She is a very young old hand but she is long in experience. She need not blush. She has stood at the Dispatch Box in Government on many occasions and she knows the process. This is a wonderful process that we go through with these Bills, as a result of which we hope to make them better. She is quite right to point out in paragraph 4 of Schedule 5 what she thinks is an odd process. This is obviously something that I must reflect on. That is why we go through this process. I will be more than happy to do so and I will write to her. Again, it is one of the joys of the process that we are going through that there is a considerable amount of time between now and Report. We want to get this right. I am not going to try and bluff my way through as I have done on many occasions in the past, and as I am sure the noble Baroness has done. She has caused me some problems with paragraphs 4 and 5 of Schedule 5. All I can say is, I want to get this right and I will try to make sure that she gets a proper answer or that we make the appropriate changes.
Baroness Smith of Basildon
I am grateful to the noble Lord. This is not the first time he has been this helpful. He was similarly helpful just last week. The fact that he is going to reflect on this and come back to me and to the House is very useful. On that basis I am happy to withdraw my amendment.
Lord Henley
Lord Rosser
“( ) In the Police Reform Act 2002, leave out section 10(1)(g) and insert—
“( ) to carry out functions in relation to the National Crime Agency which correspond to those conferred on the Commission in relation to police forces by paragraph (2) of this subsection”.”
Lord Rosser
My Lords, these amendments deal with the inspections and inspection scrutiny arrangements for the National Crime Agency. Currently the Bill requires the inspection of the National Crime Agency by HMIC but gives the Secretary of State the discretion to decide whether it should also be subject to scrutiny by the Independent Police Complaints Commission. Amendments 57 and 58 change the word “may” to “must” so as to ensure that the actions of the director-general and all other National Crime Agency officers may be subject to the scrutiny of the IPCC. Amendment 56 adds the National Crime Agency oversight into the general functions of the IPCC.
It is not at the moment clear why the Government have chosen not to give the IPCC automatic scrutiny functions over the actions of National Crime Agency officers, especially considering the fact that the National Crime Agency will be performing many more functions than its predecessor and also because both SOCA and the MPA officers were subject to IPCC scrutiny. Presumably by leaving the decision up to the Secretary of State’s discretion, the Government envisage circumstances in which they do not believe it would be either appropriate or alternatively necessary for the behaviour of NCA officers to be subject to independent scrutiny by the IPCC. If that is the situation, it would be helpful when the Minister responds if he could give an indication as to what those circumstances are and what change the Government believe would be required for the Secretary of State to accept that regulations should be made conferring functions on the IPCC in relation to the exercise of functions by the director-general and other National Crime Agency officers. Alternatively, if the Secretary of State is to decide that the IPCC should not have responsibility for the scrutiny of National Crime Agency officers, then who will? I beg to move.
Baroness Hamwee
My Lords, my noble friend Lady Doocey and I have Amendment 58A in this group. I shall leave it to her to speak to the substance of the regulations referred to. The amendment would simply make the regulations to be introduced under new Section 26C of the Police Reform Act 2002 subject to affirmative resolution.
Baroness Doocey
My Lords, my concern is about the type of investigation that the Independent Police Complaints Commission might carry out in relation to the National Crime Agency. The Government want the NCA to be,
“a transparent and accountable organization open to the public it protects”.
To satisfy those criteria, formal scrutiny and investigations must be thorough and above suspicion. I am concerned that the provisions for scrutiny and transparency in the Bill are inadequate.
I am concerned particularly about how the IPCC might carry out its functions. The Bill gives the IPCC the power to undertake investigations into complaints about misconduct, serious injury, death or other matters at the discretion of the Secretary of State, the object being to give the IPCC oversight of the NCA in broadly the same way as it oversees the police. However, as the noble Lord, Lord Rosser, said, the NCA will have considerable powers—far greater than any police force—so it requires much more rigorous scrutiny on the part of the IPCC.
The situation now is that, if a complaint or allegation is made to the IPCC, it makes a decision as to what it will do to investigate it. It has four choices. The highest level of investigation is an independent investigation, carried out by IPCC investigators and overseen by an IPCC commissioner. The second level is a managed investigation, carried out by a police force’s professional standards department but under the direction of the IPCC. The third level is a supervised investigation, also carried out by a police professional standards department but under its own direction and control. The IPCC merely sets the terms of reference and receives the investigation report when it is complete. The lowest level is a local investigation which is carried out entirely by police.
Despite there being four different options open to the IPCC, the evidence shows that in the vast majority of cases it opts for a supervised investigation, which in practice means that it leaves the police to investigate themselves. This policy is at best questionable when applied to police forces, but is completely unacceptable when applied to the NCA, given the enormous powers that that body will have. It is essential that all investigations into the NCA are independent, carried out by the IPCC and overseen by an IPCC commissioner.
Everyone accepts that the NCA will be handling sensitive and confidential information, but that just increases the need for independent scrutiny. I would welcome an assurance from the Minister that serious complaints and allegations of misconduct in the NCA will be independently investigated so that the public can have full confidence in the processes and procedures.
Lord Henley
My Lords, as always when dealing with a group of four amendments—in this case, three from noble Lords opposite and one from my noble friends behind me—I start with the good news. Amendment 57 would alter what is currently a power to make the relevant regulations to a duty to do so. We have every intention of exercising this power for the simple reason that it is only through that mechanism that we can confer the necessary functions on the IPCC. That being the case, the Government would be very happy to accept the noble Lord’s Amendment 57. That is the good news; the Government have agreed to change “may” to “must”. In the past when I have sat where the noble Lord is, I have frequently put forward amendments changing “may” to “must”, because it always provides the Government with an opportunity to explain what they are doing, and sometimes, just occasionally, one gets concessions. The same goes for those amendments that we have all put down demanding that negative resolution be shifted to affirmative. I have given the noble Lord his Amendment 57.
I cannot be quite so accommodating with Amendment 58, which appears to be similar. It states that the regulations made under new Section 26C of the Police Reform Act 2002 “must” apply the provisions of Part 2 of that Act, subject to any necessary modifications, and make provision for the agency to contribute to the costs of the IPCC. On this occasion, it is important to retain flexibility as to the content of the regulations, including, for example, the funding arrangements for meeting the costs of the IPCC’s work in relation to the NCA.
Amendment 56 is unnecessary. Paragraph 9 of Schedule 6 makes the necessary amendment to Section 10(1)(g) of the Police Reform Act 2002—of blessed memory. That amendment, together with the regulations to be made under new Section 26C, will ensure that the IPCC has the same functions in relation to the NCA, with appropriate modifications, as in relation to police forces. For that reason, Amendment 56 is unnecessary.
Amendment 58A was spoken to by my noble friends Lady Hamwee and Lady Doocey. My noble friend Lady Hamwee indicated that her intention was for the power to make the regulations to be subject to the affirmative resolution procedure. In fact, the effect of the amendment would be that regulations could be made without being subject to any parliamentary procedure. That is a drafting point and I shall not dwell on it, but if my noble friend wanted to move to an affirmative procedure, it would have to be addressed in due course. We decided on the negative procedure. My understanding is that that was deemed appropriate by the Delegated Powers Committee.
My noble friend Lady Doocey wanted to ensure that all complaints against NCA officers could be independently investigated, which is the substantive part of her amendment. The form of investigation conducted by the IPCC will be a matter for regulations. Our starting point will be that the arrangements for the agency should be consistent with the arrangements for dealing with complaints against police forces; that is, the regulations will set out which complaints should be referred to the IPCC for a mode of investigation. Where complaints are serious but do not have to be referred, complainants will still have a right of appeal to the IPCC. Where the complaint is less serious, we think that it is appropriate that the appeal is handled within the National Crime Agency. This is the more proportionate response and will ensure that the IPCC’s resources are used to deal with more serious complaints.
Lord Rosser
My Lords, it is in something of a state of shock that I stand here. I thank the Minister for his response and for accepting Amendment 57. He has set out his reasons for not thinking that Amendment 58 is appropriate and, as I understand it, has effectively said that Amendment 56 is actually addressed to other parts of the Bill and the 2002 Act. In the light of the Minister’s response, I take it that I am meant to agree the withdrawal of Amendments 56 and 58 and that Amendment 57 has been accepted.
Lord Henley
The noble Lord withdraws Amendment 56 and then moves Amendment 57.
Lord Rosser
Baroness Hamwee
Baroness Hamwee
My Lords, I beg to move Amendment 58B. Paragraph 5 of Schedule 6 deals with the disclosure of information, and regulations that may cover disclosure. We are told at sub-paragraph (6) that:
“Such regulations may, in particular … modify any provision of Schedule 7 in its application to such a disclosure, or … disapply any such provision”.
My amendment would exclude from that modification or disapplication paragraph 1 of Schedule 7, which provides that,
“any disclosure, in contravention of any provisions of the Data Protection Act”,
or,
“prohibited by Part 1 of the Regulation of Investigatory Powers Act”,
is not authorised. I hope, and expect to be told by the Minister, that that is what Schedule 6 provides because of the way that it is drafted. However, that was not obvious to me when I read it, and therefore it seemed quite important to clarify the point.
Earl Attlee
My Lords, although I recognise the absolute importance of safeguarding the disclosure of sensitive personal information, I believe that Amendment 58B is unnecessary. The kinds of information that will be required for the purpose of an inspection will be limited in nature to those required for exercising an inspection function. The disclosure of information to a policing inspectorate, and any onward disclosure, will be subject to the safeguards in Schedule 7.
Schedule 6 contains a back-stop power that enables the Home Secretary, by regulations, to make further provision about the disclosure of information by the NCA to policing inspectorates. Although this includes a power to modify Schedule 7, should this be necessary to enable the proper, independent inspection of the NCA, it is not intended to use this power to override important existing statutory safeguards relating to sensitive personal data.
Furthermore, let me reassure my noble friend, it is not paragraph 1 of Schedule 7 that applies the extensive safeguards set out in the Data Protection Act 1998 and the Regulation of Investigatory Powers Act 2000, but those Acts themselves. This paragraph simply puts that beyond doubt. I will be clear that should any regulations be made governing the disclosure of information from the NCA to policing inspectorates and their onward disclosure of such information, those regulations cannot override these safeguards by modifying paragraph 1 of Schedule 7.
I hope that in the light of this explanation, my noble friend is satisfied that there will be adequate arrangements in place to independently inspect the agency that respect important data protection safeguards. I accordingly invite her to withdraw her amendments.
Baroness Hamwee
My Lords, I think I had better read that following today’s debate, because the noble Earl seemed to be saying that those two Acts could be not be overridden; but he started his explanation by saying that it was not intended to use the provision in Schedule 6 to override them. I do not quite understand how those two statements fit together. If they cannot be overridden, the Secretary of State could not intend to override them. However, that was not, as I heard it, the implication of the introduction when he said that it was not intended to use them in that way. Of course, I withdraw the amendment, but will also read what has been said and make sure that I am entirely comfortable with it.
Lord Henley
Lord Henley
“Part 4APublished information: no restrictions on further disclosure9A (1) This paragraph applies where an NCA officer discloses information, in accordance with this Part of this Act, by—
(a) the inclusion of the information in an annual plan, framework document or annual report, or(b) the publication of the information in accordance with arrangements made under section 6.(2) None of the relevant restrictions applies to the further disclosure of that information by any person.
(3) In this paragraph “relevant restriction” means any provision of this Part of this Act (however expressed) which prohibits or otherwise restricts the further disclosure of information disclosed by an NCA officer (including a provision which limits the purposes for which such information may be further disclosed or which requires a person’s consent to be obtained before the further disclosure).”
EU: Personal Data
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McNally
That this House takes note of European Union Document No 5833/12 and Addenda 1 and 2, relating to a draft directive of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data; and takes note of the Government’s recommendation not to exercise their right to opt out of this draft directive under Protocol 19 of the Treaty on the Functioning of the European Union (The Schengen Protocol).
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the noble Lord, Lord Pearson of Rannoch, who I am glad to see in his place, has put down an amendment that will, I suspect, structure our debate. The noble Lord’s amendment is in two parts. First, he did not want us to exercise our right to opt in to this regulation and secondly, he regrets that this House had no opportunity to debate that decision before the deadline on it of 14 May.
Perhaps I may deal with that last point first. I wrote to the noble Lord, Lord Boswell, the new chairman of this House’s European Union Committee, on that matter. I wrote:
“I apologise to the Committee that the Government did not draw the Committee’s attention to the opt-out sooner. The issue of whether the Directive should be considered as triggering the possibility of a Schengen opt-out or not is a complicated one and I do recognise that the Government reached its conclusion on this matter later than was ideal … I would like to reassure the Committee that lessons have been learned by the Ministry of Justice in relation to the important issue of informing the Parliamentary Scrutiny Committees of opt-in or opt-out decisions and I thank you for your patience and understanding on this occasion”.
To that, the noble Lord, Lord Boswell, replied with his usual kindness and courtesy:
“We are grateful for your letter and will look forward to considering the Directive further in the debate which is scheduled to take place in the House on 20 June 2012. We will continue to hold this proposal under scrutiny and will look forward to receiving updates on the progress made in negotiations in due course”.
I hope that that apology to the committee, and now to the House, will be sufficient to deal with the quite legitimate complaint of the noble Lord, Lord Pearson, on this matter. As I said, it was partly because of the timing of Prorogation and the difficulty of deciding the technical issues, but we have learnt lessons and I sincerely hope that it will not happen again.
The debate also gives an opportunity to debate the proposed data protection directive, which the European Commission published on 25 January. That directive will cover the handling of personal data by public authorities for police and criminal justice purposes. It is therefore an important instrument that affects security as well as freedom and it is right that the House is given the opportunity to consider the proposals.
Negotiations on this instrument are at an early stage, so this debate is timely as there is still much to be discussed in the Council of the European Union and in the European Parliament during the months and possibly years ahead. I understand that the European Commission is looking to conclude negotiations on this directive during the Irish presidency of the Council of the European Union in the first half of 2013. However, it remains to be seen how realistic that timescale is. That puts into context the fact that we missed this one issue. It is not that the House will not have time and opportunity to return to these measures during the next months, and perhaps even years.
In the case of the proposed data protection directive, it is the view of the Government that this directive can be classified as a Schengen-building measure and therefore, under Protocol 19 of the Treaty on the Functioning of the European Union, the UK had the option of opting out of the directive. The deadline for notifying the Council of the European Union of that decision to use the opt-out was, as I said, 14 May. On this occasion, the Government decided that we would not exercise the opt-out. The decision followed a full debate in another place held on 24 April 2012.
I should say that we had also wanted to hold a debate in this House ahead of the decision on whether to opt out, but were regrettably unable to find time, partly because of Prorogation, and partly because of delays in deciding whether to accept that the directive was Schengen-building. However, the critical issue for discussion is our position on the detail and how we go about engaging with our European partners in ensuring that the directive works in the British national interest. On this, there remains ample opportunity for this House to influence the Government’s strategy.
Let me begin, however, by setting out the background to the directive, and the Government’s approach in considering it. Currently there are two pieces of European legislation governing data protection: first, a 1995 directive that relates to the use of data by businesses, public bodies and other organisations; secondly, what is known as the 2008 framework decision on data protection, which governs use of data by police and criminal justice bodies. The Commission is bringing forward a package of measures that replace the directive with a regulation, and the framework decision with a directive.
The Government’s approach on the regulation is a matter for another day—although broadly speaking we recognise a case for updating the law, but have concerns on the detail. On the directive, we have approached it on the basis of a clear position: that the continued ability to share information on crime and justice matters across borders is of fundamental importance. In an increasingly globalised world, crime does not stop at the port or the airport but happens across jurisdictions or involves people of many different nationalities.
The Government support proportionate, clear and coherent data protection rules that keep personal data safe and protect the rights of citizens. We also support the free transfer of data across borders and between organisations where it is necessary to prevent crime, increase security and help to keep our citizens safe. We believe that appropriate data protection rules and security go hand in hand and are not mutually exclusive. Our first priority in considering the directive has been to protect arrangements that allow information to be shared within the EU for the benefit of the public and the protection of their safety and freedom.
The challenge with this measure is that, although parts of it are welcome and will help in the fight against crime, some of its provisions are excessively bureaucratic and unwieldy. As our impact assessment shows, as currently drafted we have concerns about the costs it would impose on UK law enforcement agencies—for example, a requirement to appoint compulsory data protection officers and a bureaucratic requirement on keeping documents and records.
There is also a point of principle at stake. We are very concerned that, despite the fact that Europe’s focus should properly be on cross-border sharing of data, the directive has been drafted so as to apply to domestic processing of data. That is, unlamented, it would affect rules on information being shared by police forces within the borders of one country. We think that that is impractical and a matter best left to national governments.
Our approach in thinking about our position on the directive has been to work out what is the best way of securing the benefits of continued data-sharing while minimising the costs of a measure that, in some respects, goes further than we are comfortable with. Our judgment has been that, despite our concerns about the current text, the best approach is engagement to ensure that it works for Britain.
There are a few reasons for that. First, the directive is the opening position in what will be a lengthy and ongoing process of negotiation. The UK is far from the only member state to have concerns about the text. We believe we can secure a much better deal by working with our partners rather than by trying to isolate ourselves. Secondly, the legal base of this measure gives the UK an effective exemption on the issue that we have been most concerned about: domestic processing of data.
The directive is based on Article 16 of the Treaty on the Functioning of the European Union, the new data protection provision included in that treaty by the Lisbon treaty. Under Article 6a of the UK and Ireland’s protocol applying to justice and home affairs—Protocol 21—the UK has what we believe to be firm protection ensuring that the provisions of the proposed directive on internal processing will not apply to us.
Despite the fact that we have that exemption, the Government are none the less keen to try to defend the point of principle and ensure that the directive does not apply to domestic processing for any of the member states, as we consider that there is no justification for extending EU regulation to this area. We will be supporting other member states in pressing this in negotiations.
Before 14 May, it was of course open to us to exercise the opt-out on the directive and I had better say a word about why we decided not to do so. Our judgment was that opting out would be a very bad idea because it would endanger our continued ability to share information across borders without necessarily freeing us from the bureaucratic and unwelcome obligations potentially created by the new directive. The reason for that was that even if we did opt out, other member states would have continued to be bound by the terms of the new directive, which would have been negotiated in our absence. The status of existing rules governing the sharing of data would have been thrown into disarray, with a high probability that the UK would have had to negotiate new bilateral arrangements with each of the member states.
Other member states would not have wanted to share data with a country that they consider might not protect it to the same extent as the regime they operated. Rather, they would have pressed the UK to adopt similar requirements to the directive so that they would be able to operate within the same regime. All told then, opting out would not have stopped us being subject to the obligations of the directive. More likely, it would have meant being bound, albeit indirectly, by a measure that we would not have participated in negotiating and shaping. Furthermore, an opt-out would have reduced our ability to negotiate essential data-sharing agreements, such as the passenger name records directive and the EU-third country agreements, and thrown into doubt other, broad Schengen measures. This would be a serious problem for our law enforcement agencies, which benefit from the sharing of criminal data under Schengen.
All told, we have judged that the national interest is best served by participating in this directive so that we are party to the framework governing data-sharing for policing and criminal justice across the EU. The priority now is to build trust across member states for the necessary sharing of data to protect our citizens and make the strongest case possible for this to be done within a framework of appropriate and proportionate rules. Let me be clear about what is at stake here. Rules enabling the sharing of data have made a tangible difference to the United Kingdom and to take steps that imperil those agreements would put us all at risk.
We want to see a system that allows police and criminal authorities to continue to protect and serve the public effectively, and which also allows individuals to be confident that their privacy, safety and freedom will be safeguarded. The Government believe that these two objectives are not contradictory but can be achieved in tandem by creating a data protection framework founded on the principles of necessity and proportionality. We would, naturally, already expect robust data protection governance as a matter of course in public authorities. However, we would question the necessity of having the European Union telling us how to create, organise and run these arrangements. The more prescriptive and burdensome aspects of the directive are opposed by the Government and we will seek to remove or mitigate them during the negotiations in the Council of the European Union.
I repeat: this is the beginning of a lengthy process of negotiating. The UK will seek to influence negotiations in order to bring about outcomes that are more in line with our policy objective, which is to end up with an effective but proportionate framework. We expect that other member states will share the same outlook. We believe that an opt-out decision was a possibility for the Government but would have been the wrong choice. It is not possible to have data-sharing without data protection. We want to be part of a European data protection framework that protects both security and freedoms and we believe that the limited application of the directive means that we should be content to be part of it. While there are areas of the proposal that the Government will seek to alter so that they provide an appropriate level of flexibility for law enforcement bodies, we are clear that UK participation in this data protection directive is in the UK’s best national interests. I beg to move.
Lord Pearson of Rannoch
My Lords, I am grateful to the noble Lord, Lord McNally, for his apology to the Select Committee and to the House for the way that this draft directive has been handled but it might still be helpful if I put on the record the story so far. I trust it will be in order if I start by addressing the second or procedural part of my Motion and then deal with the draft directive itself and the question of our opt-outs.
Noble Lords will be aware that, under the European treaties, the British Government have a block opt-out in the field of justice and home affairs. Until the end of May 2014, the Government can opt out of all EU legislation affecting police and judicial co-operation in criminal matters. They have to opt out of all of it but would then be free to opt back in to any individual directives, et cetera, by which they wished us to be bound. However, if in the mean time they had agreed to amend any of them or had said that they will not opt out, they lose their right to opt out in those cases and will have opted in to them.
Lord Spicer
I am most grateful to the noble Lord for giving way. I wish that I could call him my noble friend because he is a close friend. I wish that he was still in the Conservative Party and hope that he comes back soon. Is he aware that, to my recollection at least, three Prime Ministers in the past 10 years have given a firm assurance that we would not tangle with corpus juris, which is one way of defining the European criminal legal system? As I am sure he is going on to say, is the true context in which this matter should be discussed not on a narrow issue of data protection?
Lord Pearson of Rannoch
My Lords, I agree with my noble friend, if I may refer to him as such. Of course, corpus juris is just one of the many important examples of how the octopus in Brussels slowly puts its tentacles around our sovereignty and democracy. I remember it first being raised at an academic conference, I think in Spain, in about 1990 and someone who was there got very excited about it and said that this corpus juris—the Roman words for the body of Roman law—was going to come into the EU and that we were going to do it. We were of course told by the then Conservative Government that that was complete nonsense and that it was only an academic idea. We went through all the usual stages of the advance of the octopus. Then we were told that it was in fact a sort of proposal but that no one else agreed with it: “Don’t worry, the British Government are going to see this one off”. Then of course we move further on and what we are looking at is certainly an example of the advance towards corpus juris.
The Government have promised that any decisions to opt in to any of this legislation will be debated and subject to a vote in both Houses of Parliament. A deadline for the Government’s opt-out on this draft directive had been set for 14 May this year. As the noble Lord, Lord McNally, mentioned, the House of Commons debated and voted on it on 24 April, with the Minister confirming that the Government were thus fulfilling their promise to Parliament—that we should debate and vote on each of these opt-ins. Yet even in the Commons there was considerable dissatisfaction with the way that the Government handled the matter. The Motion was tabled on the day of the debate, without the Commons EU Select Committee being given an opportunity of scrutiny. The chairman of that committee, Mr Bill Cash, described it as a “disgrace” and the whole debate is a powerful indictment of the directive and of the Government's behaviour. I recommend the debate to your Lordships.
However, when we come to your Lordships’ House the Government’s behaviour is, alas, even less excusable. The Government were aware of the deadline for their opt-out of 14 May many months ago. Indeed, the Home Secretary wrote on 21 December 2011 to the noble Lord, Lord Roper, who was then the chairman of our EU Select Committee, revealing the 133 measures that were still subject to our opt-out. I will come back to their substance later. I am not aware of what our Select Committee did then but I understand that the noble Lord, Lord Hannay, may be going to enlighten us. The Government failed to table their proposed Motion for debate here until 21 May, a week after the deadline for their opt-out on this measure, so that we were already signed up to the thing by the time we came to debate it—let alone to vote on it. The noble Lord, Lord McNally, mentioned Prorogation, but I remind him that we took a week’s extra holiday before that, and I cannot help feeling that this Motion could have been squeezed in.
Your Lordships might think it worse that the Government tabled their Motion in the Moses Room, where we cannot vote, so they broke their promise to give your Lordships a vote on this directive and pretended that we were not entitled to one by putting the Motion into the Moses Room.
The only thing one can say in favour of the Government’s Motion on 21 May is that it was slightly more honest than the one in front of us this evening. It asked your Lordships to take note of the Government’s decision not to exercise their right to opt out, which at least confirmed that they had already taken the decision not to opt out because the 14 May deadline had passed. Tonight, we are asked to approve the Government’s recommendation that they should not exercise their right to opt out. Will the Minister explain? Are the Government recommending for our approval that they opt in or will he confirm, as I think he has, that we have already opted in? If so, what is the point of the word “recommendation”?
I was so annoyed by the Government’s behaviour that I tabled a Motion of Regret in the Moses Room, on which I said I would vote, so the Government had to move their Motion to your Lordships’ main Chamber, which is why we are here now. I hope that at least I have raised the profile of our 2014 opt-out and the way the Government are handling it. There is widespread suspicion that the Government intend to opt in to the measures in question one by one, preferably when we are not looking too closely, so there will not be much left to opt out of in 2014. If this is wrong, will the noble Lord, Lord McNally, tell us this evening what the Government’s intentions are? It may help if I remind him that I asked him this as an Oral Question on 8 February 2011 at col. 121. He answered with, I have to say, unusual coyness that it was all very difficult and the Government had not made up their mind. Have they done so now? The noble Lord, Lord Henley, indicated at Oral Questions today that the Government are still in a muddle. Can the noble Lord elucidate?
I look forward to his reply because the Written Answer from the noble Lord, Lord Henley, on 28 May, col. WA 102, was less than helpful. I asked what measures were still subject to the UK’s opt-out, which we had already agreed, which the Government did not intend to opt in to and so what would be the position on 1 June 2014. The Minister replied that the list of all measures subject to the 2014 decision had been annexed. I referred earlier to the letter from the Home Secretary to the noble Lord, Lord Roper, on 21 December 2011 that the Minister said he would put in the Library of your Lordships’ House. The Written Answer also gave me a link to the letter and the enclosure. I suppose it is hardly worth mentioning that the letter and enclosure were not put in the Library and that the link did not work. However, the Library was good enough to extract the documents for me from the Home Office on Monday, so they are now in the Library of your Lordships’ House. They reveal that last December there were 133 measures that were subject to our opt-out. I say that the Minister’s Written Answer of 28 May was unhelpful because he concluded:
“Given that the Government cannot say with certainty what proposals the Commission will bring forward, it is not possible to say what the position will be in 2014”.—[Official Report, 28/5/12; col. WA 103.]
The Home Secretary listed all 133 measures as at 21 December last, and it was revealed on 28 May that we have already opted in to eight, including the one before us tonight. Why can the Government not tell us what they are doing about the remaining 102? Surely they must already know their position on them? Or are they telling us that Brussels has a whole lot more up its sleeve that have not yet been revealed, even reluctantly? For instance, the Home Secretary said in her letter of 21 December that the Government are aware that the Commission is planning proposals for next year involving revisions to Europol, CEPOL—the European police college—Eurojust, the framework for co-operation on confiscation of assets and criminal measures to tackle counterfeiting the euro, all of which are on the current list. The noble Lord, Lord Spicer, has a point; we are moving towards corpus juris. Is the Minister aware of any more?
I now move to the substance of the directive which we have already opted in to and related matters. A number of technical objections to it were raised in the Commons, which I will not waste time by repeating now. They include the Ministry of Justice’s impact assessment, which apparently found that the overall impact is likely to be substantially negative. I think the noble Lord, Lord McNally, has already commented that the Government will try to reduce its cost.
The Government’s Motion before us states that the data processing will be conducted by competent authorities. Can the Minister tell us exactly who these competent authorities will be? He will forgive me if I say that I am not aware of any authority in the European Union that is vaguely competent, but I look forward to the answer. The Government’s Motion refers to,
“the protection of the individuals with regard to the … free movement of”,
personal data. What does that mean? What is the present and anticipated state of the free movement of our data?
The noble Lord, Lord McNally, told us of the Government’s present position, but I cannot agree with the decision to opt in to this directive, if only for the fact that this and all our opt-ins remove yet more of the sovereignty of our Parliament and courts to the jurisdiction of the European Commission and the Luxembourg court. The Government’s action should have been obvious. They should already have exercised their block opt-out so they would now be free to opt in to any measures that they felt were useful, subject, of course, to a vote in both Houses. Interestingly, the Prime Minister agreed with this on 4 November 2009 when he said:
“We must be sure that the measures included in the Lisbon treaty will not bring creeping control over our criminal justice system by EU judges. We will want to prevent EU judges gaining steadily greater control over our criminal justice system by negotiating an arrangement which would protect it. That will mean limiting the European Court of Justice’s jurisdiction over criminal law”.
The arrangement is right there, staring him in the face. He does not have to negotiate anything. He just has to use the opt-out that existed when he made that speech.
I have one other question for the Minister which comes from a debate in the Commons. Mr George Eustice told us that Denmark has opted in to some of these measures, but has managed to do so excluding the jurisdiction of the Luxembourg court. I do not know whether the Government feel like imitating that.
The sad fact is that the Prime Minister’s Government have already opted in to eight of the more significant measures according to their Written Answer on 28 May, as I have mentioned. They include the one before us and directives on the European investigation order, combating sexual abuse, the exploitation of children and child pornography, attacks on information systems and minimum standards for the rights, support and protection of victims of crime.
Whatever noble and Europhile Lords may say about the desirability of these initiatives and the need for action at a European level, those should not outweigh the protection of what is left of our national sovereignty. Where we want to collaborate with foreign Governments, we can do so. We do not need the incompetent and well known judicial activism of Brussels and Luxembourg to take over. Of course, we Eurosceptics know that we would be better off out of the whole thing anyway, but we object strongly to such initiatives as Europol, CEPOL, Eurojust, the European investigation order and, perhaps above all, the European arrest warrant. It is heartening that a growing majority of the British people agree with us.
I have one final question for the Minister. Will he tell us why the directive before us, the seven others that we have already opted into and the 125 that await their turn do not amount to a substantial transfer of sovereignty to the European Union and therefore trigger a referendum? I will be most interested in the noble Lord’s reply. I beg to move.
Lord Wills
My Lords, I find myself in the happy position of agreeing with much of what the two previous speakers said—even with much of what the noble Lord, Lord Pearson, said in the first 10 minutes of his speech. I welcome this debate, whatever its genesis. It shows that the Government are adopting an open approach to what may be a technical measure, and which may excite little attention in the media, despite, I am sure, the best endeavours of the noble Lord, Lord Pearson. Nevertheless, it will have significant consequences for the people of this country. The Commission’s proposals have complex ramifications, as the noble Lord, Lord McNally, has already said. At this point, I want to make only a few general points.
Unusually, I agree with at least the part of the Motion in the name of the noble Lord, Lord Pearson, that deals with process. He is surely right to say that the complex process of deciding whether to opt into or out of this crucial area of public policy must be as transparent as possible. However, the apology of the noble Lord, Lord McNally, was handsome and should conclude this matter. As I remember only too well, these things happen in government and I am sure that the appropriate lessons will have been learnt by the Government in this case.
Turning to the substantive issues, the proposal for the directive alongside the data protection regulation seems to owe more to an administrative prism in Brussels than to common sense, which suggests a single instrument. Requiring the police and other organisations such as local authorities to follow one set of rules for the law enforcement data that they hold and another for all other data is surely a recipe for confusion and breach. Individuals will be unclear about what rights they have and in what circumstances they might apply.
The directive also appears to be weaker than the regulation in certain key aspects for no apparent reason. For example, why does the directive not include provision for privacy impact assessments, as the regulation does? I understand that British police forces already carry them out, so why can this not be included in the directive? However, as the noble Lord, Lord McNally, said at some length, the fact that there is clearly room for improvement in the directive surely cannot mean that the UK should have opted out. On the contrary, as the noble Lord, Lord McNally, has again said—I want only to support what he said—this would only damage British law enforcement. Other European states are going to proceed anyway, whatever we do. If the UK had opted out, that would surely have led to different regimes, and if elements of British data protection were seen to be weaker than the EU regime, it would inhibit data transfers and law enforcement co-operation.
I am not as sanguine as the noble Lord, Lord Pearson, about our ability to negotiate agreement effortlessly with other states on this. A whole succession of bilateral agreements would be complex, protracted and add layers of bureaucracy to law enforcement processes that often, by their very nature, have to be conducted speedily across many borders, as the noble Lord, Lord McNally, has said. Negotiating such a set of bilateral treaties would surely complicate and damage law enforcement.
Finally, I will briefly take the opportunity to nudge the Minister on another data protection issue—the introduction of the sentencing option of custodial terms for breaches of Section 55 of the Data Protection Act. This has been a long time coming. It was a long time coming under the previous Government and there has still been no real progress. However, surely it is now time to do what the Information Commissioner urged the previous Government and this one to do. This does not depend on the outcome of the Leveson inquiry; its main relevance is to breaches by those other than the media. Fines simply do not deter breaches of Section 55. For example, I understand that the going rate for a Section 55 offence in magistrates’ courts is £130, whereas a claims management company will pay £500 for a lead. Therefore, I hope that, amid all the other questions that he has to deal with in responding to this debate, the Minister might be able to give some words of comfort about the Government’s commitment in this area.
Lord Lester of Herne Hill
My Lords, the Minister has made a handsome apology and I agree with the noble Lord, Lord Wills, that that should be an end to this. My noble friend does not suggest that the process has been well conducted or that it will happen again. It is not helpful for noble Lords to accuse the Government of bad faith or dishonesty, as the noble Lord, Lord Pearson, has. That is unworthy of him and of this debate.
To complete the chronology of what happened, as we know, the Commission published its proposals on 25 January. Very quickly, on 7 February, the Ministry of Justice called for evidence by 6 March. On 14 March, a report was published by the House of Commons European Scrutiny Committee, which analyses this matter in depth on pages 42 to 63. There was then a debate on 24 April, which was referred to by the noble Lord, Lord Pearson. What he did not say is that in the vote on whether to take note, those who agreed with him were defeated by 267 to 24. No one can say that what happened in the other place was in any sense an absence of parliamentary scrutiny. I have had the privilege of serving on the EU Sub-Committee on Justice and Institutions three or four times during my time in this House. I take great pride in the fact that scrutiny is conducted better in our Parliament than in any other throughout the European Union.
I have listened very carefully to the Minister and read—as has the noble Lord, Lord Pearson, apparently—the Government’s explanation in the other place of why they took the course that they did. In his speech, the noble Lord, Lord Pearson, did not reply at all to any of the arguments that were put forward in the other place and here on the Government’s course of conduct. In the other place, the Minister, Mr Blunt, said that there were three main reasons for deciding not to opt out. The first was that,
“the directive is at a very early stage of negotiation”.
The second was that,
“the legal base of the measure gives the UK an effective exemption on the issue about which we are most concerned: internal processing of data”.
He went on to say:
“Thirdly, and most important, exercising the opt-out would endanger our continued ability to share information across borders without necessarily freeing us from the bureaucratic and unwelcome obligations potentially created by the new directive”.
He continued:
“If we were outside the directive, our ability to negotiate essential data-sharing agreements”—
of which there are many examples—
“could be significantly undermined”.—[Official Report, Commons, 24/4/12; cols. 886-87.]
The Minister in the other place said:
“Let us be clear about what is at stake here. Rules enabling the sharing of data have made a tangible difference to the United Kingdom, and we take steps that imperil them at our risk and at risk to our citizens. Let me give an example, which concerned a 32-year-old Romanian national who was arrested in the United Kingdom on suspicion of raping two women within the Metropolitan area. A request for conviction data identified that the suspect had a previous conviction for rape in Romania. Just prior to the trial, the individual disputed the Romanian conviction, but through close liaison with the central authority and the police liaison officer at the Romanian embassy in London, a set of fingerprints relating to the Romanian rape conviction was obtained and proved the conviction beyond doubt when they matched against the suspect.
An application to use the previous conviction as bad character evidence was made by the prosecuting counsel and was granted by the judge, allowing the Romanian rape conviction to be put before the jury. The defendant was convicted of four counts of rape and other offences … in July 2010. The defendant was given an indeterminate prison sentence, with a recommendation that he serve at least 11 years in jail”.—[Official Report, Commons, 24/4/12; col. 888.]
And so it goes on.
What the Minister explained in the other place was that the information was obtained exactly under the regime which the noble Lord, Lord Pearson of Rannoch, regards as an encroachment on our criminal law and our domestic legal system. To the contrary, the ability across frontiers to share data of this kind is entirely in the interests of protecting our citizens against crime and their public safety.
As regards the other interests at stake—
Lord Pearson of Rannoch
The noble Lord of course is right that I think what he has just said. But far superior to that is the continuing cession of our sovereignty and the supremacy of our courts to the European courts and the Commission. That is the overriding objection that I have. I have read the debate in the Commons and I cannot believe that the Romanian could not have been convicted under similar arrangements without the continuing cession of our sovereignty.
Lord Lester of Herne Hill
I do not think that your Lordships would need a full debate on the value of the two European courts in protecting the rights and freedoms of our citizens. But, as I was about to say, the other rights and interests at stake are those of personal privacy, freedom of expression, protecting the security of the state, protecting us against crime and, in one aspect of what we have before us, ethnic profiling data-taking being prohibitive but with a necessary exception for equality where it becomes necessary in the interests of equality to do so. All those rights and freedoms, which are also part of our domestic law, are protected not only by our own courts but by both European courts. If a European bureaucracy or a European piece of legislation violates our basic rights and freedoms, the Luxembourg Court and the Strasbourg Court have the capacity, and they exercise it, to protect us against the abuse of power by European institutions. That is why the dislike of the noble Lord, Lord Pearson, of supranational or European jurisdictions is entirely misconceived. We need cross-border legislation and measures but we also need safeguards, which we get from those two European courts.
I therefore warmly welcome the pragmatic and careful approach taken by the Government over these measures. I very much hope that we will continue in exactly this direction.
Lord Pearson of Rannoch
Will the noble Lord tell us whether these protections which we enjoy from the European Union apply to British subjects extradited under the European arrest warrant? Is he happy with the way in which that initiative has developed?
Lord Lester of Herne Hill
The Joint Committee on Human Rights on which I serve has expressed some concerns, as has one of our members, Dominic Raab QC MP. I share some of those concerns but I do not think that this is an occasion for us to debate whether we think all European measures might be improved.
Lord Hannay of Chiswick
My Lords, I am participating in this debate in my capacity as chair of the European Union Committee’s Sub-Committee on Home Affairs, Health and Education, which has scrutinised the measure now before your Lordships. As to the substance covered by the draft EU directive in question, the committee supports the Government’s decision not to opt out for reasons with which I will not weary the House because the noble Lord, Lord Lester of Herne Hill, has just most eloquently described them.
The directive covers the processing of personal data for the purposes of police and judicial co-operation in criminal matters and forms part of a package, together with a data protection regulation covering the general and commercial processing of personal data by public and private bodies. The directive is intended to replace the 2008 framework decision, which was adopted under the old third pillar procedures established under the Maastricht treaty before these were superseded by the treaty of Lisbon. In plain language, that is to say that the UK had agreed to that earlier decision, which required unanimity to agree to it in order to be adopted, and is covered by it whether or not we opt out of the new directive.
When adopted, the new directive will apply significantly stricter rules on data protection, which we welcomed in my committee, in contrast to the relatively weak provisions in the framework decision. There is, of course, a down-side risk about which the Minister spoke. This enhanced protection could place an additional burden on businesses and public authorities. Therefore, like the Government we attach importance to an appropriate balance being struck in this matter. With that in mind, we would urge the Government to focus on, and to play an active role in, achieving that balance during the negotiations which are now to take place.
We have noted that in addition to this package a variety of different EU measures remain in force under Title V of the treaty, which contain distinct and separate data protection provisions. Perhaps the noble Lord would agree that to enact the directive in its current form, which would not bring these existing measures within its scope, would be to miss an opportunity of achieving a more coherent, overall approach. Perhaps he could say a word about that. That sort of opportunity might not recur for many years. It would be interesting to know whether the Government will be addressing this matter in the negotiations.
The directive is currently in the form proposed by the Commission and is likely to be the subject of prolonged negotiations in the Council, which was confirmed by the noble Lord in his introductory remarks. Those negotiations are already under way. We endorse the Government’s view that the best way for the UK to shape and improve the directive is by playing a full part in the negotiations, which the decision not to opt out allows us to do. The committee I chair is keeping the directive under scrutiny and we expect to receive updates of the negotiations from the Government in due course. When appropriate, we will intervene with our views on those updates.
Having addressed the substance of the directive, I would now like to turn to the procedural concerns that have been raised regarding the handling of the directive by the Government in this House. I agree with the noble Lord, Lord Pearson, about the handling and welcome what the noble Lord, Lord McNally, said about it himself. It has not been ideal, as the Minister frankly conceded in his letter of 28 May to the chair of the EU Select Committee in response to our warning that the Ashton and Lidington undertakings were not in this case being properly implemented. It is a bit more serious than the noble Lord, Lord McNally, suggested in his opening remarks, because it was an absolutely integral part of the votes in this House to ratify the Lisbon treaty, so it is a fairly important point. But I welcome the fact that the Minister has recognised that mistakes were made on this occasion.
The Motion refers to the Schengen protocol, the effect of which is that the UK is deemed to be participating in any measures which build on those parts of the Schengen acquis in which it already takes part unless, within three months of the measure’s publication, it notifies the Council that it wishes to opt out. If it does not do so then, it becomes automatically bound by the measure, if adopted, and will participate in its negotiations.
During debates in this House on the ratification on the Lisbon treaty, the noble Baroness, Lady Ashton of Upholland, gave an undertaking to take the views of this House into account on reaching a final decision on whether the United Kingdom should opt in to justice and home affairs measures. On behalf of the coalition Government, David Lidington, the Minister for Europe, reaffirmed the undertaking and extended it to cover opt-out decisions under the Schengen protocol, which is the one that we are talking about tonight. Since then, the latter circumstance has not arisen until now and the Motion before your Lordships' House is thus the first of its kind.
While we have already welcomed the Government’s intention to participate in the directive, given their view that the potential for an opt-out applied, it was regrettable that they did not raise the issue in the Explanatory Memorandum of 13 February. Indeed, we have yet to receive an satisfactory explanation as to why they actually considered that the Schengen opt-out applied in this instance at all, but that is a fairly abstruse legal point and I do not wish to labour it now, because the Government have decided that it applies and have gone through the decision-making process in the way described.
It was also regrettable that time was not found to debate the draft directive before prorogation, as it was in the Commons on 24 April. As a result, the Ashton and Lidington undertakings have not been fully respected since the three-month period for an opt-out decision expired on 14 May. I understand that discussions are under way between the Government and both Houses to ensure that circumstances such as this do not arise again. In those circumstances, my committee would consider that the Motion to Regret tabled by the noble Lord, Lord Pearson, is disproportionate and we would frankly not support it.
As your Lordships will already be aware, following the response of the noble Lord, Lord Henley, to the noble Lord, Lord Vinson, who asked an Oral Question this afternoon, before June 2014 the House will need to return to this complex area in a significant way when the question arises of whether the UK should exercise its right to opt out of approximately 130 measures relating to police and judicial co-operation in criminal matters under Protocol 36 of the Lisbon treaty. I would be delighted to respond to the interest shown by the noble Lord, Lord Pearson, in the activities of the EU Select Committee, about which he is not always that polite. On this occasion, he seems to be interested in how we do our work. I can enlighten him, although it is all on the EU Select Committee’s website, including the Home Secretary’s reply on the list of 133 measures. It is all there and, if the noble Lord wishes to look on the website, he will find it.
The list of those measures that will be covered by Protocol 36 was provided as a result of an initiative taken by the noble Lord, Lord Bowness, who chairs the twin committee to the one that I chair, which deals with justice. He raised the issue through the noble Lord, Lord Roper, and we got the answer with the list, which was helpful. When the noble Lord, Lord Vinson, asked his Question this afternoon, we got a little further, because we got a useful Answer from the noble Lord, Lord Henley, as well as a confirmation of the complex arrangements for consulting the European scrutiny committees and various other committees of both Houses before the Government came to any conclusion about the block opt-in or opt-out of 2014. That was extremely helpful, and I welcome the fact that that enlightenment has been given. I add only that we are still not very far down the road to understanding how procedures will work. These are completely unprecedented procedures, with votes in both Houses and the consultation of the various committees, and I hope that the Minister and his colleague the noble Lord, Lord Henley, will at some stage—although we are not very close to that yet—throw some light on how that process will be covered.
I add, for the noble Lord, Lord Pearson, that as soon as we got the letter from the Home Secretary with the 133 measures, the noble Lord, Lord Bowness, and I put our heads together with the then chairman of the EU Select Committee, the noble Lord, Lord Roper, and concluded that it would be necessary for the committee to write a report to the House before the block opt-out came before the House. That has been decided; it is on our forward programme, and I think that we will start taking evidence on it early in 2013 after we have concluded, in my committee, the report that we are doing at the moment on migration and mobility. That should give us plenty of time, and I hope that we will get the report out before the end of this Session—that is, mid-2013. That should give us plenty of time to provide the House with the kind of evidentiary basis that it ought to have before it has to take a decision on this matter. It will of course include the Government’s views on the matter, but they will give evidence in that inquiry.
I hope that that is useful to the noble Lord, Lord Pearson. It may even convince him that the EU Select Committee occasionally serves a useful purpose. Anyway, I do not want to go on any longer. It is late as it is and I have gone on rather too long. I hope very much that the noble Lord will not persist in his Motion of Regret. For my part, on behalf of my committee, I support the Government’s decision in substance.
Lord Beecham
My Lords, having yesterday disavowed the Minister’s generous description of me as a distinguished lawyer, it will come as no surprise to him to hear me say that I lay absolutely no claim to any expertise in matters of information technology, data protection or the work of the European Union and, indeed, European law. However, it is 50 years since I achieved some sort of qualification in Latin, when I managed a B grade in my A-levels. Having had reference to a corpus juris tonight in the debate, it is perhaps appropriate to congratulate the Minister on his ministerial mea culpa for the not uncharacteristic failure—not on his part but that of the Government’s business managers generally—to see that the proper procedures were followed. I have, to that extent, some sympathy with the critique of the noble Lord, Lord Pearson, which was echoed in part by the noble Lord, Lord Hannay. It is unfortunate that those matters occur.
As regards the report of the European Scrutiny Committee, will the Minister confirm that the Government have complied with the committee’s request to be kept informed of progress in negotiations on the points of concern for government, as outlined in the Explanatory Memorandum? Little progress may well have been made but it would be good to have that assurance on the record tonight. Will the Minister indicate whether, as requested by the scrutiny committee, the Government will in due course share with the committee the response to the call for evidence, and explain whether the responses change their approach to negotiations? That is a straightforward request which I would expect the Government to honour. I do not know whether the Justice Committee has yet given its opinion on the draft directive. Perhaps the Minister can enlighten me on that. That, of course, is not a matter for the Government but I assume that they would wish to take that issue into account.
The Opposition are broadly supportive of the Government although we share some of the reservations around the potential cost and bureaucracy, to which the Minister referred. However, on reading the debate on this matter in the House of Commons, it struck me that the event was rather like a works outing for Eurosceptics and concentrated on process rather than on substance.
The noble Lord, Lord Lester, has forcefully and clearly outlined the important issues which the directive addresses. I draw the House’s attention to elements of the scrutiny committee’s report, which make it very clear that many of the key changes which the directive introduces are supportive of the rights of individuals. That is as it should be. I wish to refer to some of them, such as,
“new rights of access and information for data subjects, such as the identity of the data controller, the purpose of the data processing and the period for which the data will be stored; an obligation for data controllers to implement ‘appropriate technical and organisational measures’ to ensure an appropriate level of security; a right for data subjects to directly demand”—
I note the split infinitive—
“the erasure of their personal data by the data controller; an obligation on data controllers to inform supervisory authorities and data subjects of data breaches, informing the former within 24 hours of discovery and the latter ‘without undue delay’”.
These are significant protections for the citizen and we should welcome them. I hope that they can be implemented. Frankly, it seems to me that that is more important than the perennial debate about where our sovereignty lies because, as the noble Lord, Lord Lester, indicated, and as the Minister made clear, we are dealing here with matters of considerable importance: namely, the safety and security of British citizens and the protection of citizens from criminal depredation. In these days of international crime, not least through the auspices of modern technology, it is essential that we co-operate fully with law enforcement agencies among our European allies and partners.
In these circumstances, I think that the Government are on the right lines. I very much hope that the procedural hiccups that we have seen in this case will not be repeated. We look forward to the Government negotiating successfully and, more importantly perhaps, reinforcing the rights of citizens which this directive will promote.
Lord McNally
My Lords, the concluding remarks of the noble Lord, Lord Beecham, brought to mind a saying much loved by my old mentor, the late Lord Callaghan—that a lie was half way round the world before truth could put its boots on. These days, it is more than a lie that can get half way round the world before the police can put their bicycle clips on. We have to approach these issues with the benefits of modern technology but balance that with some of the threats that modern technology brings to individual privacy and such matters. It is that which we have been debating.
I am grateful to the noble Lord, Lord Beecham, for his support from the opposition Front Bench. We will keep committees informed on the matter. I am not quite sure whether the Justice Select Committee has asked for a formal meeting, but I will write. A large number of questions were asked. If I miss any out in my reply, I will make sure that I cover them in a written response to noble Lords who have taken part in the debate. As the noble Lord, Lord Beecham, reminded us, these are important issues in terms of individual rights as well as in terms of security, crime detection and related matters.
The noble Lord, Lord Hannay, implied that I had taken matters lightly in our application of, or approach to, the Ashton-Lidington promises. That is not true. I take them very seriously indeed, and that is why I have been forthcoming in my apology. I know the noble Lord, Lord Pearson, well enough—indeed, I have a certain affection for him—but if you offer him an olive branch on matters European, he is most likely to grab it and hit you over the head with it. Nevertheless, the apologies were sincerely given. Accidents happen. It is cock-up, not conspiracy. As I said in my opening remarks, we are trying to learn the lessons and, as the noble Lord, Lord Hannay, said, this is one of the first times that we have discussed Schengen under these proposals. If there are lessons to be learnt, we will learn them.
To get things into proportion, we are in June 2012. The Lisbon treaty specifically gave us until June 2014 to make up our minds on these issues. Therefore, to imply that we do not have every answer to every matter two years before that deadline suggests that we have a liking for conspiracy that simply is not there. At Question Time today, my noble friend Lord Henley gave absolutely crystal-clear assurances on how the Government will approach this. The idea that somehow we were going surreptitiously to slip through, one by one, the 133 measures covered in this area of the Lisbon treaty is laughable. Of course the world has not come to a dead stop and things come through. When measures are brought forward, as they necessarily will be, what happens—although it did not happen perfectly in this case—is that we bring them to Parliament, which has the opportunity to debate and approve them. The fact that this House did not get that opportunity in this case is regretted, but the other place, as my noble friend Lord Lester pointed out, approved the measure by 267 votes to 24.
I would say only one other thing about the points raised by the noble Lord, Lord Pearson. I will come to his questions, but he read out a list of, I think, six measures that had gone through. I would be happy if he read them out again because, as an ordinary citizen, I am much reassured that we have that measure of European co-operation on those kinds of issues, although I know that we come from a different philosophical point on this. However, if the noble Lord is trying to convince the British people of his point of view, I am glad that he reminds them of the really positive measures concerning co-operation on criminal justice matters, as I think that that strengthens my approach rather than his.
I thank the noble Lords, Lord Hannay and Lord Lester, for their contributions. Concerning the point made by the noble Lord, Lord Hannay, about taking the opportunity for a coherent approach in these negotiations, I can give him an absolute assurance that we will look to his committee and other committees in both Houses. We will provide them with updates and look to them for comments and commentary on the progress of these negotiations. There will be no attempt by the Government to do anything other than that.
As I said, I shall not be able to cover all the issues that have been raised in the House today. However, the 133 measures—a nice, frighteningly large number—need analysis. I welcome the fact that there will be an opportunity for the committee to look at them. Some of them are dead or dying. It is not the case that the Beelzebub that the noble Lord, Lord Pearson, spends his nights afeared of is thinking up 133 new measures. This is a matter of taking stock in a calm, rational manner and then, one hopes, having a rational discussion based on analysis about what is in our national interest and allowing Parliament to take a decision following such a debate. There is certainly no attempt to pre-empt matters. The Government continue to approach each opt-in decision on a case-by-case basis, taking decisions based on the UK’s national interests. They will not be making any premature decisions on this, as my noble friend Lord Henley assured the House earlier today.
I am told that the reference to competent authorities is from Article 3 of the proposed directive. A competent authority is any public authority which is competent for the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties. Therefore, a competent authority is not some branch of the Commission; we are referring here to the police.
Our impact assessment was also mentioned. It is true that we considered that there were both bureaucratic and cost implications, but we also said that being positioned outside the directive could involve costs too. Again, as we look at these matters and as the negotiations unfold, these things can be fully examined.
Oh dear! It looks as though we may have another apology to make in that the noble Lord, Lord Pearson, said that the Motion before the House is a recommendation and not a decision. This was not an attempt to mislead the House. Of course, by now it has become a decision and I am sorry for that drafting error.
I was asked why the title of the directive mentions free movement of data. The purpose of the directive is twofold: ensuring that personal data are protected and ensuring that they can be exchanged for the purposes of the prevention, investigation, detection or prosecution of criminal offences. I think that that covers the question asked by the noble Lord, Lord Wills, about why we had this twin-track approach. From the beginning, there has been legislation covering the broad area of data exchange and the very specific needs of the police and criminal detection authorities.
The noble Lord, Lord Wills, cunningly and quite outside the remit of this debate, asked me about Section 55. I am very willing to write to him. We have continued to be reluctant to put penal sanctions on Section 55, but we keep it under review and we continue to discuss the matter with the Information Commissioner.
I will shuffle through my notes and look at them very carefully because I think it will be easier to answer some of the specific questions in writing. I will write to noble Lords with a considered response to the specific questions and put copies in the Library of the House so that these matters are on the record.
I hope that the noble Lord, Lord Pearson, will agree to withdraw his amendment. This debate has been useful. Basically, he seems to argue from a very fundamentalist position, which I understand but do not agree with, about whether or not we should participate in these kinds of processes. Speaking for the Government, I take the position, as I stated at the beginning, that some of the things that the data protection issues cover are, by their very nature, matters that need international co-operation. We have been very frank in saying that we think that the approach of the Commission has been overprescriptive. There are burdens and costs that we do not like, but we are convinced that it is in Britain’s interest to opt in, to negotiate hard, to keep Parliament fully informed and to make decisions at the appropriate level and at the appropriate time on these matters.
Tonight’s debate has been chastening for my department but I give the assurance: “Please, Sir, we won’t do it again”. However, we will continue to engage positively on these matters because, in our view, that approach is in our national interest. I sincerely hope that the noble Lord will agree to withdraw his Motion so that the House can approve my Motion.
Lord Pearson of Rannoch
Before the noble Lord sits down and before I respond on my Motion, perhaps I could press him on two questions, as I did not quite understand his answers. First, is he saying that we are likely to have a number of individual opt-ins for debate and vote before the end of May 2014? I think he implied that that could well happen. Secondly, the most important question I put to him to which I would like an answer is this: as these opt-ins clearly amount to a transfer of sovereignty, or whatever you want to call it, from this Parliament and our courts to the Commission and to the Luxembourg Court of Justice, why are we not having a referendum? I understood that that was the point of the referendum Bill. If the Minister would be good enough to answer those two questions, I will reply briefly to my Motion.
Lord McNally
Gladly so. I said that—and I do not know because I am not a clairvoyant on these matters—we will try to get notice from the Commission to see if things are coming down the track. As I said, things are not frozen, so we may well get another one like this. I do not know. But if we do, perhaps with better handling, we will do what we have done with this which is to bring it before both Houses for approval.
On the question of a referendum on these measures, this was clearly laid out in Lisbon. The process was clearly laid out. The Government have made their approach one of full consultation with the relevant committees of both Houses and the opportunity for both Houses of Parliament to take a decision. I do not think that the Government could have been any clearer tonight. That is the Government’s position.
I am told that the noble Lord’s Motion is not an amendment. It is a freestanding Motion. The House must decide on my Motion and then separately on that of the noble Lord, Lord Pearson. I am grateful to the Clerk for that guidance. I hope that that is a clear enough explanation of the noble Lord’s two questions. I beg to move.
EU: Personal Data
Lord Pearson of Rannoch
That this House regrets the Government’s decision not to exercise its right to opt out of the Draft Directive of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data; and also regrets that the deadline for opting out passed on 14 May without the House being given the opportunity to debate and vote on the Government’s decision.
Lord Pearson of Rannoch
My Lords, I am grateful to all noble Lords who spoke to my Motion. I have two or three brief comments. First, the noble Lord, Lord Lester, opined that the procedure in the House of Commons on this matter was adequate. All I can say is that I have read Hansard as I am sure he has, and that was clearly not the opinion of the chairman of the European Scrutiny Committee, Bill Cash.
A number of noble Lords have said that—
Lord Lester of Herne Hill
I am not clear about the attitude of the noble Lord, Lord Pearson, to parliamentary sovereignty. The other House, the elected Chamber, has voted overwhelmingly in the Government's favour. Why is that not more significant than the view of Mr Cash as chairman of the European Scrutiny Committee?
Lord Pearson of Rannoch
I accept that the House of Commons voted overwhelmingly to opt into this measure, but it was the scrutiny procedure that came under discussion in the House of Commons. Who knows? Perhaps if the scrutiny procedure had been adequate, the result might have been slightly different. Of course I agree that the House of Commons was always going to vote this sort of thing through. That is one of the troubles with our democracy.
A number of noble Lords said that we might as well sign up to all this because if we did not have it we would have to have alternative arrangements. It would all be very complicated and there will be more administration and so forth. I am indebted to a thought on this point from the Open Europe think tank, which is a mildly Eurosceptic organisation. It makes this point, which is important because the noble Lord, Lord Wills, and many noble Lords mentioned it in our debate:
“There are various international agreements in place outside the EU’s legal framework, mostly Council of Europe conventions, including one on extradition, which the UK could continue to use should it cease to apply EU crime and policing law post-2014. Although they do not cover all areas, and are often more cumbersome than the EU measures, the fact that the UK has a fall-back option means there is no need to ‘rush … ’”,
to opt in.
Lord Wills
I hesitate to detain the House at this late hour, but is the noble Lord fully confident that those other instruments to which Open Europe refers are going to be sufficiently up to date with the technology in precisely the way that this European regulation and directive are designed to be, as the noble Lord, Lord McNally, said? They are updating our protections in line with rapidly changing technologies. Is he confident that those instruments will meet those concerns?
Lord Pearson of Rannoch
My Lords, I am not saying I am entirely confident of that, but I know that I prefer them to the cession of our sovereignty in these matters to Brussels and the Luxembourg Court. If necessary, we could negotiate these matters with other countries individually. There is no reason not to do that. In my view, and the view of those of a Eurosceptic persuasion, the price that is being required is too high.
Finally, if, as the noble Lord says, this directive is at a very early stage, and the whole process of the opt-ins is at a very early stage, I really cannot see why we do not stay out of it and wait and see. That would seem to be a far preferable route to take.
I am very grateful to all noble Lords who have spoken. It has been a useful debate. Again, I am very grateful for the generosity of the apology of the noble Lord, Lord McNally.