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Oral Answers to Questions
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Mr Clive Betts (Sheffield South East) (Lab)
1. What her policy is on the means-testing of concessionary bus travel for pensioners.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I believe that you, Mr Speaker, and the Opposition Front-Bench team will know that my ministerial colleague, the hon. Member for Hemel Hempstead (Mike Penning), is unable to be here today as he is abroad at a piracy conference—or, hopefully, an anti-piracy conference.
We have no plans to introduce means-testing to assess eligibility for concessionary bus travel for older people. The right to free bus travel for both older and disabled people is enshrined in primary legislation. In the 2010 spending review, the Government said they will protect the statutory entitlement to concessionary bus travel.
Mr Betts
I am pleased the Minister has dropped the Deputy Prime Minister’s ridiculous idea—presumably because he can envisage situations in which a pensioner who qualifies for a pass, under a means test, gets on a bus and produces their pass, and everyone can see that they are poor enough to qualify. We would end up with better-off pensioners not getting a pass because they would be means-tested out, and the poorer pensioners not using a pass because they would be too embarrassed to do so.
Norman Baker
I thought the hon. Gentleman might have wanted to congratulate the Government on giving £25 million to South Yorkshire yesterday, or on proceeding with the Rotherham to Sheffield tram-train trial, about which he has been so keen, and which his Government did nothing to advance over so many years.
The Deputy Prime Minister raised no such idea, and I made our position clear to the hon. Gentleman in a letter of 2 April. He is well aware of the Government’s position.
Maria Eagle (Garston and Halewood) (Lab)
Before the election, the Prime Minister pledged to keep the free bus pass. We know the Deputy Prime Minister and his Lib Dem colleagues did not agree, and now we learn that the Work and Pensions Secretary wants it scrapped as well. Can pensioners be sure they will not face a means test in order to receive their bus pass, or is this going to be another U-turn the Chancellor has not told the Transport Secretary about?
Norman Baker
The hon. Lady clearly does not want to take yes for an answer. I do not know how many times we have to say from the Dispatch Box that the concessionary fares arrangements will not change over the lifetime of this Parliament: end of story.
Maria Eagle
After the shambles of the last week, I am not sure that pensioners will be reassured by that commitment. After all, the Transport Secretary began the week by ruling out a U-turn on fuel duty. The fact is that pensioners are being hit now by cuts to bus services, which Age UK and the National Pensioners Convention warn are leading to concessionary bus pass holders having no buses to get on. The Government were right to respond to our call to do something for motorists, but as the Department for Transport has now admitted to under-spending its budget by £500,000—the amount needed to restore bus funding—is it not time to show a similar commitment to public transport and restore the bus cuts?
Norman Baker
If I may say so, Mr Speaker, that question strays a long way from the tabled question about concessionary bus passes, and if I were the hon. Lady I would not have asked it, because the latest figures, out this week, show that bus passenger journeys in England increased by 0.6% between 2010-11 and 2011-12. They also show that bus fares outside London fell by 4% in real terms between March 2009 and March 2011. I think that, on this occasion, the Eagle has crash-landed.
Angie Bray (Ealing Central and Acton) (Con)
2. What recent assessment she has made of airport capacity in the south-east; and if she will make a statement.
The Secretary of State for Transport (Justine Greening)
It will be quite a job to follow the Minister’s last remark.
UK Aviation Forecasts 2011 provides an assessment of how demand for air travel in the UK is expected to change in the future. We will shortly launch a call for evidence to look at how we can tackle that challenge of emerging demand. Let us be clear, however: the coalition agreement stands. This Government cancelled the last Government’s plans for a third runway, and we will be sticking to that.
Angie Bray
I thank the Secretary of State for that answer, and I know my constituents will be grateful, too. Does she also agree that talk about expanding Heathrow so it becomes a competitive international hub is wildly misplaced? A third runway would fill up almost at once—and where would a fourth runway go, unless we were to look at possibly knocking down parts of Hounslow and Staines, which I am sure would be entirely unacceptable?
Justine Greening
My hon. Friend raises some of the very difficult issues we have already run up against with Heathrow as a hub airport. She also points out that these discussions and decisions matter massively to residents on the ground, and she is right that the question is not just about a third runway at Heathrow—about which we have been very clear—because expanding that airport further would pose significant challenges to local communities, which should be taken extremely seriously.
Graham Stringer (Blackley and Broughton) (Lab)
Airport capacity in the south-east has been studied in great detail for the last 50 years, and there is no further information to be found. Is not the reason we are not getting a third runway the deal done between the Prime Minister and Boris Johnson to try to secure votes in west London, as a result of which the entire economy of the United Kingdom is suffering? I believe the Prime Minister wants to do a U-turn on this, and that he will do a U-turn.
Justine Greening
I am not sure whether that was actually a question, Mr Speaker, but what I do know is that we need to approach this discussion with maturity and from a long-term perspective. Given how much this decision affects many people, not just in the industry, but on the ground, it is not good enough to have a headline-driven, pub-style debate. What I have called for now is a much longer-term debate to get some answers that are not just right in the next 10 to 15 years, but will be right for the next 50 or 60 years. I very much welcome the fact that companies such as BA and people such as Willie Walsh are now starting to step up to the plate and join that debate. I look forward to their response and those of many others to the call for evidence over the coming months.
Dr Julian Huppert (Cambridge) (LD)
Will the Secretary of State confirm that the Government will stand by the whole of the coalition agreement in this area? Will she confirm that they will stand by the cancellation of the third runway at Heathrow, as she has said, will refuse additional runways at Gatwick and Stansted, and will rule out mixed mode at Heathrow?
Justine Greening
I think I have been very clear: the coalition agreement, in its entirety, stands. That is the position.
Fiona Mactaggart (Slough) (Lab)
I represent a constituency where the people on the ground are affected directly by Heathrow, and welcome the jobs and prosperity that the airport brings them. Will the Secretary of State improve access to Heathrow by investing in improved rail access to it from the west as soon as possible? It is a shovel-ready project—will she deliver it?
Justine Greening
I know that the hon. Lady has been very passionate about that project. Indeed, a number of weeks ago I was at a reception on it organised by her and my hon. Friend the Member for Reading East (Mr Wilson). We are looking at it very closely. I have to say that a Westminster Hall debate on rail-air transport links in the south-east took place earlier this week and not one Labour MP turned up to it.
Steve Rotheram (Liverpool, Walton) (Lab)
3. What recent assessment she has made of the level of funding for road maintenance.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The Department is providing £3 billion over four years to 2014-15 to local highway authorities in England for roads for which they are responsible. We also provided £200 million in March 2011 to repair damage caused by the 2010 winter. The Highways Agency is responsible for operating, maintaining and improving the strategic road network in England, and this financial year its maintenance budget is £755 million, excluding costs associated with private finance initiative projects.
Steve Rotheram
We know that the coalition’s manoeuvre of choice is the U-turn, so can the Transport Secretary or the Minister continue in that vein by reversing the Department’s decision to cut investment in Britain’s road network by £3.5 billion?
Norman Baker
Again, I thought that the hon. Gentleman might have welcomed the £20 million that the Department gave to Merseyside yesterday for investment in local transport projects. I thought he might also have welcomed the fact that in cash terms the Department is providing more for road maintenance over this four-year period than his Government did over the previous four years.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I welcome my hon. Friend’s announcement? North Yorkshire has the second longest rural road network, after Lincolnshire, and the most extreme winter conditions. How can we ensure that we get a fair slice of the extra money that has been announced?
Norman Baker
I am happy to say that North Yorkshire also qualified for funding from the Department yesterday to help the Harrogate and Knaresborough sustainable transport package. We continue to fund road maintenance through the standard arrangements from the Department, as I indicated a moment ago.
Kelvin Hopkins (Luton North) (Lab)
The requirement for large expenditure on road maintenance arises overwhelmingly from the heavy axle weights of lorries, so is it not sensible to look at schemes for transferring vast volumes of road freight on to rail? Will the Government look seriously at schemes for transporting lorry trailers and lorries on trains throughout Britain?
Norman Baker
I entirely sympathise with that question. We are taking steps to improve the amount of freight that can be transported by rail. The rail Minister, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), is busy activating that. We have improved the gauge from Southampton and the rail line from Felixstowe, and we hope to make further improvements. Of course our high-speed rail plans will free up space on the existing north-south routes.
Mr Greg Knight (East Yorkshire) (Con)
4. What representations she has received on plans to increase the level of ethanol in automotive fuel.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
We have received representations on ethanol from a range of individuals and organisations. Ethanol can currently be blended in petrol up to 5%. I understand an industry standard for a blend of up to 10% is being developed. The Department has asked the Low Carbon Vehicle Partnership to work with consumer groups, vehicle manufacturers and fuel suppliers to plan its introduction to ensure that appropriate safeguards are in place and consumers have clear information.
Mr Knight
Is the Minister aware that the Government are absolutely right not to increase the level of ethanol above 5% until we have a better evidence base for its sustainability? Is he also aware—I declare an interest at this point—that there is evidence that ethanol levels above 5% play havoc with older vehicles’ fuel systems, including those of classic and historic vehicles? If we have to go above 5%, will he ensure that the pumps are properly labelled?
Norman Baker
I entirely sympathise with my right hon. Friend, who makes an important point. I expect that there is a possibility that the European Commission will review the matter before January 2014, when the requirement for petrol stations to supply a 5% blend officially ends. The UK Government also have a power to require a 5% blend to be supplied beyond that point. In any case, I would expect industry to ensure that a protection grade of E5 will continue beyond that point and I entirely agree with my right hon. Friend’s point about labelling.
Mr William Bain (Glasgow North East) (Lab)
5. What recent progress she has made on transport infrastructure projects announced in the autumn statement.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
10. What recent progress she has made on transport infrastructure projects announced in the autumn statement.
The Secretary of State for Transport (Justine Greening)
The Government are not just fixing the disgraceful legacy of debt left to us by the Labour party but are also building for our country’s success in future—and that means investing in transport. At the autumn statement we announced £2.5 billion more in transport investment, building on the £30 billion set out in the spending review. An update on the progress made on the priority infrastructure investments identified in the 2011 national infrastructure plan was published alongside the Budget in March.
Mr Bain
The debt plan is not going very well, because borrowing has gone up £3.9 billion this year above what it was at the equivalent stage last year. Construction output fell in April by 13% and long-term unemployment is soaring, yet many of the infrastructure plans set out by the Chancellor do not begin until later in this Parliament. Will the Secretary of State tell us what representations she has made to the Chancellor to bring forward infrastructure spending into this financial year and whether she has had any more success with that than she had with her representations on fuel duty?
Justine Greening
I do not think this Government need to take any lectures about debt levels from the Labour party. The only problem Labour has with our debt levels is that they are not high enough. Labour Members want more debt to get us out of this debt problem, not less; no wonder they are sitting on the Opposition Benches rather than the Government Benches.
We are absolutely bringing forward transport projects. In fact, in the time that I have been in this role we have announced 42 major road schemes, many of which were sat on the stocks ready to go but had never been approved by Labour. We are getting on with them and bringing forward a number of projects, and we are cracking on with that right now.
Chi Onwurah
In his autumn statement, the Chancellor announced that he would bring forward investment in the Tyne and Wear Metro—investment that was originally secured by the previous Labour Government. What he did not say was that that was an accounting sleight of hand that will not lead to one extra metre of track being refurbished or one extra job this year. Now that the Chancellor is for turning, will the Secretary of State listen to Opposition Members and bring forward real plans for infrastructure investment in the north-east to get the economy moving?
Justine Greening
The hon. Lady raises an important point about the Metro. We are getting on with that project. As she knows, any transport project, once it gets agreement, needs to follow a number of steps before it is in a position to go ahead. We are pulling forward our investment in the Metro and I hope that the hon. Lady, as someone who represents Newcastle, will greatly welcome that.
Iain Stewart (Milton Keynes South) (Con)
Will my right hon. Friend congratulate the east-west rail consortium and the local authorities that have contributed funds that mean that the Bletchley to Oxford and Aylesbury line is in great shape?
Justine Greening
I will. It is part of the unprecedented investment that is now going into our Victorian railway network. I believe that the scheme has the potential to make a huge difference, which is why we gave it the green light to go to the next step. I am delighted to see private investment going in alongside public investment and the involvement of local stakeholders and I think that the project will make a huge difference.
Tim Farron (Westmorland and Lonsdale) (LD)
Among the projects announced in the autumn statement were the electrification of northern rail links. The Secretary of State will be aware that two of the UK’s most picturesque and economically important lines are the Lakes line to Windermere and the Furness line, which run through my constituency. Neither of them are electrified and both run the risk of losing their direct connection to Manchester airport. Will she meet a small, cross-party delegation to make sure we can fix these challenges?
Justine Greening
I would be absolutely delighted to. The hon. Gentleman is right to point out that we are getting on with electrification in a way the previous Government never did. We have already announced several hundred miles of electrification. That is one of the key things I am looking at as we finalise the high-level output specification package, which I will announce shortly. I would be very happy to meet him and his delegation to look at what that means locally and how we can make sure that we can improve his local transport system too.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
It is very important that the electrification schemes go ahead according to plan, but does the Secretary of State agree that the northern hub must be funded in full to bring the £4 billion-plus investment and improvement in services across the whole of the north?
Justine Greening
There is no doubt that the people supporting the northern hub have made a powerful case. In the past two weeks I have been in Leeds, Manchester and Sheffield and all of them have reiterated to me why this project matters so much. Like the rest of the Government I have to cut my cloth to be able to afford what we are announcing, but we have already taken some important steps on this project. I will be setting out the next steps across the railway network in the HLOS—high level output specification—statement and I have no doubt the hon. Lady will take an interest in what I have to say.
Mr James Gray (North Wiltshire) (Con)
People throughout the west country have warmly welcomed the electrification of the Great Western railway line through Chippenham and Bath. They also look forward to the redoubling of the Kemble to Swindon line. Will the Secretary of State look at whether it would be useful to have interchange between that line and the historic Swindon to Cricklade line?
Justine Greening
I would be delighted to look at that. I know my hon. Friend has raised this issue before. We are determined to improve connectivity. Looking far longer term, High Speed 2 will do that for many parts of the country and I am determined to make sure that his part of the country continues to get more investment in addition to the Great Western line investment that is already going in and the new intercity express programme trains that will also give him more capacity.
John Woodcock (Barrow and Furness) (Lab/Co-op)
But the Secretary of State and the Chancellor need to recognise that announcing something is one thing, but actually doing something about it is completely different. The breakdown of the autumn statement total suggests that only 17% was due to be made in the last financial year. In this year, with the country back in recession, only a further 5% of the total is due to be spent. Regardless of the issues with the level of influence the right hon. Lady has with the Chancellor, can she really tell the House that she thinks this is having sufficient impact?
Justine Greening
This Government and our decisions are having a major impact. I do not need to take any lectures or lessons from the Labour party, which had a failed aviation strategy, no rail strategy at all and made absolutely no investment on the roads compared with what we are putting in. Frankly, the brass neck of it is unbelievable. We are getting on with building our country for the future in a way that the previous Government never did. We are investing more and we will do more. I look forward to hearing him congratulate us when we do.
Mr Speaker
I hear the Secretary of State’s message but we have a lot of questions to get through.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
6. What steps her Department is taking to improve cycling safety.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
Last year I set up the cycling stakeholder forum, which comprises representatives from cycling groups, motoring organisations and local authorities. A sub-group has been established to look specifically at safety issues. Good progress is being made on coming up with ideas and actions to improve cycle safety. Earlier this week I announced a £15 million fund to improve safety for cyclists outside London by tackling dangerous junctions. This is in addition to the £15 million fund awarded to Transport for London in March for the same purpose.
Mrs Hodgson
Figures from his Department and independent analysis have shown that more cyclists are killed in collisions with heavy goods vehicles than any other kind of vehicle. Will the Secretary of State therefore stop the trial of longer HGVs that her Department has enacted and give serious consideration to the proposals from the cycling stakeholder forum for a proper plan to improve cyclist safety and to increase cycle use?
Norman Baker
I have already referred to the cycling stakeholder forum, which met yesterday and which I attended. We are looking at safety issues very seriously, as the hon. Lady would expect. I do not think it is a question of how long lorries are. The particular issue with HGVs is about lorries turning left and catching cyclists on the inside. That is one reason why I have now given permission for all local authorities across the country to install Trixi mirrors to pick up those manoeuvres. It is also why the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), is looking at issues relating to the information available to the driver in the cab.
Mr Dominic Raab (Esher and Walton) (Con)
7. What steps she is taking to invest in road infrastructure.
The Secretary of State for Transport (Justine Greening)
The 2010 spending review committed investment of £2.3 billion for major road improvements over the next four years. We also committed to investment of £614 million towards local road projects. The 2011 autumn statement provided a further £1 billion investment for strategic roads.
Mr Raab
I thank the Secretary of State for that answer. Surrey pays more revenue to the Exchequer than any part of the country outside London, but it has the third-worst roads and, taking traffic volumes into account, gets the second-lowest funding of all counties for highways maintenance. What steps is she taking to repair and maintain Surrey’s roads so that the county can continue to generate high revenue for Britain?
Justine Greening
I agree that is important. Actually, the latest statistics published by the Department suggest that Surrey road conditions are slightly higher than average. Of the 117 local authorities where we allocate highway maintenance funding, Surrey falls into the top 15 and we are providing £61 million. In addition, my hon. Friend will know that we are focused on important schemes; we are providing £24 million towards the Walton bridge scheme that is now under construction. We are willing to put in that investment, and it will make a big difference on the ground.
Derek Twigg (Halton) (Lab)
Roads are a very important part of any sustainable transport structure. Unfortunately, the Secretary of State turned down Halton’s bid for a sustainable transport fund, and I am in correspondence with the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), on the issue. Can the Secretary of State confirm whether any other area has been asked to rework and resubmit its bid? If so, can she tell me why it has, but not Halton?
Justine Greening
We had a rigorous process for looking at all the bids; they were considered by a panel of experts that we appointed. Some of the bids were modified in the light of the reaction of the independent panel, and we took our investment decisions on that basis.
Julian Smith (Skipton and Ripon) (Con)
8. What progress she has made on her review of the use of brown tourist signs.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The review of brown tourist signs is making good progress and we expect to publish our findings later this year. We are currently reviewing stakeholder comments on the existing requirements so that a package of options and a recommendation can be presented to Ministers.
Julian Smith
I am glad the Minister shares my passion for brown signs, but can he assure me that the Highways Agency will work much more closely with business before removing brown signs? The agency was reckless in removing the sign on the A1 upgrade in Masham. Would the Minister like to join me for a pint of Theakston’s or Black Sheep so that he can see the evidence for himself?
Norman Baker
My colleague, the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), might take that pint rather than me, although I am always happy to have a pint of Theakston’s—or anything else for that matter.
I agree that early involvement with business is helpful and desirable, and I congratulate my hon. Friend the Member for Skipton and Ripon on the work he has done on the issue. I know that my colleague, the hon. Member for Hemel Hempstead, wrote to him about it last week, and has challenged the Highways Agency to minimise the cost of the signs, including by engaging with local contractors and interest groups such as those my hon. Friend the Member for Skipton and Ripon refers to.
Robert Halfon (Harlow) (Con)
9. What steps she is taking to support motorists and the haulage industry; and if she will make a statement.
The Secretary of State for Transport (Justine Greening)
I have taken a number of steps to reduce motorists’ costs. We are working with the Ministry of Justice to tackle the cost of insurance fraud, including fraudulent whiplash claims. We are working with the fuel industry to ensure the transparency of fuel costs and that wholesale price reductions are passed on. We have halved the tolls on the Humber bridge. We are working with the Motorists Forum on improving garage experiences for consumers, and as well as freezing fees for MOTs, driving tests and licensing, in the logistics growth review we supported £1 billion of further investment to improve the capacity and resilience of the strategic roads network.
Robert Halfon
Thousands of hard-pressed motorists, and me, are so excited that the Government cut fuel duty this week that I lost my train of thought as another Labour tax rise was cancelled.
I thank the Secretary of State for her outspoken support and for the pressure she has put on oil companies to bear their share of responsibility for the high price of petrol and diesel at the pumps. Will she carry on putting that pressure on oil companies to ease the pressures on motorists?
Justine Greening
I very much welcome those comments. The Government are working hard across the board, in both the Department for Transport and, of course, the Treasury, to make sure that we keep the cost of motoring as low as possible. In fact, the AA says that Tuesday’s delay to the fuel duty increase, today’s announcement, and my call for fuel price transparency have
“placed this government at the forefront of looking out for the interests of drivers, business and families.”
I really welcome that, and we will continue to work hard on behalf of motorists.
Philip Davies (Shipley) (Con)
11. If she will make an assessment of the level of congestion on roads in Shipley constituency.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The Department for Transport purchases journey time data from the Trafficmaster satellite navigation fleet tracking and traffic information service, and provides it, free, to west Yorkshire’s local authorities. The data can be used to make assessments of road congestion in their areas. It is for the local highway authority—in this case, the city of Bradford metropolitan district council—to make any such assessment.
Philip Davies
Shipley constituency has some of the most congested roads not only in the Bradford district, but across west Yorkshire. Not least among those is the road between Baildon and Shipley. A Shipley eastern relief road would not only help local residents with that congestion but give a stimulus to economic growth across the Bradford district. What can the Minister do to ensure that that kind of scheme gets a share of the funding that his Department is giving out?
Norman Baker
My hon. Friend is assiduous in making the case for his constituents, and I understand why he puts the case for the road he mentioned. As part of the localism agenda, we consulted earlier this year on proposals to devolve funding for major local authority schemes for the period after 2015, so it will be for the new local transport body covering west Yorkshire to decide the priorities for available funding, and of course to involve the local enterprise partnership—Leeds city region LEP. That is the direction of travel that I recommend to my hon. Friend.
Greg Mulholland (Leeds North West) (LD)
The area north of Leeds and Bradford does indeed have some of the most congested roads in the country; that is a problem that is shared cross-constituency. When will we get a decision on the Leeds trolley bus scheme, which will help in that corridor?
Norman Baker
The Secretary of State and I are actively considering that matter at the moment. My hon. Friend the Member for Leeds North West (Greg Mulholland) will understand that we are talking about cutting-edge technology, as there is no such scheme already in this country, so we have to be very careful in our assessment of the proposal, but we hope to make a decision very shortly.
Tom Brake (Carshalton and Wallington) (LD)
12. What steps her Department has taken to publicise the consultation on the combined Thameslink, Southern and Great Northern franchise.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
The Thameslink consultation was published on 24 May 2012 on the Department’s website. On the same day, I wrote to the relevant MPs and a press notice was issued. On 13 June, Department for Transport officials wrote to MPs and local councils, further publicising the consultation document and details of the upcoming consultation events.
Tom Brake
I thank the Minister for her response. May I encourage her, the bidders, Network Rail, London TravelWatch and Passenger Focus to redouble their efforts to raise awareness of the franchise renewal process and, in particular, the implications for Sutton residents, who may find that the through-trains from which they have benefited for many years stop short of Blackfriars, cutting their access to north London and Crossrail?
Mrs Villiers
My right hon. Friend will appreciate that extensive advertising budgets are a thing of the past in the age of austerity, but we will do our very best to make sure that people are aware of the consultation. We are aware of his concerns about the Wimbledon loop; my hon. Friend the Member for Wimbledon (Stephen Hammond) barely gives me a moment’s rest on the issue. Network Rail has concerns about operational issues at Blackfriars, but those are not impossible to surmount. No final decisions have been made. We will consider all the representations on the Wimbledon loop and on all relevant matters in response to the consultation.
Heidi Alexander (Lewisham East) (Lab)
Page 28 of the Minister’s consultation document states that future Thameslink services may serve Sevenoaks as well as Dartford and Orpington. Will the rail Minister confirm that, if those services go ahead, they will include a stop at Lewisham, and will be in addition to, and not a replacement for, existing services that run from that station?
Mrs Villiers
As I have said, no final decisions have been made on what goes into the ultimate franchise; that is what the consultation is all about. I will make sure that the hon. Lady’s representations are properly considered when the consultation closes.
Joseph Johnson (Orpington) (Con)
Now that the consultation on rail decentralisation is drawing to a close, will the Minister or the Secretary of State devolve responsibility for south-eastern suburban rail services to city hall as a matter of urgency, so that it can drive up standards on the south-eastern suburban networks in exactly the same way as it did with London Overground?
Mrs Villiers
This is an important issue. We are interested in ways of devolving more decision making about our railways, so that it is closer to the local communities served, but we have to make sure that we take into account the interests of all users of relevant rail services, whether they are within or outside the London boundary. We will make an announcement in due course on the results of our consultation on the decentralisation of rail decisions.
Mr Philip Hollobone (Kettering) (Con)
13. What consideration she is giving to the reintroduction of double-decker trains on the rail network.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
A report prepared by Network Rail in 2007 concluded that the introduction of double-decker trains on the current UK rail network would require extensive modification to structures and stations and was not economically viable.
Although such trains operate in a number of European countries, the larger loading gauge used in continental Europe allows the use of taller, wider trains than is possible in the UK.
Mr Hollobone
Other nations seem to make a success of having double-decker trains, and we used to have them on some suburban services in this country. I urge my right hon. Friend the Minister to ask Network Rail to think again, because lots of commuters on congested trains would want us to replicate the success of double-decker buses by having double-decker trains.
Mrs Villiers
I welcome my hon. Friend’s interest in this issue, and I have looked at it. The reality, however, is that double-decker trains that were run in the past by British Rail were claustrophobic, it took a long time for passengers to get on and off, and they deployed the sort of slam-door stock that we have tried to phase out. The shape of the UK rail network, the size of the bridges, the distance between rail tracks and the distance between the tracks and the platform mean that we cannot run the large double-decker trains that work in Europe. I am afraid that there are much more cost-effective ways to expand capacity, with longer trains and more frequent services, which is what the Government are doing.
Mr Peter Bone (Wellingborough) (Con)
14. What her policy is on the issuing of renewal notices for driving licences.
The Secretary of State for Transport (Justine Greening)
If the photograph on a driver’s licence needs to be renewed, the Driver and Vehicle Licensing Agency sends a renewal notice 56 days before the licence expires. If the licence needs to be renewed because the driver has reached the age of 70 or has a shorter-period licence due to a medical condition, the renewal notice goes out 90 days before the licence expires.
Mr Bone
Someone close to my heart had a driving licence that expired, and did not receive such a notice. Mrs Bone is following Transport questions closely, so would it not be helpful—there must be tens of thousands of people who are driving with expired licences—to include on the licence, in clear, large print, the expiry date?
Justine Greening
My hon. Friend makes a perfectly reasonable point. Holders of a photocard driving licence are required by law to renew the photograph on the licence every 10 years so that it remains a good likeness of the driver. I take his points on board—I absolutely do not want to see drivers caught out—and, as he is aware, we are looking more broadly at how we can make sure that our driving licence works well for motorists, not least investigating when we can begin to put the country’s flag on it for a change.
John Pugh (Southport) (LD)
T2. If she will make a statement on her departmental responsibilities. Is this topical question 2 or topical question 1, Mr Speaker?
Mr Speaker
It is still T2, but we are grateful to the hon. Gentleman. Mr Sheerman has withdrawn his question T1.
The Secretary of State for Transport (Justine Greening)
It has been a busy couple of months in the Department for Transport. We have announced our plans to work with petrol retailers to get a better deal for motorists at the pump. We have helped local authorities to unlock economic growth with our £266 million local sustainable transport fund announcement. We have set out the next steps for attracting greater investment in the strategic road network, issuing rail franchise consultations on the inter-city east coast and south-eastern franchises. With other Government Departments, we are working extremely hard to put in place the final planning and preparations to make sure that we host a fantastic Olympic and Paralympic games this summer.
John Pugh
I thank the Minister for the additional £20 million for Merseyside Transport. Without wishing to appear ungrateful, what is happening to the appalling rolling stock on the northern franchise, which is wholly unsuitable, particularly on the Southport-Manchester link?
Justine Greening
There is a significant piece of work under way to look at what we can do to improve rolling stock across the network, including looking at what additional new rolling stock we need, and how the existing rolling stock can cascade to improve services for others on the line. I have no doubt that my right hon. Friend the Minister of State, who is responsible for railways, is listening closely and will look into the issues that he has just raised.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I understand that the road casualty figures for 2011 were published this morning and, sadly, show the first increase since 2003 in deaths and serious injuries. Road casualty reduction targets commanded cross-party support for nearly three decades and played a big part in sending a strong message from Government about how committed they were to reducing deaths and serious injuries on our roads. Those targets were scrapped by the Secretary of State’s predecessor. Is she prepared to revisit that decision? Many in the road safety sector felt that that was a mistake, and the figures this morning tend to suggest that bringing back targets would help in the battle to reduce deaths and serious injuries.
Justine Greening
I can assure the hon. Gentleman that as far as I am concerned, one accident is too many. The figures are disappointing. We are concerned to make sure we improve our road safety record. Many of the things that we are doing, including managed motorways, can help with that. I think he is wrong to draw too many conclusions from the latest figures, because we know that we had some exceptional weather in that period. That is one of the reasons why there was such a change, but I am happy to look at what we can continue to do to work with all sorts of stakeholders to improve road safety. It is an issue that this Government take incredibly seriously.
Dr Julian Huppert (Cambridge) (LD)
T3. The latest figures from Sustrans show a 40 million increase in the number of cycling trips in 2011 compared with 2010—a very welcome 18% rise. I and many others, including British Cycling, welcome the funding that has been provided by the Government, particularly most recently the £15 million that has been provided towards dangerous junctions around the country, a key feature of the safer cycling campaign in The Times. What steps is the Secretary of State taking to make sure that local authorities match this money to do even more work on more junctions, rather than ducking their responsibilities when the Government step up?
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I am grateful to my hon. Friend for this support for our measures, which include large sums of money allocated yesterday through the local sustainable transport fund, which will also benefit cycling. The sum of £50 million will be available to local authorities on a match-funding basis. We are encouraging them to contribute, and the more they contribute, the more likely it is that they will be successful in securing money from the Government for their dangerous junctions.
Andrew Gwynne (Denton and Reddish) (Lab)
T9. Following last week’s publication of the east coast franchise, does the Minister think passengers on the east coast should expect an eye-watering 8% above inflation fare increase, which my constituents travelling on the west coast main line will face in years ahead?
The Minister of State, Department for Transport (Mrs Theresa Villiers)
This Government are determined to get the cost of running the railways down. That is the way we deal with the concerns that passengers have about fares. If the Opposition think concerns about fares started in May 2010, they are living on another planet. We need reform to get the costs down so that we can respond to passengers, and it is time Labour started producing its own reform plans if it insists on rejecting ours.
Andrea Leadsom (South Northamptonshire) (Con)
T4. My right hon. Friend is aware that I have had constituents in tears in my advice surgeries who are blighted by the HS2 project and trapped in their homes, unable to sell them. Can she reassure my constituents that she is determined to make sure that no private home owner has to pay with the value of their home for the project? What update can she give us on the consultation to get a decent, fair compensation scheme in place?
The Secretary of State for Transport (Justine Greening)
I know that the High Speed 2 line is already causing uncertainty for many individuals, communities and businesses that will be affected along the route. We have introduced the exceptional hardship scheme. As my hon. Friend knows, I am about to have a meeting later today to talk to some of the key stakeholders, including herself, about their concerns. Having listened to many concerns and looked at the effectiveness of the exceptional hardship scheme, we are drawing up long-term proposals for compensation, and we will be consulting on those very shortly.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
On that point, does the Secretary of State agree that one of the best ways of ending the uncertainty is to reach a quick decision? Will she confirm that the Government will introduce legislation on HS2 in the coming Parliament, and that she continues to have the full support of the Chancellor and the Prime Minister in taking forward HS2, which is so vital not just for England, but for Scotland?
Justine Greening
The short answer to the hon. Gentleman’s question is yes. We are planning to introduce the hybrid Bill. HS2 is vital for the long-term success of this country.
Jo Swinson (East Dunbartonshire) (LD)
T5. Following on from that question, given the Government’s vision for a truly national high-speed rail network extending to Scotland, I welcome my right hon. Friend’s meeting with the Scottish Transport Minister. Will she continue to work very closely with the Scottish Government on the project, not least to ensure that any short-term rail improvements, such as the Edinburgh-Glasgow electrification, can be done in a way that is compatible with future high-speed rail?
Justine Greening
I found my meeting with the Scottish Government extremely helpful, and I am keen to work with them on their plans for high-speed rail north of the border. Obviously, they will have to look at the rest of their investment plans in the meantime. That discussion is under way and we will pursue it over the coming months.
Ian Austin (Dudley North) (Lab)
If we are to make real improvements in cycling, we must ensure that it is considered properly as part of all decisions and policies on road use, so will the Minister consider the Cycle Stakeholder Forum’s proposal to add a mandatory risk assessment and consultation on cycling to every policy review that affects road users? That would have no cost implications but would make a real difference to transport policy and would show that the Government consider cycling a key part of transport policy.
Norman Baker
The Cycle Stakeholder Forum is producing some useful suggestions and doing some good work. The process that is under way means that all its suggestions will be properly assessed by the Department, and we will respond to those in detail later this year.
Neil Carmichael (Stroud) (Con)
T6. Following the very welcome news that we have ended Labour’s fuel duty, may I ask the Secretary of State whether she will continue to promote the use of alternative fuels in heavy haulage lorries, as practised by Downton and Howard Tenens in my constituency?
Justine Greening
We are very keen to do that. In fact, my hon. Friend might be aware that we have started the low-carbon truck demonstration trial, which now involves £10 million of funding for investigating how we can encourage haulage companies to operate in a lower carbon way. He mentioned the fuel duty impact. Actually, hauliers will be about £4,900 better off on average. The Labour party is interested in carping, but the reality is that we are delivering for people on the ground in a way that it never did.
Chris Ruane (Vale of Clwyd) (Lab)
The big society pervades every Government Department. What is the Secretary of State’s definition of the big society?
Justine Greening
It is people stepping up to the plate and seeing what they can do to help their local community. We are very good at doing that in times of crisis, particularly in places such as London, but I think that we should be doing it every day of the week. That is what it is about.
Tom Brake (Carshalton and Wallington) (LD)
T7. Helicopter flights cause significant noise disturbance for people living under flight paths and they also benefit from reduced fuel taxes. Will the Minister look at schemes such as those adopted in Paris and Los Angeles to tackle helicopter noise and also look at the unfair tax advantage that helicopter operators have?
Mrs Villiers
My right hon. Friend will appreciate that fuel duty is a matter for the Chancellor. We do appreciate the irritation that helicopter noise can cause—anyone who works in this building gets irritated by them buzzing overhead so often—and will consider it as part of our consultation on a sustainable framework for UK aviation.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Like many Members, I eagerly await publication of the high-level output specification and the statement of funds next month. As matters stand, Wales would see electrification only of our rail network to Cardiff, compared with electrification of 40% of UK railways and the electrification of the Glasgow to London route in 1974. I invite the Department to make up for this historical injustice by including electrification of the valleys network, the north Wales coast line and the main line to Swansea?
Justine Greening
I can assure the hon. Gentleman that the Government are looking closely at what we can do to improve the railway system in Wales. He will have to wait for the HLOS statement itself, but I am absolutely determined to ensure that we see investment go to all parts of the country. It is a key part of what the Government want to do—rebalance the economy—and that absolutely includes Wales.
Dr Sarah Wollaston (Totnes) (Con)
T8. The Dutch now have two thirds of their minor rural road network covered by speed restrictions of 40 mph approximately, as they found those even more effective than 20 mph approximately zones in urban areas. Will the Minister please confirm that he will take this evidence into account when drafting the forthcoming guidance on setting speed limits and set out what other measures should be taken to protect rural cyclists?
Norman Baker
I am happy to confirm that the Department is giving local councils much more freedom in how they use the road network, including the classification of roads and the speed limits that are set. I hope that my hon. Friend will be aware of the extra freedom for 20 mph limits, in particular. Her point on 40 mph limits is well made and I will ensure that my fellow Transport Minister, my hon. Friend the Member for Hemel Hempstead (Mike Penning), is made aware of her comments when he returns.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
2. What assessment she has made of the cumulative effect of welfare reform legislation on disabled people.
Nia Griffith (Llanelli) (Lab)
5. What assessment she has made of the cumulative effect of welfare reform legislation on disabled people.
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
The Government consult fully with stakeholders on the impact of policy changes and produce robust equality impact assessments, as required by the Equality Act 2010 and its predecessor, the Equality Act 2006.
Gemma Doyle
I am sure the Minister will be aware of Scope’s recently published report, which labels the Government’s impact assessments as wholly inappropriate when applied to one reform at a time. Does she accept that, unless the impact of welfare reform is considered cumulatively, the human cost of her Government’s austerity measures will be completely overlooked?
Maria Miller
I understand the hon. Lady’s point, but she knows that neither the Institute for Fiscal Studies nor the Treasury have a methodology to assess such impacts in the way she describes, but I remind her that we have impact assessments and equality assessments for every policy in order to ensure that all the changes that we make benefit the people whom we are trying to support.
Nia Griffith
The Government’s Welfare Reform Act 2012 will force families to make children with disabilities share a bedroom with their siblings, regardless of the difficulties and disruption that that may cause. Will the Minister prevail upon colleagues in the Department for Work and Pensions to look again at the issue before the 2012 Act is fully implemented, to show some compassion and to let disabled children have a bedroom of their own, where necessary, instead of wasting Government money pursuing a case in the Supreme Court on the issue?
Maria Miller
The hon. Lady is right to make sure that we have the right provision to support families in our communities, particularly those with disabled people, and that is why we have made sure that local budgets and funding are available to local authorities so that they can make such discretionary payments. Every family situation is different, and we need to take those differences into account.
George Hollingbery (Meon Valley) (Con)
Can my hon. Friend tell the House whether a care component will be built into universal credit, whether it will be subject to work conditionality, whether carer’s allowance will be assessed within universal credit, and whether households in receipt of disability living allowance and personal independence payment will be subject to the benefits cap?
Maria Miller
My hon. Friend got a lot of detail into that question, and he will know that we have looked at the issue very carefully. Disability living allowance will not be included in the benefit cap, and importantly we intend to raise the equivalent in universal credit of employment and support allowance from £32.25 today to about £77 in future, ensuring that it includes more support for those who cannot go to work.
Jo Swinson (East Dunbartonshire) (LD)
9. When disabled people are wrongly found fit for work, it causes a great deal of distress, and of course it is costly to have unnecessary appeals. So the falling rate of successful work capability assessment appeals is welcome and shows some improvement, but three out of 10 being wrongly found fit for work is still too high a figure. What more can the Government do to improve the process, particularly in terms of applying sanctions to Atos when it gets an assessment wrong, so that we can get more decisions right first time?
Maria Miller
My hon. Friend is absolutely right to want to drive through more good decision making in that process, and we are doing so across the board by working with Atos to make sure that it adheres to the contracts we have with it, and through the changes that we are making as a result of the Harrington reports, but importantly mandatory reconsideration, which begins in April 2013 for all decisions on benefits, will ensure that more decisions are right first time.
Kate Green (Stretford and Urmston) (Lab)
The Government say that their welfare reforms are intended to enable more disabled people to get into work, but a case has been raised with us about a young man who is a wheelchair user, had been desperate to work, found a job but had to turn it down because he would have needed to move and could not find affordable adapted housing. Why are the Government delaying the reasonable adjustment provisions that would help such people to work?
Maria Miller
The hon. Lady will know that we have a broad range of support available for people such as the gentleman she refers to through the access to work scheme, for which we are increasing funding by about £15 million over the spending review period, and through local housing payments, such as the one I referred to in a previous answer, in order to ensure that local authorities have the flexibility to support such individuals, so that they can get into work and stay in work.
Jessica Lee (Erewash) (Con)
Will my hon. Friend commend the work of disabled people’s user-led organisations, particularly the Outlook centre in Long Eaton in my constituency, which I visited last week? The parent of a service user told me that they were doing a passport renewal form for their daughter and were not happy about having to complete the children’s section of the form for her because, although she is 40 years old, she has learning difficulties. They felt that this was inappropriate. Will my hon. Friend kindly look into the matter?
Maria Miller
We can of course look into the detail of the point that my hon. Friend raises. She is absolutely right also to highlight the very valuable work of user-led organisations such as the Outlook centre, which can provide bespoke support for families who are dealing with benefit claims or other issues to do with their loved ones’ lives. That is why we have launched a significant programme to try to expand and support more user-led organisations up and down the country in doing similar work in all our communities.
Andrew Selous (South West Bedfordshire) (Con)
3. How many people have continued to work as a result of the abolition of the default retirement age.
The Minister of State, Department for Work and Pensions (Steve Webb)
The Government’s impact assessment estimates that after one year about 6,000 people will have continued in work as a result of removing the DRA—in other words, between 4% and 7% of employees aged 65 or over.
Andrew Selous
Does my hon. Friend agree that older workers enable knowledge and skills to be transferred from one generation to the next, and that putting a “best before” date on workers was unacceptable discrimination that this Government have justly got rid of?
Steve Webb
My hon. Friend is right. One of the lasting legacies of this coalition will be that, after years of its being talked about, we finally abolished age discrimination in the workplace. To give him an example, research has found that McDonald’s restaurants that employ people over 60 have, on average, far higher customer satisfaction than those that do not.
Fiona Mactaggart (Slough) (Lab)
Is the Minister aware that the experiences of men and women who work beyond retirement age are very different? Nearly two thirds of those who work beyond retirement age are women, and of those most—nearly two thirds—work in lower-skilled jobs, whereas, in contrast, the smaller group of men are working in higher-skilled jobs. What is he going to do about dealing with the poverty of women in old age?
Steve Webb
The hon. Lady is right. Successive Governments have failed to deliver an adequate pension to women. That is why we are reforming the state pension, as the Prime Minister confirmed on Monday, to deliver a pension that is simple, decent and, in particular, treats women fairly for the first time.
Jackie Doyle-Price (Thurrock) (Con)
6. What steps she has taken to ensure that the criminalisation of forced marriage does not discourage victims from bringing complaints forward.
The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)
Forced marriage is a hidden problem, and criminalising this abhorrent act will give victims the option of seeking the toughest form of justice. To ensure that victims and others are not discouraged from coming forward, civil remedies will remain available to them. We are also providing a package of support to ensure that victims know what help is available, and we are better equipping practitioners to deal with cases of forced marriage more effectively.
Jackie Doyle-Price
I thank my right hon. Friend for her answer. However, victims will clearly be intimidated in reporting family members who are committing these crimes. What more can be done to encourage other family members and potential witnesses to report the crimes, and what more can she do to raise awareness that this practice will not be tolerated?
Mrs May
My hon. Friend raises an extremely important point. We have retained the twin-track approach of the criminalised route or the civil remedy route precisely because of a concern about those who may not want to report people because of the criminalisation aspect. Raising awareness is incredibly important. That is why we are putting in place a support package, working with practitioners to help them to identify the signs that somebody might be about to be taken away for a forced marriage. We are also going to run a summer awareness campaign aimed at young people so that they understand the signs as regards not only something that might happen to themselves but what is happening to their friends, and are more willing to come forward.
Thomas Docherty (Dunfermline and West Fife) (Lab)
7. What assessment she has made of the potential effect of recent labour market trends on black and minority ethnic communities.
The Minister for Equalities (Lynne Featherstone)
Tackling unemployment is a priority for this Government. Our approach is to support people according to their individual needs and circumstances rather than segregate them according to ethnicity. That is why we have introduced personalised support through the Work programme, the youth contract, and the Get Britain Working measures. The significantly increased flexibility that we have given to providers and Jobcentre Plus means that interventions can be tailored to address an individual’s specific needs.
Thomas Docherty
Given, however, that 44.4% of economically active 16 to 24-year-old black people are without work, compared with just 20% of white people, is not this policy not working?
Lynne Featherstone
The hon. Gentleman raises the issue of the number of young black men who are out of work. However, the recent press coverage gave inaccurate figures. Figures from the Office for National Statistics show that less than a third of black men aged 18 to 24 are unemployed. The Government recognise that that figure is still too high, which is why we have introduced tailored and personalised support to help people get back into the labour market.
Claire Perry (Devizes) (Con)
The whole House recognises the difficulty of getting certain groups of people into work. Does the Minister agree that payment by results is the way to ensure that the right level of resources is targeted at those who are hardest to help?
Lynne Featherstone
My hon. Friend highlights exactly the right point. Work programme providers are encouraged by payment by results, which means that when a young black man comes in, the providers will not get paid unless they remove the barriers that are prohibiting him from getting work, whether through education, training, skills or whatever else.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Is not the fact that young black men are still being hit hardest of all by the Government’s economic failure? Should not the Equalities Minister commit to publishing a full audit of what is happening to young men from different BME backgrounds and the impact that that is having? The latest figures show that unemployment among young white men has gone up by three percentage points since the election, and among young black men by 14 percentage points. There is currently no targeted support for young black men in getting apprenticeships, and the Work programme clearly is not working. Faced with this growing crisis, will Ministers now take serious action to provide the support for jobs and opportunities that young people from all backgrounds need, and consider a bankers’ bonus tax so that they can do so?
Lynne Featherstone
The Work programme introduces the conditions that will get young black men into work. That is something that never happened under the Labour Government. The number of people from ethnic minorities who are in work is up by 179,000 compared with 2010. Moreover, on the issue of BME apprenticeships, which the right hon. Lady raised, 2010-11 saw the highest ever percentage of BME apprentices start their training. The labour market trend for the number of people starting apprenticeships has gone up significantly in recent years, from 167,000 in 2003 to 457,200 in 2010-11. We are doing what Labour failed to do.
Jim McGovern (Dundee West) (Lab)
8. What recent discussions she has had with her ministerial colleagues on unemployment levels in black and minority ethnic communities.
Lynne Featherstone
I refer the hon. Gentleman to the reply that I gave some moments ago.
Jim McGovern
Following on from what has been said, black and ethnic minority people seem to figure higher in the unemployment figures in Scotland. Has any of the Ministers present discussed this matter with any Minister in the Scottish Government?
Lynne Featherstone
We work closely with the Scottish Government on this issue. As I said, I refer the hon. Gentleman to the answer that I have given. We have put in place a Work programme that will deliver results; Labour never did.
Business of the House
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House please give us the business for next week?
The Leader of the House of Commons (Sir George Young)
The business for next week will be:
Monday 2 July—Motion to approve Ways and Means resolutions relating to the Finance Bill, followed by remaining stages of the Finance Bill (day 1).
Tuesday 3 July—Conclusion of remaining stages of the Finance Bill (day 2).
Wednesday 4 July—Estimates day (1st allotted day). There will be a debate on the work of the UK Border Agency, followed by a debate on UK-Turkey relations and Turkey’s regional role.
Further details will be given in the Official Report.
[The details are as follows: There will be a debate on: UK-Turkey relations and Turkey’s regional role: 12th report from the Foreign Affairs Committee of Session 2010-12, HC 1567, and the Government response thereto, CM 8370.]
At 7 pm the House will be asked to agree all outstanding estimates, followed by a motion to approve a statutory instrument relating to terrorism.
Thursday 5 July—Proceedings on the Supply and Appropriation (Main Estimates) Bill, followed by debate on a motion relating to VAT on air ambulance fuel payments, followed by debate on a motion relating to the public administration Select Committee’s recommendation for the Prime Minister’s adviser on Ministers’ interests to be empowered to instigate his own investigations.
Friday 6 July—Private Members’ Bills.
The provisional business for the week commencing 9 July will include:
Monday 9 July—Second Reading of the House of Lords Reform Bill (day 1).
Tuesday 10 July—Conclusion of Second Reading of the House of Lords Reform Bill (day 2).
Wednesday 11 July—Debate on a motion relating to the sitting hours of the House of Commons. The subject for that debate has been nominated by the Backbench Business Committee. Following that, the Chairman of Ways and Means is expected to name opposed private business for consideration.
Thursday 12 July—Motion relating to the reform of the Court of Justice of the European Union, followed by a motion on a European document relating to the EU draft budget, followed by a motion on a European document relating to EU human rights strategy.
Friday 13 July—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 5 July will be a debate on PIP breast implants and regulation of cosmetic interventions, followed by a debate on adoption.
Ms Eagle
The right hon. Gentleman has announced for next week a debate on a Backbench Business Committee motion on giving the adviser on the ministerial code the power to initiate an investigation rather than waiting for the Prime Minister to ask for it, which this Prime Minister has been remarkably reluctant to do. Will the Government accept the decision of the House on this matter?
The revelations that Barclays bank engaged in “widespread” market manipulation to maximise its profits are truly shocking. There are suggestions that other banks were also involved in rigging the LIBOR and EURIBOR rates. I know the Chancellor will make a statement after business questions, but does the Leader of the House agree that such behaviour is “morally repugnant”?
Yesterday, the Deputy Prime Minister published the House of Lords Reform Bill. The Opposition welcome this legislation. I have always voted for an elected second Chamber and look forward to doing so again, this time with Conservative Back Benchers joining us in the Division Lobby. When the Labour Government took through legislation to remove hereditary peers—a simple six-clause Bill—there were nine days of debate. Why are the Government planning to offer little more debate on the House of Lords Reform Bill, which is a much bigger and more complex piece of legislation? The Leader of the House is fond of saying that the House is not a legislative factory. The Queen’s Speech was short of Bills; time is not a problem. Will he undertake to arrange future Government business to ensure that Members have sufficient time to scrutinise that important Bill?
I can understand Conservative MPs finding the Liberal Democrat differentiation strategy increasingly infuriating—perhaps that explains why the Prime Minister and the Education Secretary have jumped on the same bandwagon —but if the Liberal Democrats differentiate themselves from the coalition and the Conservatives do the same, where does that leave the Government? Perhaps the Education Secretary, who wants to micro-manage schools, could pose this as an exam question: if two parties come together and then differentiate themselves, what does that leave? Based on the last few weeks, the answer is a complete shambles. Will the Leader of the House arrange in future business for Liberal Democrat and Conservative Ministers to share the speaking time to give both parties ample opportunity to differentiate themselves?
We have known for months that the Chancellor is out of touch with the country, but we did not realise until recently the extent to which he is out of touch with his own ministerial colleagues. The Transport Secretary has spent weeks telling everyone that the increase in fuel duty announced in the Budget is going ahead, and on Tuesday morning on the airwaves she was absolutely clear that it would not be postponed. Later that day at 12.30 pm, Conservative Whips sent a briefing to all Tory MPs saying that freezing fuel duty would be
“hypocrisy of the worst kind”.
Two hours later, the Chancellor popped up at the Dispatch Box to announce that he will, after all, freeze fuel duty. Having humiliated the Transport Secretary, the Chancellor then forced the Economic Secretary to make her now celebrated “Newsnight” appearance to explain the latest Budget U-turn, on the grounds—to quote her words—that
“there isn’t much in the world that is certain”.
Given the disarray and panic in the Treasury bunker, the Leader of the House might struggle to give an exact figure, but how many Budget U-turns have we had to date? I wonder whether the Chancellor could write the next Budget in pencil so that we can rub it all out again when he changes his mind. The Leader of the House has announced two days of debate on the Finance Bill next week. Will he now put his reputation on the line, here and now, and tell us categorically that there will be no more U-turns on this bungling Budget? Perhaps he should just give up and vote for our amendments next week.
The Government have made the wrong choice on the economy—a double-dip recession made in Downing street, borrowing up, tax receipts down, living standards down, no plan for growth. The Government’s economic policy is running out of road. The U-turn that the Chancellor needs to make is on his failed economic strategy.
Sir George Young
On the point about the debate on the adviser to the Prime Minister, the hon. Lady is now asking us to do what her Government consistently refused to do, which was to allow the Prime Minister’s adviser to initiate inquiries. She will have to listen to the response given by my ministerial colleague in the debate that I have just announced, which was selected by the Backbench Business Committee.
On the Barclays debacle, as the hon. Lady knows, my right hon. Friend the Chancellor will make a statement, but it strikes me as a failure of the light-touch regime introduced by a previous Minister.
So far as the House of Lords is concerned, the Opposition seem to be in a total muddle. They say that they support the Bill but that they will oppose the programme motion, before they even know what it contains. I ask the hon. Lady, who I know supports reform, to listen to what her leader said in his first conference speech in 2010:
“This generation has a chance—and a huge responsibility—to change our politics. We must seize it and meet the challenge… we need to finally elect the House of Lords after talking about it for…a hundred years.”
That is what he said in 2010, yet yesterday the shadow Leader of the House of Lords said that
“it is not a priority”.—[Official Report, House of Lords, 27 June 2012; Vol. 738, c. 237.]
The only thing that is consistent is the sheer opportunism of the Labour party on this subject.
On the usual knockabout about the coalition from the hon. Lady, I would simply say that two parties are now working together in government more harmoniously than one party did in government for 13 years.
Finally, on fuel, I admire the cool performance of the Economic Secretary in the face of some very aggressive interviewing by Jeremy Paxman. The Opposition accuse the Government of a U-turn, but let us consider their position. First, they introduced a fuel duty escalator—[Interruption.] Secondly, they asked us not to go ahead with their tax rise. Thirdly, when we do not, they complain. The alphabet does not contain a letter describing that manoeuvre.
Dr Sarah Wollaston (Totnes) (Con)
Will my right hon. Friend please provide a debate on setting up an inquiry into the very serious allegations made against one of my predecessors, Raymond Mawby? These serious allegations, amounting to treason, need to be fully and fairly investigated, because he is not here to defend himself. It is in no one’s interest to have trial by media.
Sir George Young
I admire what my hon. Friend has just done in defending one of her predecessors—a man with whom I served in the House from 1974 to 1983. As she said, so far only one side of the story has been put into the public domain, and it is imperative that the other side also be put forward, in the interests of the friends and family of Ray Mawby. I would like to make the appropriate inquiries to see how we might get the full story into the public domain, so that we can find out exactly what happened to him in the years to which she referred.
Ian Mearns (Gateshead) (Lab)
I convey to the House the apologies of my hon. Friend the Member for North East Derbyshire (Natascha Engel), Chair of the Backbench Business Committee, who cannot be with us today owing to unavoidable personal business.
We are grateful for the time allocated to us by the Leader of the House and business managers, but it is still difficult managing demand. Having said that, we were grateful for the opportunity to suggest to him that the debate on the House’s sitting hours be on 11 July. However, we are still struggling with demand for the time allocated. Will he please reconsider the amount of time allocated to the Backbench Business Committee?
Sir George Young
I am grateful to the hon. Gentleman and to the Backbench Business Committee for collaborating with the usual channels in enabling the House to have a proper debate about sitting hours in the relatively near future. I take to heart what he has said about both the quantity of time and the predictability. We are committed to providing at least 27 days in the Chamber for the Backbench Business Committee, and I will use my best endeavours to give the hon. Gentleman adequate notice of time and do what I can to find more time, if possible, between now and the end of the Session, when I would expect, in any event, to have the usual pre-recess Adjournment debate.
Mr David Nuttall (Bury North) (Con)
As this week has seen the visit to London of the renowned American economist, Dr Arthur Laffer, may we please have a debate on the optimum level of taxation so that we have the opportunity to restate both the moral case and the economic case for lower taxation?
Sir George Young
I am grateful to my hon. Friend. We have two days on the Finance Bill, including a debate on Third Reading, when that might be possible. I would welcome such a debate. The Prime Minister said yesterday—at this Dispatch Box, I think—that he believed in flatter, fairer taxes, which is why we have taken 2 million people out of tax altogether, reduced corporation tax and now have a lower top rate of tax to make Britain competitive with the rest of the world. I look forward to hearing my hon. Friend’s contributions on Third Reading of the Finance Bill on Tuesday.
Mr Andy Slaughter (Hammersmith) (Lab)
Could we have a debate about health service reorganisation and cuts, including plans to close four of the nine accident and emergency departments in west London, where the local NHS says that without closure they will
“literally run out of money”?
The right hon. Gentleman will know these hospitals very well, as hospitals such as Hammersmith, Charing Cross, Central Mid and Ealing served his former constituents, and they are much needed by the people they serve.
Sir George Young
As the hon. Gentleman knows, I had an interest in the area he now represents. We are putting more resources into the NHS than were planned by the Labour party, but I will share the hon. Gentleman’s concerns with my right hon. Friend the Secretary of State for Health and ask him to write to the hon. Gentleman about the proposed rationalisation to which he refers.
Sir Tony Baldry (Banbury) (Con)
As co-chairman of the all-party group on carers, I ask my right hon. Friend to give an undertaking that, if the White Paper on social care is not published and a statement made on it next week, we will have both that White Paper and a statement before the rise of the House for the summer recess—not least to give right hon. and hon. Members the opportunity to study it during that recess? It would be good to see the White Paper, as I understand that it might include some enhanced rights and remedies for carers.
Sir George Young
I am grateful to my hon. Friend and take this belated opportunity to congratulate him personally on his knighthood. It is indeed our intention to publish in the very near future the White Paper and the progress report on the reform of funding. We plan to implement the recommendations of the Law Commission. I applaud my hon. Friend’s interest, and that of the group he co-chairs. We are determined to do more for carers and to drive up carers’ rights. I very much hope that when the White Paper is produced, he will be reassured by some of its proposals. As I said, we plan to bring it forward very shortly.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
The Leader of the House has announced the Second Reading of the coalition’s House of Lords Reform Bill, which gets two days’ debate. At the end of Tuesday’s debate, after the question that the Bill be read a Second time has been put, is it the Government’s intention immediately to hold the vote on any programme motion?
Sir George Young
Yes, that would be our proposition—a proposition that we have adhered to for all the legislation we have produced so far. Discussions continue through the usual channels about the content of the programme motion. I very much hope that the Opposition will enter into sensible and constructive discussions so that we can make good progress on this important piece of legislation.
Duncan Hames (Chippenham) (LD)
What representations has the Leader of the House received from Back Benchers, or indeed from the official Opposition, on the number of days in the programme for the House of Lords Reform Bill? Just how many days are they seeking?
Sir George Young
The particular usual channel that would handle those negotiations would be my right hon. Friend the Patronage Secretary, the right hon. Member for Derbyshire Dales (Mr McLoughlin). However, I note that in an exchange during yesterday’s debate on the Electoral Registration and Administration Bill, the Opposition were asked how many days they wanted for the Committee stage, and all that they said was “plenty”. As I have said, I hope very much that that they will enter into serious discussions so that this important legislation can complete its progress through the House in an agreed and structured way.
Chris Bryant (Rhondda) (Lab)
I know that amnesia is now afflicting so many members of the Cabinet that it is amazing that they manage to recognise one another when they meet, but the Leader of the House said earlier that the fuel escalator had been introduced by a Labour Government. It was not; it was introduced in 1993 by the Conservatives.
My question, however, is about the statutory instrument which is to be debated next Wednesday, and which deals with terrorism. So far the Home Office is refusing to tell us what it is about, and it has not been published. How can we possibly scrutinise a statutory instrument on a key matter next Wednesday if we are not even told what it is about?
Sir George Young
The motion will be on the Order Paper in good time for the debate on Wednesday.
Dr Andrew Murrison (South West Wiltshire) (Con)
May we have a debate on the exposure of UK business men to personal hazard in Serbia as a result of article 359 of the Serbian criminal code, which was condemned by a resolution of the European Parliament on 29 March and which has resulted in the incarceration without trial of my constituent Mr Nicholas Djivanovic since 28 March last year? Given Mr Djivanovic’s case, the advice must be that investors considering Serbia should proceed with extreme caution, if at all.
Sir George Young
I understand my hon. Friend’s concern, and I very much hope that the consular service is giving his constituent all the support that it can. I cannot promise an early debate, but this strikes me as an appropriate subject for an Adjournment debate, or indeed, if we have one, a debate on the pre-recess Adjournment. In the meantime, I will raise my hon. Friend’s constituency case with the appropriate Minister at the Foreign and Commonwealth Office.
Mr Dave Watts (St Helens North) (Lab)
It is now eight months since the Department of Health announced that it would provide more money for the seven private finance initiative hospitals. Eight months on, those trusts still do not know how much money they will receive. May we have an urgent statement from the Department on when the money will be allocated?
Sir George Young
Rather than waiting for a statement from my right hon. Friend the Secretary of State for Health, I will write to him today and ask whether he can correspond with the hon. Gentleman and answer his question about when the resources to which he has referred will be made available.
Chris White (Warwick and Leamington) (Con)
Yesterday the Associate Parliamentary Manufacturing Group held a meeting to prepare a submission for the Heseltine review, which gives the Government an opportunity to look strategically at how it can support our country’s competitiveness. Given the importance of the review, I believe that it is also important for Members to have their say. Will the Leader of the House be able to commit himself to arranging a debate on the review in Government time and giving Members an opportunity to make clear their views on how we can increase our competitiveness?
Sir George Young
The Enterprise and Regulatory Reform Bill is currently going through its stages, and it may be possible to debate the issue raised by my hon. Friend when it returns to the Floor of the House.
My hon. Friend is right: the Chancellor and the Business Secretary have asked Lord Heseltine to undertake an independent review of how spending Departments and other relevant public sector bodies interact with the private sector, and then to assess their capacity to develop pro-growth policies. The review will include a benchmarking exercise comparing how we do with how other countries do, and Lord Heseltine is engaging comprehensively with all interested groups. He has said that he will publish his report in October, and it may be appropriate to hold a debate thereafter, possibly in Back-Bench business time.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Has the right hon. Gentleman seen early-day motion 274, which stands in my name?
[That this House pays tribute to Emily Rawlins, of Manchester, who has triumphed over her learning disability to become a member of the Great Britain Athletics Learning Disability Team, representing our country in Croatia, Italy, France and Sweden, and winning silver and bronze medals in the hammer; further pays tribute to her volunteering work about coping with bullying, following having been bullied herself for most of her school life, and volunteering in addition as a sports coach and at a charity shop; and hails her as a marvellous example of how courage and determination can prevail in adverse circumstances.]
Will the right hon. Gentleman join me in paying tribute to my constituent Emily Rawlins, a young woman who has overcome a learning disability and bullying to become a member of the Great Britain athletics learning disability team, and who has won silver and gold medals when representing our country in European countries? Will he do his best to ensure that this young lady, who volunteers against bullying and does a lot of other volunteering but is looking for full-time work, does not have her access to jobseeker’s allowance reduced because of the marvellous public work that she does?
Mr Speaker
I assume that the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) was seeking either a statement or possibly even a full debate on that important matter.
Sir George Young
I will raise with the Secretary of State for Work and Pensions the interaction of entitlement to jobseeker’s allowance with the activity to which the right hon. Gentleman has referred. I have indeed seen early-day motion 274, and I join the right hon. Gentleman in congratulating Emily, who is, I believe, a member of Sale Harriers and who provides a great example of the ability to triumph over disability and bullying. I think that the British team won 11 medals in Sweden, which bodes very well for the imminent Paralympics.
Philip Davies (Shipley) (Con)
May we have a debate on who the Government thinks should be in our prisons? Although nearly 4,000 burglars and 4,500 violent offenders with 15 or more previous convictions were not sent to prison last year, the Government’s view is that there are still far too many criminals in prison. Perhaps the Government could explain why they have agreed to allow Charles Taylor, the former Liberian President, to serve his 50-year prison sentence in this country. Surely, if we cannot afford to have British criminals sent to prison, we cannot afford to send former Liberian Presidents to prison in this country either.
Sir George Young
My view is that some people who are not in prison should be and some people who are in prison should not be, but the issue of whether someone is given a prison sentence is primarily one for the courts rather than Parliament. We recently passed a sentencing Bill which raised the thresholds for some minimum sentences, and I am sure that that was welcomed by my hon. Friend. As for the specific case to which he referred, I will raise it with my right hon. and learned Friend the Lord Chancellor.
Mr Denis MacShane (Rotherham) (Lab)
Like many other people, I welcomed the appeal by my right hon. Friend the shadow Chancellor for a cut in fuel duty when he was interviewed on the “Today” programme. A few hours later, the Chancellor accepted it. That is, I think, what we mean by bipartisanship. May we now have a debate on the need to cut air passenger duty? It will cost a family in Rotherham £320 to go on holiday this summer, whereas it will cost a family in France, for example, just £38. Following the U-turn on fuel duty, may we have a U-turn on air passenger duty?
Sir George Young
I am not sure whether the right hon. Gentleman was present for Transport questions, but they would have provided him with an ideal opportunity to raise the issue. [Interruption.] If he is proposing a reduction in a particular form of taxation, perhaps he would like to suggest where the money might come from.
Mr Speaker
Order. The right hon. Member for Rotherham (Mr MacShane) has been chuntering from a sedentary position that he did not make that point at Transport questions because he was not called by me, but he was called this time, and I know that he is deeply grateful.
Mark Lancaster (Milton Keynes North) (Con)
May we have a debate on spinal muscular atrophy, which is the number one genetic killer of infants and small children? I am sure that the Leader of the House will join me in congratulating 24 of my constituents who are cycling from Le Mans to Olney to raise funds for my three-year-old constituent Maya Czerminska to buy the special equipment that she needs. May I simply ask the Government to redouble their efforts to tackle this appalling disease?
Sir George Young
I applaud the fundraising initiative of my hon. Friend’s constituent. The National Screening Committee is currently scoping out a review for screening for spinal muscular atrophy, and once the review has been completed, it will be put on the NSC’s website for consultation. I know that the NSC would welcome an input from my hon. Friend, and, indeed, from those who are raising funds for this worthwhile cause.
Kate Hoey (Vauxhall) (Lab)
May we have a debate on the way in which we treat the staff of the House, particularly the very loyal staff on the switchboard, many of whom are my constituents and many of whom have been here for more than 20 years? They have been told that they will have to move to Southampton next May because Capita has taken over the running of the service. Can we really not look at the way in which we treat our own staff?
Sir George Young
The hon. Lady is right to draw the House’s attention to the debt that we owe to all those who work for the House and provide such a high-quality service, often in challenging circumstances. I understand that the contract for the switchboard operation has been awarded to Capita as part of the initiative of the House of Commons Commission to reduce costs. The hon. Lady’s concern is not primarily a matter for the Government, but it is a matter for the Commission, so I will raise it with the Commission and see whether there is a role for us to play in minimising the dislocation of her constituents.
Mike Crockart (Edinburgh West) (LD)
Will my right hon. Friend arrange for a debate on the functioning of Her Majesty’s Revenue and Customs, especially in relation to the extra funds made available to it to deal with tax avoidance and tax evasion? It appears to me that it is the media that are finding high-profile tax avoiders, while HMRC is chasing one of my constituents for small overpayments of tax credits from more than 10 years ago. I am sure that is not what the extra resources were intended for.
Sir George Young
I am sure my hon. Friend will take up with vigour the case of his constituent who is being pursued for tax credits. We all know from our own casework that quite often tax credits are overpaid through no fault of the constituent, and then some time later HMRC asks for the money back and it is not there.
On my hon. Friend’s first point, the Government have given £900 million in extra resources to HMRC specifically to bring in more tax, and we estimate that that will bring in an extra £7 billion of revenue.
Kelvin Hopkins (Luton North) (Lab)
This weekend is likely to see the beginning of the end of the euro. While euro-obsessives wring their hands in anguish at the thought, some of us believe that re-establishing national currencies will be beneficial in both economic and democratic terms, yet we have not had a serious debate about life after the euro. Will the Leader of the House make time for such a debate?
Sir George Young
My right hon. Friend the Prime Minister has a good record on keeping the House in the picture after European Council meetings. I have to say that I do not think it would be in the interests of this country for the euro currency to come to an end, as the uncertainty and instability would be gravely damaging to British interests and British employment. However, if my right hon. Friend the Prime Minister reports on the weekend conference, there may be an opportunity for the hon. Gentleman to pursue this matter with him.
Charlie Elphicke (Dover) (Con)
May we have a debate on the operation of the parliamentary information technology system, so I can understand why we have a wi-fi system that we have to log into about every five seconds, my constituents can have a better understanding of the alleged overspending on iPad rental, and everyone can understand who is responsible for the operation of this system?
Sir George Young
Again, that is more a matter for the Commission than the Government, but speaking from memory, I think there are plans to roll out access to wi-fi within the Palace of Westminster. At the moment it does not reach the Leader’s office. I hope that—[Laughter.] I hope that, as the reach of wi-fi spreads through the Palace of Westminster and the signal strength is improved, my hon. Friend will not be inconvenienced in the way that he clearly is at present.
Helen Goodman (Bishop Auckland) (Lab)
On Monday, I raised the case of a constituent who has had cancer. She has been told by her doctor that she is not fit enough to go back to work, but she is being denied benefit. The Minister in question refused to meet me and said it was now policy for Ministers not to look at individual cases. I am sure the Leader of the House agrees that we must be able to represent our constituents in exceptional cases. Please will he look into this matter for me?
Sir George Young
I assume the hon. Lady is referring to Department for Work and Pensions Ministers?
Sir George Young
I will certainly pursue this matter. As far as I know, Ministers are accessible to other Members who want to raise cases. On the particular case the hon. Lady raises, I am sure the constituent is appealing against the decision to deny benefit, but I will raise this specific concern with my right hon. Friend the Secretary of State for Work and Pensions and see whether a meeting might be arranged.
Kris Hopkins (Keighley) (Con)
Wednesday 4 July is “Independents day”, a campaign day supporting and promoting the independent retail sector, spearheaded in my community by the Keighley Town Centre Association. Can we have a statement on what the Government have already done to support this important sector of our economy, and what they plan to do in the future?
Sir George Young
I welcome this important initiative, supported by Keighley, and I pay tribute to independent shops, which are often a lifeline in areas that have not been reached by the multiples. I cannot promise an early debate, but this might be an appropriate subject for an Adjournment debate or one of the longer Westminster Hall debates.
Huw Irranca-Davies (Ogmore) (Lab)
Can we urgently have a statement on the medicine supply chain problems facing patients, front-line pharmacists and dispensing doctors? After 18 months of freedom of information requests, we now know that four out of five health boards, health trusts and prescribing bodies in England and Wales are experiencing difficulties in accessing drugs for conditions including diabetes, cancer and coronary care. In our country there is a public service obligation to provide electricity to every household. We should consider putting in place a patient service obligation to make sure UK patients have access to the drugs they need.
Sir George Young
The hon. Gentleman raises a serious issue. There has been some discontinuity in the supply chain of certain medicines—in some cases companies can get a better deal if they sell pharmaceuticals overseas. My understanding was that there was a back-up service to ensure that shortages were avoided, but I will pursue this important matter with my right hon. Friend the Secretary of State for Health.
Mr Edward Timpson (Crewe and Nantwich) (Con)
Dairy farmers in Crewe and Nantwich and elsewhere are rightly concerned about how much power the supermarket buyers have over them. Will my right hon. Friend find time for a debate on the establishment of the groceries code adjudicator, which my local farmers broadly welcome, and in particular the sanctions available to the adjudicator to make sure the supermarkets adhere to the code, thus protecting our vital dairy industry?
Sir George Young
As my hon. Friend will know, in the Queen’s Speech we committed ourselves to introducing the Groceries Code Adjudicator Bill. That Bill has now been introduced and is making its way through the other place. I hope it will come before this House before too long. The adjudicator will have strong powers to hold retailers to account if they have broken the code. He will be able to name and shame retailers and, if the Secretary of State agrees that it is necessary, to impose financial penalties.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
May we have a statement or debate on the Government’s proposed changes to secondary education and the reintroduction of O-levels? This week, there was a leak to the Daily Mail and we had an Opposition day debate in which we heard a lot about aspirations but very few details. Schools in Birmingham and elsewhere have a right to know precisely what the Government are planning to do.
Sir George Young
We had a good debate on O-levels on Tuesday, and if the hon. Lady looks at Hansard she will see that the resolution agreed by the House refers to the forthcoming consultation on the secondary school qualifications and curriculum framework. The point at which to have another debate would be once that consultation document is in the public domain. I would simply add that we inherited a situation in which far too many children were leaving primary school unable to write, read and add up properly. That was wholly unsustainable, and we have proposals to put it right.
Mark Menzies (Fylde) (Con)
Many Members recognise the excellent work nurses do. However, a constituent of mine who has spent more than 40 years as a nurse and nurse trainer has raised concerns about some of the basic personal care aspects of nursing training. May we have a debate on nursing training, therefore, and on how we can ensure that we have an excellent standard of nursing throughout the country?
Sir George Young
I agree with my hon. Friend that it is important to drive up the standards of nursing, and I believe that there has been a move to make nursing more of a graduate profession. I cannot promise an early debate on this subject, but again it might be a suitable subject for a debate on the Adjournment or in Westminster Hall. We are committed to driving up the standard of nursing training, so that nurses can provide an even higher quality service to patients.
Kevin Brennan (Cardiff West) (Lab)
May we have a debate on endangered species, having read this week the very sad news of the death of Lonesome George, the last giant tortoise of his kind on the Galapagos islands? Does the Leader of the House see any parallel between the plight of Lonesome George and that of the endangered Chancellor, with his tendency to hide in his shell at the first sign of trouble?
Sir George Young
A moment ago, the Chancellor of the Exchequer was at my side. I am sure he will return—and he will certainly get support from me for his forthcoming statement. I should just say to the hon. Gentleman, however, that things are not going too well for his party. I see that Tony Blair took control of the Evening Standard yesterday, and when asked whether he wanted to become Prime Minister, he said, “Yes, sure.” I am not sure whether that is the vote of confidence in the current leadership that Labour was hoping for, or whether the reserves are lining up on the touchline.
Robert Halfon (Harlow) (Con)
Can we have a debate on topsy-turvy welfarism? The Sun has revealed that taxpayers are to be squeezed by the EU for tens of millions in winter fuel cash to send to pensioners who have not lived in the UK for decades. Surely it is wrong to tax pensioners and working people in my constituency to send what could be up to £90 million in benefits abroad to warm countries and tax havens across Europe.
Sir George Young
My hon. Friend is absolutely right about this. My right hon. Friend the Secretary of State for Work and Pensions has said that we will challenge these ridiculous rules and make sure that winter fuel payments go to those in this country. It is ludicrous that we should have to pay for more pensioners living in warmer countries than this one.
Diana Johnson (Kingston upon Hull North) (Lab)
Following the excellent debate we had in Westminster Hall on women bishops in the Church of England, after recent events in the House of Bishops and with concern across the House of Commons about the good standing of the Church of England, is it not about time that we had a debate on the Floor of the House about women bishops?
Sir George Young
If the hon. Lady is in her place this time next week, there will be Church Commissioners questions. The Second Church Estates Commissioner is in his place and has now had advance warning of the question, so he will come up with a scintillating reply in a week’s time.
Gavin Barwell (Croydon Central) (Con)
As a member of the Joint Committee that examined the draft Bill, may I welcome the dates for the Second Reading of the House of Lords Reform Bill and the fact that the Government listened to the Committee’s recommendations to protect the primacy of this place? Can the Leader of the House tell us when he will publish the programme motion? Does he share my view that it is, sadly, all too typical of Opposition Front Benchers to say they will oppose something they have not seen and which is necessary to enact the reform they claim to want?
Sir George Young
The programme motion will be tabled in good time for the debate. My hon. Friend is absolutely right that it is absurd for Labour Members to say that they are going to oppose the programme motion before they have even seen it.
Nick Smith (Blaenau Gwent) (Lab)
Earlier this week, Defence Ministers talked up their budgetary competence. Today, the National Audit Office says that £6 billion has been wasted on redundant kit—this includes storing parts for spy planes that no longer fly. Can we have a debate on improving financial management in the Ministry of Defence?
Sir George Young
The MOD will of course consider the NAO’s detailed conclusions and recommendations, and will make a full response in due course. The priority at the moment is to make sure that those in Afghanistan have the kit they need, but we are addressing these issues, which have built up over some time. In respect of the NAO report, we are pleased that the NAO recognises that these changes are already making a difference. We are changing the way in which we buy, store and dispose of equipment, and we are investing in IT systems in order to make progress in this area.
Christopher Pincher (Tamworth) (Con)
By 2013, all secondary schools and many primary schools in Tamworth will have converted to academy status, under several providers. Those schools are even now discussing with the borough council how they can develop an overarching schooling strategy for the town. So may we have a debate on education and local government to discuss how county local authorities can devolve further responsibilities and powers to schools and to district councils?
Sir George Young
I welcome the progress being made in my hon. Friend’s constituency. The schools that he has just mentioned are joining the more than 1,600 new academies that have been created since we came into office in May 2010, driving up standards and performance. I would welcome a debate along the lines that he suggested about the relationship between schools and local authorities, in which I could hear his thoughts about how we can do more to empower teachers and parents. I cannot promise such a debate in the very near future, but there may be an opportunity for one when we have the consultation paper to which I have just referred.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The Immigration Minister’s recent statement reflects growing concerns that Government policies are stopping able overseas students from coming to the UK. Can we have a debate on that important issue?
Sir George Young
I would welcome such a debate. I have seen no evidence that our recently introduced controls are keeping out of the country able students who want to go to our best universities. I have to say that the system of immigration control that we inherited was shambolic, and we have had to take firm steps to bring it under control. We have seen no evidence that our approach is having the effect to which the hon. Lady refers.
Paul Uppal (Wolverhampton South West) (Con)
Following on from my question last week, could my right hon. Friend find time for a debate about the use of parliamentary language in this place? A specific theme of such a debate would be the public perception of parliamentary procedure. Does he agree that this would be a debate in which hon. Members from both sides of the House would actively participate?
Sir George Young
Further to our exchange last week, Mr Speaker, you and I have exchanged letters, and we are both more than happy to place that correspondence in the Library of the House for the convenience of right hon. and hon. Members. I also understand that the Procedure Committee has asked for a memorandum from the Clerk on this very subject, and I hope that in due course that might also be put in the public domain. I repeat what I said to my hon. Friend last week: when we engage in debate in this House, we ought to observe your injunctions to use temperate language, Mr Speaker, and have regard to what the public watching us think if we use language that is over the top.
Graham Stringer (Blackley and Broughton) (Lab)
The Government have kept this House starved of business over the past 12 months, leaving us less than fully employed in this Chamber. That makes it more difficult than normal to justify the return of the Commons in September, but I understand there are also special circumstances this year, as bringing the House back when the carpets and floors on the principal level will have been lifted will incur extra costs, and health and safety risks because of the asbestos discovered. Will the Leader of the House inform us what the extra costs and the health and safety implications are?
Sir George Young
The Government believe, and indeed the House believes, that it is wrong that the Government should not be held to account from the middle to end of July until October, as was the practice in the previous Parliament. We believe that it is right that the House should sit in September, so that the Government can be held to account. Figures are in the public domain—I think from last year—showing the extra cost of sitting in September. My view is that it is very difficult to put a price on democracy, that it is right that we should be held to account throughout the year and that we can manage the maintenance of the House within the budget that is available.
Bob Blackman (Harrow East) (Con)
Earlier this week, the Prime Minister made an excellent speech about the future strategy for benefits. The key issue that he made clear was that work will always pay but that benefits would be available for those who cannot work. Incredibly, the Labour party opposes a benefit cap and set up, when in government, a huge and complicated system of benefits. May we therefore have a debate on the future strategy for benefits, so that we can pin down, once and for all, where the Labour party stands? [Hon. Members: “Hear, hear.”]
Sir George Young
I am very grateful to my hon. Friend. He will have heard my hon. Friends’ reaction to his proposal for a debate, and he may wish to ask the Backbench Business Committee for one. I applaud the speech that the Prime Minister made on Monday. The indications from one of the polls—I think I saw it in today’s paper—is that that speech struck a chord with the vast majority of the population. We have already made progress with universal credit, with housing benefit reform and reforms in respect of disability, but it is right to ask questions as to where we go next. I think that there is an appetite out there for further changes in the direction in which we have already embarked.
Pat Glass (North West Durham) (Lab)
The further education loans regulations that are due for implementation on 1 September are to be laid before Parliament on the day before the recess begins, which is, coincidentally, the same day on which most FE colleges in this country close for the summer. That means that parliamentarians will not have time to scrutinise the regulations properly and, probably more importantly, that it will be almost impossible for FE colleges to put in place their operations for 1 September to make this work. May we have an urgent statement on this matter?
Sir George Young
I understand the hon. Lady’s concern. She is asking for the regulations to be made available at an earlier date than the one currently planned, and I will certainly make inquiries to see whether that might be possible.
Andrew Jones (Harrogate and Knaresborough) (Con)
Youth unemployment in my constituency has fallen for the fourth successive month, and it is down by almost a quarter since the beginning of the year. Ensuring that people leave school with the skills that employers need is crucial to continuing that trend, so can we have a debate on the link between education, skills and employment?
Sir George Young
I am delighted to hear the good news in my hon. Friend’s constituency. In the last quarter, youth unemployment in the country as a whole was down by 29,000. I am convinced that the Work programme has a role to play, as do work experience and investment in apprenticeships. He is right to say that the higher the qualifications of those leaving school, the more likely they are to find a job in competitive markets. The thrust of our education policy is indeed to drive up those standards to improve the employability of those leaving school and college.
Andrew Bridgen (North West Leicestershire) (Con)
Can we have a debate on the definition of poverty? The current measure of poverty as an income of less than 60% of the national median wage means that if anyone increases their income, even the lowest paid worker in the country, they are judged to have pushed someone else into poverty. Perhaps even more perversely, if everyone in the country was to have an income of zero, we would be judged to have eradicated poverty altogether. That flawed measure highlights the failings of the previous Government, with their concentration on income transfer rather than on addressing the root causes of poverty, namely low aspirations and worklessness.
Sir George Young
I am grateful to my hon. Friend for his question and it is right that we should, if possible, move away from a purely mathematical calculation of poverty that aims to move a group of people from just below a level to just above a level. We should try to define poverty in more general terms and then deal with the causes of poverty. Speaking from memory, I think my right hon. Friend the Secretary of State for Work and Pensions is proposing to change how poverty is measured in exactly the direction my hon. Friend proposes.
Greg Mulholland (Leeds North West) (LD)
Can we be assured that we will get an oral statement to the House from the Secretary of State for Health next Wednesday, when the Safe and Sustainable review into children’s heart surgery is published? Recent documents suggest that, even now, proper account is not being taken of the independent figures that clearly suggest that certain units will not achieve the 400 units necessary, whereas Leeds will. With that lack of confidence in the process, we need a clear statement from a Minister.
Sir George Young
I understand my hon. Friend’s concern and, as I understand it, a report or review is to be published next Wednesday. I cannot promise my hon. Friend that my right hon. Friend the Secretary of State will make an oral statement on that day, but I am sure that he will want to respond to the review in the most appropriate way.
LIBOR (FSA Investigation)
(11 years, 10 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
I would like to update the House on the Financial Services Authority’s investigation into the manipulation of the setting of the LIBOR and EURIBOR interest rates and the Government’s response. The London interbank offered rate, or LIBOR, and the Euro interbank offered rate, or EURIBOR, are the benchmark reference rates that are fundamental to the workings of the UK, European and international financial markets, including markets in interest rate derivatives contracts. Those contracts might sound exotic but they are the bread and butter of our financial system and are used by businesses and public authorities every day, and they affect the mortgage payments and loan rates of millions of families and hundreds of thousands of firms, large and small.
LIBOR and EURIBOR are by far the most prevalent benchmark reference rates used in euro, US dollar and sterling interest rate derivatives contracts. The outstanding interest rate contracts alone are estimated to be worth $554 trillion. Yesterday, the FSA published notice that Barclays had on numerous occasions acted inappropriately and breached principles 2, 3 and 5 of the FSA’s principles for businesses. As a result, the FSA has imposed a financial penalty of £59.5 million on Barclays. In other words, the FSA reports that this bank, on numerous occasions, did not conduct its business with due skill, care and diligence, that this bank did not take reasonable care to organise its affairs responsibly and effectively, with adequate risk management systems, and that this bank did not observe proper standards of market conduct. As the FSA puts it:
“Barclays’ misconduct…created the risk that the integrity of LIBOR and EURIBOR would be called into question and that confidence in or the stability of the UK financial system would be threatened.”
Barclays are not alone in this. The FSA is continuing to investigate the conduct of a number of other banks in relation to LIBOR, to commit significant resources to its investigations into potential attempts to manipulate LIBOR and to work with its counterparts overseas and with other authorities in the UK.
The investigations concern a number of institutions based both in the UK and overseas, but it is already clear that the FSA’s investigation demonstrates systemic failures at the heart of the financial system at the time. I want to thank Adair Turner and the team at the FSA for a very thorough piece of work, but it prompts three vital questions. First, how were such failures allowed to continue undetected and unchecked, particularly in the two years before the financial crisis, which is when the FSA is clear that the most serious breaches occurred, for which the only motive was greed? Secondly, what changes are needed to our regulatory system in the future to prevent such abuse from occurring again and to make sure that the authorities have every power they need to hold those responsible fully to account? Thirdly, what further investigations are required into the activities at Barclays, what sanctions are available and what questions must the chief executive answer?
First, the FSA report is a shocking indictment of the culture at banks such as Barclays in the run up to the financial crisis. The e-mail exchanges between derivative traders and the LIBOR submitters read like an epitaph to an age of irresponsibility. Through 2005, 2006, and early 2007 we see evidence of systematic greed at the expense of financial integrity and stability. They knew what they were doing:
“Keep it a secret”,
one trader told another in February 2007,
“If you breathe a word of this I’m not telling you anything else”.
Yet no one at Barclays prevents them, no one in the tripartite regulatory system knows anything about it and the Government of the day are literally clueless about what is going on.
The FSA is clear that the most serious breaches of its principles for businesses occurred in the years leading up to the financial crisis. Once the crisis is under way, Barclays’ concern switches from the greed of traders to concern from the management about the reputational risk to the firm. To be fair, Barclays itself raised concerns about LIBOR with the FSA in late 2007 and in 2008. Yes, the financial system was experiencing a severe stress and markets were frozen, but it is clear that Barclays—and potentially other banks—were still in flagrant breach of their duty to observe proper standards of market conduct and give citizens and businesses in this country and elsewhere proper transparent information about the true price of money.
Britain’s tripartite system of regulation failed us in war and in peace and the country has paid a very heavy price for that. That brings me to the second question of how we prevent this from happening again. The Government are getting rid of the whole tripartite system. The Financial Services Bill now before Parliament will create a new and far tougher regulatory system. A new Financial Conduct Authority will focus razor-like on market abuse and protecting consumers. We have been reviewing with the FSA and the Bank of England the operation of the LIBOR regime, which was not regulated under the previous Government’s Financial Services and Markets Act 2000. The market is already changing and the role of LIBOR is changing with it. As part of our review into LIBOR and the strength of the financial regulatory—[Interruption.] May I just say to the Opposition that I think a little more silence would do, and perhaps an apology for the mess that this Government are trying to clean up? [Interruption.]
Mr Speaker
Order. Rather more silence is needed on both sides; the Chancellor is quite justified in making his point. I gently remind the junior Whip on the Treasury Bench that although his oratorical talents might be deployed in the future—we look forward to that with eager anticipation and beads of sweat on our brows—for now his role is to fetch and carry notes and to nod in the appropriate places. Silence is required.
Mr Osborne
Mr Speaker, my hon. Friend the Member for Chelsea and Fulham (Greg Hands) does far more than that and he is very good at it.
Let me get back to the serious matter in hand. As part of our review into LIBOR and the strength of the financial regulatory architecture, we will examine if there are any gaps in the criminal regime inherited by this Government and we will take the necessary steps to address them. I cannot comment today on possible criminal investigations into individuals involved in this activity. The authorities are exploring every avenue open to them but, shockingly, the scope of the FSA’s criminal powers, granted by the previous Government, does not extend to being able to impose criminal sanctions for manipulation of LIBOR. As part of our review into LIBOR and the strength of the financial regulatory architecture, we are examining whether strengthening the criminal sanctions regime for market abuse and market manipulation is warranted, and if so, we will provide for these powers quickly.
Next week, the Government will be publishing a consultation in response to the report on the failure of RBS and will consider the possibility of criminal sanctions for directors of failed banks when there is proven criminal negligence. Under the previous Government’s regime, fines paid to the FSA are used to reduce the annual levy other financial institutions are asked to pay. I am far from convinced that in all cases that is the best use of the money and we are considering amendments to the Financial Services Bill that ensure that fines of this nature go to help the tax-paying public, not the financial industry.
I have also asked my officials to investigate urgently whether that legislation could be applied to the fine imposed on Barclays bank. It is clear that what happened in Barclays, and potentially in other banks, was completely unacceptable and was symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees.
That brings me to my final point. As I have said, a number of individuals are under formal investigation by the FSA, and that number is expected to increase as the investigations continue. The Serious Fraud Office is aware of the matters under investigation and there are ongoing discussions between the FSA and the Serious Fraud Office about the evidence as it develops. The chief executive of Barclays has some very serious questions to answer today. What did he know and when did he know it? Who in Barclays’ management was involved and who therefore should pay the price? It is quite right that the Treasury Committee has asked him to appear urgently to account for himself and his bank, and I congratulate the Chair of the Committee on doing that. We all want to hear his answers. The story of irresponsibility is not over yet.
Our financial services should be a source of economic strength and national pride for this country, but failures in our banks and financial system have cost the country billions and put thousands out of work. Those responsible should be held responsible. We want our financial services to support the creation of jobs and prosperity for millions. This Government are sweeping away the regulatory system that failed. We will protect taxpayers, punish wrongdoing and put right the wrongs of an age of irresponsibility.
Rachel Reeves (Leeds West) (Lab)
I start by thanking the Chancellor for advance notice of his statement, which was handed to me at 12.19 pm—two minutes before he delivered it. [Hon. Members: “Where’s Balls?”] As my right hon. Friend the shadow Chancellor is addressing the Local Government Association’s annual conference in Birmingham, I am responding for the Opposition.
Nine months ago, the Leader of the Opposition talked about “irresponsible, predatory capitalism”, of which this is one of the worst cases yet. The public had been assured that the banks had cleaned up their act. Ordinary borrowers and savers were told they could trust the banks again, but these unfolding revelations shine a new light on shocking practices in one of Britain’s most important banks. What should have been an impartial process of reporting independent interest rate statistics became an exercise in cooking the books, cheating the system and fixing the market.
Financial stability and the effective regulation of our banking and wider financial services industry are vital for stability, for consumers to save and for businesses to invest. Getting the balance of regulation right is an important task for the Government, especially when hundreds of thousands of jobs depend on the industry and when all of us and small businesses in all our constituencies rely so much on the financial services sector.
There are three areas in which I have questions for the Chancellor, the first of which is dealing with the people who are responsible. Are those responsible in the banks being held—[Interruption.]
Mr Speaker
Order. This is an extremely serious matter which warrants serious consideration. Let it be absolutely clear to hon. Members on both sides of the House that if they want to shout out, they will not be called to ask a question on the statement. They should not shout, but if they think they are going to shout and then be called to ask a question, I am afraid they are rather deluded.
Rachel Reeves
Thank you, Mr Speaker. I could not agree more with you about the importance of this issue.
On dealing with those who are responsible, are those responsible in the banks being held accountable, or will this whole thing just return to business as usual? Are criminal investigations progressing, and which law authorities will be leading the conspiracy and fraud cases that might arise? Has the Chancellor reflected on the consequences for competition and has he considered involving the Office of Fair Trading, the Serious Fraud Office or the City of London police? We need to know who knew what and when, and criminal prosecutions should and must follow against anyone who might have broken the law.
Millions of home owners with variable rate mortgages, small businesses with floating loans and consumers who depend on affordable credit could have lost money because of what amounts to a price-fixing scandal. What support will be available for individuals and small businesses who have potentially lost out because of the market fixing and who contact the Financial Ombudsman Service or the bank directly? Is the FSA also investigating the role of the bank’s auditors in tracking and reporting the manipulation of the figures between the rate submitters and the traders involved? What is happening to ensure that other banks that have manipulated markets in a similar way are brought to justice?
Secondly, what is being done to prevent anything like this from happening again? We raised our concerns with Treasury Ministers about the regulation of LIBOR recently. On 6 March, during a debate on the Financial Services Bill about the set of unregulated financial activities that the Chancellor evidently felt should remain unregulated, the shadow Financial Secretary, my hon. Friend the Member for Nottingham East (Chris Leslie), asked the Financial Secretary directly about the
“billions of pounds of trades that are subject to the LIBOR rating”––[Official Report, Financial Services Public Bill Committee, 6 March 2012; c. 359.]—
and why that might need to be regulated. When asked whether he had a view—any view at all—about ending self-regulation, the Financial Secretary to the Treasury had a one word answer: “No.”
The Chancellor made a conscious decision to exclude LIBOR from the Financial Services Bill in its current form, even when he must have known that a massive FSA investigation into precisely that matter was under way. The reputation of the City of London and our financial services sector is at stake. Instead of Ministers’ saying that the Treasury has no view, surely we need swift action to prevent the market abuse? Will the Chancellor urgently revisit his decision not to regulate LIBOR arrangements and instead amend the Financial Services Bill, which is still before Parliament?
Thirdly, a much wider issue is the culture in the City of London. As Bob Diamond said only last year, culture is about
“how people behave when no one is watching,”
but people in his organisation thought they could do anything they liked, just to make a fast buck. They thought they would never be held to account and that they were effectively above the law. We cannot allow Britain to become a place where the privileged and the powerful act according to their own set of moral standards. That is why we are calling for the strongest punishment for those who have broken trust and broken the law, tough regulation to prevent such practices in future and a culture change in our banking industry. We must get our economy working for the majority, not just a few at the top. The Government must act.
Mr Osborne
The whole House will be both surprised and disappointed that the shadow Chancellor is not here to account for himself today. He was certainly there every single day while these abuses were taking place, as the City Minister responsible for regulating Barclays and other banks. The hon. Lady says that the Government should do this and that. We are doing all those things; the question is why did the Labour Government not do those things when all this was actually happening?
Let me answer the hon. Lady’s specific questions. She asks whether the individuals responsible will be held to account. Absolutely, and the authorities are carrying out investigations into individuals. She asks whether people who have broken the criminal law will be held to account. That is absolutely what the authorities are looking at but as I have said, the FSA’s criminal powers granted by the previous Government do not extend to criminal sanctions for manipulation of LIBOR. [Interruption.] The hon. Member for Nottingham East (Chris Leslie) asks, “Why is it unregulated?” It is because he did not regulate it—that is why. We are introducing a major Financial Services Bill, which has been through the House of Commons and is going through the House of Lords, to deal with the abuses that happened under the previous Government.
Secondly, the hon. Lady talked about the regulation of LIBOR. Of course the Government have been reviewing LIBOR while awaiting the publication of this report, which we knew was coming. As I have said, we have considered it carefully and we are looking at criminal sanctions for market manipulation. The hon. Lady did not ask about this, but it is an important point so I shall repeat that we are looking at what can happen to the fines levied on companies under the Act passed by the previous Government. Those fines are used simply to reduce the levy that is paid to the FSA by the rest of the financial sector, so the money paid by Barclays would just go to reduce the levy paid by other banks to the FSA. We are considering changing that, looking at whether that is appropriate in all cases and, specifically, whether the fine that Barclays will pay can go to the general taxpayer, who has suffered so much as a result of the failures of the financial system.
Finally, the hon. Lady talked about a culture change in the City and in banking. I completely agree. That is why the Government have introduced very tough new rules on remuneration and the clawback of remuneration, which is what will happen in this case. It is why we asked John Vickers to look at the whole structure of our banking industry, and the Business Secretary and I are implementing reforms that will ring-fence our retail banks to protect them better. It is why we have before Parliament as I speak the Financial Services Bill, which will sweep away the financial regulatory system that failed this country so badly. The Labour party’s trouble is that it is led by the cheerleaders for the age of irresponsibility, but they have yet to say sorry for it.
Mr Speaker
Order. A very large number of hon. and right hon. Members are seeking to catch my eye, but I remind the House that there is significantly subscribed business to follow, under the auspices of the Backbench Business Committee; therefore, I must appeal for short questions and short answers.
Mr Andrew Tyrie (Chichester) (Con)
What is now left of trust between Parliament and the banks? Barclays and probably other banks were profiting by lying and rigging the markets at a crucial time in the last crisis, when the Government had a right to expect that they would supply the then Chancellor with reliable information on the basis of which to conduct policy. The Treasury Committee will now investigate properly. Under the current legislation, as the Chancellor has pointed out, the Financial Services Authority has no power to bring a criminal prosecution in relation to not only LIBOR, but derivatives. Will the Chancellor undertake now to amend the Financial Services Bill to include derivatives and LIBOR in the legislation before Parliament?
Mr Osborne
I completely agree with the sentiments that my hon. Friend has expressed. I congratulate him and his Committee on acting swiftly to ask Mr Diamond to come and account for himself. As I said in my statement, we are looking at strengthening the criminal sanctions regime in general for market abuse and market manipulation, not just of LIBOR but in other parts of the market; and next week, as planned, the consultation on potential sanctions for directors of failed banks will be published. Sadly, the Government have been in this situation before with the FSA’s report into the failure of Royal Bank of Scotland, when the authority reported to us that it did not have the powers it would have liked to hold to account those responsible for the failure.
Mr Alistair Darling (Edinburgh South West) (Lab)
I am sure that, in his quieter moments, the Chancellor will reflect on the fact that we are kidding ourselves if we think that the UK was the only country where this sort of thing was going on. The American authorities are just as concerned as our authorities. The situation is symptomatic of a culture that prevailed for much of the last decade, when, frankly, anything was allowed to go.
Does the Chancellor accept two things? First, LIBOR now has to have some degree of independent supervision. It cannot be a work of fiction. It is so important, especially at times of financial crisis—in 2008, we were concerned about the financial health of Barclays and other banks—to know exactly what it is costing them to borrow. Secondly, although the FSA may not have criminal powers, I am pretty sure it does have powers to take out of banks and put off the road the people who are responsible for doing this, the people who tolerated it, and those gained from it and condoned it. If that is not done, we have no chance whatsoever to move on in what remains a very important industry for this country.
Mr Osborne
The former Chancellor is of course right: there was poor financial regulation in American markets too, and part of the investigation has been conducted jointly with the American authorities—but LIBOR was set in London, which is why it is called LIBOR.
The right hon. Gentleman raised two points. The regulation and supervision of LIBOR is precisely what we are investigating, although we have to make sure that we are not regulating the LIBOR market as it existed three years ago. That market today is somewhat different and changing quite a lot, so we have to get the regulation right for 2012, not for 2006-07. His second point was on the individuals concerned and the FSA’s powers. I have spoken to Adair Turner and I am absolutely clear that the FSA is pursuing cases against individuals, but it is a prosecuting authority and it would not be appropriate for me to comment about those individuals and ongoing cases.
Mr David Ruffley (Bury St Edmunds) (Con)
Can the Chancellor indicate how widespread the investigation is? How many other British banks are under investigation for market manipulation?
Mr Osborne
HSBC and RBS are two of the banks under investigation, but international banks such as UBS and Citigroup are under investigation too, partly for activities conducted in this country.
Mike Gapes (Ilford South) (Lab/Co-op)
The Chancellor referred to the costs and penalties that the general public have suffered. Is there any estimate of how much per head ordinary people in this country have suffered from the activities of a group of corrupt banksters?
Mr Osborne
First, I hope the hon. Gentleman does not mind me saying on behalf of the whole House that we very much welcome him to his place. He has the deepest sympathy of the whole House for the tragedy in his family. It is good to see him back here.
There is no estimate of the cost to individuals or consumers, and it would be very difficult to construct one. We are talking about the daily rate set, in the case of these abuses, over a three or four-year period, and it was used to set mortgage rates, loan rates and all sorts of other things. Sometimes the rate was manipulated to be too low and sometimes it was manipulated to be too high compared with the true market price. We do not have an estimate, but it is clear that, as the FSA says, the manipulation contributed to the risk to the entire financial system, which then, in effect, collapsed, not because of that, but as part of the culture we have been talking about, and the country has paid many billions for that.
Andrew Selous (South West Bedfordshire) (Con)
I agree with what the Chancellor said about the failure of the previous regulatory regime, but as far as the senior management of the banks are concerned, does he agree that ignorance is absolutely no defence? They should have known what was going on.
Mr Osborne
I completely agree. One of the things that has shocked the entire country in the aftermath of the financial crisis is how little people appeared to know about what was going on in their banks. That is why it is very important that Mr Diamond accounts for himself and his management and explains what they knew and when they knew it.
Sir Stuart Bell (Middlesbrough) (Lab)
May I build on the question put by my right hon. Friend the former Chancellor of the Exchequer about the independence of LIBOR? The Chancellor has not referred to the British Bankers Association, which was involved in 1984 in putting the rate together. Is it appropriate to talk again to the association to see if we can get a true, independent LIBOR?
Mr Osborne
The BBA is concerned about what has happened and has already instituted a review into the operation of LIBOR. I should like to hear its thoughts on that, but we need to look at the regulation of the rate and its independence. LIBOR is a very important rate that is used to set mortgage and loan rates for pretty much everyone in the country, so we want to make sure that what happened never happens again.
Claire Perry (Devizes) (Con)
When I heard about the situation, it made me think that “light touch” should be substituted with “clueless”. I am extremely concerned about the damage to Britain’s international reputation as a world-leading financial centre. Has the Chancellor had any conversations with his international counterparts to keep them apprised of the investigation, and does he think this is happening in other markets?
Mr Osborne
The fact of the investigation was something I discussed with Finance Ministers and representatives of other Governments, but I have not spoken with any of them since the FSA report was published yesterday because the issues immediately before us are about Britain and a British bank. As I indicated in my response to my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), however, a number of international banks were potentially involved, such as UBS and Citigroup, which are not British banks and are in part regulated by overseas authorities. The whole FSA investigation is part of a joint international effort with the US Department of Justice and the Securities and Exchange Commission.
Mr Dennis Skinner (Bolsover) (Lab)
If we are going to study the culture of the banking system and the changes that have taken place over the years, would it not be fair to start from the fact that the late ’80s, with the big bang in the City, is when the culture of the banks changed dramatically? If we are going to lay blame, let’s get the history books right.
There is another scandal with the banks. Now that the Chancellor is in the mood to tame them, what about looking at the question that blind and disabled people are contributing more to reduce the Government’s deficit than all the banks put together? Sort that out as well. As for saying somebody is absent, the Chancellor ought to be explaining why he did not turn up at the BBC and face the music with Paxman.
Mr Osborne
It is one thing not to appear on the BBC’s “Newsnight”, and another not to be in the House of Commons to answer to the public and to Parliament for one’s own mistakes during the years of irresponsibility. That is the question the shadow Chancellor will no doubt have to answer today. As for history lessons, let me say this to the hon. Member for Bolsover (Mr Skinner): he has never once got up and apologised for the mistakes of the Government he consistently supported over 13 years. It is no good blaming what happened in the 1980s; we are talking about what happened in 2005, 2006, and 2007, when he and his cronies were in charge.
Mr Desmond Swayne (New Forest West) (Con)
When I left banking 16 years ago, we were a dull profession, but capable of giving solid advice. When did it go so horribly wrong? When did bankers start treating their customers as punters to be exploited or devoured? Can my right hon. Friend assure the House that his reforms will restore the status quo ante?
Mr Osborne
I think the answer to my hon. Friends question is: when he left the industry.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Chancellor concentrated heavily on regulation in his statement. He was less keen to tell the House that throughout the period in question, he and his colleagues were calling for less regulation, not more. Does not the responsibility for wrongdoing really lie with those who did wrong—in this case, the traders in Barclays, and very possibly other banks, who participated in a rotten culture, far removed from the job that we want banks to do, which is supporting savers, home owners and businesses? If it really does come down to regulation, why will the Chancellor not accede to the request made by Opposition Front Benchers and now the Chair of the Treasury Committee to include LIBOR in the Bill that is going through Parliament?
Mr Osborne
First of all, when in opposition, we actually objected to the creation of the FSA, the tripartite system of regulation, and taking the Bank of England out of supervision. We voted against that. By the way, I remember—I was the shadow Chancellor at the time—the previous Prime Minister endlessly berating us for voting against that particular piece of legislation.
When it comes to responsibility, of course those involved should be held responsible. I have made that absolutely clear, and that is what the FSA is doing. However, I point out that the Government at the time should be held responsible for the culture that they presided over. As I say, we will take the steps necessary to prevent this happening again, and we are looking at the regulation of the LIBOR market to get it right.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. A lot of Members want to speak and I want to get everybody in, but we need brevity in both questions and answers.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
This ruling surely confirms that the financial markets, as many of us suspected, have been neither free nor fair, but rather a sewer of systemically amoral dishonesty. Is not the case for separation of retail banking from merchant banking now so overwhelming as to be unanswerable?
Mr Osborne
I agree with my hon. Friend that we should separate retail banking from investment banking, but the best way to do that is through the ring-fence as proposed by John Vickers. We asked him and his distinguished commission to look at the structure of banks, and explicitly to consider the option that some had proposed of completely separating retail and investment banking. The commission considered and rejected that option, and instead proposed an approach that it thought would be stronger for financial stability, and particularly for the stability of retail banking. That is the ring-fence approach, for which we will now legislate.
Stewart Hosie (Dundee East) (SNP)
Notwithstanding that Barclays has been hit with a very large fine, it is truly shocking that market manipulation of this sort is not a criminal offence, particularly as the FSA final notice tells us that the abuses went on for three and a half years. I echo the comment made by the Chair of the Treasury Committee and others: we should look again at legislating now, in the Financial Services Bill, particularly as regards the powers of the Financial Conduct Authority—the conduct-of-business authority that will be responsible for this matter—to make sure that it has the powers and the sanctions it needs to deal with this sort of problem.
Mr Osborne
I agree with the hon. Gentleman. Of course the Financial Services Bill is before Parliament and there is still some time to go before it completes its passage, so it is a readily available vehicle, but we want to make sure that we get this right, given what went so badly wrong with the previous attempt to regulate the financial services industry.
Mark Garnier (Wyre Forest) (Con)
While £60 million may sound like a great deal of money to the average man in the street, when it is compared with the size of Barclays’ balance sheet and the potential claims for compensation, does my right hon. Friend not agree that it is a relatively small amount of money? When he is looking at compensation for those who have lost out, will he take care to ensure that Barclays is liable for its own liabilities—that they will not necessarily be shared with other banks and that each bank takes care of its own liabilities?
Mr Osborne
Under the current regime, it is up to the FSA to consider whether there is loss, and it is up to individuals who feel that there has been loss to bring their case forward. As I say, the Government have not been able to come up with a round figure for the total impact on the financial services industry and the economy of what went on, and nor has the FSA. If individuals feel that they have been affected, there are channels available to them.
Chris Bryant (Rhondda) (Lab)
Is not the truth of the matter that all the political parties were so nervous about financial services business going abroad, because it is so international a business, that we were effectively in thrall to them? Would it not make perfect sense for Mr Diamond, when he appears before the Select Committee, to give evidence on oath?
Mr Osborne
It is entirely up to the Treasury Committee to decide how it wishes to conduct its business.
This Government are introducing far-reaching changes to our regulatory system and the structure of our banking system. It is far from clear that that receives the support of the shadow Chancellor. He has gone out of his way to point out what he thinks are the flaws in the Financial Services Bill, and he has gone out of his way at the Dispatch Box to defend the tripartite system that he designed. The hon. Member for Rhondda (Chris Bryant) talks about all-party consensus; let us have all-party consensus on clearing up the mess that the previous Government presided over.
Stephen Barclay (North East Cambridgeshire) (Con)
First, I declare that before I joined the House, I worked for Barclays—[Laughter]—and before that, the FSA.
As the Chancellor may recall, I wrote to him on 7 February calling for a change in the way fines were treated, and for an amendment to paragraph 16 of schedule 1 to the Financial Services and Markets Act 2000, so I welcome his announcement that other banks will not profit from the wrongdoing of banks that have breached rules.
I turn to an issue that the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), picked up: the ability to take enforcement action against senior managers, particularly at executive level. Lord Turner set out in his RBS report the difficulties of that, in terms of the evidential level required. Can the Chancellor update the House on when a response, in the form of a discussion paper from the Treasury, will be forthcoming? Will it be before the summer recess?
Mr Osborne
I am grateful to my hon. Friend for sharing his CV with the House. [Interruption.] At least he did not work for the shadow Chancellor. The answer to his question is that we are publishing the consultation next week.
Helen Goodman (Bishop Auckland) (Lab)
The Chancellor has very sensibly said that he will look at how fines are used, but his answer to my hon. Friend the Member for Ilford South (Mike Gapes) about calculating how much people have lost is somewhat disappointing. Can he not look into whether the fine money can be used to compensate people? Surely he is not expecting every individual to make their own case against a large institution such as Barclays bank?
Mr Osborne
I am happy to take away, because it has been raised by several Members, the issue of the total impact on the economy and on individuals. I would point out to the hon. Lady that that might be extremely difficult to work out, because the LIBOR rate was manipulated up as well as down. Sometimes the rate was too low for the true market price, and sometimes it was too high. It was manipulated by its derivative trading floor to suit the particular position that the bank had taken on that day, and that is why it is a difficult calculation to make. The FSA has made it clear, however, that that contributed to a risk to the country’s financial stability, and the cost of that is enormous.
Matthew Hancock (West Suffolk) (Con)
In January, I set out the case for criminal sanctions against irresponsible management at significant financial institutions, so I welcome the announcement that that will be taken forward. May I push the Chancellor to make those sanctions as firm as can be done responsibly to ensure that those who profit from deep irresponsibility do not face the threat of walking out of the door and spending more time with their money but instead have the full force of the law against them if they do things wrong?
Mr Osborne
My hon. Friend was prescient in making his case. He has pointed to something that concerns a number of people: the apparent ability of, for example, authorities in the United States to use criminal sanctions, while the authorities in the UK have not been granted those powers by Parliament. That is precisely what we are looking at.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
The Government’s new financial services regulatory architecture puts a lot of power and responsibility on the shoulders of the Governor of the Bank of England, but proposes no change to the relationship between the regulator and Parliament. May I ask the Chancellor to reflect again on the relationship of the House and the other place with the regulator, and how best we can establish a continuing—not adversarial—dialogue with the regulator so that problems, such as the one that he has shockingly reported to the House, can be explored and reflected on in a mature way, and not subjected to party political point scoring?
Mr Osborne
Of course, it is important that the regulator, including the Bank of England, is accountable to Parliament for its actions, and has to answer for its actions, while at the same time—and I think that there is cross-party support for this—we maintain the independence of the Monetary Policy Committee and the Governor in his role. The Financial Services Bill includes many new tools to increase accountability to Parliament and to the public. In the White Paper that accompanied publication of the Bill, we set out further changes that we are making in the House of Lords to increase that accountability.
David Mowat (Warrington South) (Con)
Had price fixing on that scale taken place in other industries, under competition law, a fine of multiples of turnover could have been levied. Will the Chancellor tell us whether there is any possibility of a further fine, because £60 million is not a great deal to Barclays?
Mr Osborne
The FSA, which is the appropriate authority, has concluded its work on assessing the fine that Barclays has to pay, but there is also the important question of what happens to the fine. I do not think that other financial institutions or banks benefit from the lower FSA levy as a result. We are therefore looking at precisely that in the Bill, specifically at whether the Barclays fine can go to the taxpayer, rather than to the financial services industry.
Kevin Brennan (Cardiff West) (Lab)
Further to the words of my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), may I gently remind the Chancellor that he told Andrew Marr two things on 4 December 2005, when asked what he would have done differently if he was Chancellor? One was about taxes and the other was that
“we need…a lower regulatory environment”.
Why is his hindsight so different from his foresight?
Mr Osborne
First, the Opposition voted against the creation of the tripartite regime. Secondly, I remember the joyous occasion, when I was shadow Chancellor, at Mansion House in 2007 of all years, when the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), told us about the
“new golden age for the City”,
and the right hon. Member for Morley and Outwood (Ed Balls) praised the virtues of the light-touch regulatory regime of which he claimed sole authorship, although these days, funnily enough, he does not talk about that very much.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Does my right hon. Friend agree that, as the report by the Economic Affairs Committee showed, under Labour’s failed system, it was unclear who was in charge of regulating the banks? Is it fair to say that, sadly, Labour just dropped the ball on this one?
Mr Osborne
It is true that the tripartite regulatory system—and one of the three parts was the Government of the day—failed. That is self-evident, which is why we are making these changes. It is disappointing that they do not command the full support of the Opposition Front Bench, but perhaps the hon. Member for Nottingham East (Chris Leslie), on his 40th birthday, will reconsider his position now that he has reached a new age of maturity.
Frank Dobson (Holborn and St Pancras) (Lab)
Does the Chancellor of the Exchequer agree, in view of the fact that the already overpaid bankers have been revealed to have bolstered their bonuses by corruption and criminal conspiracy, that it is about time that the Government and, in particular, the news media gave far less credence to bankers and their apologists when they come out urging austerity on everyone else?
Mr Osborne
Of course, the credibility of the industry has quite rightly taken a hit because of what happened. However, we have a new pay regime so that we can claw back some of that money from the traders and bank chiefs involved, which is a good thing. Secondly—and we are all rightly concerned about what has happened, and we need to change it—we have to change the financial services industry from one that was part of the age of irresponsibility to an industry that employs many hundreds of thousands of people and which creates jobs and prosperity in this country. It is the largest private sector employer. Knowing the right hon. Gentleman’s constituency, it is almost certainly the largest private sector employer there. Yes, we have to hold those responsible to account, but we must also rebuild the industry, because it is absolutely vital to our economy.
Sir Tony Baldry (Banbury) (Con)
The City of London and its integrity are crucial to our country’s welfare. Does my right hon. Friend agree that this rather sorry, sad state of affairs is a wake-up call for every individual and institution in the City of London which, collectively, has to rediscover and reassert that sense of integrity?
Mr Osborne
I completely agree with my hon. Friend. As I said, this is an incredibly important industry for our future, despite the problems that the banking sector in particular has caused in our recent past. It is important that we do not taint the entire financial services industry with what went wrong. That industry includes insurance companies and all sorts of other businesses that were not involved, but the banks themselves, as the most prominent institutions in the industry, have a huge responsibility to change their culture and image with the rest of the country.
Mark Durkan (Foyle) (SDLP)
What we are looking at essentially is daily daylight robbery, with a culture that said, “Anything goes, but nobody knows”. In light of what we do know, would it not be a dereliction to introduce the Financial Services Bill without specifically addressing LIBOR and looking again at the data competence of the regulators? Without wishing to draw the Chancellor on what criminal charges might be brought, does he believe that the forfeiture committee should look at the cases of other bankers who may be implicated?
Mr Osborne
The part of the country that the hon. Gentleman represents has been affected perhaps more than any other by what went wrong in financial services. Northern Ireland has suffered enormously from the failure of banks in the UK and in the Republic, and it has paid perhaps a heavier price than anyone else, so he speaks with authority and passion on this. Let me make it absolutely clear: we are going to deal with the regulation of LIBOR, and we will choose the most appropriate vehicle. The Financial Services Bill has been introduced in the House, so it is a convenient vehicle but, as I said, let us introduce the right regulation and get this right after its having gone spectacularly wrong in the past. As for the forfeiture committee, it is completely independent of the politicians of the day, he will be glad to know. No doubt, its members will have heard what he said.
Paul Uppal (Wolverhampton South West) (Con)
Continuing the “Newsnight” theme, last night Lord Myners, when asked about the previous Government’s role, shrugged his shoulders and said that this was nothing to do with them. Does my right hon. Friend agree that although Opposition Members are anxious to distance themselves from banking involvement, the anything-goes culture was driven by light-touch regulation, and that if we are to make progress, those who sit on green benches or on trading desks must ultimately take responsibility for their involvement?
Mr Osborne
My hon. Friend makes a good point, which is that those responsible in government at the time have to apologise and account for their own role before they will be listened to when speaking about their plans for the future. At present they do not seem willing to do that.
Derek Twigg (Halton) (Lab)
I must check up on what Barclays says about customer care, following the debate today. In view of what the Chancellor told the House today, do he and the Governor of the Bank of England have full confidence in the senior management of Barclays?
Mr Osborne
What I have said is that the chief executive of Barclays has some very serious questions to answer about who knew what when, and who in the management knew that.
Stephen Williams (Bristol West) (LD)
All our constituents will be outraged but perhaps not surprised by yet another scandal rocking the foundations of part of a functioning liberal democracy. A fine on the bank is all very well; that just hits the shareholders. The directors of that company have, at the very least, failed in their fiduciary duties to those shareholders and may have done or sanctioned an awful lot worse. What sort of sanctions should be taken against directors who preside over such terrible practice?
Mr Osborne
The Government whom the hon. Gentleman and I both support have introduced clawback so that the bonuses that were given to executives, traders and others in the banks can be clawed back if necessary. That did not previously exist. We are looking specifically at the responsibilities of directors of failed banks. The consultation on that will be published next week as a result of the FSA inquiry into what went wrong at RBS, and as I say, we are responding to today’s report by looking at the regulation of LIBOR, at the criminal sanctions that are available for prosecution, and at what happens to the fine, so that it is the people of Bristol who benefit from the fine that is paid, rather than other banks in the City of London.
Mr Andrew Love (Edmonton) (Lab/Co-op)
This inquiry was started by the US authorities. The fines that have been imposed, which have been mentioned by many Members, were four times as large in the United States as they are in the United Kingdom. The US authorities also imposed stringent conditions on the operations of Barclays in this area. When will we get robust regulation in this country? When will the FSA send out e-mails entitled, “You’re nicked, big boy”?
Mr Osborne
It sounds like one of the e-mail exchanges that the traders were engaging in at the time, if one reads the report. The US authorities are rightly involved, because much of the manipulation happened with the US dollar market so it is perfectly understandable why they would want to be involved. I have raised this question. Perhaps it is an issue that the Select Committee would also want to consider—why in the US there seem to be more powers available to the authorities than in the UK, and what we can do in this House to make that change here so that the UK authorities have the full range of powers available to them.
Mr David Burrowes (Enfield, Southgate) (Con)
It is right that the focus of attention should not be just on the greedy bankers drinking Bollinger and the like, but on constituents—victims who have had their businesses and homes trashed as a result of this scandal. As they are the victims of gross irresponsibility, is it not time for some basic responsibility, with the chief executive of Barclays stepping down and the shadow Chancellor saying sorry?
Mr Osborne
As I say, the chief executive of Barclays needs to account for his actions, and the Treasury Committee provides the platform where he can do that, and as I said, the shadow Chancellor needs to account for his actions too.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Across the House there is agreement on the need for better regulation of investment banks, but does the Chancellor think regulation on its own, however well designed, will be enough to deal with the rotten culture at the heart of our investment banking, which this episode has revealed? Does it not need a change in leadership to change that culture fundamentally, going forward?
Mr Osborne
Where I would agree with the hon. Gentleman is that regulation cannot do everything and we need the right culture of management in the banks, but there is also a job for the regulators here. One of the purposes of the Financial Services Bill is to put the Bank of England in charge and allow the regulator to exercise more judgment. As I have said before in the House, the Royal Bank of Scotland ticked every single box when it came to its takeover of ABN AMRO, yet many people were asking at the end of 2007, “Is that a sensible transaction?” We need the regulators to be empowered to make judgment calls, not just to check whether every line of the regulation has been complied with.
Clive Efford (Eltham) (Lab)
I agree with everything that the Chancellor said in his statement, but following that, all he has done is try to heap responsibility on the Opposition Front-Bench team, rather than dealing with the bankers who are at the heart of the problem. We all know that lighter-touch regulation would have come in had he been Chancellor at the same time. That is not the point. The point is that people out there are angry. Those people are thieves and criminals, and they have made beggars of many of our constituents, who want to know what this Government are going to do about it. Can the Chancellor say whether the financial regulatory Bill before the House deals with all the issues that have been raised as a result of the report from the FSA yesterday? If not, what is he going to do about it?
Mr Osborne
I will tell the hon. Gentleman what this Government are doing. First, we are getting rid of the tripartite system that failed. Secondly, we are changing—[Interruption.] I will tell hon. Members what failed—the regulation of financial services. The hon. Gentleman’s constituents and mine and everyone else are paying a very heavy price for that, so we are changing the regulator, changing the structure of banks in order to have ring-fenced retail banks—
Clive Efford
No. The right hon. Gentleman is doing nothing. It is business as usual.
Mr Osborne
The hon. Gentleman voted for 13 years for a Government who failed this country. We are changing the regulation, changing the structure of banking—[Interruption.] and we are dealing with this latest abuse— [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We have heard the question. The hon. Gentleman should have the courtesy to listen to the answer, even if he does not like it. There is no need to get so excited—
Jeremy Lefroy (Stafford) (Con)
The prices of many important international commodities are set in London, such as cocoa and robusta coffee, and tens of millions of smallholder farmers and poor people around the world depend on these. Is my right hon. Friend confident that the kind of problems that we have seen with LIBOR are not spreading to such markets, which are so important for people around the world?
Mr Osborne
Of course we should be vigilant in the supervision of all markets. Although there have been many complaints of the kind that my hon. Friend makes, every investigation here and, as far as I am aware, in other jurisdictions has not found the kind of market manipulation in those commodity markets as we see in LIBOR.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
In Iceland bankers have been prosecuted, as well as those politicians who presided over the 2008 financial crash, including the then Prime Minister, on charges of gross negligence. What lessons has the Chancellor learned from Iceland on how to hold politicians and bankers to account for their actions?
Mr Osborne
The hon. Gentleman really is tempting me. As we do not see so much of the previous Prime Minister, perhaps we should send him off to Iceland, where I think he would be particularly welcome.
Bob Blackman (Harrow East) (Con)
It is clearly vital that we rebuild confidence in the banking system after this further scandal, but there are questions to ask about what compliance regime was going on in Barclays during the mid-2000s and in every other bank. Does my right hon. Friend agree that no matter what the regulations are, it is now vital that the banks come out with a clear, transparent and independent compliance regime to make sure that people who disobey the rules are caught very quickly?
Mr Osborne
My hon. Friend is right that the compliance regime is absolutely the first line of defence in the financial services industry. To be fair, Barclays did raise concerns about the LIBOR market operation in late 2007 and early 2008. I think that we can draw a distinction, as the FSA does, between what was going on in 2005-06 and early 2007 and what happened once the crisis hit. He is absolutely right that the compliance regime is vital, and if there are any banks listening to what has happened today that are not looking carefully at their compliance regimes and ensuring they are up to scratch, I think that they are being pretty foolish.
Ben Gummer (Ipswich) (Con)
The Chancellor will know that concerns about the setting of LIBOR go back some time. A paper circulated by New York university’s Stern business school in 2008 raised the issue of the manipulation of LIBOR. Indeed, in that year the panel changed the criteria for and composition of the setting of LIBOR because of concerns about the fairness of the rate. What investigation will he undertake about the concerns raised at the time, whether they were picked up by the FSA, whether the American authorities passed any concerns to the Treasury and the FSA and, if so, what was done about them?
Mr Osborne
My hon. Friend is right that concerns were raised in late 2007 and in 2008 once the markets had frozen and become very illiquid. Barclays raised its concerns with the FSA, which is why the report draws a distinction between the situation before the summer of 2007 and the situation after, because different things were going on. In 2007-08 Barclays, and potentially other banks, were concerned about their reputation and the high cost of funding they were being charged, so he is right to draw that distinction. The FSA began investigating the complaints in 2009, as set out in the report. He asks a good question on whether any evidence was passed to the authorities by international bodies or other Governments. That is not in the report, so I am happy to get back to him on whether there was anything specific.
Backbench Business
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Green Economy
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Laura Sandys (South Thanet) (Con)
I beg to move,
That this House urges the Government to promote the right fiscal and regulatory framework to accelerate green growth as an intrinsic part of the UK’s economic recovery strategy.
I want to thank the Backbench Business Committee for providing time for this important debate at this moment in the economic cycle, when we are considering the draft Energy Bill, which will reform the electricity market, and different issues relating to the renewables obligation and other fiscal measures. I also thank the Economic Secretary to the Treasury for agreeing to respond to the debate and so many colleagues on both sides of the House for signing the motion.
Few terms in today’s industrial dictionary are as loose and ill defined as the word “green.” People talk about “the green economy” and “green jobs.” The word—I mean no disrespect to the hon. Member for Brighton, Pavilion (Caroline Lucas)—places a set of philosophical values around policies that, I believe, are not about debating sandal economies. I strongly believe that the measures the Government have put in place are aimed at increasing productivity, improving output, supporting greater competitiveness and building a resilient economy that is both lean and keen for the future.
In my constituency, I have seen at close hand the construction of a multi-billion pound wind farm. It is much more about heavy engineering than traditional green jobs. Those working at the cutting edge of new energy sources, vibration technology, surface engineering and friction reduction will deliver the so-called green revolution, but those individuals hold degrees in mechanical engineering, not sustainability. The green deal will implement energy efficiency measures in homes and offices throughout the country thanks to skills that are as wide ranging as construction innovation, research in plastics and synthetic materials and, of course, practical installation. From heavy engineering and the white coats in our university laboratories to those who fit cavity wall insulation, all these jobs and all these opportunities comprise part of that wide term, “the green economy.”
Today, the green economy is no sideshow; it represents a significant part of the UK economy, with more jobs than in information and communications technology, finance and insurance, and the motor trade. With low-carbon and environmental goods and services growing by 4.6% in 2009-10, it is a growth sector. However, we also need to talk about our industrial and energy policy in an international context. Why are South Korea, China and other Asian countries placing renewable energy and energy efficiency at the core of their industrial growth strategies? They are not overburdened with Green party candidates, and in some cases, such as China, they do not even need to secure votes. They are trying to build what is absolutely essential to this country: a strong, sustainable and resilient economy in which energy consumption and fossil fuel inputs are considered vulnerabilities, not assets.
Kelvin Hopkins (Luton North) (Lab)
I note in the papers that have been provided for the debate that the Foreign Secretary has apparently been strongly converted to green energy, but that some of his Cabinet colleagues have not. Will the hon. Lady make every effort to get more people on the Foreign Secretary’s side in these matters?
Laura Sandys
I do not think that the Foreign Secretary has needed much persuasion or that there is any lack of will or determination in the Government. As I will continue to iterate, it is absolutely crucial that the policies we have put in place are sustained consistently into the future to attract the significant investment we need in the energy sector and the green economy.
If we look internationally, we will see that the so-called tiger economies are combining economic policies, subsidies, industrial focus and energy efficiency solutions to build their stronger economies. It is that co-ordinated model that I propose to the Minister today. Globally, there will be a race for resources, including energy, water and food. Energy consumption will grow by 33% over the next 20 years, with 50% of that growth coming from China and India. Even the Governor of the Bank of England has acknowledged that we must be cautious about our exposure to fossil fuels and that they could be considered a risk to financial security. Any country that is serious about future economic competitiveness, not least this one, will ensure that it limits its reliance on fluctuating and politicised energy inputs. Energy security, domestic production and low-input process re-engineering are not, in my view, things that it would be nice to have; they are a total necessity.
In many ways that creates a challenge for politicians. We need to come clean with the public and the private sector. We cannot con them that energy prices will come down today, tomorrow or even any time soon. The increase in global consumption is so marked that even the great shale gas discoveries in the US will not have a long-term impact on global costs. From the domestic perspective, Ofgem has calculated that domestic energy prices will rise by 60% by 2016.
It is the Government who will need to take an important role in the development of a long-term, secure and resilient energy supply. Frankly, there are some of us in the Energy and Climate Change Committee who believe that, whatever energy solution we adopt in the next few years, the Government will have to stump up a lot more money than they thought to keep the lights on, but that is a debate for another day. We need to deliver a strong and sustainable energy sector that delivers as much value as possible to the energy consumer and jobs and economic growth at the same time. To do that, we must look at energies in similar terms, whether tax incentives on fossil fuels or subsidies for the renewables sector.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the hon. Lady agree that the £3 billion earmarked in the Budget to support the fossil fuel industry—oil and gas drilling—undermines precisely the green agenda she is setting out?
Laura Sandys
It does not undermine that agenda. We need to understand where subsidies, incentives and tax reliefs are deployed throughout our energy sector. I look to a future with a mixed energy economy that utilises all the different energy resources, but we must be transparent about where those subsidies lie.
Oil and gas exploration, for example, has been hugely beneficial to this country, as no one can deny, and that is why we subsidise the sector. Oil taxation measures, oil allowances, petroleum revenue tax safeguards, the ring-fenced expenditure supplement, the field allowance and coal investment aid are all important parts of the energy industrial strategy. As John Browne, formerly of BP, has said:
“People forget the government supported the oil and gas supply chain in its early days: with generous tax incentives, training programmes, strategic infrastructure; and supportive regulation.”
The Government are still doing so today.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Will my hon. Friend draw breath and think again? On this suggestion that we have been subsidising oil and gas, we have very high taxes on petroleum products and an extra tax on petroleum production called the petroleum revenue tax, so where does she get this “subsidy” from?
Laura Sandys
The International Energy Agency states that the fossil fuel sector is currently subsidised by $480 billion.
Laura Sandys
In all sorts of forms, from production right the way through to—
Andrew George (St Ives) (LD)
My hon. Friend will be aware that the noble Lord Stern, who produced a seminal work just a few years ago warning of the consequences of ignoring the impact of climate change, emphasised the way in which past Governments have given, and the current Government still give, tax breaks and other subsidies and support to the fossil fuel industry—to the disadvantage of renewable energy.
Laura Sandys
I thank the hon. Gentleman for his comment. I do not see the issue as a positive for one sector or another, but we must have transparency across all the energy sources that we as a country decide to—let us say—invest in or to support in any way.
Ben Gummer (Ipswich) (Con)
Without wanting to get tied up in the argument about subsidy, whether it existed or the lack of it, I note the certain truth that there was significant state investment in the oil and gas sector in the 1960s and ’70s, which was repaid only when the gas and oil started flowing. An analogy could be drawn now with the green technology industry, where we hope that such development might happen, too.
Laura Sandys
I thank my hon. Friend for his comments, and, exactly as he says, there was an emerging industry and significant Government support, which saw the opportunities that the sector could offer to our industrial policy and to energy security and resilience. On industrial policy, we also supported the car industry. In the ’80s we gave generous incentives to Nissan to attract it to the UK, and, when we look at our long-term, and now leading, role in the motor sector, we find that that has been a huge success.
So it is neither unusual nor wrong for government to incentivise energy investment or to support industrial development, and that is why I am pleased that this Government have put in place so many fiscal measures to do just that in relation to the new generation of energy sources and to investment in green technologies.
There are unfounded rumours that some in government have gone cool on the modern green agenda, but I know that not to be the case. I know that the Chancellor is committed to inward investment and to ensuring that companies such as Vestas reconsider their investment in north Kent.
I know that my hon. Friend who represents Sheerness—
Gordon Henderson (Sittingbourne and Sheppey) (Con)
Sittingbourne and Sheppey.
Laura Sandys
I know that my hon. Friend the Member Sittingbourne and Sheppey (Gordon Henderson), whose main port is Sheerness, is very keen to ensure that in the south-east we secure an important manufacturer of wind turbines.
I know that Treasury officials are totally committed, as they were to the oil and gas sector in the ’70s and ’80s, to attracting the new jobs and growth that are emerging from the fastest-growing business sector in the UK; and I am sure that all in government are focused on securing the £200 billion of funds to rebuild our energy sector in a highly competitive capital investment market, where policy certainty is fundamental to investment decision making.
All that the Government need to do to unlock those industrial opportunities is to sustain and reiterate their consistent and constant policies, with subsidies based only on proper evidence and with investment messages that resonate among the largest industrial companies in the world, such as Siemens and GE, and the large energy generators.
Caroline Lucas
I am grateful to the hon. Lady for giving way to me for a second time, but I cannot let pass what she has just said about the Government’s “consistent and constant” green energy policies, because they have been the exact opposite. Whether on solar or on wind, they have chopped and changed, and that is exactly why so many solar companies and wind companies are so furious—because they cannot plan for the future.
Laura Sandys
I totally disagree. On solar power and feed-in tariffs, in particular, we inherited a totally unsustainable policy and system, which needed to be addressed, and unfortunately we have spent the past couple of years recalibrating in order to ensure that we have in place sustainable, consistent and long-term policies that will provide investment certainty to such companies.
The UK is a great place to invest, and it has a strong vision for a modern, green and forward-looking economy. On the impact of our fiscal measures and support, we have a choice: to build that modern economy and compete with the forward-looking, future-proofing countries, such as South Korea, China and Japan; or to hold on to an outdated energy model that will not cost us any less but will leave us and our businesses stranded in the past.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to have to introduce a time limit, but let us see how we go. If Members try not to use this much time, I shall start off the limit at eight minutes, but I may have to reduce it. How is that?
Joan Walley (Stoke-on-Trent North) (Lab)
I congratulate the hon. Member for South Thanet (Laura Sandys), who serves with distinction on the Select Committee on Energy and Climate Change, on bringing the debate to the Commons this afternoon, and I note that the Economic Secretary to the Treasury, the hon. Member for Norwich North (Miss Smith), is in her place, because if we really are going to make progress on this most important issue, we will do so only if the Treasury puts the whole issue at the core of its policy making.
It has always seemed to me perverse that we have a Green Book that is anything but green, so the time has come to ensure that the Treasury’s guidance on the national infrastructure programme, in particular, guarantees that every single policy is appraised and joined-up in taking further forward the agenda of securing more renewable energy and more energy efficiency.
I shall try very much to comply with the limit on speakers—
Mr Deputy Speaker
Order. The limit is eight minutes, and we will not go beyond that, so if we can please keep to it that will be much more helpful. I do not want to have to use a big stick, as I want to get everybody in.
Joan Walley
I, too, want everybody in the Chamber to get into the debate.
Let me bring to the attention of the House the two reports that the Environmental Audit Committee has produced, and which for the benefit of Members we have tagged on the Order Paper: the Committee’s twelfth report on “A Green Economy” and its sixth report on “Budget 2011 and Environmental Taxes”, which shows how we have examined the Treasury’s role in the matter.
We intended the two reports to be a starting point and an overarching basis on which the discussions that now need to take place throughout business, local government, the private sector and international development might be brought together, so that our policies—including what we do, and how we keep scrutinising what happens, in Parliament—can be tied to that agenda. We found that two years after making the commitment to increase the proportion of tax revenues accounted for by environmental taxes, the Government still have no strategy for achieving this commitment. In addition, they have not published their definition of an environmental tax. In our further follow-up inquiries, we will do what we can to obtain that definition and to scrutinise what is happening so that we get some real progress.
A further relevant aspect is the Rio+20 summit that took place last week. Its outcome was extremely disappointing given the lack of a highly ambitious outcome and follow-up action plan. However, all the different parties who were there, from business people, to legislators, to parliamentarians, to members of civil society were in absolute agreement that if the high-level leaders cannot come up with significant outcomes, everybody else has to raise their game. So it is with our Parliaments. I urge the Economic Secretary to demonstrate that she understands this issue by saying what she is doing through Treasury policy and in making sure in Cabinet meetings that there is a joined-up approach towards environmental taxes.
I want to raise issues relating to my own constituency, because we will not deal with this situation nationally or internationally unless we can deal with it locally as well. It is a matter of great concern to me that a large number of people in Stoke-on-Trent are living in fuel poverty. Indeed, of the 40,678 households in Stoke-on-Trent North, 10,120 are in fuel poverty, which is absolutely outrageous. It is a rate of 24.9%, which compares with the UK average of 18.6%—and even that is shocking. If ever there was a reason we should be getting support from the Treasury to address these environmental issues, it is that. We have a commitment to eliminate fuel poverty by 2016, and we will not achieve that unless we scale up everything that is done and look at how revenues can be reinvested so that whole communities see the importance of moving towards the renewables future that is so urgently needed.
I say this as someone who represents a constituency where the industrial revolution started because of our reliance on carbon.
Ben Gummer
Will the hon. Lady comment on the fact that the Labour Government spent almost £5 billion on trying to eradicate fuel poverty through various measures, with the consequence that fuel poverty went up in their 13 years in power?
Joan Walley
I am not going to get involved in any kind of partisan debate. Unless we can bring in measures that deal with fuel poverty in the short term and the long term, and get people’s commitment to work on this agenda instead of making political capital at the expense of everybody else, we will not deal with the problem.
In Stoke-on-Trent, we want to work with the coal authority to extract geothermal heat, which we see as one part of the solution in the context of all the other things that need to be done, to provide the jobs that are required, to provide training for people in the skills that will be needed for the new investment in renewables, and to see what we can do to bring about district heating schemes for city centre developments. We want to use the water that is underneath our city—albeit in what is, to date, an innovative way—to do what other countries, such as the Netherlands, have done to get the investment that is needed. We cannot do that without fiscal changes and incentives, and ways of getting innovation and new technology on board very quickly.
On fuel poverty, yes, we have had investment, but we have seen that piecemeal investments do not deal with the whole issue. That is why the previous Government invented the CERT—carbon emissions reduction target—scheme. If we deal with whole communities, often in areas of Victorian housing where there are huge issues with energy efficiency, it is possible to get the investment that is needed in one fell swoop. That is the kind of scaling up that is now so urgently needed.
We have aspirations to decarbonise our city. We have an untapped renewable resource, but at the same time we recognise the need for investment across a wide range of different industries and sectors. If this debate helps to take that agenda further forward, and if our Select Committees can examine and scrutinise every single action that the Treasury is taking to make these aspirations a reality, given the urgency of the need for greater energy efficiency, it will have been worth while.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
I oppose the motion. I suspect that I will be the only person to do so. It is not because we cannot have green economy. We could—indeed, we once had a totally green economy. We relied on windmills to grind our flour, on watermills to saw our wood, on horsepower for transport, and on biomass—as burning wood is now called—for heat, but we abandoned those when we discovered that coal could fuel a steam engine, that oil could fuel the internal combustion engine, and that gas and nuclear could give us electricity. Since then, we have enjoyed huge increases in our material standard of living based very largely on comparatively cheap energy from fossil fuels.
The great Victorian economist, Jevons, pointed out nearly a century and a half ago why coal had ousted wind:
“The first great requisite of motive power is that it shall be wholly at our command, to be exerted when, and where, and in what degree we desire. The wind, for instance, as a direct motive power, is wholly inapplicable to a system of machine labour for during a calm season the whole business of the country would be thrown out of gear.”
Much the same can be said about the unreliability of solar and the discontinuity of tidal energy. My hon. Friends may want to return to a mediaeval economy that relies on unreliable, high-cost water, sunshine, wood and wind, but I do not. I am a conservative, not a reactionary. Of course, it may be that some time in the future new sources of energy will become available that are as reliable as, and cheaper than, fossil fuels—perhaps thorium reactors, nuclear fusion or cheaper battery storage, in conjunction with the intermittent renewables that we are developing at the moment. I will rejoice if those come about, but they are some way off.
Dr Alan Whitehead (Southampton, Test) (Lab)
Does the right hon. Gentleman accept that since the time of the quote he read out, we have had three further industrial revolutions, which makes his assumptions completely obsolete, and that we are in the middle of a further clean-tech and biotech industrial revolution that will make obsolete the previous assumptions on industrial revolutions? Has he taken that into account in his calculations?
Mr Lilley
I do not know which industrial revolutions the hon. Gentleman is referring to, but they certainly did not rely on our subsidising the use of more expensive energy to replace less expensive energy.
There are perfectly respectable, if not entirely convincing, arguments for saying that we have to replace cheap energy with expensive, less reliable energy to reduce carbon emissions, and that that is a price worth paying, to coin a phrase. However, the premise of this debate is that we can generate economic growth by introducing fiscal measures to subsidise and promote green energy. Let us be clear what that means: it means subsidising the replacement of comparatively cheap and reliable energy from fossil fuels with more expensive and intermittent energy from renewables.
Andrea Leadsom (South Northamptonshire) (Con)
Does my right hon. Friend agree that the debate should really be about whether we want to switch from higher-emitting to lower-emitting sources of energy, rather than having this complete confusion all the time about its being a question of carbon emissions or renewable energy? Renewable energy is very expensive, but there are plenty of sources of non-renewable energy that would be far less carbon-emitting.
Mr Lilley
I am sorry, but I have given way a couple of times.
To suggest that we can make ourselves richer by adopting more expensive energy is self-evidently ridiculous. Most of what has been cited as evidence of green growth involves creative accounting on a scale that would make Enron blush. First, there is the suggestion that a green sector has arisen, which allegedly employs 1 million people, produces goods and services worth £120 billion and, as the Deputy Prime Minister said the other day, contributes 8% to our GDP—although the House of Commons Library can find no source for that figure, other than the Deputy Prime Minister.
Those figures aroused my natural scepticism, so I tracked them down and found that they came from a Department for Business, Innovation and Skills report published earlier this year, entitled “Low Carbon Environmental Goods and Services (LCEGS)”. My scepticism was confirmed by the opening words, which explain:
“The definition of the LCEGS sector is the result of five year’s work”.
You bet it was! It carries on:
“The definition is broad”—
I can believe that—
“and includes activities that may appear under the overlapping headings of Enviro, Eco, Renewable, Sustainable, Clean Tech, Low Carbon or No Carbon (and any other we might have missed).”
That is not my comment, but theirs. It goes on:
“In the strictest sense it is not a ‘sector’ but a flexible construct or ‘umbrella’ term for capturing a range of activities spread across many existing sectors”.
What does the sector contain? A quarter of it or more has nothing to do with low-carbon activities at all, but relates to things such as sewage and water treatment, double glazing and controlling noise. Those are all excellent things, but they are not what we are talking about today and nothing to do with the low-carbon economy.
The biggest sector within the low-carbon sector looks promising: it is called “Alternative Fuel Vehicle” and employs 105,000 people, making it the biggest employment area in the low-carbon sector. I thought, “Terrific, we are employing 105,000 people making electric cars.” Sadly, however, we are not. I know one of the producers of electric vehicles and, alas, it is no longer producing them. It turns out that the name relates to mainstream and other vehicle fuels. We are not starting off some great manufacturing revolution through all this subsidy at all.
Laura Sandys
The largest wind farm in the world is off the shore of my constituency, and 5,000 people are going through the port of Ramsgate on the construction side. The investment that has come in to the area has been significant—
Mr Lilley
That is fine, but my hon. Friend has read her speech. It is a question I was hoping for.
The growth of such sectors is either natural, in which case it is splendid, or it is the result of subsidies, in which case it is tosh. Subsidies can boost one sector at the expense of the rest of the economy, but we cannot make ourselves richer by providing subsidies. If a person moves a pound note from their left-hand pocket to their right-hand pocket, they are no richer. Subsidies can make us worse off, however. If we invest in offshore wind, which is twice as costly as conventional energy generation, we get half as much energy for a given sum of money. That makes us worse off, not better off.
Mr Lilley
Only if the hon. Lady is going to prove that we make ourselves better off by producing half as much electricity for a given sum of money. She is not. If she gives up on that, I am glad.
The only way in which subsidies might conceivably generate an economic revolution is if we subsided the producers of goods and services that we could export;, but we are not allowed to do that under European rules. Instead, what we do is subsidise users, consumers and those who install generating capacity in this country. Unlike the Chinese and the Koreans, we are not allowed to subsidise those who manufacture wind farms or photovoltaic cells. We may want to, but we are not allowed to. The pretence that the subsidies that we are giving will promote infant industries is untrue.
Mr Lilley
No, I have given way lots of times, including when it has reduced my own time.
Let us give up on the belief that we will create a new industry. All we are doing is subsidising jobs in other countries, whose manufactured goods we import. It is quite clear from a look at the detailed figures in this bogus sector that we are not creating an infant industry.
I will now give way to the hon. Member for St Ives (Andrew George), who wished to intervene, because I have a couple of minutes to go.
Andrew George
I thank the right hon. Gentleman for giving way. He must address the fact that the low-carbon goods and services market, including the renewables sector that he is talking about, is worth £3.2 trillion a year, employs 28 million people and is growing at a rate of 4%. Either we turn our back on that as a market for the UK or we engage with it, in which case we have to have production capital here.
Mr Lilley
Exactly, but who is we? If we is the Government, the hon. Gentleman is proposing that the Government subsidise industries to go for that £3.2 trillion world industry. In fact, that is a bit of an exaggeration, but let us suppose that the figure is correct. The Government are not allowed to do what he wants because of European Union rules, which he supports. We cannot offer infant industries subsidies in this country, or indeed anywhere else in the European Union, although some of our partners may do so in concealed forms. We do not and cannot, so let us not pretend that we are doing so.
The subsidies that we deploy in this country go largely towards generating electricity by more expensive means than is necessary, which increases the cost base of our industry and makes it less competitive across the board. I hope that companies in this country will set up businesses in this sector, as in any other sector, to win exports across the world, but the Government are not allowed to support those companies, and let us not pretend that they are doing so when, in fact, they are subsidising imports.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to follow someone who can be defined as the Don Quixote of this debate, both figuratively and literally tilting at windmills.
The answer to the speech we have just heard is that the green economy is about not just underwriting one form of energy out at sea, but putting the entire economy on a green footing in terms of resources, energy and demand, and including our homes and our vehicles. As the Government said a little while ago:
“A green economy is not a sub-set of the economy at large—our whole economy needs to be green. A green economy will maximise value and growth across the whole economy, while managing natural assets sustainably.”
That is what a green economy is about. Those are not my words, but the first paragraph of the Government document, “Enabling the Transition to a Green Economy”. There is precisely one paragraph in the document about what the fiscal incentives to move to that green economy might consist of, so this debate is timely. We must ask what fiscal incentives we should put in place to bring about those changes.
Our aim in the economic recovery should not be simply to return the UK economy to business as usual as it was before the crash; it should be consciously to use the opportunity provided by the need to reinvest and to re-engineer our economy to make decisive moves towards the green, sustainable, low-carbon economy that the first paragraph of that document suggests we should be aiming for. We need to be clear about what that entails in how we craft our fiscal policy.
The emergence of a green economy cannot be brought about just by changing the dials on a few economic levers; it is fundamentally asymmetric with what has gone before. Low-carbon sustainable energy, for example, does not have an investment or operational pattern that is anything like what we have been used to for the past 100 years. We cannot construct the next generation of low-carbon power plants and providers on the basis of what has gone before.
We can no longer rely on the assumption that we can generally predict what capacity will be needed and then work out how best to meet it. Future energy policy must be based on investing first in consciously reducing demand and then in decarbonising the remaining demand. In doing that, we have to move to a different paradigm of investment, because demand reduction is a process not an asset, and because low-carbon plants are capital intensive but mean on fuel. In other words, low-carbon plants take a lot of money to construct but, once constructed, use fuel that is either free or recovered from other processes. The model of low and basic construction costs and investment in sourcing, transporting and using fuel, and paying for it as we go, is no longer applicable.
We can no longer rely on the assumption that the purpose of investment in resourcing the economy lies in procuring material into the economy, using it and disposing of the consequences. A linear model of investment and expenditure no longer applies. We will need to move increasingly to a circular-resource economy, in which we do not throw things away—there will be nowhere to throw them. We still throw things away, however. Something like 520 million tonnes of material comes into our economy for domestic consumption, and 200 million tonnes leaves as waste. Only 20% of our material is sourced from secondary inputs.
The changes we need are about investing not just in the green economy, but in jobs. Contrary to what the right hon. Member for Hitchin and Harpenden (Mr Lilley) said, they are real jobs for the future. Moving our resource base to the 70% EU27 recycling target would create something like half a million jobs in the UK by the early 2020s.
Diana Johnson (Kingston upon Hull North) (Lab)
I am listening carefully to what my hon. Friend says about jobs. If Hull becomes a wind turbine manufacturing site, 700 jobs will be created directly and up to 10,000 jobs will be created in the supply chain. Those are real jobs for real people in my constituency.
Dr Whitehead
My hon. Friend is absolutely right: not only are the jobs real, but they are long-term, skilled jobs. Other countries are investing heavily in such jobs as that sixth-wave energy and industrial revolution takes off across the world.
My reference in an intervention to the several industrial revolutions since the horse and cart and steam relates to the fact that we are now beyond the information and technology revolution and moving into the clean-tech biotech revolution, which is taking off throughout the world. Who is the world leader in clean energy? We talk about its pollution and energy profligacy, but it is China—a country that is clearly engaged in a conspiracy of useless non-job creation in the green economy.
Mr Lilley
I pointed out that the Chinese are allowed to subsidise their manufacturers of, for example, wind turbines, whereas we are not. Is the hon. Gentleman saying that we should subsidise such manufacturers, and how does he propose to alter the EU regulations to enable that?
Dr Whitehead
As it happens, EU regulations enable the underwriting of investment in technology that will lead to a lower-carbon economy. The renewables obligation is regarded as state aid, but such investment can be underwritten precisely because it brings new technology to market, reduces its costs and increases its prevalence. That is why the Chinese invested £34 billion in clean energy in 2009, compared with £18 billion in the US. As the hon. Member for St Ives (Andrew George) has said, the goods for low-carbon markets are expected to reach something like £4 trillion by 2015. Put simply, if we are not in that market, we will be sidelined not temporarily, but permanently.
Curiously, the recession gives our country an opportunity to be far more proactive than we might otherwise be. The cost of capital is low and liquidity is high because of the paradox of thrift: there is no danger that investment in green goods, services and plants will crowd out other forms of investment. Fiscally, we can go for it, but in view of the asymmetry, there must be clear and long-term signals.
What might we do? We could invest in decarbonising our homes, for climate change purposes and for demand reduction purposes. We should insulate homes to make them fuel poverty-proof—as we know, the green deal will only scratch the surface. We will get £4 billion per annum over the next 15 years from the EU emissions trading scheme, carbon trading and the carbon floor price. As a fiscal measure—without hypothecating what is in the tax pot—we could invest a large amount of that money in ensuring that our homes are energy-efficient.
We should invest in low-carbon energy provision in the way that I have outlined. If the state wills the ends of that provision, it must underwrite it. That need not mean putting money in the pot, but it does mean underwriting at least some of the risk. It is ridiculous, for example, that there is no state backing for the contracts for difference that will replace the renewables obligation under the Energy Act 2011, and that no demand-side measures, underwritten by feed-in tariffs, are being introduced under the Act. We can get long-term value by taking such fiscal action.
Fiscal policy need not involve underwriting money. Holding the ring on risk and bringing new forms of low-carbon power home is key. To get us to a position in which we have a substantial number of ultra-low carbon vehicles on the road, why not have a “feebate” system, whereby we use, as a fiscal measure, additional fees on high-carbon consuming vehicles to underwrite the new low-carbon vehicles that come on stream? We have a target of 1.7 million ultra-low-carbon vehicles on our roads by the early 2020s. That is the sort of measure we should undertake.
Above all, we should get real about the green investment bank. The bank will have £3 billion as a fund until 2016, or perhaps later, depending on whether the Chancellor decides that it is ready for investment as a whole, yet last year KfW, the German public green investment bank, invested £24 billion—more than a third of its £70 billion —on energy and climate change measures. We can do that if the green investment bank is a bank, but it needs the ability to raise bonds and money at an early stage. That is the sort of fiscal underwriting we need for this green energy, resource and social revolution that we are going through. We need to get on with that urgently, and I urge the House to support the motion to assist with that process.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
We will hear in the debate arguments for and against investment in renewable energy, although I can see only one person in the Chamber who is against such investment. Those on both sides of the argument would probably agree on two things: the first is that there is only a finite supply of fossil fuels, and the second is that Britain relies too heavily on foreign imports for the energy needed to power its homes and businesses.
Both factors are problems that need to be addressed if Britain is to have long-term energy security. Hon. Members have a choice: we can leave the problem for our children and grandchildren to solve in 40 or 50 years’ time, when it might be too late to find a solution, or we can get to grips with the problem now and ensure that future generations can switch on their lights.
The problems I mentioned are interlinked and can be solved only by finding replacements for the fossil fuels on which Britain has become too dependent. There are a number of options, including nuclear power, shale gas, clean coal technology, biomass energy, anaerobic digestion, ocean wave energy, tidal power and wind energy. The sensible long-term strategy would be not to major on any one of those alternatives, but to establish a national plan that draws in power from all of those sources to supplement the reserves of oil that will become increasingly scarce and expensive over the next few decades.
The advantage of establishing an alternative energy industry is that most of the components needed to generate power could be sourced in Britain. That is particularly true of the renewable energy sector. As an island, we have the advantage not only of a limitless flow of water, but also of access to all-year-round wind, particularly offshore, which leads me nicely to that part of the green economic sector on which I would like to concentrate.
Many oppose an expansion in Britain’s wind capacity. They either say that wind turbines will never produce enough electricity to make them viable, or object to the use of Government subsidies to encourage investment in wind energy, or both. I would have more sympathy for the first argument if wind turbine technology had stood still, but it has not. For instance, the new V164 offshore turbines, which are being developed by Vestas on the Isle of Wight, each generate 7 MW of electricity.
It was with deep regret that we learned one week ago that Vestas has decided not to renew its option for land at the port of Sheerness, which had been set aside as the site for a factory that would have produced the blades for the V164. That factory would have created 2,000 new jobs for my constituency, and many of them would have gone to people living in my constituency. Given that my constituency has a higher unemployment rate than the average south-east constituency—in Sheerness East, where the factory would have been built, it is more than 11%—the decision by Vestas has been another blow to the morale of my constituents.
In many ways, Vestas’ decision is surprising, because Sheerness is an ideal location for a wind turbine factory, which is why I will be working closely with Swale borough council, Kent county council and the Department for Business, Innovation and Skills to attract another manufacturer to the Isle of Sheppey. Full planning permission is in place, and we have the right infrastructure and a willing and ready work force; all we need is somebody willing to take Vestas’ place.
Mr Lilley
Will my hon. Friend confirm that the one thing that none of those organisations can do is offer a subsidy to anyone to come to his constituency to produce wind farm components? It might be desirable that they should—it would certainly be a better use of money than subsidising rich landowners to install wind farms—but it is not the case. Can he confirm that?
Gordon Henderson
I can confirm that none of those organisations can offer such a subsidy, but that is not to say that we cannot do something to attract an alternative.
Andrew George
The hon. Gentleman will surely acknowledge that one thing that the sector, particularly the production sector, wants more than anything else is the underbelly of a functioning sector—one where there is a market, even if only initially in the UK, and certainty. That is one thing that the Government can and need to provide.
Gordon Henderson
I agree, and I shall come to that in a moment. Vestas has not given any reason for its decision, so we can only speculate on why it decided to pull out of Sheerness. A few months ago, it announced that it was slowing down development of the V164 to take account of the current economic conditions and the needs of their potential customers, which is what the hon. Gentleman touches upon. As I said, though, I will return to that point later.
That slow-down has resulted in the slipping of the date for erecting the prototype VI64 from the end of 2012 to 2014. I can only assume that Vestas took the decision—quite sensibly from a commercial perspective—that it did not want to lay out more money in an option on land for which it had no need for the foreseeable future. What will happen in 2014 is anybody’s guess, and that is a big worry both for my constituents and those of my hon. Friend the Member for Isle of Wight (Mr Turner). It is still conceivable, I suppose, that Vestas will come to Sheerness in 2014, but it will only proceed with its project if it can obtain firm orders for the VI64, and no potential customers will commit to those orders until they are clear about the Government’s commitment to offshore wind energy. Currently, however, the Government’s position is not clear, so I would like it to be made clear.
That brings me to the issue of subsidies, which has been raised already. As a Conservative, I am not naturally in favour of taxpayers’ money being used to help any business. If a product is good enough, it should be able to stand on its own two feet. I accept, however, that strategically Governments often use taxpayers’ money to invest in research and development in some industries, particularly where such developments are in the national interest—the defence industry is a case in point, of course. I believe passionately that securing energy supplies into the next century is in our national interest and that it will benefit Britain if taxpayers’ money is used to encourage the development of alternative sources of energy, whether nuclear power, shale gas or offshore wind. For that reason, I will gladly support the motion.
Kelvin Hopkins (Luton North) (Lab)
I defer to the previous two speakers on their knowledge of energy matters, but I have some points I wish to make. I was interested in the suggestion from my near neighbour, the right hon. Member for Hitchin and Harpenden (Mr Lilley), who seems to be strongly in favour of getting rid of the EU’s restrictions on state aids. I completely agree. I am completely in favour of state aids, where appropriate, and we should not be constrained from applying them by the EU—but then my Eurosceptic views are, I think, fairly well known. My hon. Friend the Member for Southampton, Test (Dr Whitehead) made a thorough, erudite speech that I will read in detail with interest later.
My concern is about energy conservation. Massive investment in energy conservation has everything to commend itself, while investment in nuclear generation has nothing to commend itself. With energy conservation, every home, office, public building and factory in the country can save enormous amounts of energy, so rather than generating energy, we need to conserve it. It is cheaper, too, particularly for the less-well-off living in constituencies such as mine, where some people still do not have roof insulation—aerial photographs at night show the infrared glow from those homes. These are poor people who cannot afford to invest, so it is something that the Government have to attend to.
Investment in energy efficiency would be enormously cheaper than focusing simply on generation. The Association for the Conservation of Energy has produced a report in the past few months demonstrating that such investment would be as much as £1 trillion cheaper over time than investment in generation and would create hundreds of thousands of jobs. Many of those jobs, in home insulation, would not be high skilled, so a lot of unemployed people, particularly young people, in my constituency who do not have high skills would be ideally suited to working in the sector. We desperately need these sorts of jobs at every level.
Energy conservation would be labour-intensive, rather than capital-intensive, which is what nuclear investment is about. I have been informed this week that officials in the Department of Energy and Climate Change are doing a deal that will be massively beneficial to EDF. All the other energy companies have dropped out of the nuclear programme in Britain, leaving EDF the monopoly supplier. It is effectively owned by the French Government—they own 85%—and our DECC officials are so obsessively pro-nuclear that they are going to strike a deal that will effectively subsidise EDF to the tune of £5 billion. That money will go to EDF, a French company, and will be used to benefit French taxpayers, French consumers and, no doubt, the French nuclear industry as well. It will not benefit us at all. That £5 billion could be spent in many other ways, particularly on energy conservation.
The right hon. Member for Hitchin and Harpenden is right that we need a base provision of core generation for peak times, but if we invest heavily in green energy of every kind in order to maximise energy provision in other ways, we could reduce that core requirement to its very lowest level. Germany has already done it. I understand that it has invested gigantic amounts in all sorts of alternative energy, such that, on warm summer weekend days, they can effectively shut down their power stations and tick over on the alternative energy provision.
Zac Goldsmith (Richmond Park) (Con)
The hon. Gentleman is absolutely right about energy efficiency and nuclear power. I echo everything he has said. Will he join me in urging the Government to put more emphasis on energy efficiency in the proposed electricity market reforms, the original intention of which was to introduce the concept of “negawatts”, which would put energy saved on a par with energy generated and therefore revolutionise the energy market and fundamentally change the dynamic?
Kelvin Hopkins
I thank the hon. Gentleman for his informed intervention. The problem is that the energy companies have been far too influential in DECC and have been able to bend the arms of even our Secretaries of State, because the central core of government decided years ago that it wanted to keep the companies and nuclear power on side. Those companies make money out of selling energy, not conservation or solar power at a local level; they do not make a profit out of that kind of energy provision. Indeed, we must have strong Government intervention to achieve that. In Germany, they have done it; with their feed-in tariffs being brought in years ago, the Germans are effectively decades ahead of us. In just a decade or two, half of their energy will be provided by alternative means. We are talking about enormous proportions of energy, and we have to go for that.
It has been said so many times, but we have wind on our shores and we are surrounded by sea and tides. We are aware of a positive move towards using the Severn barrage, that will produce enormous amounts of our energy, but there are other forms of generation, too, which could be flexible and provide us with base load, such as generation by burning organic waste, or anaerobic digestion. Unlike with wind and sun, we can turn that on and off. If we invested heavily in anaerobic digestion, so that all the organic waste was used to produce methane, which could be used either directly or to generate electricity, it would provide a massive contribution to the core base load of our electricity and energy provision. We have to go in this direction. We have to resist the power and controls of the energy companies and go for an alternative energy and green energy society.
I congratulate the hon. Member for South Thanet (Laura Sandys) on securing this important debate. If we do not move in this direction, we will be in serious economic trouble as well as environmental trouble.
Caroline Nokes (Romsey and Southampton North) (Con)
I add my congratulations to those of other colleagues to my hon. Friend the Member for South Thanet (Laura Sandys) on securing today’s important debate. As a member of the Environmental Audit Committee, I am conscious—as our Chair, the hon. Member for Stoke-on-Trent North (Joan Walley), who is no longer in her place, mentioned earlier—of the need to have a green thread running through every area of Government policy. That, of course, gives us the opportunity to have a very wide-ranging debate today. I am conscious, however, of the number of Members who wish to speak, so I shall try to keep my comments brief and restrict them to just two areas.
First, we have seen over the last few days the importance of fuel tax as a fiscal measure, and we are all well aware of the impact of high fuel prices on our constituents—not just on motorists, but on the consumers of goods transported by road, which in this country is, of course, absolutely everything. The carbon emissions from road transport make up a significant proportion—over one fifth—of the UK’s total CO2 emissions. Passenger cars, in particular, emitting in the region of 76 million tonnes of CO2 annually, contribute 13% of all CO2 emissions.
Clearly, this is an area where Government policy must be used constructively not only to encourage shifts in modes of transport, but to encourage road transport users to look for cleaner, greener alternatives. I am a big fan of differential rates of vehicle excise duty, as there is nothing that concentrates the mind of the user quite so much as choosing to drive a car that attracts a lower duty tariff. I urge Ministers to ensure that ultra-low levels of duty are retained for the cleanest and most efficient engines.
I do not wish to dwell today on passenger transport and the private car, so I shall move on to road haulage and the freight industry. This is an area of policy relating to green transport, which is a matter of concern to me, and I have asked a number of parliamentary questions on the subject. I particularly emphasise today the duty differential for used cooking oil biodiesel, which expired in March this year. I appreciate that biodiesel is currently little used in the passenger car sector, although it does have potential; it is far more significant in freight transport, which accounted for 26 million tonnes of CO2 emissions in 2010.
Without the support of the duty differential, many biodiesel users will inevitably switch back to fossil fuels, resulting in higher emissions and risking the loss of up to 3,000 jobs in the low-carbon economy. The double certificates allowed under the renewable transport fuel obligation look unlikely to be able to support this sector, particularly given that recent certificate values have fallen as low as 10p. While this industry is maintaining an ongoing dialogue with the Minister’s colleagues in the Department for Transport, looking to find an alternative solution, Treasury support and awareness is also vital.
The second area of policy I wish to highlight is house building. The hon. Member for Luton North (Kelvin Hopkins) mentioned the efficiencies that can be made through better insulation. Better use of water should also be highlighted, as should better and more efficient boilers. Linden Homes, a house building company that operates in my constituency, has come up with an innovative way to help the Government to progress a zero carbon policy. Its proposal to create a “new homes sustainability bonus”, has the potential to contribute towards a zero carbon policy in a sustainable and affordable way, at a time when the industry faces significant challenges.
At present, all new homes constructed in the UK are required to meet stringent Government energy and water efficiency standards—and rightly so. This company’s idea, as part of the policy mix for national carbon reduction, is that developers could, for all new units built from 2013, contribute a new homes sustainability bonus paid into a central fund, which would then be used to find the most cost-effective ways to reduce carbon within the UK’s existing housing stock, which chronically falls behind new home standards and has significantly higher energy and water consumption. Only 40% of all homes currently have energy-efficient boilers.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
My hon. Friend is making a very good point about existing housing stock, which is the majority of the stock in this country. Retrofitting and improving energy efficiency in those homes is good not only for business, but for consumers, particularly for those on fixed incomes such as the frail elderly and people in other vulnerable groups.
Caroline Nokes
I thank my hon. Friend for that comment. He makes exactly the point I was moving on to.
Last year, the Environmental Audit Committee went to visit the Sustainable Building Centre in Leamington Spa, where we learned that if everyone in the UK with gas or oil central heating installed a high-efficiency condensing boiler, we would save more than 6.5 million tonnes of CO2 every year—and that is only one aspect.
Kelvin Hopkins
The hon. Lady makes a good point, but a 20% VAT charge is still made, when it could be only 5% VAT. That would be one simple subsidy to encourage people to invest in better and more efficient boilers.
Caroline Nokes
I thank the hon. Gentleman for that, but my point is that if home developers were obliged to pay into a central fund, we could start to ensure that people in social housing and those on the lowest incomes do not merely think about cheaper energy-efficient measures, but have a grant to enable them to achieve that. The hon. Gentleman mentioned insulation earlier, but improvement is possible from double glazing, too.
Particularly at a time when my constituency and parts of the south-east are under water stress, we must start to look at finding better ways to use our water. We need to be more efficient through rain water harvesting, using grey water and taking simple measures to improve sanitaryware systems, so that the cistern from the lavatory uses less water. All these measures could be done very cheaply indeed.
According to the Energy Saving Trust, each person in the average UK home currently uses 150 litres of water a day. Level 6 of the code for sustainable homes seeks to reduce that usage to just 80 litres—but, significantly, that applies to new-build properties. As I have already said, however, they are a tiny proportion of our housing stock, and far greater savings—both in litres per day and cost to the consumer—can be achieved through working on older properties.
Independent research has indicated that by shifting the focus on to the existing housing stock of 25 million homes, rather than on the already energy-efficient new-build sector, great efficiencies and more value for money can be delivered for the nation as a whole. That scheme would mean that existing home owners would see reduced energy bills, social housing associations would benefit from reduced maintenance costs and local employment would receive a boost, thanks to the number of trades people needed to carry out the work. New home buyers would be spared additional costs, which would in turn help to ensure the viability of many development projects—a critical factor for the UK economy given the already chronic under-building due to economic constraints.
Mr Robin Walker (Worcester) (Con)
I congratulate my hon. Friend on her speech. She is making some important points about both water and heating, and about the work that can be generated. Does she agree that it is vital for the Government, when designing schemes, to work closely with the installers, who are key to people’s decisions about how to implement these policies in their homes?
Caroline Nokes
My hon. Friend is right. The Government must work hand in hand with industry and the installers to ensure that we come up with schemes that not only look good on paper, but work in the real world.
Evidence suggests that if the hearts and minds of consumers are to be won over to energy efficiencies, there must be demonstrable cost savings for them. In response to a survey conducted in April this year, 41% of people said that they would be prepared to pay nothing more to make energy efficiency improvements in their homes. A scheme of this kind has the potential to provide grants for householders, enabling work to be done at no cost to them while also saving money, reducing emissions, and helping the Government to meet their targets. Surely that it is a win-win situation.
I have mentioned water efficiency. A company operating in my constituency, i2O, has developed the advanced pressure management solution, the world’s first system to monitor and control water pressure through a pipe network. It is an extremely successful design which has been deployed throughout the world, and is most widely deployed to regulate water flow and manage leakages. Last month South East Water awarded the company a £1.5 million contract to help to reduce its leakage problems. In view of last month’s drought conditions throughout the country, I am sure that such technology will be needed more and more, and I am pleased that South East Water wanted to install the system as soon as possible. I urge the Minister to support companies such as i2O which are employing innovative and sustainable ways of managing water levels and distribution.
Let me again congratulate my hon. Friend the Member for South Thanet on securing the debate. I look forward to hearing the Minister’s response.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the hon. Member for South Thanet (Laura Sandys) on securing this important debate.
I am genuinely pleased to observe a fight-back from many Tory Back Benchers who are now trying to make the Government see the huge economic and employment benefits of a green economy, as well as the obvious environmental benefits. The scale of the challenge that they face was amply demonstrated by the speech of the right hon. Member for Hitchin and Harpenden (Mr Lilley), who sounded as though he was still living in the dark ages.
I do not know where the right hon. Gentleman has been for the past few decades, but when I last looked, Germany did not seem to be an economy that was struggling. Germany is doing incredibly well, and it is being built on an economy that is light years ahead of ours in terms of the use of the green economy. Let me remind the right hon. Gentleman that we ended the stone age not because we ran out of stones, but because we found a cleaner, more efficient way of behaving. In the same way, we will leave the fossil fuel economy behind because we now see cleaner, more efficient ways of behaving.
As for subsidies, there is a world of difference between subsidies that are time-bound until new technologies reach, in this instance, grid parity, and subsidies that have been going on for decades—as they have in the case of nuclear and fossil fuels—and are driving us ever closer to climate catastrophe.
Much of the debate has rightly focused on fiscal measures. Three years ago, the green fiscal commission revealed that a “polluter pays” tax shift would provide a significant boost for UK low-carbon jobs, as well as increasing competitiveness. It suggested that such a measure would reduce emissions by more than 30% by 2020, that it would create about 455,000 jobs, and that it would receive a great deal of public support.
It is important to bear in mind how widespread that support potentially is. Let me quote these words:
“I don’t underestimate how difficult it will be to rebuild public confidence that green taxes are genuine environmental policy… not just stealth taxes… I am… determined to rebuild this trust… As leading green… Professor Paul Ekins has rightly pointed out, this type of green tax switch might be termed a ‘win-win-win’ outcome… The time for action is now. Future generations will not forgive us if we fail.”
Those are all words with which I agree, but if a week in politics is a long time, four years is evidently an eternity. Those words were spoken by the present Chancellor to a Green Alliance conference back in 2008. I agree with all his words from 2008, but unfortunately they have not been matched by any real action since he has been in a position to put them into action.
I hope that today’s debate will enable us to remind the Chancellor of his words of four years ago, and help to convince him that he should throw his weight behind the UK’s aim of becoming a world leader in low-carbon industries. If he does not believe in the environmental reasons for such action, he certainly ought to believe in the economic and employment benefits. I also hope that we shall be able to persuade him to convince the Treasury that its flagship “green bank” ought to be given the power to borrow as soon as possible.
More broadly, I should like the Chancellor to consider measures such as “green quantitative easing”. I was interested to note that even the former Government chief scientist Sir David King has echoed my calls for green conditions to be attached to the billions of pounds that are currently being poured into our banks. I think that the money should be going directly into the economy rather than into private banks, but wherever it is going, the Government should at the very least ensure that green conditionality is involved, so that we can ensure that it goes into low-carbon infrastructure. Crucially, they should also recognise that the low-carbon economy is far more labour-intensive than the fossil fuel economy that it will replace, so it makes good employment sense to invest the funds in green rather than fossil fuel measures.
The one thing businesses are united in calling for is certainty. The CBI says about low-carbon investment:
“Businesses need, above all else, policy certainty, consistency and clarity over the long-term”,
yet that has been conspicuous by its absence under this Government—demonstrating a failure of leadership by them. The sad news about Vestas reversing its previous decision to invest in the wind turbine manufacturing plant at Sheerness is just the latest casualty of the Government’s failure to provide that most basic condition.
Nigel Adams (Selby and Ainsty) (Con)
Is the hon. Lady aware that in the last three days Vestas has also decided to close a manufacturing plant in China?
Caroline Lucas
It does not make me feel any better to know it is also closing plants in other parts of the world. It has clearly said one of the reasons why it did not go ahead in Sheerness was that it did not have enough orders for turbines on the order book. If that is a problem here in the UK, we should be addressing that, rather than worrying about what is happening in China.
One measure that would provide huge and tangible benefits both in my constituency and the rest of the UK is a massive investment in making the UK housing stock super-energy efficient. As others have said, that would not only be good in terms of getting our emissions down and creating lots of jobs; crucially, it would help tackle fuel poverty as well. This measure should be funded not through more levies on energy bills—as the Government plan, and which is inherently regressive—but from using funds such as the revenue from the carbon price floor and auctions of carbon emissions permits through the EU emissions trading scheme. That would have benefits in job creation, tackling high energy bills and achieving rapid emissions cuts. Some 118 Members have now signed the early-day motion on the Energy Bill Revolution campaign, which calls for precisely this step.
Members support that EDM because they know that, sadly, as it is currently designed, the green deal policy instrument is extraordinarily weak and the energy company obligation part of it—the bit that is supposed to be tackling fuel poverty—looks set to fail miserably both against the Government’s own objectives and in terms of doing what is needed to cut carbon emissions and end fuel poverty. The truth is that the final shape of that fuel poverty package could result in a 50% drop in the funding targeted at low-income and financially deprived households. There will be far less money in the ECO than there is in the measures that are being phased out—the carbon emissions reduction target, the community energy saving programme and Warm Front.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
I think the hon. Lady is being disingenuous, to say the very least, in respect of this Government. It is because of the policies of this Government that we are seeing investment in increasing numbers of offshore wind farms, not only off the Kent coast, but, as I am sure my hon. Friend the Member for Waveney (Peter Aldous) will point out in his speech, off our coast in Suffolk. Will the hon. Lady at least accept that there have been many good advances in green energy—some of which are being delivered right now in Suffolk?
Caroline Lucas
That has probably happened in spite of Government policy, not because of Government policy. [Interruption.] I hear the muttering on the Government Benches, but what I say is true. The measures of investment figures show that under this Government investment in green technologies has decreased.
Caroline Lucas
I apologise, but I will not give way again, as I do not have much time left.
For many low-income households the green deal financial mechanism simply does not stack up. [Interruption.] The mechanism is based on loans with interest rates of between 6% and 7%. That creates the risk that these loans will be taken up by middle-class and well-off households, which might be able to afford to take them up without needing any support, rather than by less-affluent families with next-to-nothing in their pockets. Although there are limitations in respect of this market mechanism, if we are going to use it, we will at least need support to bring interest rates down to a more realistic level—as Germany has done through the development bank, KfW.
Renewable energy enjoys massive public support. That is true even of wind—although judging by the outcry from some Tory Back Benchers, we would be forgiven for assuming otherwise. In November, a YouGov survey found strong support for renewables, with 60% of people supporting wind power subsidies. The Prime Minister said in his half-speech at the clean energy ministerial meeting in April that he passionately believed that the rapid growth of renewable energy was vital to the UK’s future, but, sadly, his Government’s policies do not reflect those warm words. Instead, we hear rumours that he and his Chancellor are seeking backroom deals for a 25% cut in subsidies to onshore wind. Any reduction beyond the proposed 10% cut to wind subsidies would fly in the face of environmental and economic common sense, jeopardising the future of both onshore wind and investment in other renewables across the country, as well as the thousands of jobs they could bring.
The solar feed-in tariff fiasco provides another example of coalition Ministers creating harmful uncertainty. As one solar company in my constituency described it, the industry has had to endure a series of “unsettling knee-jerk changes” that have undermined not only investor confidence, but public confidence in the solar industry. Solar energy has huge potential in the UK and it is a tragedy that we are not supporting it more.
Marine energy also has massive potential. With the right support the UK industry could seize almost a quarter of the world’s potential market, according to the Carbon Trust. That would be worth an estimated £29 billion per annum to the UK economy by 2050 and would support more than 68,000 jobs. Sadly, that potential looks hugely unlikely to be realised, given that we have a Government Budget with a £3 billion tax break for more offshore oil and gas drilling—
Caroline Lucas
I will not give way, because I am running out of time. I am sorry. I was going to say that we also have a draft Energy Bill that threatens to usher in a new dash for gas.
Finally, in my last 40 seconds, I wish to pick up on the way in which “accelerate green growth” is being used in the motion, as we need to be a little clearer about that. Of course we need faster growth in some sectors of our economy, including in renewable energy and energy efficiency, but we must stop pretending that we can have infinite growth on a planet of finite resources. The current economic crisis gives us the opportunity to change direction and get on the path to a very different kind of economy, one that it is not measured solely by GDP. The problem with GDP is that it measures everything in cash terms; it does not measure what is growing, and it does not give us any sense of the quality of the economy and whether it is delivering true well-being.
Madam Deputy Speaker (Dawn Primarolo)
I call Nigel Evans. [Laughter.] I do apologise. I meant, of course, Nigel Adams.
Nigel Adams (Selby and Ainsty) (Con)
That is not the first time I have been mistaken for Nigel Evans, and I see that as a great compliment, so thank you, Madam Deputy Speaker.
I am pleased to be contributing to this debate on the green economy and the fiscal support it receives. Like many other hon. Members, I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing it. It is particularly important in my constituency, because of the substantial investment being made in sustainable biomass and carbon capture. Drax and Eggborough power stations are based in my constituency, as is Kellingley colliery, the deepest coal mine in the UK. Drax currently produces more than 7% of the UK’s electricity, having generating capacity of just under 4,000 MW. It has been investing in research and development and in new facilities to co-fire with an increasing percentage of biomass. It has proven that its current plant can successfully operate with 12.5% co-firing, and there are plans to increase that to 20% and to build a new power station that would be fired with 100% biomass. Eggborough power station proposes to convert its 1,960 MW generating capacity to run entirely on biomass.
Those are the big wins we need if we are to secure our targets for reducing CO2 emissions and ensure that the green economy flourishes. Biomass results in 80 to 90% less net CO2 emission than coal, and these are the facilities we need to produce power when we need it and not just when the wind blows. They also currently provide secure employment for a large number of people.
We are talking about world-leading companies that have proven that their technology works and that have solved the supply and materials handling problems. However, they cannot provide a solution on financial viability without having a UK policy framework that supports it, which is why I am delighted that we have a Treasury Minister here with us today. Drax is already the UK’s largest producer of renewable energy, even without yet running its current renewable capacity to the full—the current renewables obligation framework does not make it financially attractive to do so. Drax is willing and able to go further, but the policy framework must support rather than hinder it.
Unlike onshore wind, the transition to biomass in my constituency enjoys considerable local support. The local labour force has the expertise to support the plant and sees it as a great new employment opportunity. Public support is important and these projects enjoy support rather than enduring local opposition. I am afraid that the same cannot be said of onshore wind farms, which are proposed in many numbers in my constituency. There is widespread knowledge about power generation and I am repeatedly reminded that more than 3,000 onshore turbines operating last year, which received nearly £400 million of subsidy, produced only 3.3% of the electricity consumed.
Such a level of subsidy for wind, which proudly claims to be the cheapest form of renewable energy, is not a particularly good use of the money that is being levied from the consumer, driving more of them into fuel poverty every year. Electricity that can be produced as and when required, at any time of the day or night, must be worth more than electricity produced only when the wind blows.
Electricity generated near to the industry and homes it supplies via a major node on the grid must be worth more than power from the wind generated in some remote location. Electricity generated competitively with a local labour force must be worth more than electricity that depends on imported turbines with low UK labour content. We should address those issues and I appeal to the Economic Secretary to the Treasury to allocate our financial resources accordingly.
Diana Johnson (Kingston upon Hull North) (Lab)
I, too, congratulate the hon. Member for South Thanet (Laura Sandys) on securing the debate. When the coalition came to power, it talked about rebalancing the economy, including moving from services to manufacturing, moving from London and the south-east to the regions and moving towards a more low-carbon economy. In my area of the world, the Humber region, the green economy is one way in which we can see growth brought back into the local economy.
I understand that three of the world’s largest offshore wind farms are around the UK and Hull is particularly well placed for the third round, as we have the Hornsea and Dogger Bank areas of the North sea. I want to talk about the benefits to my area of the green economy and about why it is important that the Government are clear in their approach.
At the moment, the Hull and Humber area is working up a proposal for a green port at east Hull. The proposal is for Siemens to come to the port and set up a wind turbine manufacturing site for turbines that could then be used out in the North sea. We are well placed because of the deep channels in the Humber estuary and the sailing time to the proposed Hornsea and Dogger Bank wind farm areas. At the moment, we are talking about a £250 million investment in Hull, with the further investment of £100 million through the supply chain that we hope will come to the city when Siemens arrives. I must say to the right hon. Member for Hitchin and Harpenden (Mr Lilley), who is no longer in his seat, that my understanding was that a financial package was available to support such investment in the city in recognition of how important the development was not just to my city but to the wider economic situation in the Humber and around the United Kingdom.
Laura Sandys
I think the regional growth fund has given support to many of those companies as they open up their investment, to secure investment in Hull as well as in Sheerness. Perhaps the hon. Lady could provide clarification on that point.
Diana Johnson
I am grateful to the hon. Lady for her intervention. I will talk about the regional growth fund, but under the previous Government funding was made available for ports so that they could develop projects such as the wind turbine manufacturing that I mentioned. We need to recognise that not only the previous Government but, to give them some credit, this Government have taken steps to support the green economy through wind turbine manufacturing. I think it is a combination of the two things. I do not think we can deny that the previous Government did a lot around the green economy, with the very important legislation in the Climate Change Act 2008, which was the first of its kind in the world. I will come to the regional growth fund in a moment.
The North sea has been called the “Saudi Arabia of renewables”. There is huge potential for growth in the economy. Work on Green Port Hull is going exceptionally well and we are moving steadily, I hope, towards Siemens actually signing on the dotted line later this year. I pay tribute to the Associated British Ports manager, Matt Jukes, as well as Lord Haskins, who has been the chair of our local enterprise partnership, Councillor Steve Brady at Hull city council and Ian Kelly at the chamber of commerce. This has been an example of the public sector and the private sector working successfully together on the green economy. There are potentially 300 construction jobs on the Siemens site building the manufacturing factory. There will be 700 permanent jobs at Siemens and up to 10,000 in the supply chain working alongside different companies around the Hull and Humber area.
Let me put that into context. My constituency has 43.6 people chasing every job vacancy, so jobs are the key issue for my city and people who live in north Hull. At the moment, more than one in 10 young people in the city are not in education, employment or training, so it is important to do something fairly dramatic to ensure the regeneration of what was once a great city. Hull has the potential, with the opportunities offered by renewables, to become a world centre of excellence. We need to recognise the investment that is going not only into the green economy and the manufacturing side of turbines but into the wider economic benefits for areas such as mine. That is so important during a double-dip recession, and the green economy is growing at a rate of about 4%. I am sure that all parties would recognise that we need to do everything we can to support job creation and this particular industry.
I want to give the Government their due regarding the regional growth fund, through which £25 million was made available to work on the supply chain infrastructure that needs to be put in place to support the work that Siemens will, we hope, bring to the city. We also have enterprise zones on both banks of the Humber. I am waiting to see exactly how they are going to work, but the Government have given us the largest area of enterprise zone in the country. So, we hope that we are set, with a fair wind, to move forward, with Siemens coming to the city and with that renewables hub being developed.
Let me make two points about the Government’s approach. First, I am very concerned that any decisions the Government make on energy policy should be evidence-based. The hon. Member for South Thanet made this point in her opening remarks. We need clarity and transparency in policy and I am for ever asking the Government, in relation to all sorts of areas, where the evidence is that what they propose will work. It would be very helpful if the Minister, in his response, set out a commitment to provide reassurances about energy policy being evidence-based. The industry is looking for that and is keen to know why certain decisions are made. We also need to consider that, with investment now, the costs will come down in future. We know that the costs of the offshore wind industry will come down over time—the supply chain will ensure that—and that subsidy will reduce over time.
My second point is about the Government’s announcements, which need to be very clear and quick. The drip-drip of different possible announcements is very unhelpful. I also think that procrastination is a problem. Things need to be got on with. These mixed messages are a problem and I have to say that the Treasury seems to be causing the biggest problem. The Chancellor seems to have indicated in the past that he will not allow economic growth to be held back by green considerations, but clearly most of us in the Chamber today would say that green issues could drive the economy.
Finally, I understand that the consultation on the banding for renewables obligation certificates has taken us up to only 2017. Even with a fair wind and a relatively quick start, the green port in Hull will not begin until 2015, which will only give the industry two years of certainty about its returns. We have to look much more to the long term when we are asking industry to make huge investments.
I hope there is cross-party support for the motion. Labour introduced the Climate Change Act. We are committed to a green economy, and I very much hope that the Conservatives will fulfil their promise to be the greenest Government ever.
Peter Aldous (Waveney) (Con)
I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing the debate. Realising the full potential of the green economy is vital to securing economic recovery and creating new jobs.
The green economy is performing particularly well at present and it is important that the UK takes full advantage. Last year, the low carbon goods and services market grew by 4%, and investment in renewable energy around the world reached record levels. In 2011, there was an estimated £6.9 billion of investment in the UK renewables sector, with 21,000 jobs announced. Research and development work is ongoing, and renewable technology is becoming more competitive. The offshore wind cost reduction taskforce estimates that it should be possible to cut the cost of offshore wind by a third by the end of the decade.
It is important to take advantage of those opportunities so that as a country we are less vulnerable to rising global energy prices. We need to future-proof our economy against the vagaries of fluctuating fossil fuel prices. Such fluctuations restrict household expenditure and business investment decisions as well as pushing up inflation.
It is appropriate to commend the Government for the work they have done in the past two years. In many respects they have laid the foundations upon which a successful green economy can be built. They are tackling difficult challenges that do not have straightforward solutions. A good start has been made.
The fourth carbon budget, for the period 2023-27, has been set and the green deal starts this autumn. The Government have brought forward the green investment bank and have invested £3 billion as its initial capitalisation. It is good news that the Enterprise and Regulatory Reform Bill will enshrine in legislation the green investment bank’s objectives, embed its operational independence and provide Government with specific powers to finance it.
It is welcome that the Government are tackling electricity market reform as part of the draft Energy Bill, which is at present before the Environment and Climate Change Committee. I shall not comment on EMR in detail as we shall return to it in the autumn, but it is an extremely important subject where it is vital that the right decisions are made. In tackling EMR five guiding principles should be pursued: timeliness, simplicity, certainty, transparency and coherence.
I commend the Government for the work they have done locally in East Anglia. There is an enterprise zone aimed at the renewable energy sector in Lowestoft, in my constituency, and in Great Yarmouth, and a centre for offshore renewable engineering designation for those two ports.
To realise the full potential of green growth, the Government need to address four challenges. First, there is a need for coherence from Government. Green investment is highly mobile and globally foot-loose. Investment will flow to the most attractive destinations. It is therefore important that the Government continue to send the right message: the UK is the best place to invest, with a stable fiscal regime and a sound pricing mechanism. That is how we shall achieve the necessary investment in new energy technologies.
It is also important to provide international investors with the confidence to invest in the UK. Investors need to have faith that all departments of Government are serious about the green economy. There should be a coherent and consistent framework and the right rhetoric must emanate from the Treasury.
Secondly, there is a need to provide 21st-century infrastructure. That means smart metering, a smart grid and in due course a European supergrid. Important work has already begun on rolling out superfast broadband, and it is important that that does not stall. There is also a need to continue with the work to achieve a 21st-century renaissance on our railways, and the Economic Secretary to the Treasury is playing an important role in that in East Anglia.
My third point relates to the green investment bank and its right to borrow. I have already commended the work that the Government are doing in setting up the GIB, which will operate from 2013-14, a year earlier than anticipated. It is envisaged that the bank will have the right to borrow from 2015-16. However, I must emphasise the vital importance of the GIB having powers to borrow, so that it can reach its full potential and provide certainty to investors. It must have that power so that it is not just a Government-run fund. The £3 billion of start-up funding should unlock £15 billion-worth of private sector investment, but that is a drop in the ocean compared with the £200 billion of investment needed to invest in energy infrastructure up to 2020.
It is important not to pursue the option of borrowing through the national loans fund to fulfil the GIB’s borrowing requirements. If that is done, there will be no independence at all. The GIB needs to be able to borrow independently from the capital markets. It is important to learn from the examples in Germany, where KfW leverages its equity by a multiplier of 28, and the Netherlands, where Bank Nederlandse Gemeenten achieves a multiplier of 59. My fourth point is that we need to provide people with the skills and training needed to take up the many exciting and diverse job opportunities in the green economy.
In many respects, that meeting of minds and hearts in the rose garden of No. 10 in May 2010 seems a distant memory, and perhaps another country. However, it is important to remember that one of the objectives in the coalition’s programme for government was the Prime Minister and Deputy Prime Minister’s shared vision of building a new economy from the rubble of the old, supporting sustainable growth and enterprise, balanced across all regions and industries, and promoting the green industries that are so important for our future.
I would like to promote “Leading the Way: Green Economy Pathfinder manifesto 2012-2015”, a document about which I suspect the Economic Secretary to the Treasury knows a great deal. It is a report produced by the New Anglia local enterprise partnership, covering Suffolk and Norfolk, setting out its route map for a transition to a green economy. It was launched earlier this month, and it will be presented to the Government in the next few weeks. I urge the Government to give full regard and consideration to its five objectives and 25 goals, which I will not go through because of the shortage of time.
In conclusion, the Government have made a good start, but a lot of work is still required to realise the full potential of the green economy, and there are many challenges that remain to be met. There is a need for more co-ordination across government, closer working with both business and local government, and a clear and simple regulatory framework to promote green investment. The UK remains an attractive place to invest, but we must do all we can to ensure that that reputation is not lost, but enhanced. I support the motion, and look forward to hearing the Minister’s response.
Mr William Bain (Glasgow North East) (Lab)
I congratulate the hon. Member for South Thanet (Laura Sandys) on securing this timely and important debate, and the Backbench Business Committee on granting it.
The OECD has estimated that this year in the UK total economic demand will be only a tenth of that in Japan or the United States. The fiscal stance adopted by the Chancellor towards the economy as a whole, and particularly towards the green sector, is disappointing, given that our green economy accounts for 7% of gross domestic product and is the sixth largest in the world. It sustains 900,000 jobs and is growing at a rate of 4.7% a year, whereas, as the Office for National Statistics established this morning, the economy as a whole has shrunk by 0.2% since the comprehensive spending review in autumn 2010, although the Office for Budget Responsibility had predicted that in the six quarters following June 2010’s emergency Budget, the economy would grow at 3.7%. It seems that the green economy is one of few areas in which there is any growth at all.
China and South Korea are investing hugely in the low-carbon sector, which, it is estimated, will be worth $2.2 trillion by 2020. China’s share of the low-carbon economy is set to rise to 24% by that year. The Chancellor’s lack of foresight risks leaving the UK in the economic slow lane. It is extraordinary that it is not only the Governor of the Bank of England who now writes letters to the Chancellor about the state of the economy but, we have learned, the Secretary of State for Environment, Food and Rural Affairs, the Secretary of State for Energy and Climate Change and, perhaps most surprisingly, the Foreign Secretary. Perhaps there is only 24 hours to save the green economy, based on their concern that Government policy is simply not going far enough to generate growth in an innovative sector that, after the financial crash of 2008, provides an opportunity to rebalance a growth model that many people believe has failed.
This morning, Paul Krugman and Richard Leyard set out in the Financial Times how we have become mired in the slowest climb out of a slump since the 1870s, largely because of a lack of productive economic output. We face endemic long-term unemployment and mass underemployment, with 2 million people forced into part-time or temporary work because not enough full-time jobs are being generated in the economy. Investment in the green sector is the key to ending that trend. Krugman and Leyard conclude in their powerful piece:
“Companies will only invest when they can foresee enough customers with enough income to spend. Austerity discourages investment.”
Kelvin Hopkins
I support everything that my hon. Friend is saying, but is he aware that in a survey recently reported by the CBI, 94% of employers wanted, above all, markets so that they could sell their goods? They were not concerned about regulation and all the other things that the Tories talk about.
Mr Bain
For many months, my hon. Friend has identified the real problem—a jobs and demand crisis, which is what fiscal policy and investment in the green sector must address.
Lack of confidence means that private sector surpluses amounted to £99 billion last year, and £700 billion of private-sector assets are not in productive use in the economy. In the first three months of this year, global green investment fell to the lowest level for three years, according to Bloomberg New Energy Finance. It is clear that Governments have to act quickly if they are not to find themselves in a classic example of what Keynes called the paradox of thrift, in which the pressure to save overwhelms the need to invest and grow.
Although they are somewhat more reticent in their self-promotion, it is worth remembering that this is the Government who asserted that they were “the greenest Government ever”. Regrettably, this year’s Budget did little to redress the lack of green investment. The principal failure was the failure to improve the capital and borrowing powers of the green investment bank. As a concept, the bank is quite unique. It draws support from the CBI and the New Economics Foundation. Before the Budget, James Meadway, senior economist at the New Economics Foundation, called on the Chancellor to bolster proposals for the green investment bank with higher capitalisation and earlier borrowing powers.
Ernst and Young estimates that £4 billion to £6 billion of public capital is necessary over the course of this Parliament for the bank to be effective in tackling the investment barriers in offshore wind, carbon capture and storage, and associated infrastructure. Lord Stern, a leading climate change economist, notes that that is not state aid or subsidy, as the institution is needed because of market failures in finance, particularly those associated with risk and policy risk. However, the green investment bank will not have borrowing powers until April 2017, which casts huge doubt on its ability to raise the £200 billion estimated to be necessary to meet the UK’s CO2 reduction targets by 2020. While immediate borrowing powers are essential, so is timing. As the Environmental Audit Committee reported in March last year, investors may put off investment while there is uncertainty about how the bank will operate. A bank that is slow in building its balance sheet may not meet our emissions and renewable energy targets by 2020.
The London School of Economics recently issued a report showing the link between the effects of the current crisis of demand and the flailing prospects of the green economy in the UK. In its recent report on green investment and innovation, the LSE argues:
“Investment has slumped mainly because households, businesses, and banks are nervous about future demand and have responded by forgoing more risky investment in physical capital.”
That is the crisis that must be addressed now. The LSE also points out that the Government
“can still steer spending and investment through a mix of policies including pricing, regulation and institutional reform”
that need not cost more money now.
Consensus on this issue comes from a surprising source—the Foreign Secretary, who said in his letter of 19 March to the Chancellor that
“we could get more mileage from this without additional commitment of expenditure or fiscal risk.”
Uncertain economic times need not mean an uncertain approach to the transition to a green economy.
Sir David King, as the hon. Member for Brighton, Pavilion (Caroline Lucas) discussed in her speech, has argued that the quantitative easing programme could also be aimed at the green economy. In an article published in The Guardian this Tuesday, he wrote:
“This laissez-faire attitude that is gospel at the Treasury is not the right one at the moment. We do not have time to play about with this—we need to move quickly to get out of the financial crisis and the resource crisis”,
and he suggests that preference could be given to projects that promote environmentally responsible and sustainable development, modernising infrastructure and marking a shift away from the present high-carbon, resource-intensive economy.
In opposition, the Chancellor highlighted the need to
“bring to an end the stale argument that we have to choose between economic growth and the environment.”
In government he has so far, sadly, forsaken both, but this is the season for Treasury U-turns. The motion and this debate give him the opportunity to get serious and to generate real green growth and green jobs, so let us have the largest U-turn yet—a fully capitalised and properly borrowing green investment bank and proper levels of investment in the green economy.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) who crafted such a genius motion, covering so many strands and industries and laying open the field for us to speak on a number of topics. I have been beaten by my hon. Friend the Member for Waveney (Peter Aldous), however, who has already given a full and comprehensive speech on the merits of Suffolk, supported by my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter).
I said in my maiden speech that I hoped our coast, the Suffolk coastal area combined with the coast around Lowestoft in the constituency of my hon. Friend the Member for Waveney and round into Yarmouth, would be known as the green coast, and I am delighted to say that our county councils, working with the local enterprise partnership, as has already been mentioned, are doing their bit to try and make sure that that vision becomes a reality. That was further enhanced when an enterprise zone was granted in a neighbour’s constituency and has been designated one of the centres for offshore renewable engineering.
I am delighted to say that the Suffolk-Norfolk rivalries are not quite as strong as they once were: we now reach across the border and our county councils, our LEP and, I understand, Essex county council work together to make sure that we have an energy skills strategy that reaches right across our area. That was evidenced by the decision to allow Norfolk university technical college to be based in Norwich, the city represented by my hon. Friend the Economic Secretary. That is a great opportunity and I am delighted to say that Suffolk and Norfolk are getting a grip on it.
With regard to the fiscal and regulatory framework, I was not surprised by the speech made by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), because I know that he holds strong views on these matters. I understand perfectly why he feels that energy costs are unnecessarily high: he blames the subsidy and thinks it is a problem for other industries. I take a very different view: that if we are to encourage self-reliance in energy, we have to invest in our energy infrastructure. It is not about subsidy; it is about an incentive to attract investors from around the world, and nowhere more so than at Sizewell C. I have seen the strong commitment of EDF and British Gas to continuing their planning application work not only at Hinkley Point, but at Sizewell C. Frankly, all the talk about subsidy is nonsense. It is an incentive to have green energy infrastructure on which we can all rely.
I hope that we in Suffolk Coastal will be vying with my hon. Friend and neighbour across the river with the coming online of the Greater Gabbard, Galloper, and East Anglia wind farms and so on, as many of those come onshore in my constituency. That does not mean pylons in my constituency, although sadly it does in one nearby. We are seeing for ourselves the future of green energy, and we are proud to be part of it.
I say to the Minister—she has heard me talk about this before—that it would be lovely if the contribution those communities are making to green growth was reflected in the allocations from the coastal communities fund. They deserve the lion’s share of that money. Frankly, I feel that we should get our share of the revenue that the Crown Estate secures from offshore wind farms and other such activities. [Interruption.] I am delighted that my hon. Friend the Member for South Thanet seemed to say, “Hear, hear” to that.
On other routes to market, I think it is telling that one aspect of green growth is trying to reduce the amount of energy we need for anything. I am delighted that the Government have put in place the money for rural broadband roll-out. I hope that the director general for competition in the European Commission does not put a spanner in the works by trying to prevent that money—our money—being used to ensure that we get broadband throughout the country. The other investment that my right hon. Friends in the Government are making, of course, is the investment in rail. I am sure that the Minister will not mind if I plug the future launch, which we hope will be very soon, of our prospectus for increased investment in rail, because we believe that it will generate a huge economic return for our region and the country.
I will mention briefly the contribution from my hon. Friend the Member for Selby and Ainsty (Nigel Adams). I have a lot of sympathy with his dedication to biomass. We have an anaerobic digestion plant at Adnams near Southwold and more are planned, but there is concern in East Anglia that biomass plants will be powered by straw that is sourced locally, because that would increase the price of straw for farmers elsewhere. With increasing welfare standards, which we all welcome, agricultural production will require more straw, which will start to become a scarce commodity. I have raised the issue with hon. Friends elsewhere—indeed, I am meeting the Minister to discuss the point—because we need to bear in mind the risk of distorting practices elsewhere through incentives on one side.
Finally, I will turn to the planning debate. There is no question but that I prefer offshore turbines to onshore ones, even though they are more expensive—the cost is coming down, as has been mentioned—especially as half my constituency is in an area of outstanding natural beauty. A very unpopular planning application was granted only the other day in Levington, which is in an AONB, and I was rather shocked and surprised that the four councillors outvoted three and the one who abstained. It was a great shame, because one of the things we need to do is get our communities behind the energy revolution and to share in it. Elsewhere in the constituency, communities have come together in wanting a turbine, so that they can use the proceeds from it. We need to develop an element of consensus on wind farms, because once they are in place, as my hon. Friend the Member for Waveney will know with the Kessingland turbines, there are still issues for residents that need to be solved.
I shall use part of my contribution to this debate to call on my local district councils and indeed councils throughout the country to take advantage of the recent Department for Communities and Local Government guidance on including a supplementary planning document specifically on renewable energy. Instead of councillors being beset by every single application and the Planning Inspectorate overturning decisions, I would like to see local councils develop their activities in a planned and structured way and be part of the process of making sure that the future is as green as the luscious fields that we have enjoyed since all this rain fell.
The future is green. One of our party’s slogans was “Vote Blue, Go Green” and I would like to think that under this coalition Government, we are doing more than ever to promote the green economy.
Martin Vickers (Cleethorpes) (Con)
I, too, congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing this debate.
Energy policy and, in particular, the fiscal and regulatory framework that governs it is critical to my constituency. The hon. Member for Kingston upon Hull North (Diana Johnson) outlined the advantages of the Humber estuary in terms of location and the development of the renewable sector, and its geographical situation is absolutely ideal for servicing offshore developments.
Developing renewable energy is more than an environmental solution to help slow climate change, however; it is about bringing jobs and investment and revitalising, rejuvenating and regenerating my constituency and other areas that have been hard hit by unemployment and by business closures.
Existing jobs in my constituency are heavily dependent on energy-intensive industry, including petrochemicals refining and steel production, but there is a limit to their ability to subsidise the development of the renewables sector, and the Government must be mindful of that. Part of the political process does, of course, involve balancing competing arguments.
To return to future jobs, however, the Government have recognised the area’s potential by establishing an enterprise zone, the very name of which—the Humber renewable energy super cluster enterprise zone—does not roll off the tongue but is an acknowledgment of the Government’s support for the growth of the sector in the area.
The zone includes the south Humber energy park, being developed by Able UK, which will not only, we hope, attract a major international company, but provide a massive opportunity for smaller and medium-sized businesses to become involved in the supply chain.
The establishment of the energy park project is going as well as can be expected, but the long drawn-out process has highlighted the need for greater clarity and speed on the part of the various Government agencies involved. I welcome the recent announcements indicating the Government’s determination to tackle those issues, and I urge them to ensure that the announcements are followed through and delivered speedily. If investors are to make sound judgments that favour the UK, we need to avoid delay and to speed up the development of infrastructure and jobs in areas such as my constituency, which so desperately needs them.
Potential investors have drawn my attention to several other factors, including the need for greater clarity on how the Treasury will value and ration contracts for difference—CFDs—for levy-control purposes, given that the amounts paid out under them will vary according to the wholesale price for power.
On CFDs, there are questions also about budgeting. From 2014 to 2017, there will be a choice between renewable obligations certificates and CFDs, but the available budget will have to cover both, so I stress again that clarity is needed on how this highly uncertain situation will be managed.
The industry is asking questions because it wants to see the expansion not purely of one sector, but of many, as indeed we all do. The knock-on effects of the green economy will be felt for generations, and I for one want to support the best opportunities that we can give them—but not necessarily at the expense of the current generation of jobseekers. That is what the green economy is really about, so saving the beauty of Britain and saving jobs for the British people must be our aim. This is an economic eco-system in which what happens in one area affects all the others. One aspect of that eco-system that the Government have got right is the interaction of stakeholders with local authorities, which has produced great successes in Humberside involving the recently established local enterprise partnership.
Recently I got together with my hon. Friends the Members for Cambridge (Dr Huppert) and for East Hampshire (Damian Hinds), and Green Alliance, to produce a pamphlet highlighting the importance of local leadership in the dash for green growth. The hon. Member for Kingston upon Hull North mentioned names that were familiar to me from the north bank Humberside area. I add my support and congratulations to political and business leaders in northern Lincolnshire, who have played a significant part in this. There has been cross-party, cross-river support for the various initiatives. As in the case of the Suffolk-Norfolk situation mentioned a few minutes ago, it is relatively unusual in Humberside to get support from both banks of the river, but thankfully, colleagues from both sides have come together. The local aspect of this could unlock business and industry from over-taxing, centralised policies. We urgently need to cut red tape and speed up the process.
Localism is powerful, and these opportunities are being ambitiously pursued with a focus on green business and investment. Investors are perceiving more risk than opportunity, and we need to ask why that is so. Perhaps there are too many complexities in the current set-up. Complexity equals risk, risk equals costs, and costs equal a lack of investment. We need to reduce the administrative quagmires and uncertainties and introduce a more locally based initiative that could speed up the process. The potential for job growth from the green economy is considerable, and I hope that we can move forward much more quickly to achieve that. I urge the Government to do more to end the uncertainty that the industry faces.
The other day, I attended an informative reception on biofuels—a huge growth area that has one plant coming online, but only one. We need to expand that sector as quickly as possible.
Ministers have worked hard to simplify the process by which the industry can develop. Despite the recent withdrawal of Vestas from its Sheerness project, there remains great potential to grow the industry, to the enormous benefit of my constituency and the country as a whole. I readily support the motion.
Andrew George (St Ives) (LD)
I am pleased to have an opportunity to speak in this important debate. I warmly congratulate the hon. Member for South Thanet (Laura Sandys) on driving the initiative for the debate and on making a telling and significant opening speech in which she set it on the right course.
So far, speakers have not much reflected on why it is necessary for us to pursue a low-carbon future—apart, that is, from the right hon. Member for Hitchin and Harpenden (Mr Lilley), who is no longer in his place—and have accepted that policy as a given. As a responsible and significant country that wishes to lead the way internationally—for example, at the recent Rio+20 summit —we should be setting the standards in responding to the challenges facing the globe. The recent Stern report set out the significant impact that rapid climate change will have on people and their lifestyles around the globe, and on the world’s economy, including this country’s economy, if we fail properly to get on top of the problem.
I am glad that that is now seen as the relatively unarguable fact of the matter. Although there are some who advance the case—I will not say that it is a respectable case, but I respect the fact that they argue it—of the climate change deniers, who are the modern equivalent of the flat earth society, on a relatively un-peer reviewed and un-scientific basis, it is good that this Government, the previous Government and Members of this House generally take a reasonable approach to the challenges that we face.
The global market in low-carbon goods and services is currently worth £3.2 trillion and may be worth as much as £4 trillion by 2015. It employs 28 million people worldwide and, unlike many sectors, is growing at a rate of 4%, which is faster than the world’s GDP. The nub of the debate is that we can either ignore that growing global market in low-carbon goods and services and say that Britain wants no part of it, or say that we want not only to be part of it, but to be at the cutting edge. Britain should provide the necessary economic certainty for the players in that market to develop low-carbon technology in this country. We must give the right signals and encouragement to those industries. The underbelly of such certainty in Britain can provide the basis on which companies can test and develop those industries, and then become world leaders and develop an export market for the UK.
Fundamentally, that is what I believe lies behind what the Government are doing, and theirs is the right approach. They are putting the investment in and trying to read the messages in the market itself. I know that the Government have had some difficulty with solar photovoltaics, but the fact is that the cost of solar PV reduced by more than 50% in one year. It is difficult for any Government to have a system that can respond effectively to that and not create distortions in the market. We need to have the right incentives to encourage these industries, but the incentives must work in a manner that creates certainty for the long term. Despite the difficulty that was experienced last year, I am pleased that there is now a great deal more certainty and a formula in the feed-in tariffs system that will take the solar PV industry forward to a point where ultimately, in only a few years time, it will not need any fiscal stimulus to continue succeeding and to be one of the most significant players in our economy.
Mr Robin Walker
Worcester Bosch, a manufacturer of solar thermal energy, is based in my constituency. One of its concerns is that the enormous subsidies for solar PV under the unreformed feed-in tariffs system discouraged people from investing in solar thermal. Does my hon. Friend agree that having a more sensible and sustainable system will encourage the development of all technologies?
Andrew George
My hon. Friend makes the point very well. We must get the balance of the fiscal incentives right. The hon. Member for Southampton, Test (Dr Whitehead) made the point to the right hon. Member for Hitchin and Harpenden that the European rules do not rule out establishing incentives to develop and then roll out new technologies to promote the low-carbon economy.
West Cornwall and the Isles of Scilly in my constituency have for many years been at the cutting edge of many renewable technologies. We had the first wind farms at Delabole and Cold Northcott in the late ’80s. The geothermal project at Rosemanowes, near Penryn, has spawned a number of developments involving ground source heat pumps and deep geothermal, which I believe will be a significant driver of low-carbon technologies into the future. I am also pleased that the Government are investing in geothermal energy. More of Cornwall’s landscape is taken over with large solar PV than other parts of the country—Cornwall is famed for its sun, and it rarely rains. We want to harness that technology.
The first place in the UK to roll out commercial-scale wave technology is also in my area. That required significant Government investment—from the previous Government and the current one. We are at the critical point of ensuring that we plug companies into the system and that it works.
With all those sectors, Cornwall wishes to be seen as the green peninsula—the cutting edge or blueprint from which others can learn. The Eden project is an exemplar of rolling out such projects. It is not just the technologies that hope for opportunities, but companies. For example, Fugro Seacore, an offshore drilling company—I must declare an interest: my son works there—is helping to put in the footings for offshore wind. Such companies hope to have improved opportunities as a result of the fiscal measures that the Government are putting in place to promote low-carbon technology. I hope all hon. Members support this important motion.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I thank the Backbench Business Committee for bringing this important matter to the House, and the hon. Member for South Thanet (Laura Sandys) for her opening speech. Other hon. Members have mentioned the drive she showed to ensure that we had the opportunity to discuss this matter.
We heard 14 subsequent speeches, covering a range of subjects—I shall mention some of them in my remarks. I welcome the Economic Secretary, who is here to listen. A succession of Ministers has been present during the debate, which is important in the context of joined-up government. I hope she finds the debate slightly less of a hot seat than she was subjected to previously. It is good that hon. Members have tried to shed more light than heat.
I am proud that one of the Labour Government’s legacies was the broad acceptance of the need to tackle climate change. They worked tirelessly to attract low-carbon investment and to strengthen the UK’s green economy. The Climate Change Act 2008 was a world first—it binds the UK Government by law to reduce carbon emissions by a third by 2020 and by 80% by 2015. My hon. Friends the Members for Southampton, Test (Dr Whitehead), my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and others were part of that process. We owe them a debt of gratitude for their work at that time, because it helped us to reduce the UK’s greenhouse gas emissions by more than 20%—to below 1990 levels—and to beat our Kyoto target.
The Labour Government doubled renewable energy generation. We tried to establish Britain as a world leader in offshore wind capacity, and moved towards the UK becoming a world leader in the prototype development of wave and tidal technology, as hon. Members have said. Clean coal and coal-fired power stations can sometimes be controversial, but the previous Government proposed that no new coal-fired power stations would be built without carbon capture and storage to cut emissions drastically.
When I spoke of the debate being generally consensual, I should have mentioned the slightly discordant note struck by the right hon. Member for Hitchin and Harpenden (Mr Lilley). I use the word “discordant” not to be critical. In characteristic style, he made his point and put the other side of the argument. It is important that such views are heard. When Labour left office, investment in alternative energy and clean technology had reached £7 billion, and we were generally thought to be moving things in the right direction compared to other economies in the world. Even amid the worst global economic slow-down since the 1930s, the low-carbon economy in the UK still grew by 4.5% in 2008-09 and by 4.3% in 2009-10.
Several contributions this afternoon have referred to the Chancellor and the Prime Minister’s position when in opposition. Indeed, prior to the 2010 election, both promised to continue the work under way and to prioritise the transition to a low-carbon economy. We have heard several quotes this afternoon, but let me recap the Chancellor’s position in 2009, when he said:
“We need to recognise the fierce urgency of now. We need to see the whole of the government pulling in the same direction to cut emissions and green our economy… Climate change cannot solely be the concern of the climate change Minister.”
That is an important message—and might be one of the few occasions I have agreed with the Chancellor. He also said:
“I want a Conservative Treasury to be in the lead of developing the low-carbon economy and financing a green recovery”.
He then gave the following commitment:
“If I become Chancellor, the Treasury will become a green ally, not a foe.”
Some of today’s questions have focused on how the Government plan to deliver on their promise to be the greenest Government ever and to build on the work already done.
Neil Carmichael (Stroud) (Con)
I have just come from the Enterprise and Regulatory Reform Public Bill Committee, where we discussed the green investment bank, which is an important part of the Government’s strategy. Does she agree that it will be a powerful driver for improving our environment as part of the green economy?
Cathy Jamieson
I thank the hon. Gentleman for that information, and I am glad that the Committee is discussing the green investment bank. It has generally been welcomed this afternoon, although there is concern about whether it can deliver on its objectives and whether the Government are taking the right action to secure investment. Hon. Members have mentioned borrowing powers and other things that I will develop later, if I have time. However, although the green investment bank is important, it must have the right powers to succeed.
I have another concern that was reflected in contributions this afternoon. Are we really on the path to making this the greenest Government ever, or is the coalition, as has been suggested,
“on a path to becoming the most environmentally destructive government to hold power in this country since the modern environmental movement was born”?
Those are not my words—I mention them because it is important to consider different sides of the argument—but the words of leading environmentalists, including Greenpeace and the Royal Society for the Protection of Birds writing at the end of last year.
It is almost as if the Government, despite their earlier promises, no longer consider the transition to a low-carbon economy as their top priority. In the autumn statement, the Chancellor said that if we burden British businesses
“with endless social and environmental goals, however worthy in their own right, not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer.”—[Official Report, 29 November 2011; Vol. 536, c. 807.]
As hon. Members have argued powerfully, that is a particularly short-sighted way of looking at the world and completely ignores the opportunities to create an active industrial strategy within which the green economy can grow.
As other Members have argued, we have choice: we can either embrace and lead a new energy industrial revolution, or we can be left behind. We know that we are in difficult economic times, but all the measures we want to take on growing the economy will also help green growth, which is why Labour’s five-point plan sets out the immediate actions that we believe the Government should take to boost growth and create jobs, which would also help to strengthen the green economy. Even businesses have rejected the argument that the transition to a low-carbon economy is a burden; they believe it provides the UK with a huge opportunity for growth. The deputy director general of the CBI was very clear:
“Environmental regulation doesn’t have to be a burden for business. Framed correctly, environmental goals can help our economic goals—help start new companies and generate new jobs and enrich us all.”
We have heard the Foreign Secretary’s views quoted a number of times this afternoon. I suspect that he would be surprised to feature so often in a debate on the green economy. I shall not repeat quotes already referred to, other than to say that there are some powerful messages in them, as there are in the report published last month by the Environmental Audit Committee, which warned that green investment should play a key role in the UK’s economic recovery. We have also heard figures suggesting that the global market for environmental goods and services stands at around £3.2 trillion today, but will potentially be worth as much as £4 trillion by 2015. The figures on investment in clean energy have also been mentioned.
The green economy is growing worldwide, but the real danger is that if this Government do not continue the work started under the previous Government and do not see that climate change is important or that the green economy is a part of growing the wider economy, we risk being left behind.
Let me return briefly to the green investment bank. The Chancellor was very quick in the autumn statement to take credit for it as the Chancellor who funded the first ever green investment bank. It could, of course, leverage private investment and help drive economic growth, but the danger is that it risks falling into limbo. The Government now seem set to borrow £150 billion more than they planned to do a year ago, which poses issues, and the date by which we will have a proper functioning green investment bank with full borrowing powers has slipped back to 2016 at the earliest. Perhaps the Minister will provide some reassurance on that. The Government’s claim that the green investment bank is part of a strategy for growth and is to be centre stage will look pretty thin if it is not able to deliver any real investment in a meaningful time scale.
I have a couple of further points before I allow the Minister to sum up. The green deal has been referred to by several hon. Members this afternoon. That is important, but concerns have been raised about the fact that, despite the original claim that up to 100,000 jobs would be created in the insulation sector by 2015 and that 14 million homes would be reached by 2020 and 26 million by 2030, the consultation on the green deal, which was published in November 2011, came with some downgraded job forecasts, less funding for fuel-poor households, as we have heard, and no detail about the interest rates on which the green deal will rely.
Some Government Members have raised concerns—quite gently, I think—about what I and others described at the time as “shambolic” attacks on the feed-in tariffs for solar power. That risked thousands of jobs and left the public with legal bills running into tens of thousands of pounds.
Let me add my concern to those already raised about the plan by Vestas for the manufacture of wind turbines. It was originally hoped that it would create some 2,000 jobs, but it has been abandoned. The hon. Member for South Thanet, a member of the Energy and Climate Change Committee, was quoted as saying at the time that Vestas’ decision would have been
“a commercial one but it also suggests a lack of confidence within the industry over the government’s commitment to the green economy and crucially to offshore wind.”
As I understand it, she went on to say, as other Members have said this afternoon, that the market needs certainty from the Government. That has been a running theme throughout our debate: in order to develop, create and ensure that new technology is made accessible and affordable as part of the delivery from tackling climate change and growing the economy, the market needs certainty and long-term planning. I strongly argue that it is necessary for the Government—across all Departments, including the Treasury—to stand up and take those responsibilities seriously.
Let me end my speech by telling the House what Labour believes we need to do. Some of it has already been set out by the shadow Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Don Valley (Caroline Flint). She identified five key elements in an active industrial strategy. First, we need to unlock private investment by delivering on electricity market reform and ensuring that the Government act decisively. Secondly, we need to improve public procurement to support the green economy. We have heard about housing-related issues, and I think that we could do more in that regard.
Thirdly, we need a strategy for skills for a low-carbon economy. Over the past weeks, I have been meeting representatives of the automotive industry and the biofuels and combined heat and power sectors. All of them have said that there are possibilities for job creation, but that it will require investment, research and development and the right skills set, and that young people should be encouraged to take up those job opportunities.
Fourthly, we need to rebalance the economy, support growth in the regions and encourage manufacturing, and, as I have said, supporting green technologies will be a vital part of that. Further growth will require policy certainty and stability for investors, producers and users. Although talks are in progress in some of those sectors, I find it worrying—as, I am sure, do other Members—that the Government’s long-term commitment to combined heat and power and biodiesel, for instance, has not yet been made explicit. The industry must be persuaded that investment in those processes is worth its time, effort and money.
The final element in an active industrial strategy is something that we did not have the opportunity to discuss in great detail this afternoon, although a number of Members referred to it. We need to engage with the public and communities. Such engagement cannot be seen as a mere add-on, or something that we should do after everything else has been done. That goes for economic growth, but it also goes for our own behaviour. Household energy consumption is responsible for nearly a third of total carbon emissions. Of course we could do more in that respect, but we must also ensure that our communities are actively involved. Members have given some good examples today of how that can be done—for instance, through co-operative energy ventures or through communities’ buying, establishing and benefiting from their own turbines.
Today’s debate has given us an opportunity to explore ideas, to raise the concerns of industry—which have been mentioned throughout the debate—and to consider creatively how we can bring about the right economic conditions for sustainable growth and how the green economy itself can contribute to jobs and the wider economy. What we now want to hear from the Minister are practical ideas for fulfilling the commitments that the industry wants from the Government.
The Economic Secretary to the Treasury (Miss Chloe Smith)
This has been an extremely interesting debate on the important issue of how to achieve a green economy in the United Kingdom. I am delighted to be back at the Dispatch Box discussing a subject of great importance in a civilised and reasonable way. Indeed, I shall be happy to take interventions, having already had such extensive experience of that practice during the week.
Let me echo the tributes that have been paid to my hon. Friend the Member for South Thanet (Laura Sandys). She did a fantastic job in setting out the terms of the debate. She spoke of jobs and opportunities, she spoke of transparency and evidence, she spoke of the long term, and she spoke of a role for the UK in being proudly and successfully resilient, innovative and productive. I think we can all identify with the sentiment and the passion with which she dealt with those issues.
Many Members mentioned the Environmental Audit Committee’s report on the green economy, which was published in May. I had the pleasure of giving evidence to the Committee during its inquiry. I commend its Chair, the hon. Member for Stoke-on-Trent North (Joan Walley), for her work and for the speech she made this afternoon. Like my ministerial colleagues, some of whom were able to join us today, I read the report with interest. The Government are preparing a response, and will release it shortly.
As I said a moment ago, some of my ministerial colleagues were able to join us for a debate that, ultimately, dealt with much wider issues than the fiscal aspects of the green economy. It should be noted that, in many areas, the UK is leading the way globally. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon)—who was present in the Chamber until recently—is off to Panama this weekend to represent the UK. The work that he and others have been doing demonstrates that the UK takes the protection of our natural environment and the development of the green economy very seriously indeed.
I pay tribute to Members for their contributions to this debate, including the hon. Members for Southampton, Test (Dr Whitehead), for Brighton, Pavilion (Caroline Lucas), for Luton North (Kelvin Hopkins) and for Kingston upon Hull North (Diana Johnson), and my hon. Friends the Members for Sittingbourne and Sheppey (Gordon Henderson), for Romsey and Southampton North (Caroline Nokes), for Selby and Ainsty (Nigel Adams), for Cleethorpes (Martin Vickers), for St Ives (Andrew George) and for Waveney (Peter Aldous). I hope to be able to address their points, and those of other speakers, later in my remarks. Sadly, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) has had to leave the Chamber, but I suspect even he would agree that this Government are focused on reducing the deficit, keeping our country safe in the global storm, and doing everything possible to help people in Britain deal with the rising cost of living.
We must consider the effects our comments this afternoon will have on households and businesses. The hon. Member for Brighton, Pavilion mentioned interest rates, and I assure her that our actions more broadly throughout the economy have helped keep them low for households and businesses. My hon. Friend the Member for Romsey and Southampton North talked about simple household measures that can help, and she and I share the same principles in this regard.
The Government have made it absolutely clear that we want a growing economy. That cuts to the heart of the issues we have been debating this afternoon. I make no apology to those that have heard me—and other members of the Government—say this before, as it bears repeating: green growth and a green economy are not separate from the economy at large. On the contrary, they are closely intertwined, as my right hon. Friend the Deputy Prime Minister made clear in his statement on the outcomes of the Rio+20 summit earlier this week. Our entire economy needs to be environmentally sustainable, enabling us to maximise growth while, importantly, managing our natural assets sustainably. That is plain common sense; it is about the efficient use of assets in the interests of the nation. It is both economically and environmentally the right thing to do.
We all know that that is the case from our experiences in our constituencies—I certainly do. I must pay tribute to my hon. Friends representing Suffolk constituencies who have spoken today about the thriving low-carbon sector in their seats—and mine—in East Anglia. As well as all the other sectors mentioned this afternoon, I might refer to the beer industry—which is a presence in the constituency of my hon. Friend the Member for Suffolk Coastal (Dr Coffey)—as all of us might almost prefer to be enjoying its products on this warm afternoon than to be here in the Chamber.
The Government are using the broad range of tools at our disposal to help support the transition to a green economy. Those tools include regulation, financial incentives, voluntary commitments, public sector procurement and fiscal measures. As the motion highlights, we need to have the right regulatory and fiscal framework to achieve that, and we are putting such a framework in place.
From the outset, the coalition Government have committed to being the greenest ever and to increasing the proportion of revenue from environmental taxes. Some have said that Budget 2012 was not green enough. I disagree. We need to be realistic and acknowledge that not every Budget can be full of new green measures and proposals. After all, these are projects for the long term, as has been acknowledged in our debate. I might cite the examples of helping to protect households in the long term through taking action on energy bills, creating investment, supporting new infrastructure—I welcome the comments on that by my hon. Friend the Member for Waveney—and putting in place a stable fiscal and regulatory regime. Budget 2012 demonstrated the Government’s commitment to continuing with their plan to meet their environmental commitments while reducing unnecessary administrative burdens. Let us also be clear that, as well as incentivising behavioural change, the environment-related tax decisions in the Budget make an important contribution to reducing the record deficit left to us by the previous Government.
I shall now discuss how we can bring forward green growth and incentivise it. As I have said, our priority is to achieve strong, sustainable and balanced growth that is evenly shared across the country and between industries. May I set out a couple of areas of policy on which the Treasury and others are collectively leading that we think are in a position to help with green growth? The first of those is the carbon price floor. At Budget 2012, the Chancellor set the carbon price support rates for 2014-15 to meet the carbon price floor as it was set out at Budget 2011. This is a first-of-a-kind tax, and it will provide greater long-term certainty to the carbon price. It will give a secure future for billions of pounds of investment in low-carbon energy, which I am sure all hon. Members will welcome.
Support is also being provided to key industries—our energy-intensive industries—to ensure that they can adapt over time. Electricity market reform has recently been proposed in the draft legislation currently undergoing pre-legislative scrutiny, and that programme talks of needing more than £100 billion of investment to 2020 in electricity generation and networks.
Dr Whitehead
I am taking up the Minister’s invitation to intervene. Will she consider, even at this late hour, telling us about electricity market reform and how it affects the Treasury at the next meeting of the Select Committee on Energy and Climate Change, which I hope will be held next week? May I assure her that if she does take up our invitation, she will receive a warm welcome and some very straightforward and supportive questions during that discussion?
Miss Smith
I thank the hon. Gentleman for his good-natured reiteration of an offer to appear before the Committee. I have not appeared before it because it is scrutinising the draft legislation of another Department. I believe that my right hon. Friend the Secretary of State for Energy and Climate Change, who was also here this afternoon, explained to the Committee this week that he, of course, is representing the Government’s collective position. Although I welcome the hon. Gentleman’s faith in me, I regret that I do not feel that I could usefully add more than that which the Secretary of State has already provided to the Committee. May I also point out that electricity market reform, as my right hon. Friend will have set out, is an early and credible signal to investors that the Government are serious about encouraging investment in low-carbon electricity generation now?
I shall now deal with some of the points made in this debate. My hon. Friend the Member for Sittingbourne and Sheppey exhorted the Government to be clearer on wind energy. I say to him that the Government have been conducting a thorough review of the support provided by the renewables obligation and the Department of Energy and Climate Change will publish the results of it shortly. I know that he and others will take a deep interest in that.
Let me discuss other ways in which the Government have set out action, for example, in the area of accounting for our natural capital. The natural capital committee will help the Government to prioritise actions to support and improve the UK’s natural assets. I reassure the hon. Member for Stoke-on-Trent North that sustainability is considered when developing policy. Her Majesty’s Treasury’s Green Book already does that in guidance, clearly setting out how Departments can take into account natural capital and long-term sustainability issues.
May I further reassure the hon. Members for Southampton, Test and for Glasgow North East (Mr Bain) on the green investment bank? The important point is that the GIB pathfinder—UK Green Investments—is now open for business, with more than 20 individual projects under active consideration, including in renewable energy, waste management and energy-efficiency. All those are large markets with enormous growth potential. Calls have been made this afternoon for it to move forward more quickly and be able to borrow. I wish to reassure the House that it has been given £3 billion in its initial capitalisation and has the potential to borrow from April 2015 when debt is falling as a percentage of GDP—that is a crucial point.
Across the economy, we are focusing on creating the conditions for private sector investment and growth, including through innovation. As Members would expect, that includes supporting private sector investment and focusing on sustainability. I could point out fiscal steps that are in line with the motion, including a new above the line credit to support research and development activity in the UK and increases to the rate of enhanced deductions of SME research and development tax credit. Together with the green investment bank, those measures will play a crucial role in encouraging innovation in the green technology sector, which will have benefits for the wider economy, jobs and growth. Together with the green deal, the measures will help householders both directly and indirectly. I can reassure the hon. Member for Brighton, Pavilion that her calls for a whole-house approach in retrofitting are in line with what the green deal and the ECO aim to achieve. Those schemes also target funding at low-income households, which is very important for the battle against fuel poverty.
Regulation can play an important role in setting common standards and expectations. The Government recently announced that we will introduce mandatory reporting of greenhouse gases for all companies quoted on the London stock exchange. Again, that goes back to the theme of transparency. In this current economic climate, it is crucial to make it simpler for businesses and industry to meet their environmental responsibilities. We will continue to review and amend existing fiscal instruments and regulatory instruments to ensure they remain focused on achieving both economic and environmental objectives. An example of that is the review of the carbon reduction commitment scheme. Budget 2012 announced a consultation on proposals to reduce administrative burdens in that scheme and the Government are considering the responses to the consultation, which has just closed.
Let me return to the importance of this afternoon’s debate. It has been interesting and has demonstrated the importance of appropriate Government action across a breadth of sectors and using various tools. That action must encourage and drive forward an environmentally sustainable and growing economy. It must pay attention to skills, and I was interested to hear the calls for attention to be paid to the high level of skills we can achieve in the British economy in a fully competitive sense. Once again, I welcome the passionate speeches from hon. Friends and hon. Members. I fully agree with those who have said growth and greenness are not mutually exclusive. We can have both. This Government want an economy that is growing, balanced and sustainable, which is good for businesses and for households. The actions that this Government are taking will help us get there and I thank the Backbench Business Committee and the House for raising the issue.
Laura Sandys
I want to thank everybody who has participated in the debate. It has been very wide ranging, as the Minister said, and I thank her in particular for her attention as she sat through the debate and heard all the different constituency and thematic issues that were expressed. I want to question only one thing that she said, as I do not think that anybody would presume that it is a question of either green growth or industrial growth and GDP. In my view, they are one and the same. Unless we think about the domestic production of energy to hedge off the international volatility of energy production, we will find domestic growth extremely difficult. Household bills will increase and businesses will start to be challenged.
We have covered every part of the green economy in the debate, and it is a part of the economy that is growing. In my constituency, the potential investment of £1 billion is about to be decided in boardrooms not just in the UK but around Europe. They are looking for investor confidence and I hope that this debate has contributed to that. I know that the Minister’s contribution has underpinned what this country requires to build on that growth: investor confidence, clear policies and a commitment to a green economy for the future. We need to take measures to deliver for UK jobs and our wider economy.
Question put and agreed to.
Resolved,
That this House urges the Government to promote the right fiscal and regulatory framework to accelerate green growth as an intrinsic part of the UK’s economic recovery strategy.
Minister for Older People
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Penny Mordaunt (Portsmouth North) (Con)
I beg to move,
That this House notes the concerns of the Grey Pride campaign; and calls on the Government to consider appointing a member of the Cabinet to be the Minister for Older People, to give a political voice to the older generation, to oversee the co-ordination of services which affect older people, and to focus on tackling the social and economic challenges of demographic change.
I thank the Backbench Business Committee for selecting the motion for debate. I am pleased that the new Committee agreed with the previous Committee that the issue of co-ordinating policy for older people is worthy of time on the Floor of the House.
I should also thank at the start of my speech the 140,000 people who signed Anchor’s Grey Pride petition calling for a Minister for older people to be appointed. Unusually, it was not an online petition, and signatures were gathered from care home residents across the UK. I was approached by Anchor, a not-for-profit care home provider, as the Conservative chairman of the all-party group on ageing and older people, to help Anchor to present that petition at Downing street, and I was pleased to do so because I think the value of such an appointment is readily apparent.
The term “older people” is used often, but is likely to be used without much thought, even by those of us who purport to be their advocates. On a recent fact-finding mission to my local hospital’s physiotherapy department, I met an elderly gentleman exercising his leg. “Hello,” I said, “What’s your name?” “Donald” he replied. “Do you mind me asking how old you are Donald?” I asked. “I’m 83,” he said. “What happened to you?” I asked. “I broke my hip, my thigh and my shin bones,” he replied. As I thought of him trying to navigate a slippery pavement in his slippers, I ventured, “Gosh, that must have been a terrible fall.” “It was a parachuting accident,” was the matter-of-fact response. That shut me up.
Say, “older people” and the image that comes to mind is probably one of someone in gentle dotage plucking a Werther’s Original from his cardigan pocket and proffering it to a beaming grandchild, but what about the skilled manual worker who has been made redundant in his early 50s and is in need of a drastic career change to carry on working? What about the grey entrepreneur who has a cracking business idea but faces far more hurdles to get credit than a younger man would? What about the 80-year-old who is isolated in his own home, miles away from his family; or the couple who care for each other until one is ill but who cannot access the support they need because ad hoc domiciliary care is not an option?
Caroline Nokes (Romsey and Southampton North) (Con)
I am pleased to hear my hon. Friend mention carers. In England and Wales, there are 1 million carers who are over 60 and 40,000 who are over 85. Does she believe that a Minister for older people would be able to act as a champion for those carers?
Penny Mordaunt
My hon. Friend is absolutely right to raise that issue. We recently had carers week and I know she is a great champion for all carers in her constituency.
There is huge and diverse range of older people. We now have the first generation of older people living with HIV, who worry whether they will find a care home with staff and residents who understand their needs. Evidently, older people are a diverse bunch with needs and problems that fall within the remit of many Departments—just like everyone else then—but too often policy is focused on the needs of the stereotypical old person. Too often, policy is made with the fit, the able-bodied, the internet-savvy and the average user in mind. Older people can be at the margins of those groups and are peculiarly exposed to the dangers of unintended consequences. There have been too many missed opportunities and unforeseen outcomes that have robbed the Treasury of income, the taxpayer of value for money and older people of life-enhancing opportunities.
There are many Ministers across Government with responsibilities that touch on some aspect of older people’s lives, but with only a narrow focus on one policy area. That is why someone in government must be responsible for the interests of older people. It would be no good if it were a Minister of State from the Department for Work and Pensions—I apologise to the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb)—or from the Department of Health, because they would be susceptible to the silo thinking we must avoid.
Dr Sarah Wollaston (Totnes) (Con)
Does my hon. Friend agree that this is an issue not just for central Government but for local government? Does she agree with the findings in the Select Committee on Health’s report on social care that we need a single joint commissioner for health, social care and housing as we move forward into health reform?
Penny Mordaunt
My hon. Friend is absolutely right and I hope to give some practical examples of where I think that will have an effect.
The ministerial position should not be a new one; it should be an additional responsibility, and given to a member of the Cabinet. Hon. Members can see that I am not trying to insert an extra card with my name on it into the pack ahead of a reshuffle.
Penny Mordaunt
Thank you.
At the Cabinet table, Secretaries of State are jealous of their remit, ready to explain when another policy trespasses on their departmental interest. If there was someone with responsibility for older people, the implications for them of each policy presented to Cabinet could be considered. We have had forums, tsars, taskforces and champions but we are still a long way from where we need to be. We need to try something new. An older person is likely to get a better standard of care on a hospital ward if there is one nurse on the shift with particular responsibility for that patient. Someone who has responsibility and is accountable will speak up to protect the interests of those in their care.
In the days leading up to the debate, it was suggested to me that older people are doing rather well at the moment. The Government have introduced the triple lock on pensions, guaranteeing that the state pension will increase by the greatest of earnings, prices or 2.5%. Pensioners enjoy free bus travel and winter fuel payments, and the over-75s get a free TV licence. The DWP has done well, so it is not a shock that the Department is responding to the debate, and I am delighted about that. Against those arguments, however, we have to consider the disproportionate impact of cost of living increases on older people. Saga has shown that between 2007 and 2012, retail prices index cost of living increases affected the whole population by 16.5%, but for 50 to 64-year-olds, the figure was 19.1%; for 65 to 75-year-olds, it was 22.4%; and for the over-75s, it was 22.2%.
We would do well to consider the many reports on health and social care that do not paint a rosy picture. The Equality and Human Rights Commission report on domiciliary care, the Care Quality Commission report on hospital care, the Centre for Social Justice report on quality of life in isolation and today’s CQC report on medication management beg to differ from the optimistic view. There is huge unmet need. In my city, Portsmouth, the local authority has budgeted for an extra 200 social care clients over the next five years, due to an ageing population, but today 1,000 people in the city have dementia and no access to any services. Major policy issues such as pension reform, which I am pleased the Government have tackled, and social care reform, which we still have to tackle—I am pleased that we are to do so—have been left for too long.
We need to do better. There is an argument for additional responsibility for a Cabinet member, but such an initiative will be judged on the practical differences it makes. What might they look like? A YouGov survey on the attitudes of people over retirement age found that 14% of people aged over 60 live more than 100 miles away from their most significant family members, excluding their partner. Six per cent have to travel between 50 and 100 miles to family, 8% between 25 and 50 miles, and 12% saw or heard from their family less than once a month. Isolation and inactivity were recognised by the House of Lords Select Committee on Science and Technology as accelerating
“physical and psychological declines, creating a negative spiral towards premature, preventable ill health and dependency.”
How are those issues reflected in transport policy? In my area, Southern Trains has recently introduced on the Portsmouth to Brighton route—a journey of 80 minutes —rolling stock that has no toilets. In rail franchise agreements, there is no mention of comfort standards or the provision of toilets, so old age pensioners could have to travel in crippling discomfort. The impact of the subsidy on train fares for old age pensioners is blunted, because it does not matter if the ticket is free when the mode of transportation is unusable. Older people are left with a poorer quality of life because there is another obstacle for them to overcome to stay in a job that involves a commute, and inactivity leads to demands on the health and social care budget. Transport Ministers may be sympathetic, but the Department refuses to act. A Minister for older people could intervene.
Let us look at the Treasury. In July 2011, the Office of Tax Simplification was asked to review the system for pensioner taxation. The interim report, published earlier this year, identified pay-as-you-earn on the state pension as an area to explore. People would not be taxed more, but would pensioners have to fill out self-assessment forms? Would they cope? Would they simply end up paying more tax through inability to process the forms? Plans have been mooted to combine income tax and national insurance contributions. Old-age pensioners do not pay such contributions, so will there be a different tax rate for them, or will pensioners be taxed more?
Quantitative easing and low interest rates are right for the economy as a whole, but they are not good for older people who annuitise their pensions and live off their savings. Quantitative easing has reduced gilt yields, on which annuities are based. The level of that annuity is then locked in. Should not offset measures be considered? What about an extra individual savings account allowance? More thought is needed if fairness is to be upheld.
Looking at work, economic analysts SQW found that older people benefit the economy by £175.9 billion, including £34 billion in social care and £10 billion in volunteering. Projections show that by 2030, those figures will be £291.1 billion, £52 billion and £15 billion respectively. That affirms what Saga has found about the willingness of older people to participate, in and out of work. Retirement is not a retreat from the world. Turning Point has asserted that integrated work to enable older people to stay independent for longer could produce savings of between £1.20 and £2.65 for every £1 spent from the public purse. Saga’s research suggests that 71% of over-50s would like to work part-time after 65, and 7% already work past the age of 70. The Office for National Statistics confirms that 1.4 million pensioners already work.
The demographic shift requires us to work longer, and we are willing and able to do so, but have businesses and industry really caught up? The Chartered Institute of Personnel and Development suggests that 14% of managers do not believe that their organisations are ready for an older work force. The Government have responded to that need and willingness by abolishing the compulsory retirement age and increasing the state pension age, but those excellent policies have not been accompanied by moves really to help employers manage their older workers and recruit new ones. At the close of 2011, 189,000 over-50s had been unemployed for more than one year. Of unemployed over-50s, 43% are long-term unemployed, compared with 26% of unemployed 18 to 24-year-olds and 35% of unemployed 25 to 49-year-olds. Training is often denied to workers nearing state pension age, as is promotion. Flexible working, phased retirement and mentoring schemes are few and far between. We need to do more to help older workers and to encourage employers to take them on.
In social care, we could certainly make better use of what we already have. As chairman of the all-party group on ageing and older people, I often hear care home providers boasting about their wonderful new home—its facilities, hairdressers, spas and shops. Those care homes’ doors are often closed to the local community, yet a few streets away there will be an elderly woman who is still independent, but whose quality of life suffers for want of a social life and bathing facilities. How many bathing facilities lie unused in our hospitals, homes and hospices?
Another example of missed opportunity is that most local authorities do not direct self-funders inquiring about care home options to financial advice. Instead, they wait until those people have spent their savings and are a burden on the state. Schemes that enable people to offset the cost of their care and keep their property assets intact by renting their home to the local authority, thus easing pressure on housing waiting lists, are not widespread, despite the headache that such initiatives would cure.
Andrea Leadsom (South Northamptonshire) (Con)
Does my hon. Friend agree that there is another anomaly in that a person who works and cares for their partner receives carer’s allowance, but as soon as they retire, although they continue to care full time for that partner, they have to choose either their state pension or their carer’s allowance? That is a direct incentive for caring retired spouses to call on the state for help, although it would be far better for their loved one if they continued to care for them, with a bit of state support.
Penny Mordaunt
My hon. Friend is absolutely correct, and I know that she has made that and many other suggestions to the Chancellor and highlighted the administrative savings, as well as the improvements to the individual’s quality of life, that would result.
Finally, let us look at Government communications. On taking office, the Government froze their £540 million advertising budget, and over the following nine months, they cut £130 million from it. Every time we mail an older person about approaching retirement or a free television licence and we do not accompany that mail with a flu-jab leaflet, information on the winter warmth scheme, or anything else that we want to send them that week, we are wasting that remaining budget.
Those are just a few examples of the way in which better focus in the Cabinet on older people’s issues could lead to improvements in the quality of life for older people and save us money. Who might be the person for that important job? It should not be the Secretary of State for Health or the Secretary of State for Work and Pensions, because the heavy duties that they already have in relation to older people could militate against the panoptical approach that is required. There is an obvious parallel with the Home Secretary’s additional remit for women and equalities; a similar duty for older people may sit well there. Such are the financial possibilities of the reform that perhaps the youngest and emphatically least grey member of the Cabinet, the Chief Secretary to the Treasury, should take on the role.
The Deputy Prime Minister, it appears, was at a loss as to what to do with himself in quiet hours at the Cabinet Office, and took to doodling constitutional wrecking balls on the back of fag packets. He is now very busy indeed encouraging us to abolish the House of Lords, where many older people are to be found doing great work for this country. If he turned his attention away from that constitutionally destructive policy towards this economically and socially constructive proposal, we would be much better off. There would be many candidates for the job and, given the massive gains to be made in the quality of life for older people as a result of effective and efficient government, as well as a better return on investment, one would think that there would be a long queue to do the job.
Further evidence of the need for a co-ordinating role is shown by how difficult it was to agree the responsibility to respond to this debate. I congratulate the Minister of State on stepping forward, on the work that his Department has done to protect the interests of older people, and on his initiative better to understand their needs through the UK advisory forum on ageing. I hope that he will take away from this debate the ideas and aspirations that contributors will discuss, and consider how we might do a better job of spotting the opportunities and understanding the ambitions of this generation. There is no better mark of the values of a nation than the way in which it treats its older generation. This Government, I am proud to say, are going to address the issue of long-term care, which will have far-reaching implications, and there is no better time to ensure policy on older people is well co-ordinated across Whitehall.
It is perhaps appropriate that our debate takes place on the day on which, at long last, Bomber Command has received the recognition that it deserves for its immense achievement and sacrifice. I hope that the Arctic convoy veterans, too, will soon achieve the recognition that they deserve. Many of us are wondering why something so needed, right and obvious should take so long to do. Quite.
Madam Deputy Speaker (Dawn Primarolo)
Six Members wish to take part in the debate, so it is necessary to have a time limit of 10 minutes, but if there are lots of interventions, we may need to revisit that.
Kevin Brennan (Cardiff West) (Lab)
On a point of order, Madam Deputy Speaker. I did not want to interrupt the hon. Member for Portsmouth North (Penny Mordaunt), but as of four minutes ago, the fifth written ministerial statement on the Order Paper, from the Secretary of State for Education, on educational reform, had not appeared in the Vote Office, despite its contacting the Department to remind it that it said that it would issue that statement today. Is it not a discourtesy to the House, Madam Deputy Speaker, that nearly six hours after the House began to sit, the statement has still not arrived? After all, the Department is quick to leak stories to the Daily Mail, but it is slow to provide written ministerial statements that it has promised to the House.
Madam Deputy Speaker
Mr Brennan, you will be aware of Mr Speaker’s ruling in this matter. He has indicated in this Session—and, indeed, it was indicated in the previous Session—that written ministerial statements should arrive promptly on the day for which notice has been given. That does not stretch on a Thursday to 4.30 in the afternoon, so I will make inquiries as to when we expect to receive the statement to which you refer. I am sure that Ministers will ensure that it flies here as quickly as possible, because you are clearly keen to read it immediately.
If there are no further points of order, perhaps we can move on. I call Julie Hilling.
Julie Hilling (Bolton West) (Lab)
I am extremely pleased to speak in the debate and delighted to follow the hon. Member for Portsmouth North (Penny Mordaunt). I thank her for leading our request to the Backbench Business Committee for the debate.
Last August I was invited to visit Ryelands court in my constituency. Ryelands is an Anchor Homes development providing flats for older people in Westhoughton. They asked me to sign their petition for a Minister for older people and I was delighted to join the 137,000 other people who thought this was a good idea. As only 34% of 65 to 74-year-olds and 31% of people over 75 feel that they are able to influence decisions affecting their local area, and when 1.8 million pensioners are living in poverty—that is 16% of people over state pension age—I absolutely agree with the campaign for a Minister for older people.
Labour has already recognised the need for such a position with the appointment of my hon. Friend the Member for Leicester West (Liz Kendall) as the shadow Minister for care and older people, with a seat in the shadow Cabinet. I very much hope this debate will encourage the Government to appoint a Cabinet member to champion the needs and aspirations of older people, with clear cross-departmental accountability for the services that they receive. One might ask why we need for a Minister for older people. Should it not be the responsibility of everyone? My experience of working with the issues of equality and discrimination over many years has taught me that as soon as we mainstream an issue and make it everybody’s responsibility, we lose focus and end up with nobody doing anything.
If we wonder why we should concentrate on older people, let me provide some statistics. Because of the baby-boomer generation of the 1950s and 1960s, the number of people over the age of 65 is likely to rise by 49% to more than 16 million in the next 20 years. Fortunately for the planet, but unfortunately for those of us who will be retiring, the growth in the younger population has not matched the longevity of older people and therefore many fewer people will be paying into the system. By 2020 more jobs are expected to be created than entrants to the work force, which is likely to mean that there will be considerable demand for older workers. However, there is significant age discrimination in our society. Policy Exchange did a blind study, applying for 1,200 jobs posing as both an older and a younger worker. The 51-year-old got fewer than half the number of positive responses that the 25-year-old received. Even though there are clear laws to prevent it, there is definitely a culture of bias against older workers.
We have also seen horrifying reports of the violation of older people’s right in the care system and in hospitals, including people being refused treatment on the basis of their chronological age, not on the basis of their fitness for treatment. We too often see older people as problems, not as equal members of society with the same hopes and fears as everyone else. Services to older people are not just about care, but about health, pensions, housing, transport, education and leisure, and we badly need someone around the Cabinet table championing their issues and making sure that there are no unintended consequences of policy.
Of course, the needs of older people can change very rapidly. Many hon. Members will have heard me talk on previous occasions about my mother’s journey. Twelve months and 10 days ago my mum was an incredibly active 86-year-old, still teaching three yoga classes a week, practising reflexology, driving her car, totally independent. Then, out of the blue, she suffered a very severe stroke. Overnight she went from an older person paying into the system to a recipient of care. During the past year Mum spent some time in acute care and a couple of months in a rehabilitation hospital, then she was back in acute care, and went into respite care for nearly eight months. She had fantastic physiotherapy and two months ago she made it back to her flat. Because the care home rarely sees anyone walking out on their own two feet, the staff laid out a red carpet for her. In fact, it was a pink blanket, but it was the same as a red carpet.
Mum now has carers four times a day, visits from the community matron, regular visits to the hospital, and is paying for physiotherapy. Whether it is because of her basic fitness when she had the stroke, or just because of her extreme determination—she is a very determined woman—she is continuing to make wonderful progress. The care that she received has varied from the excellent to the appalling, and if she did not have a family battling with her the whole way, I hate to think what may have occurred. She lost all dignity on this journey. The first day a young man wiped her bottom, she was so ashamed, but after 10 months she became used to depending on help—help that from the majority has been excellent, but a few of those who have cared for her should really think about a change in career. She is also £20,000 poorer and still worries about paying for her care. There are other costs. We have just booked to go on a cruise this summer, but it took me all day to find an insurance company prepared to insure her and, in the end, there was only one—thank you, Saga—at a cost of £750.
My mother’s story is not unusual. Families every day are facing the decision of whether or not to move their loved ones into a care home, wondering whether they can afford it and what will happen when the money runs out. We need someone at the Cabinet table battling for the Dilnot report or for another solution. Mum has been very lucky. Since the cuts to the Supporting People funds and local authority budgets, many people no longer receive any support in their homes. The £259 million Supporting People fund, which kept older people in sheltered housing, provided a net financial benefit of £1.1 billion by reducing the need for residential and nursing care, hospital admissions and home care. That money is gone. What a false economy.
As the hon. Member for Portsmouth North said, the House of Lords Science and Technology Committee has reported that isolation and inactivity accelerate physical and psychological decline, creating a negative spiral towards premature and preventable ill health and dependency. We now have a society in which often we live very far away from our loved ones: 14% of people over 60 live more than 100 miles from their most significant family member, and 12% of older people see family members less than once a month. The decline in adult education and the cuts to the voluntary sector leave more and more older people isolated in their homes.
Last month I visited Belong village in Atherton, a purpose-built and not-for-profit residential complex catering for people who need 24/7 care and also those who live independently in flats on the same complex. There are activities, a restaurant, exercise and much more, and it is open to the local community to come in and take part in those activities. We need to look at more examples like that and build homes that are fit for older people.
Hopefully, we will all become older people—in some people’s eyes many of us already are. Older people have specific needs that need to be championed. We need the Equality Act 2010 provision outlawing age discrimination in relation to goods and services to be implemented now, at a time when we have an ageing population who most need it. I hope that the Government listen to us, and the other 137,000 people, and appoint a Minister for older people as soon as possible.
Margot James (Stourbridge) (Con)
I congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt) on leading the charge to secure this debate and all the other work she does on behalf of older people. It is also a pleasure to follow the hon. Member for Bolton West (Julie Hilling), whose mother I have had the privilege of meeting—she is indeed very fortunate to have such a daughter.
Before entering Parliament I was a local councillor in Kensington and Chelsea and served as older people’s champion for the borough. What I learned in that role has reinforced my support for the campaign, led by Anchor housing and supported by so many charities and housing organisations, for a clear voice at ministerial level for older people.
We already have Ministers with specific responsibility for women, children and people with disabilities. The Minister for Women is also the Minister for Equalities but, although that includes older people with regard to discrimination in the workplace, the Equalities brief is focused primarily on ethnic minorities and gay and transgendered people. If those five demographic groups are represented at ministerial level, why are older people not? Surely such different treatment implies some discrimination.
The arguments for having a Minister for older people go further than the fact that other demographic groups are represented at ministerial level. There are a specific set of interests and challenges associated with our ageing population that require the voice and insights of older people to be heard and taken into account across Government.
What would the role of an older people’s Minister involve? I have learned, from my own experience of a similar role locally, that older people’s interests are commonly perceived to lie in health, benefits and pensions, but that is a misperception, because older people have interests across a far wider spectrum of policy, and, as my hon. Friend the Member for Portsmouth North said, in areas such as transport their experiences are totally different, on account of their age, from those of younger people.
One policy area that is of prime importance today is the voluntary sector, and research by HSBC has found that the economic value of volunteering among people over 60 years old is £4 billion. My constituency has a remarkable voluntary and charitable sector, which relies hugely on the energy and dedication of large numbers of people who have already retired from paid employment, so an older person’s Minister should champion that aspect of their lives. They are not a cost to, and a burden on, society; they are contributors to society.
The requirements of a Minister go well beyond the role of champion, however. A Minister should do battle for the cause, and that involves questioning and challenging the effects of policy on older constituents. I have a few examples from the past and present.
The social care budget for the five years to 2010 was almost static, meaning that the same budget had to stretch to cover more and more older people, and that local authorities were no longer able to fund care for people in moderate need. They started to restrict care to people in critical need, and that is going to have implications for the future which an older people’s Minister would have been able to spot and to anticipate.
There is still plenty to challenge on behalf of older people, and, as the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) is here to answer our debate, I congratulate him on securing the best ever deal, as announced this year, for pensioners, but he will know that existing pensioners are concerned about proposals for a flat-rate individual pension for new pensioners from 2015.
If the new pension were set at £140 a week, it would provide a couple who both drew their pension with an income of more than £14,000 a year. Currently, a couple in receipt of the basic state pension and the additional state pension receive an income of more than £11,000, however, so the difference between what I understand to be the new flat rate, £140, payable to both members of the couple and the amount paid to existing pensioners in a couple will be almost £3,000 a year. I welcome the desirability of a new system in terms of simplicity and the restoration of incentives to save, but I ask the Minister to address the sense of unfairness building up among the currently retired population.
There is also a need to challenge the “never had it so good” mentality that has built up among think tanks and interest groups, one example of which the Institute for Fiscal Studies published recently. There are affluent pensioners, and some are asset-rich and income-poor, but there is also considerable pensioner poverty. The scandalous deaths of older people each winter, owing to fuel poverty and numbering more than 20,000 in the most recent year for which figures are available, shame our society.
I have covered the importance of a Minister for older people as champion, advocate and challenger of policy, but the final critical aspect of the role would be to act as a critical friend to the older population; the job could not simply be to promote older people’s economic interests in a silo, as if the wider economy were not an issue. That is why I spoke up for the measure, announced in the Budget, to reduce the special tax threshold that is allowed for pensioners.
One of the toughest jobs of the Minister for older people would be to manage the expectations of our older population now and of the general population as they approach old age. The Government have taken difficult decisions to raise the retirement age and to put public sector pensions on a more sustainable footing, but we will in time have to go further. It is a year since the Dilnot commission reported on the funding of long-term care. I understand that there is no new money to fund Dilnot’s recommendations, and a new Minister will have to level with families and older people about what is affordable and what will have to be financed by individuals, families and private insurance schemes in future. I personally subscribe to much of what is in the commission’s proposals as regards standardising eligibility criteria, making care packages more portable around the country, and setting out standards that individuals and carers can expect.
I am pleased that the Government are going to bring forth a Bill in this Parliament to address these matters, and more, but I hope that if they accept the need for an older people’s Minister, that person would start to lay out what it is reasonable to expect and not to expect from the taxpayer towards implementing Dilnot’s fundamental recommendations on the funding of long- term care.
Tony Lloyd (Manchester Central) (Lab)
It is a pleasure to follow the hon. Member for Stourbridge (Margot James). I, too, congratulate the hon. Member for Portsmouth North (Penny Mordaunt), who made an intelligent and wide-ranging speech that helpfully set the parameters for this debate.
First, I want to talk about the treatment of the Arctic convoy veterans, which is a disgrace to our nation. My constituent, Mac McNeill, who was a boy when he volunteered to join what was unfortunately classified as the “non-Royal Navy”, experienced the most horrendous hardships during that period of his life and saw many of his friends and comrades die. He pointed out to me the irony of his having a chestful of medals from the Soviet Union—the Russian Federation—but very little by way of recognition from our own society. In that respect, I heartily agree with the hon. Member for Portsmouth North.
Penny Mordaunt
I do not know whether the hon. Gentleman is aware that the Prime Minister has instigated a review that is due to report imminently; I gave evidence to it, as did many other hon. Members. I therefore hope that the situation will be rectified very shortly.
Tony Lloyd
I strongly join the hon. Lady in hoping that that is the case. It is a matter not only of justice but of recognising the contribution that our fellow citizens made at a time of national need and crisis.
Secondly, we need to think about how we classify the needs of the elderly. The hon. Member for Portsmouth North rightly drew our attention to her 83-year-old constituent who is fit and active enough to jump out of planes—something that many of us in this Chamber would not want to do, at less than 83 years of age. I can think of people who would not necessarily be classified as elderly but have the same needs. Somebody said to me today that, ironically, dementia is not a working-class condition. That may be an extension of the reality, but there is some truth in it, because those who die younger suffer less from the conditions that are associated with age. Areas such as the one that I represent unfortunately have that social categorisation.
Someone recently drew my attention to a home where victims of stroke were given care, including a man in his fifties who was mentally very fit and active but physically severely taken down by the stroke that he had had. He found that he was treated wrongly in the same way as more elderly residents, but in his case it was more challenging because he knew what was going on. It is wrong that what he described could happen to anybody, but particularly wrong that it happened to somebody in their fifties. He knew that he was not being given his medication properly, but when he complained the staff treated him as though he were foolish, doddery and incapable of remembering, yet of course he had his memory and knew that he was being badly treated.
There is a real and proper concept of responsibility in issues to do with the elderly. Perhaps the Justice Secretary is the right person to take this on; I suspect that he has a natural feel for these issues.
We need to be careful that we do not silo what we mean by care for the elderly, because it covers a huge range of issues. It is important that we recognise that among the elderly are people like the elderly woman in my constituency who is well into her hundreds, but still helps those who are frailer than her, although considerably her junior, by taking them cups of tea and such like. When I asked her one day whether she was going to play bingo with the other old people she said, “No, no, I am going to walk down to the local commercial bingo hall—the prizes are better.” She does not need many of the things that would be classified as being for the elderly. It is important that we accept the point made by the hon. Member for Portsmouth North that it is the concept that we need, rather than an overly rigid classification of the elderly.
In my few remaining moments, I want to talk about something that troubles me and that I think will trouble all Members of the House. Every one of us would say that the recent case of the abuse of young children in Rochdale was an outrage and that the full force of the law ought to be used against those who brutally use and abuse our young children. We ought to have exactly the same sense of outrage at the abuse of the vulnerable and elderly. The stroke victim to whom I referred a few moments ago would be in that category. We are a considerable way off that.
I say to the Minister gently that the Care Quality Commission may have its merits, but the jury is out on what it has been doing. I heard on the radio this morning about its report on the giving of medicines. The comment was made—I paraphrase, but I do not think unfairly—that 80% of the time it is going well. Eighty per cent. of the time is not good enough when dealing with individuals. One hundred per cent. of the time is good enough. Ninety-nine per cent. is not good enough because it means that some people are not getting the medication that they need.
When there is abuse of the elderly, such as in the Winterbourne View case, we have to look to the criminal justice system. We need a much more robust system of whistleblowing, whereby those who feel that they are not being listened to can have their voice heard and can have matters fast-tracked. I concede that in many cases inspection is the right way to deal with such problems, but in the worst cases, the full force of the criminal law must be brought in to prevent the abuse. If we are not prepared to say that those who abuse our elderly will end up with criminal sanctions, we will have failed.
Last night, a debate was started about whether the criminal law has a role to play in dealing with Barclays bank. If we are prepared to talk about the role of the criminal law in dealing with financial irregularities, we should certainly be able to talk about its role when the vulnerable and elderly are treated in the most appalling way. Everybody would agree with that statement, but we must fast-track the process for those who are subjected to threats or to care that is inappropriate. There must be a system of gradation by which we begin to improve where improvement is possible and to clamp down on the very worst features.
I will finish as I began: by congratulating the hon. Member for Portsmouth North. This is a genuinely important debate. There are many other concerns for the elderly that we could raise and she has raised many important issues.
I will make one final point, which is slightly partisan, but is nevertheless important. The Prime Minister opened up a debate this week about how we treat people within the welfare system. He said that he would honour the pledge on the winter fuel payment and free transport for the elderly for the life of this Parliament. We could do with some clarification of what that means for after the next election. I understand that the Minister can answer for only one half of the coalition, but we need to have that debate. If we are to see changes in this area, they ought to be debated by society in general. If we are talking about the quality of life of the elderly, and not simply about the economic functioning of the elderly, we have to recognise that things such as access to transport and people’s ability to maintain their role as full members of society depend on a form of social contract. That is why a champion for the elderly would be an important step forward.
Mr David Amess (Southend West) (Con)
When I saw the hon. Member for Bolton West (Julie Hilling) and her mother in a wheelchair on the Terrace on the day of the flotilla, I had no idea what the circumstances were. I have now found out that it was the first outing for her mother. All I would say after the hon. Lady’s moving speech is that her mother can be extremely proud of her daughter.
My hon. Friend the Member for Portsmouth North (Penny Mordaunt) made a splendid speech—her remarks about the other place will live with me for some little while. I congratulate her on securing the debate, and the Backbench Business Committee, of which I am unashamedly a member, on having the good sense to grant it.
There is some disappointment with the motion. I had rather hoped we would be given the opportunity to make our pitch to become Minister for the elderly, but my hon. Friend cleverly says in the motion that the responsibility will go to a current member of the Government. I should also tell my hon. Friend that the longer she is here, the more she will struggle to find anything original to say. She will not be surprised that, over the years, a number of colleagues have made similar suggestions. However, I want her to be in a position to celebrate after the debate, and after, perhaps, we hear from No. 10 of the appointment of a Minister with responsibility for older people.
As my own dear mother starts her second century, I have some experience in these matters. There seems to be a fashion—I think it was started by my hon. Friend the Member for Harlow (Robert Halfon)—for colleagues to go around with broken arms, wrists and knees, and hip replacements. Everyone seems to be on crutches or in wheelchairs. Only when people associate with those who need wheelchair assistance do they stop saying, “What a wretched nuisance” when they see someone trying to get by on a Zimmer frame or in a wheelchair. They instead say, “How can we raise the money for a lift for elderly people?” Only when those things touch people do they realise how valuable they are, as the hon. Member for Bolton West rightly reminded the House. I congratulate Anchor, which is a wonderful organisation, on getting 140,000 people to sign an online petition. That is a great triumph.
Many people would say that as people move on and become older, they return to childhood. I do not mean that judgmentally. When we are very young, we are totally dependent on others, which is eventually what happens in later life. There is a further link between young and old: they are the times of life when people are best placed to impart wisdom. Older people’s roles as grandparents and great-grandparents should be recognised—that vital glue across generations holds our society together.
There is a crucial difference between the old and the young in this country: younger generations are heavily catered for in politics through the Department for Education, but far less support is available for those classified as older people. We used to hear about joined-up Government and Departments working together. No doubt the Minister will contradict me, but I need to be convinced that that is happening currently. For the sake of joined-up Government, however, I congratulate my hon. Friend the Member for Portsmouth North—my younger hon. Friend—on introducing the motion to give a Minister responsibility for older people.
According to Age UK Essex, there are fewer under-18s in the UK than over-65s. The total number in this age group stands at 10.3 million. Each year, 650,000 more people turn 65, and one-fifth of the population is of pensionable age. What is more, with ever-better health care, life styles and support, more people are living longer. On average, people in Southend live to 80. We all welcome that change, of course, but we want people to grow old with dignity. According to projections from Age UK, the number of people aged 60-plus will increase by 50% over the next 25 years, while in 2083 one in three people will be over 60. So we are clearly faced with a serious problem.
My constituency has the most senior citizens in the country. Every year, we have a tea party—we have been in the Guinness book of records three times and are having another one this year to break the world record again. It is wonderful: as they leave the tea party, they always say, “See you next year.” According to recent statistics outlined by Age UK, 36.1% of Southend’s population is classified as “old”. More than 24,000 people are aged between 65 and 84, while more than 5,000 are over 85. The trend in Essex is clear: over the next 15 years, we can expect a 39% increase in the number of over-65s.
All I am saying is that this is happening, and we cannot bury our heads in the sand. In earlier years, we have had big arguments about people having to sell their homes—it was all wrong in terms of people’s inheritance and so on. It will be a brave political party—I know we have a coalition at the moment—that faces up to the terrible question of how we fund the future care of an ageing population. When I go around the excellent care homes in my constituency, it is heartbreaking to be told, “There are never any visitors for some of our residents, but when it comes to the funeral, they all turn up to see what they’ve been left.” These are real issues that we need to face up to.
There is a wide variety of issues affecting older people, and services need to be co-ordinated. From pensions, and health and social care, to fuel poverty and housing, each individual will have problems unique to them, and in most instances these problems will span several Departments. Essex Age UK has researched what sort of support older people would like, and its conclusions included: mobility, managing personal affairs, transport, better access to information and recreational opportunities. Older people need to be stimulated. It is no good everyone sitting in a lounge with no stimulation. If we stimulate older people, their quality of life improves.
Dr Wollaston
Would my hon. Friend add to his excellent list the role for technology in helping to improve the lives of older people? In my area, Devon and Cornwall, more than 250 older people go missing every year, many of them with dementia. Many technological advances can be used to give older people much greater confidence to go out, knowing they can be found quickly and easily, and to reduce distress. Also, many technological improvements can keep older people in touch, give them a link with younger people and improve their IT skills.
Mr Amess
I agree wholeheartedly with my hon. Friend, who is right to mention dementia. Fortunately, in our area, through the generosity of a local resident, Ivan Heath, we will shortly be opening Peaceful Place to care for people with dementia. My goodness that is an issue we must increasingly face up to, given our ageing population. She is also right to talk about the assistance that improved technology can provide.
The Dilnot commission, agreed to in the coalition agreement, has now reported, with some controversy. I have been involved in this issue for some time, and in 2000 I was fortunate to come fourth in the ballot for private Members’ Bills, so I am associated with the Warm Homes and Energy Conservation Act 2000, which sought to eliminate fuel poverty, and the more that colleagues can do to advertise the help available to older people, the better. There is much they can claim.
In conclusion, there is a good precedent for creating a Minister for older people within the current Government. We have a Minister for nearly every walk of life—for children, for disabled people, for women and equalities—so why can we not have one for older people? Such a position might even warrant a promotion. My right hon. Friend the Member for Maidenhead (Mrs May) who does a splendid job as Home Secretary is concurrently the Minister for Women and Equalities, managing both roles equally well. A dual role could easily be managed by one of my right hon. or hon. Friends. It is important to note this has been done internationally—in Ireland, Canada and New Zealand, for example. Ministers for older people have been appointed in those countries.
We should do everything we possibly can to ensure that people in old age are treated with as much respect and dignity as possible. They have worked all their lives, experienced a huge number of scenarios and situations and contributed to this country in countless ways. If it were not for the sacrifices of older people in the first and second world wars, we would not have our Parliament today. We have a duty to support them. I congratulate my hon. Friend the Member for Portsmouth North again, as this debate represents a significant step in the right direction. I fully expect a Minister to announce from the Dispatch Box at the end of the debate that the Government will indeed appoint a Minister for older people.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Will Members please resume their seats. An earlier point of order related to written ministerial statement No. 5, which Kevin Brennan said had not been lodged. The House will wish to be informed that it has now been lodged.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
It is a pleasure to follow my hon. Friend the Member for Southend West (Mr Amess), who made a fantastic speech, highlighting the human challenges that many older people face and rightly arguing that people who have worked hard for our country deserve to be properly looked after in their retirement.
I pay tribute to my hon. Friend the Member for Portsmouth North (Penny Mordaunt) for initiating this debate. She was absolutely right to say that we need a more integrated approach to elderly care nationally and locally. She was also right to highlight the importance of housing as part of that integrated approach. I am somewhat reassured that this Government have already taken great strides in the right direction properly to support and recognise the needs of older people. I am somewhat more reassured than my hon. Friend about the Government’s plans to reform the upper House. I look forward to speaking in support of those plans in the debate that will take place shortly.
Before the general election, Age UK set an important test on the key challenges facing elderly care in this Parliament. It is worth highlighting what those challenges were and measuring what the Government have done to meet them. We can be greatly reassured that the Government are already well on the way to dealing with many of the issues older people face today.
First, Age UK set out the problem of forced retirement, which it said must be ended by scrapping the default retirement age. The Government have clearly done that in their first few months. Older people should be allowed to work while they are able to work. The default retirement age discriminated against the valuable contribution older people can make and continue to make to the workplace. This Government should be proud—I am proud to be part of them—of scrapping that discrimination against older people. Government Members can all be proud of that.
The second test set by Age UK was that radical reform of the care and support system should be taken forward as an urgent priority. I am pleased to note the consensual approach across the House today, which, wherever possible, is an important part of that. I am greatly encouraged by the fact that the Minister with responsibility for adult care and social care will respond later this year to the Dilnot commission’s funding proposals and assess how we can better look after older people and better integrate care at the local level so that we can provide greater dignity in elderly care. We have heard a lot today about abuses and indignities and about variability in the care system, which was brought home to us very effectively by the hon. Member for Bolton West (Julie Hilling). It is important that the Government continue to support older people and improve the social care system.
The third test that Age UK set for the incoming Government before the election was that they should prevent the current system from collapsing, and introduce proper safeguards that would guarantee joined-up, integrated care through health-related spending. The Government have already committed themselves to investing £3.8 billion in the NHS to provide the necessary integration between the NHS and social care. My hon. Friend the Member for Portsmouth North rightly said that more joined-up care was needed at a local level. Only if that additional £3.8 billion is filtered into local NHS providers—hospitals and primary care providers—will we be able to secure the joined-up, integrated care, involving adult social services and health care providers, that we need so badly in order to focus on preventive care for older people.
Age UK’s fourth challenge was that the commitment to link the basic state pension with earnings must be honoured by 2012, and pension payments must be increased over time as and when that became affordable. The Government have already achieved that as well. The triple lock on pensions will ensure that, for the first time, older people will receive a meaningful increase in the basic state pension every year. That will help them to meet the rising cost of living, especially in these difficult economic times. The commitment in this year’s Budget to increase the basic state pension to £140 a week is a commitment of which the Government can be proud, and we know that it will become a reality in the future.
The fifth and final test was that NHS resources must be redirected towards community health services that sustain a good quality of life by preventing and treating common health conditions. As I have said, the Government have made a clear commitment to invest £3.8 billion in the NHS to support interaction with local social care services, but, in addition, a major element of their health care reforms was the establishment of health and wellbeing boards. For the first time, primary care practitioners, secondary care clinicians, nurses, housing providers such as Anchor—all the key players who are so essential to providing that joined-up, integrated care for older people—will be brought together.
As has already been said today, it can no longer be considered acceptable for older people to fall and break their hips because of poor housing conditions and poor lighting in their homes, and for the NHS to have to deal with the consequences. The challenge must be to provide more integrated care and better preventive care, and we will do so by ensuring that all the key players work together properly. The establishment of local health and wellbeing boards was a step in the right direction towards the provision of the joined-up, integrated care that we want, which will save the NHS money, but, more important, will provide dignity in elderly care.
Already, two years into the current Parliament, the Government have passed all five of the tests set for them by Age UK. We look forward to the proposals for meaningful reform of the social care system and proper funding that the Government will present later in the year, but I am reassured that they are already making great strides in relation to elderly care. What they are doing for older people has already surpassed what has been done by many Governments in the past.
Although I consider the appointment of an older people’s Minister to be a laudable notion, I think that the Government are doing very well already.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt) on securing this important debate, and I am glad to have an opportunity to raise the views of Blackpool here in the Chamber. Blackpool is in many respects a pensioners’ capital. We have just hosted the National Pensioners Convention, at which the Minister with responsibility for adult and social care, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), was due to speak. Unfortunately, however, he had to return to the Chamber to reply to an Opposition day debate. The NPC replaced him at the Winter Gardens with a cabbage. I am not sure what fruit or vegetable the pensions Minister might like to be represented by; he might tell us when he delivers his winding-up speech. I should warn him, however, that the banana has already been taken by the right hon. Member for South Shields (David Miliband), so it is off the menu.
My hon. Friend the Member for Southend West (Mr Amess) told us that his constituency had the most pensioners. I am trying to compete with him in that regard. As with most coastal towns, both Blackpool and Southend have large populations of retirees.
Paul Maynard
Modesty forbids me from commenting, so we will draw a veil over that.
My constituency has the most people who live in a household with someone with a long-term medical condition, so carers policy perhaps matters more there than in any other seat. I am therefore as aware as any Member about some of the issues raised today.
In order to access carer’s allowance, people have to apply for pension credit, to which they may not be entitled. People might know that that application will be rejected, but they still have to apply in order to access carer’s allowance—an obvious anomaly in accessing benefits. Although we all know that many pensioners do not claim everything that they are entitled to, they are still not getting what they should be getting.
I know from my postbag and my surgeries that there would be no shortage of work for a Minister for older people. Almost every Government Department has some policy issue that matters more to older people than to any other group.
The Service Personnel and Veterans Agency is located in my constituency. I will spend the next three days attending various Blackpool veterans week events, because I know that matters, not least to my older constituents. My hon. Friend the Member for Portsmouth North talked about the Arctic convoys medal, too.
Buses are another key issue, as in my constituency they are used predominantly by elderly residents. There are also complicated matters such as the past presence test, about which we are arguing with the European Union, as well as eligibility for benefits when abroad, and what happens when people return. There is a long list of such issues—and I have not yet mentioned long-term care for the elderly and the Dilnot report.
I am something of a nostalgia specialist. I like to look back at the first post-war Labour Government, and try to do so with a degree of fondness because they knew how to use royal commissions as a policy-making tool. They managed to secure all-party support, and produced some of our greatest welfare reforms. Sadly, the last Labour Government turned their back on royal commissions as a policy tool. I remember the royal commission on long-term care. It was a gargantuan exercise—voluminous, colourful, pretty—yet it was utterly ineffective because nothing ever happened after it. The journey to secure reform of long-term care has been long, arduous and, hitherto, fruitless, yet I retain some optimism that the current Government might find enough coins down the back of the sofa to get things right this time; I have my fingers crossed.
As well as the range of issues Members on both sides of the House have raised today, it should be stated that we face a demographic challenge, which we must overcome. It is time that we thought about setting up a royal commission on the consequences for this country of having an ageing population. It would cover a much wider remit than trying to solve a specific policy problem. It would assess what the challenges are and what they mean for every Government Department.
A key issue in this regard is the consequences of having a population that is—to put it crudely, perhaps—dying more slowly. We no longer die rapidly from heart attacks or other such conditions that might hit us in our prime. Now, the decline is much slower and gradual, and it is much more expensive for the taxpayer in providing appropriate care. That deserves some analysis.
The specific proposal to have a Cabinet Minister in this area is an interesting one. This question is not so much about policy towards the elderly, but about government architecture: how do we make things happen in government? As many have pointed out, we have Ministers for the disabled and for children. Both positions are at Minister of State level and both cross more than one Department. We also have a Minister for pensions—the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), whom I am delighted to see on the Front Bench today—and a Minister for adult social care. Perhaps they could arm-wrestle each other for the title of being the Minister for older people. That Minister could sit across both the relevant Departments and perhaps could have the same effect that the Ministers for children and for the disabled are having. I do not think that someone needs to be in the Cabinet to achieve things. There is a grave danger of our being more concerned about the name and where this person sits than about what they can actually achieve. We have had a history of tsars—an entire palace of Romanovs was produced by the previous Government—all of varying effectiveness, which was often not related at all to where they sat or where their home was. What matters is what someone does.
It is worth looking at what is done abroad, because there are some instructive lessons. I do not normally take the French as a model of how to behave in any situation in life, but they have often had a ministry of solidarity between the generations, as they put it. That is an interesting concept. We often battle in this country, with some saying that the young are getting too many resources and others saying that the elderly are. That French Department tried to resolve the two, to bring them together and to work out how intergenerational solidarity is actually created. To be honest, I do not know whether it worked terribly well, but it is an interesting idea that is worth thinking about.
Australia has a Minister for Mental Health and Ageing, who is No. 2 in the health Department. So the Australians do have a Minister for older people, although some might quibble about the linking of those two things. In Ireland, Áine Brady, a Fianna Fáil Minister in the previous Government, was Minister for Older People and Health Promotion. Sadly that particular Government left office—it was not sad for the Irish people, as this is democracy—and the current Government decided not to retain that title.
I note that the Labour party has a Front-Bench spokesman on this specific issue. I can go as far as to welcome that, but I note that in opposition we had a shadow Minister for coastal towns and that role did not survive the transfer to office. It is far easier in opposition for people to create the architecture around what they want to campaign on, rather than around the architecture of the Government buildings that they then have to slot into. So that provides a good example, too.
The example I pray in aid in particular is that of New Zealand, which does have a Minister for older people, sited in its Ministry of Health. New Zealand also has an office for senior citizens, situated in its Ministry of Social Development. That is a particularly interesting combination. Before Conservative Front Benchers start to worry that I am proposing yet another quango, I can tell them that they need not fear as nothing could be further from my mind. None the less, what both Ireland and New Zealand had in common was that they had first developed what they called a “positive ageing strategy”. So before they appointed the Minister, they ensured that the Minister had something to do. One of my concerns is that if we have a general Minister whose objective is to proof all policies so that older people do not experience a disbenefit, we will end up getting a bit fluffy and soggy. I would far rather have a set of very specific areas that affect older people that the Government should be focusing on; these would be certain policy areas that should be driven through.
As much as I love the Deputy Prime Minister—I adore him, I swear I do—I know that he is burdened by trying to cope with the problems of social mobility, which are being discussed in Westminster Hall at the moment. I am not sure that I would wish to give him older people to deal with as well, because he has to fit in trips to Rio; one man cannot do everything, surely. Rather than simply nominating one Cabinet Minister and tacking older people on to the end of their responsibilities, I would far prefer it if we created a new role that had a very specific remit, that had a positive ageing strategy behind it and that had only a handful of specific policy proposals to see through. In this country, we do not define the remit of a Government Department closely enough. We have aspirations, but often they read to me as waffle. A good example is HS2. One of the Department for Transport’s goals is to introduce HS2, which is fine, but it never says why that is particularly important. It states the goal, not the reasons for it. I would far rather we had a much narrower focus.
I welcome the debate and think it is an opportunity to put dignity at the forefront of everything we do in government. Sometimes, I am disappointed that Ministers do not always have dignity at the forefront of their minds in every decision they take. We should not need a new Minister to achieve that, but if that is what it takes then so be it. Once again, I congratulate the hon. Member for Portsmouth North on securing this important debate.
Liz Kendall (Leicester West) (Lab)
I start by thanking the Backbench Business Committee for enabling this important debate to take place, and I congratulate the hon. Member for Portsmouth North (Penny Mordaunt) on securing it. I know that she has been very committed to the issue and I am delighted that we have discussed it today. I also thank my hon. Friend the Member for Bolton West (Julie Hilling), the hon. Member for Stourbridge (Margot James), my hon. Friend the Member for Manchester Central (Tony Lloyd), and the hon. Members for Southend West (Mr Amess), for Central Suffolk and North Ipswich (Dr Poulter) and for Blackpool North and Cleveleys (Paul Maynard) for their speeches.
In particular, I thank Anchor for the superb Grey Pride campaign it has run and the 137,000 people who signed its petition, which made today’s debate possible. As hon. Members might know, the Leader of the Opposition created the post of shadow Minister for older people in the shadow Cabinet in October last year, and I feel privileged and honoured to have been appointed to the position. I hope the Government will follow suit and appoint their own Minister for older people in the Cabinet, and I will use my speech today to explain why.
My first point is obvious, but none the less important: older people are not an homogenous group. They have different views, needs and expectations, just as people in any other age group do. We would not treat everyone aged nought to 50 as a single group, yet this is exactly what we do for people aged 50 to 70, 80, 90, 100 or even beyond. Our discussions and debates about older people tend to be based on one image or stereotype, usually that of a very elderly person, frequently frail or dependent and in need of care and support. The need to develop a better, fairer system of care is a huge challenge and one that I will return to later, but the reality is that most people in their 50s and 60s are not frail or dependent and they want never to be so. Rightly, many do not regard themselves as old at all—my mum and dad certainly do not. Many older people are still in paid work, and local businesses and the economy benefit hugely from their skills, experience and incomes. They play a part in their local community, in voluntary groups or as councillors, and they help with local public services and in churches and faith groups. They also help to look after their grandchildren, and sometimes their own elderly parents; an increasing number do both.
Before I came to the Chamber, I was at a very interesting event organised by Grandparents Plus where I was told that 28% of grandparents have parents still living. They are a sandwich generation, helping out with the kids as well as helping their own parents. We have what I would call the young old as well as the older old, and the young old want to try new things, especially when they have retired, to develop new skills and to travel to different places. They want to enjoy their lives. They want to have fun, if they have time to do so after all the other things they are doing.
The aspirations of today’s over-60s are in many ways quite different from those of previous generations. My parents have quite different expectations from their parents of the kind of life they want. My expectations, those of my niece and those of the one in three babies born this year who will live to be 100 years old will be very different in the future too.
If older people are not an homogenous group, if they have different views, needs and expectations, why have a Minister for older people? The first reason is that despite all their differences, one thing that the young old and older old frequently say is that they too often feel invisible to politicians, businesses, public services and the media. That is a key reason behind the Grey Pride campaign: to ensure that the needs and views of older people are heard and understood at the highest level, so that we can change attitudes about older people, challenge the stereotypes and put older people at the forefront of British political debate. Of course, a Minister for older people could not do that on their own: local businesses, councils, public services, voluntary groups and the media all have a vital role to play, but the Government can and must take action. The previous Labour Government’s Equality Act 2010 will be crucial in helping to turn the tide on some of the age discrimination we see, including in goods and services, but Governments must also take positive steps to ensure that older people’s needs and concerns are actively promoted in every area.
That leads me to the second reason why we need a Minister for older people: to ensure that all Departments understand the issues facing older people and that work is properly co-ordinated across Government. Many hon. Members have discussed the different Departments that need to understand the views, feelings and expectations of older people. Let me repeat some of those and add some more.
The Minister of State, Department for Work and Pensions (Steve Webb)
I am listening to the hon. Lady with great interest and I congratulate her on her role. Does she think that because for 13 years the previous Government did not have someone in this role, they failed older people?
Liz Kendall
I think we made big improvements for older people, but far more needs to be done. One of the biggest challenges—transforming the care system for older people—requires action across Government. It is not something that a Minister for older people could do on their own. They would need the Treasury, No. 10, the Department for Work and Pensions and other Departments to be closely involved. It is a matter of having someone who can help to co-ordinate action across Government and provide a stronger voice at Cabinet level. That is the role a Minister for older people would perform.
Let us consider some of the other areas in which we need to make sure that older people’s needs and concerns are heard. Take education policy, which some might not think would be relevant. We need to understand that as people live longer and need to work for longer, lifelong learning is essential to help them to develop new and different skills. In family-friendly working, we need to understand that a quarter of all grandparents— 3.5 million in total—are still working as well as helping to look after their grandchildren.
Several hon. Members have mentioned housing policy. We must ensure that there is a range of good-quality options for people as they get older, so that they are not given a choice between living in their own home or a care home; there should be various stages in between. Transport policy is also very important. I am sure that many hon. Members find that bus services are a big issue in their constituency. Making sure that services are linked up is a big challenge. Our energy policy must also take into account the needs of older people, many of whom have very high energy and heating bills, particularly if they have long-term health conditions.
Having a Minister for older people in Cabinet would help to ensure that all Departments were more aware of the issues and concerns I have raised, but the final and most important reason why we need the role is that, as a society and a country, we need to face up to the major economic and social challenges of demographic change. That is a key issue behind Grey Pride’s campaign and is highlighted in the motion. Many hon. Members have spoken about pensions, and I am sure the Minister will speak about them too, but I will focus on care and support.
That must be one of top priorities for the Minister for older people because it is one of the biggest challenges facing Britain today. That is why one of the options would be to have the Minister for older people in the Department of Health, because the key to transforming the care system is in transforming the NHS. Social care budgets have been under increasing pressure for many years, but the care system has now reached breaking point. Adult social care makes up around 40% of local council budgets—up to 60% in some areas—and it is their biggest discretionary spend. When the Government are cutting local council budgets by a third, it is inevitable that services for older people will suffer. Figures from the Department for Communities and Local Government show that more than £1 billion has been cut from local council budgets for older people’s social care since the coalition Government came to power. The result is that councils are raising their eligibility criteria: 80% now provide care only for those with substantial or critical needs, up from 50% only four years ago.
Margot James
Does the hon. Lady not accept that the phenomenon of councils changing their eligibility criteria to restrict care to critical level started way before the cuts to local government budgets?
Liz Kendall
I did say that social care budgets had been under increasing pressure for many years, but local councils are now facing cuts of a third in their overall budget. Adult social care is their biggest discretionary spend, so they face real challenges and are moving their criteria from modest to only substantial and critical need.
Preventive services have all but disappeared in many areas. Fewer older people get free care; more end up having to go into hospital, or are unnecessarily stuck in hospital or more expensive residential care. Charges are increasing across the country and vary hugely depending on where people live. It is not just older people who are suffering, but their families. Carers suffer ill health and some have to give up work because the right services are not available. There are costs to the taxpayer if they are not in work and contributing financially. There are also increased benefit bills.
The fundamental problem, and another reason why a Minister for older people is important, is that our welfare state was established in a very different age. In 1948, average life expectancy was 66 for men and 71 for women; now, it is more than 78 for men and 82 for women. Some health conditions that are now common amongst older people, such as dementia, were almost unknown back then, and many disabled children died at a young age. Social expectations were very different. Disabled adults had fewer rights, and people automatically assumed that women would stay at home to care for their families.
Liz Kendall
I have a little more to get through, but I will take the hon. Gentleman’s intervention.
Dr Poulter
I am going to be supportive. The hon. Lady is making some good points. Does she agree that not only the welfare state was set up for a previous era, but also the NHS? It is a crisis-management system built around acute hospitals, and the challenge has to be to deliver more care in the community.
Liz Kendall
I thank the hon. Gentleman. I meant welfare state in its broadest sense, including the NHS. That is the big challenge for us. We have to make a fundamental shift in the focus of services—out of hospitals, into the community and towards prevention and early intervention to help keep people as fit and healthy as possible for as long as possible. Services need to be more joined up and personalised to meet individual needs.
The previous Government made big improvements. We backed integrated care, including care trusts such as the one I recently visited in Torbay, which has made huge progress. We invested £230 million in extra care housing projects, which have made a big difference in older people’s health and physical condition, and we introduced personal budgets and direct payments. I hope that this Government will build on many of those developments in their long awaited White Paper, but we shall not be able to tackle the care crisis unless we reform care funding.
Several Members have talked about the Dilnot commission, which represents the best opportunity in a generation to reform the way care is funded. It is an opportunity that politicians in all parties must grasp with both hands. We tried to get cross-party agreement on social care funding at the last election. We did not succeed, but we are determined to try again now. That is why my right hon. Friend the Leader of the Opposition initiated cross-party talks when Dilnot’s recommendations were published.
I am concerned about the fact that the Government have backtracked on their promise to legislate in this parliamentary Session for new legal and social frameworks for social care. The Queen’s Speech included only a draft Bill on reforming social care law. The Opposition want legislation on a new system for funding social care in this Parliament, and we are pressing for that in the cross-party talks, but that can only come about if there is commitment at the highest level—not just from a Minister or shadow Minister for older people, but from No. 10, No. 11 and other members of the Cabinet.
Our ageing population is something that we should celebrate. Older people make a huge contribution to their families and our society; I see that in my constituents’ lives, and in mine—as often as I get to see my parents. However, our society has barely begun to understand the implications of this vast demographic change. A Minister for older people would make a big difference, but it is incumbent on all politicians—local and national—across the spectrum to understand that we must work together to deliver a better, more dignified life for people, so that they can live a long, fulfilling life, and have more life to their years, as well as more years to their life.
The Minister of State, Department for Work and Pensions (Steve Webb)
There were just eight contributions—but eight high-quality ones, from Members on both sides of the Chamber—to this debate on an important issue. The unanimous view of all those who took part was that we should congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who introduced the topic in a very effective way. I also congratulate her on the work of the all-party group on ageing and older people, which she chairs, and I congratulate the Backbench Business Committee—some of its eminent members are here today—on making sure that we had the time to discuss the crucial issue of how we best ensure that older people have an effective political voice. That would be the united perspective.
We have heard diverse views. We heard a suggestion that the Minister for older people should be an additional role for the Home Secretary. We heard it suggested that it should be the Chief Secretary to the Treasury, or perhaps another Cabinet Minister. My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) suggested that the Government were doing pretty well without a Minister for older people, although the post might be a welcome addition.
I assure the House, from my now extensive experience—two years—in government, that the idea that the views and priorities of older people are not in every room, in every discussion, is not something that I have ever encountered. To give just one example, the Department for Work and Pensions had to make some very difficult decisions as part of the comprehensive spending review, but if we look at the areas where savings were made—at the reduction in the growth in the budget for disability living allowance for people of working age; at the local housing allowance; at the employment and support allowance; at child benefit, tax credit, and social housing; and at the benefits cap—virtually without exception, those changes apply wholly or predominantly to those of working age. The benefits of those above pension age were protected, almost exclusively. As we have heard from a number of hon. Members, crucially, the basic state pension has been enhanced through the restoration of the earnings link and the triple lock. I assure hon. Members in all parts of the House that the political priorities of pensioners and older people more broadly—as we all know, they are the people who turn out and vote—are very much in the Government’s mind at all times.
My hon. Friend the Member for Portsmouth North suggested that there had been some discussion about who should reply to the debate, and she is correct. Part of the reason is that so many Ministers have a keen interest in the concerns of older people. There were many potential candidates, but I fought them off. I want to respond to some of her particular points, and in doing so, reassure my hon. Friend the Member for Southend West (Mr Amess), who was sceptical—I was shocked by this—that there is still joined-up government when it comes to older people. As I run through my response to some of the concerns of my hon. Friend the Member for Portsmouth North, I hope that it will be apparent that I am giving a litany of examples of joined-up government.
My hon. Friend raised the very important issue of loneliness. A number of people mentioned nobody visiting the care home, but everyone coming to the funeral for the reading of the will. That was a powerful point. There is a powerful cross-departmental partnership between the DWP and the Department of Health. The Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), the Minister responsible for care services, has pioneered work on loneliness. We have worked with the Campaign to End Loneliness. There was a summit on 15 March that I attended, which my hon. Friend chaired, on how Government and local government can act effectively on loneliness. Something that has emerged from it is the importance of equipment for local authorities that want to tackle loneliness in their area, including “how to” guides, websites and so on. We take the issue very seriously: too often, we talk about care, transport, health or pensions, but the fundamental issue of whether someone sees anyone from day to day and whether anyone cares whether they are there or not is a vital one, and I am grateful to all the hon. Members who mentioned it.
Something that has come out of our work is the age action alliance, which brings together more than 200 organisations, including Government Departments, private sector bodies, charities and voluntary groups. The alliance operates under the umbrella of Age UK, and is supported by the Department for Work and Pensions. It tackles a range of issues affecting older people in a joined-up way across sectors. Loneliness is one of the key themes that it is looking at.
My hon. Friend the Member for Portsmouth North mentioned taxation and older people. Let me say on the record that if tax and national insurance were brought together in a single operation, national insurance would not, I can assure her, be applied to pensions. There is no proposal to bring pensioners into that higher combined tax rate. In an example of joint working, the DWP and Her Majesty’s Revenue and Customs are working together on the recommendations from the Office of Tax Simplification. I can assure her that, as Pensions Minister, I will scrutinise exceptionally closely any suggestion that tax might be withdrawn at source from the state pension.
My hon. Friend and my hon. Friend the Member for Central Suffolk and North Ipswich raised the abolition of the default retirement age, and the position of older workers more generally. As I mentioned in oral questions this morning, that is something of which the coalition Government can be resolutely proud. There were years of talk about abolishing mandatory or forced retirement, but we have done something about it. There is still more to be done: employer attitudes to older people still need work, which is why the DWP and the Department for Business, Innovation and Skills work jointly on that. In fact, BIS-led legislation has been introduced. We have worked with employers and business organisations on the “Age Positive” initiative to challenge outdated assumptions about older workers and to encourage improvements in the employment and retention of older workers as part of a mixed-age work force.
Older workers are good business. I said this morning in the House that research evidence from McDonalds has found that McDonalds restaurants that employ over-60s have on average higher customer satisfaction than those that do not do so. Some people might find that surprising, but it is an example of enlightened employers who get it, and who do well as a result. We shall certainly spread the word.
My hon. Friend the Member for Portsmouth North raised the issue of someone who goes into a care home and wants to be able to get something from the value of their home. I think she referred to the Redbridge “FreeSpace” pilot, and spoke about it very positively. I can assure her that my hon. Friend the Minister for Housing and Local Government has encouraged other local authorities to look seriously at that innovative project, and is trying to promote it, as she suggests.
My hon. Friend suggested that we do more to communicate with people and that it was important to piggyback messages. I agree, which is why the DWP is working with the Department of Energy and Climate Change on a pilot scheme to promote the green deal. When we write to people about winter fuel payments, we take a target sample of 1.2 million letters, and those recipients will receive a separate flyer in the envelope promoting the green deal to encourage them to take up energy efficiency schemes. My hon. Friend the Member for Stourbridge (Margot James) mentioned excess winter deaths which, she is absolutely right, remain a scandal. It is not so much about giving people an extra pound to pay an exorbitant fuel bill but about trying to make sure that their home is properly insulated. She will know, as I do, that in Scandinavia, excess winter deaths are almost unknown, not because it is warmer—it obviously is not—but because people have properly insulated homes. We must make sure that there is more action across government on that issue.
The hon. Member for Manchester Central (Tony Lloyd) raised an important issue, and mentioned the very recent report on hospital care and the management of medicines. His home city is recognised as a World Health Organisation centre of excellence for the way in which it approaches older people—he will be aware of that—and that is something that has come out of cross-government working. He is right that the issue of medicines management in care and nursing homes is important, which is why early last year, the Department of Health agreed to fund a project to improve medicines management in residential care. The project is driven by the sector and led by the national care forum. The goal is to design and test a set of practical tools to help care-home staff, doctors, pharmacists and nurses to provide safer care and reduce the incidence of medication errors and what are known euphemistically as “near misses” in care and nursing homes. The hon. Gentleman is right to raise that issue, which the Government take seriously.
Coming back to the point made by my hon. Friend the Member for Stourbridge about excess winter deaths, she will be aware that in December 2011 the Department of Health published a cold weather plan for England and identified up to £20 million for 2011-12 to support local authorities to reduce levels of deaths and morbidity during cold weather. It is designed so that local government —again, a partnership approach—working with voluntary and community sector partners can address the risk factors of cold weather for vulnerable older people. I accept my hon. Friend’s point that we need to do more work on the issue.
We heard some powerful contributions, including a very moving one from the hon. Member for Bolton West (Julie Hilling). It sounds as though her mother is rather well known. My hon. Friend the Member for Southend West mentioned that he had met her on the Terrace, on an outing to see the flotilla, as I understand it, so she is becoming quite a celebrity. The hon. Lady spoke powerfully about both the excellence and, shall we say, the lack of excellence in the care that her mother had received. There is indeed too much variability in the quality of care. The hon. Lady also talked, rightly, about wrong attitudes to older people, which others mentioned as well. That is something we need to challenge, which we are trying to do in Government.
My hon. Friend the Member for Central Suffolk and North Ipswich mentioned Age UK’s five tests for a Government taking office, and he was generous enough to point to a number of things that the Government have already delivered on and others on which we are trying to make further progress. My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) mentioned that it was important that what happens is not fluffy or soggy. I want to assure him that there is a lot of unfluffy and unsoggy work going on, and to highlight the UK Advisory Forum on Ageing, which was set up just before the last election. It meets quarterly. I attend every meeting. The Minister of State, my hon. Friend the Member for Sutton and Cheam who has responsibility for care services, is a regular attender as well.
We co-chair the forum and it is attended by about 30 representatives of advisory forums for older people from the regions of England, the Welsh Commissioner, the Northern Ireland Commissioner, organisations that are not great fans of the Government, such as the National Pensioners Convention, Age UK and others. We come face to face with these groups once a quarter. I have attended every meeting since the election, and that group sets its own agenda and decides what it wants to talk about. One possible fruit of this debate might be that that work, which has been extremely effective, might be expanded and might bring in other Government Departments more systematically and perhaps other Ministers. That might be a response to some of the concerns that have been expressed.
I should mention that the Home Office is finally—in the sense that these things have been talked about for many years—bringing forward legislation to ban discrimination in goods and services for older people, which is long overdue and very welcome.
I was interested to see that Age UK had commented ahead of our debate. Its position on the proposal for a Cabinet Minister with separate responsibility was, perhaps, more nuanced than we might have expected. Although Age UK obviously welcomed the debate, it said that the appointment of a Minister would not be a panacea, which I do not think anybody suggested. It also suggested that it might create risks as well as opportunities. For example, it says that there is the potential that other Departments might decide that they are no longer responsible for thinking about older people. It says that there is a further potential risk of confusion over the responsibilities of the Minister for older people vis-à-vis those of other Ministers.
I was interested to hear my Labour shadow, the hon. Member for Leicester West (Liz Kendall), say that the important issues all related to care, and that what we need is a Minister in Cabinet responsible for those issues. The Minister of State, my hon. Friend the Member for Sutton and Cheam, who I am pleased has been able to join us at this point in the debate, is doing an excellent job. We do not need two Ministers doing the same job. The hon. Lady said that the issues needed to be discussed at the highest level in Government. I can absolutely give her the assurance that on a regular basis the very issues that she identifies are discussed round the Cabinet table with the principal players of the Government.
Liz Kendall
What I said was that, although a Minister for older people would make a big difference, responsibility must lie at the highest levels of Government—with the Prime Minister, the Chancellor and other members of the Cabinet. I am glad that the hon. Gentleman put that on the record.
Steve Webb
I am sure the House would expect the Prime Minister to take a very close interest in these matters.
Age UK says that a weak and ineffective post of Minister for older people could do more harm than good. None of my ministerial colleagues are weak or ineffective, so that is not something we need to worry about. It is clear that all Cabinet Ministers, even the Chief Secretary, have a pretty full inbox at present. It was generous of my hon. Friend the Member for Portsmouth North to give him an extra role. I will have a chat to him about it. The worry would be that if an additional role is given to an already stretched Minister, either it becomes marginal and is not done properly, or it ends up being duplicated. That is the challenge for us.
Responding on behalf of the Government to this important debate, I very much welcome the terms in which the whole debate has been conducted. We are united in the view that older people need a proper voice right at the heart and right at the top of Government. We need to think very hard about how we deliver that.
I welcome the terms of the motion, which proposes that the Government should consider—we certainly should—whether that role would best be done by a Cabinet Minister with additional responsibilities. My proposition is that one response might be for the UK Advisory Forum on Ageing to have a more cross-government role. There are plenty more things we could do, but I stress that there are plenty of cross-government and co-ordinated things already being done. I hope that I have been able to give the House some reassurance on that point.
I can confirm that the Government are very happy to support the motion and look forward to further discussions, because I have a feeling that, if we do not make sure that older people have a proper voice right at the heart and at the top of Government, my hon. Friend the Member for Portsmouth North will not let us hear the last of it.
Penny Mordaunt
I want to thank all Members who have taken part in this afternoon’s debate. I know that the Thursday afternoon shift is a tough one, so their constituents can be in no doubt about the importance they place on the issue or their commitment to improving the lives of older people and the services we provide to them.
The challenges we have discussed are great, but I am very encouraged by the breadth of support across the House and the quality of contributions that have been made this afternoon. I thank the shadow Minister and the Minister for their contributions. There is good work going on in Government and in all sorts of organisations across the country. The Department for Work and Pensions, in particular, is doing some very interesting things and has made great progress. I hope that the Minister will forgive us if we are being greedy, but we want more, and I was pleased to hear about his plans for the future.
My hon. Friend the Member for Southend West (Mr Amess) told us that he has been here before, and I am not so naive as to think that we will have a Minister for older people in post by tomorrow, whether that is a stand-alone post or a role attached to a Cabinet post, but I will be greatly comforted in my disappointment if the Minister takes up the issues we have raised this afternoon, as I am sure he will, and continues to improve cross-government working for the benefit of older people.
Finally, I would like once again to thank Anchor and the Grey Pride campaign for their achievements, especially all those care home residents who signed the petition. The objective was to have a debate in the Chamber, which we have done, but they have also started a debate outside the Chamber and I am sure that good will come of it.
Question put and agreed to.
Resolved,
That this House notes the concerns of the Grey Pride campaign; and calls on the Government to consider appointing a member of the Cabinet to be the Minister for Older People, to give a political voice to the older generation, to oversee the co-ordination of services which affect older people, and to focus on tackling the social and economic challenges of demographic change.
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Young Offender Institutions (Speech and Language Therapy)
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Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I am grateful to the House for the opportunity to speak today on this important topic and thank many hon. Members for their supportive comments this week and for sharing their own perspectives. I wish to raise several points in my contribution, which I hope the Minister will be able to address. If he cannot answer today, I would be grateful if he would ensure that he writes to me with answers or, if the questions relate to areas that are not his direct responsibility, agrees to forward them to the Minister responsible.
This debate was triggered by my recent visit to Feltham young offender institution and, indeed, my interest in youth justice as a member of the Justice Committee. Speech, language and communications needs have become an increasing area of policy focus. An inability to communicate effectively has a tremendous impact on the ability to learn, hold down a job and have a stable family life. I am pleased that the all-party group on speech and language difficulties, which was convened by my hon. Friend the Member for Swansea West (Geraint Davies), is undertaking an inquiry into the links between SLCN and social disadvantage.
The Marmot review of health inequalities in 2010 identified communications skills as being necessary for school readiness, and a Department for Education research report last year showed a clear association between social disadvantage and SLCN among primary school children. It stated:
“More of the low attainers were boys, more were eligible for free school meals and more had English as an additional language.”
Speech, language and communication needs are characterised by difficulties in understanding complex language, in explaining oneself clearly and logically and in responding appropriately to specific social settings. The Bercow report described those needs as including
“difficulties with fluency, forming sounds and words, formulating sentences, understanding what others say and using language socially.”
Paul Maynard (Blackpool North and Cleveleys) (Con)
The hon. Lady mentions the impact of many forms of communication delay. Does she agree that one of the most dangerous forms is when young offenders, upon release, do not understand the terms of their release and are called back to prison because they do not understand what they cannot do, such as cross a road to reach a grandmother, for example? Does she agree also that that is why speech therapy is so important in our young offender institutions—to make sure that individuals understand what is happening to them?
Seema Malhotra
I thank the hon. Gentleman for his contribution. He makes an important point about the inability to understand what is going on in the justice system through an inability sometimes to read and, certainly, to understand what is being said. An important part of the argument is that we need better speech and language therapy services in order to reduce reoffending.
Statistics from the Royal College of Speech and Language Therapists show that 10% of school-aged children and 1% of adults in the general UK population have speech, language and communication needs, but that 55% of children in deprived areas are affected by such needs. They suffer from a “word gap” of an estimated 30 million words when compared with children in wealthier households, and that limits their ability to use language to communicate effectively.
It is estimated that more than 60% of young offenders have speech, language and communication needs, and there is evidence of a vicious circle—of deprivation leading to reduced language development, leading in turn to communication difficulties. Children with speech and language difficulties are more likely to become frustrated at school, to play truant and to get involved with crime. Once they are involved, they struggle with the formalities of courts and of police interviews, and they come out worse because of it.
Nick Smith (Blaenau Gwent) (Lab)
I, like my hon. Friend, have visited young people with communication disabilities in prison; I did so in Park prison, near Bridgend. Does she agree that it is essential to recognise as early as possible, at the point when young people enter the criminal justice system, whether they have communication difficulties? Does she agree further that the Asset tool should be updated so that needs can be identified without delay and the right help delivered?
Seema Malhotra
I thank my hon. Friend for his comment. He makes an important point about early identification within the justice system—particularly if somebody’s needs have been missed earlier in life—in order to help an individual to facilitate the rehabilitation that we hope is possible for them.
There is an important debate about the standards of provision in the education system, and I shall speak about that tomorrow at an excellent training conference on developing oracy and literacy, organised by Hounslow Language Service in my constituency.
My concern in this debate, however, is about the access to speech, language and communication needs assessment and services once young people have reached prison. When I visited Feltham young offenders institution recently, I met a 15-year-old boy who has been receiving speech and language therapy, and learning a few speech exercises had already made him more confident in speaking to his family on the phone—with a clear impact on his personal confidence.
The boy’s vocabulary was like that of a child, but this is not so surprising when we discover that 35% of offenders have speaking and listening skills below national curriculum level 1, equivalent to those of a five-year-old. A further 26% of offenders are estimated to have national curriculum level 2 speaking and language skills, which compare to those of an average seven-year-old.
I also heard the story of a young man who was recently at Feltham. He had a lisp, and when he was three his GP had told his parents that this was because he had a small tongue and nothing could be done. He proceeded to do poorly at school. He was laughed at, including by his own family; his mother would force him to speak when friends came round as a source of entertainment. When in prison, this young man came to accept some speech and language support, and within a matter of weeks he was becoming a more confident speaker, with an almost instant change in attitude to turning his life around. An ability to communicate better has been increasingly associated with reduced violent behaviour of young offenders, and that was indeed the case with this young man.
We know that it works to invest in communication skills and in the training of staff and officers in the justice system. The Royal College of Speech and Language Therapists’ briefing on youth crime of June 2012 quotes statistics from Red Bank secure children’s home in Liverpool. Five out of seven young offenders in one section had challenging behaviour. Staff were involved in physically restraining these young offenders on two to three occasions per day. After communication training and guidance from the speech and language therapist, staff were able to reduce the number of restraints to two per week. The Communication Trust has published in its booklet, “Sentence Trouble”, some useful suggestions about how youth justice professionals can positively interact with young people with speech, language and communication needs. It identifies an awareness and training gap in the youth justice work force, who are much better prepared to deal with mental health issues and substance abuse than with speech and language difficulties.
I am concerned that dealing with the speech, language and communications needs of young offenders is falling through the cracks between the Departments for Education, Health and Justice. It is probable that many young people in prison may not have been there had the education system or health system intervened effectively earlier in their life. In 2010, research with therapists conducted by the royal college in four areas of the country suggested that over 90% of young offenders with communication difficulties had not been known to speech and language therapy services prior to their contact with the criminal justice system. Yet the benefits of these services are clear in improving justice outcomes and reducing reoffending. It is feared that current education and rehabilitation measures in prison require a higher level of language comprehension than many young offenders possess. However, current provision of these services in young offender institutes is limited and patchy. Of the 21 young offender institutes, only Feltham has a full-time speech and language therapist, while four others—Hindley, Wetherby, Polmont and Cornton—provide some support on one to three days a week.
There have been moves to make this case and improve provision in the past. In 2006, Lord Ramsbotham, formerly Her Majesty’s chief inspector of prisons, said in a Lords debate:
“in all the years I have been looking at prisons and the treatment of offenders, I have never found anything so capable of doing so much for so many people at so little cost as the work that speech and language therapists carry out.”—[Official Report, House of Lords, 27 October 2006; Vol. 685, c. 1447.]
The Bercow report recommended that the youth crime action plan and work on young offenders’ health should consider how best to address the communication needs of young people in the criminal justice system, including those in custody. The youth crime action plan of 2008, produced under the previous Government, included recognition of the Bercow review’s recommendations. However, I am not certain whether any action has yet been taken by this Government, nor has the Under- Secretary of State for Justice, the hon. Member for Reigate (Mr Blunt), who is responsible for youth justice, commented on speech and language therapy.
The royal college has called for at least one full-time specialist in every young offender institute. The Prison Reform Trust supports this recommendation, and its report, “No One Knows”, recommended that
“prison healthcare should have ready access to”
learning disability expertise and
“speech and language therapy.”
Arguably, on the current evidence, there is a strong economic case for this. Secure children’s homes and training centres cost about £200,000 a year, while placement in a young offender institute costs £60,000 a year. This, the House may be interested to hear, is twice the cost of a year at Eton, which is £30,981. I thank the Minister for providing these up-to-date figures following my written question last week—excluding the Eton figure, of course, which were obtained from Eton’s website. In comparison, a full-time speech and language therapist employed under NHS “Agenda for Change” band 7 costs £30,460 a year—marginally less than a year at Eton. The funding of speech therapy is surely cost-effective, compassionate and necessary for an effective and intelligent youth justice system.
To conclude, I would be grateful if the Minister updated the House on a number of matters. First, what is the Government’s policy on the provision of speech and language therapy in young offender institutions, and on the call for there to be at least one full-time speech and language therapist at every institution? Secondly, will he clarify which Department is accountable for the provision of speech and language therapy in young offender institutions, and how the Department for Education, the Department of Health and the Ministry of Justice work together on this issue? Thirdly, is it true that Asset, the assessment tool used by police and the justice system, does not include a section that enables staff accurately to identify speech, language and communication needs? Fourthly, what assessment of speech, language and communication needs takes place when a young offender is sentenced to prison? Fifthly, is the existing funding secure and are there plans to increase the provision in young offender institutions? Finally, how do Ministers currently measure and review the effectiveness of such services?
I thank the House for the opportunity to speak on this topic today.
The Minister of State, Department of Health (Paul Burstow)
I congratulate the hon. Member for Feltham and Heston (Seema Malhotra) on securing the debate and on setting out the issues so clearly. I note that, curiously, my noble Friend Lord Addington is debating this matter with Ministers in the other place. It is clearly of importance to parliamentarians in both Houses. The work of the all-party parliamentary group on speech and language difficulties underscores that point.
It is important to recognise that speech, language and communication difficulties are part of a complex and multi-layered range of needs that young people between the ages of 15 and 21 may have, particularly those within our criminal justice system. I understand the concerns about speech and language therapy that the hon. Lady has raised and will try to address them.
There have been a number of studies, mostly small-scale studies, on the prevalence of speech, language and communication needs. They place the prevalence of such needs in custodial settings at anything between 60% and 90%. One recent study found the 60% of young offenders screened on entry to custody had speech, language or communication needs. As has been said, among the general population the figure stands at 1%, although there are regional and local variations.
Much attention has been given to these issues over recent years. The hon. Lady made reference to Mr Speaker’s work on behalf of the last Government. The coalition Government are taking forward a number of the actions in the Bercow review. First, we had the Green Paper on special educational needs and disability, and the follow-up report that was published recently. Secondly, there have been pathfinder pilots to develop unified plans covering health, education and care needs, supported by the use of personal budgets. Thirdly, we have had the review of the early years foundation stage. The Department of Health is working closely with the Department for Education to join up health and care, sorting out one of the oft-stated criticisms of SEN provision for so many years.
I assure the House that speech and language therapy is available to young people, and in particular to those in the custodial estate. Currently, it is commissioned in the custodial estate through primary care trusts. It is meant to be commissioned according to local need. That means that in-house services are provided in some larger young offender institutions—not just in Feltham, but in Wetherby and Hindley. I urge the hon. Lady to look at the provision in those two other institutions.
From next April, the responsibility for commissioning prisoner health will move from primary care trusts, as they are abolished, to the new NHS Commissioning Board. That will help to ensure that people with health needs in custodial settings receive care comparable with that received by those in the wider NHS. Offender health lead commissioners will act for the board and determine the right level of service to be provided to meet the identified needs within the prisoner population. They will work at local level with health and wellbeing boards, children’s services, and police and crime commissioners.
Nick Smith
May I press the Minister? How many young people’s custodial settings have speech and language therapists working at them? Do some or all settings have them?
Paul Burstow
The hon. Gentleman will have heard me say that there is specific in-house provision at three settings, but there will also be referrals through NHS pathways for speech and language services, meaning that any young person in need of speech and language therapy should have access to it. That is one of the requirements of the commission—its responsibility is commissioning appropriate services to meet identified needs. I shall come to the identification of needs in a moment.
Speech, language and communications needs are just one part of an often complex picture. It is important that we acknowledge that there are complex interactions with, for example, mental health problems, learning disabilities, substance misuse and alcohol problems. Therefore, psychiatry, psychology, community psychiatric nursing, psychotherapy, and occupational and creative therapy can all play a valuable part—a bigger part in some cases—in treating and meeting the needs of young offenders.
The hon. Lady was right to highlight the contribution that speech and language therapies make not just in direct services, but in supporting colleagues in a multi-disciplinary team to ensure they have the necessary skills to provide the right communications support and so on.
Adopting a personalised approach is at the core of that. The hon. Member for Blackpool North and Cleveleys (Paul Maynard) rightly said that we need to ensure that people have the communications skills and understanding both when they are in prison or youth offending services and when they are released. That was an important point.
The hon. Lady spoke powerfully of her visit to Feltham and the conversations she had with the 15-year-old lad about his experience of speech and language therapy—he said it gave him more confidence. That is another reason why such therapy is an important component of the right health interventions to meet identified needs.
The hon. Member for Blaenau Gwent (Nick Smith) said in an intervention that early intervention is relevant as well as the change in commissioning responsibilities. Early intervention is a key part of the Government’s approach. Continuity of care and treatment is key. The average period of detention for a young offender is very short—80 days, often including remand. Custody therefore provides opportunities for health assessment and for identifying problems and needs, after which referrals can be made. It is therefore important that we have systems that allow those follow-ups to take place. It was right that the previous Government decided that the commissioning of prison health services should be an NHS responsibility, enabling those systems to be properly joined up, and this Government have maintained that.
We need to look right across the whole criminal justice pathway to provide health interventions that are appropriate to the individual presenting needs. In 2010-11 there were 2,040 10 to 17-year-olds in the secure estate at any one time on average. Sometimes, four times as many were on remand or awaiting sentence to custody, and 85,300 were being supervised by youth offending teams. There is a similar pattern in the 18 to 20 age group.
Seema Malhotra
It is important to talk about action across the justice system and recording and assessing, but where will that information be held, so that the records are kept and maintained as a person passes through the justice system?
Paul Burstow
That allows me to talk about Asset and what we are dong. Asset is a tool used by the criminal justice system to risk-assess reoffending, whereas we are introducing a comprehensive health assessment tool that incorporates questions on speech, language and communication needs and is designed better to meet the complex range of needs of children and young people in the secure estate. I will send further details about that to the hon. Lady, but in a way the role of the NHS in our prison service is better supported through the second tool and the information systems that support an individual on their journey through the criminal justice system.
We also need to go further back up the criminal justice pathway. The Department is expanding the liaison and diversion services for all ages, and that includes tailored support for children and young people and appropriate referrals for those with speech, language and communications needs. Even further back up the criminal justice pathway is our programme to support troubled families, which tries to break the very cycles that the hon. Lady talked about—of school absenteeism, crime and antisocial behaviour—and which can exacerbate other presenting problems and lead to greater communications difficulties.
In conclusion, this has been an important debate. Speech and language therapy is a highly valued intervention, and the Government recognise the contribution it can make to the quality of life of young people and the potential for reduced reoffending as a consequence. It is clearly necessary that people in the custodial service and in contact with the criminal justice system can be referred and have access to those services. However, speech, language and communications difficulties are just one part of a complex picture of needs, which is why we are ensuring that a more holistic approach is taken that assesses the range of needs that an individual presents when they enter the custodial estate.
As a consequence, we have threaded right through the criminal justice pathway a more personalised mix of treatment and therapy that meets those individual needs. That is our goal. These changes build on the important reform of commissioning, using the strength of a national commissioning board leading on commissioning prisoner health services and working with local partners to make the necessary connections with local services. That is how we will improve the quality of life, care and treatment for young people in our custodial estate. I shall write to the hon. Lady with the details she requested.
Question put and agreed to.
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(11 years, 10 months ago)
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Backbench Business
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Social Mobility
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Mr Philip Hollobone (in the Chair)
I am sure the world would be a very interesting place if you were the Prime Minister, Mr Crabb. To start our interesting debate this afternoon, I call Damian Hinds.
Damian Hinds (East Hampshire) (Con)
It is a pleasure, Mr Hollobone, to see you in the Chair. I thank the Backbench Business Committee for granting time for this debate on a subject that matters a great deal to many hon. Members—and, indeed, brought many hon. Members into politics, directly or indirectly.
There are many aspects to social mobility, and I am sure that hon. Members will pursue different angles. I want to focus on some of the material in the report of the all-party group on social mobility, “Seven Key Truths about Social Mobility”. We formed the group a year ago, and I thank the many hon. Members and outside organisations that have come to our sessions and contributed to the debate.
I also thank the group’s officers, particularly the right hon. Member for Salford and Eccles (Hazel Blears), my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw), who is detained in the Finance Bill Committee, and the noble Lady, Baroness Tyler. She is not taking part in this debate, for obvious reasons, but I am pleased to see that she is here. I also thank the Prince’s Trust, which provides great support to our group.
We did not seek to carry out primary research, or to espouse a load of opinions, but to synthesise the material, data, statistics and intelligence on social mobility. We always knew that, coming as we do from different political traditions, it was exceedingly unlikely that we would end up agreeing on policy prescriptions, but we thought we could agree on what we disagree on, to focus the debate.
Politicians sometimes know what needs to be done, but large challenges remain for implementation. However, sometimes they do not know what needs to be done, and no one does. I want to present some of those challenges. Unlike in other debates, I will not shout out a list of demands for the Government, or ask to know about this and that. In many cases that is more of an acknowledgement of the gaps that exist and where, as a society and a political system, we need to build up the approach.
Social mobility clearly matters, and from an economist’s perspective, it matters in terms of both equity and efficiency. To put that into better terminology, it matters for social justice and for economic growth. It is self-evident that every person should be able to achieve their potential and to become fulfilled, but from the economic growth perspective, national income maximisation requires the best deployment of resources. As a nation, we cannot afford to have talent going to waste and not providing all it can.
Studies suggest that reaching international benchmarks on social mobility could be worth around £150 billion per annum on national income, or the equivalent of a one-off increase in gross domestic product of 4%. Today, we are far away from those benchmarks. There are various studies comparing social mobility in Britain with other countries with liberal democracies and advanced economies. In those studies, we are near or very near the bottom of the list. What is worse and more depressing is that that has not improved. Today’s 40-somethings, such as me, have shown less mobility on average than today’s 50-somethings. In an advanced country such as ours, we would expect social mobility to be improving every year, even if it was difficult to catch up.
Social mobility is not one subject, but three, and we tried to bring that out in our report. If two people discuss social mobility, they may leave thinking that they had agreed, and that the other person was talking about the same thing, but it often turns out that they were talking about two completely different aspects. The three subjects are three degrees of intensity, or three types of challenge.
At one end is the “breaking out” category of people who are trapped in poverty or difficult circumstances for one reason or another, and need help to access mainstream society and opportunities. At the other end of the spectrum is the category, “stars to shine”, with outstanding talent that we must ensure fulfils its potential. In the middle is everyone else, and they are the ones who are often forgotten. They are the 60%, 70% or 80% of the population who are neither severely disadvantaged nor outstandingly talented, and they are the greatest number of people.
To bring those categories to life a little, I will explain how they interact with different policy issues. With early years and the moving on up category, which includes the vast majority of children, early-years settings and their quality, and general parenting programmes, are relevant. But to address the problems in the breaking out group requires a lot more action, starting with high-intensity parenting support programmes, and, in the most extreme cases, child protection.
During the school years of the breaking out group, children must be exposed to opportunities so that they have aspiration to fulfil their potential. Children in care have a particularly difficult time in the school system, and relatively poor levels of educational attainment. Talking about grammar schools to that group is supremely irrelevant, but for a relatively small group, grammar schools, selective education, assisted places and so on are relevant. Those children are in the stars to shine category.
That is the horizontal axis and those are the different degrees of challenge. On the vertical axis, we have seven key truths. Those are not my seven key truths, or those of the right hon. Member for Salford and Eccles. They emerged from the expert witnesses we heard from. One may write one’s own list with a different emphasis, but we have run our list past quite a lot of people, and no one has said it is wrong, so we have some confidence that they really are seven key truths about social mobility.
First, the point of greatest leverage is what happens between the ages of 0 and 3, right at the start of life. That means primarily at home. Secondly, the cycle may be broken through education. Thirdly, the single most important controllable factor in education is the quality of teachers and teaching. Fourthly, what happens not just at school, but after the school bell rings—in the evenings and at weekends and in the holidays—is relevant.
Fifthly, university is the most important swing factor of achievements later in life. Pre-18 attainment dictates whether someone gets there, so pre-18 attainment is key. Sixthly, people should not give up, because it is possible to get back on the ladder and to go up it. Later pathways to mobility are possible as long as the will and the support are there. Seventhly, personal resilience and emotional well-being are the missing link in the chain, and permeate those different levels and life stages.
I believe that the right hon. Member for Salford and Eccles will talk about what happens after the school bell rings, and about opportunities later in life. I will talk briefly about the early years and what happens at school. I am a member of the Select Committee on Education, and it is remarkable that whenever one talks to people in education, they always blame the stage before—employers blame the colleges, universities blame the secondary schools, secondary schools blame the primary schools, and the primary schools blame the nursery schools. It is sometimes comic, because it can sometimes be predicted when that sentence will come into the conversation. However, there is an element of truth in it, which is why we said that the 0-3 life stage is the point of greatest leverage.
We have all seen the famous Leon Feinstein graph. It shows, if children’s cognitive ability is measured in the early years of life, that bright children from poor backgrounds are overtaken by less bright children from wealthy backgrounds and it is quite depressing. More recently, there has been an acceptance that that analysis has perhaps been a little over-egged and overused, but it is not totally invalidated. The central message remains: we must nurture and support families with children when they are at a very young age in order for them to reach their potential at primary school. I am talking about children being able to access the curriculum, to read and so on.
In that regard, we should welcome a number of things that the previous Government did and that the current Government have done or are doing. I am thinking of the Sure Start programme, the 12.5 hours of free care from the previous Government and, under the current Government, the keeping of the extension to 15 hours and, critically, the extension to disadvantaged two-year-olds.
However, there is something slightly depressing about all this. If we look at what I call “the Sure Start generation”, the millennium cohort—children born in 2000—we see that there has not been the narrowing of the gap between the rich and poor that, other things being equal, we would expect to see. That was one of the purposes of Sure Start in this country, as it was for the Head Start programme—a remarkably similar name—in the United States.
The standard explanation is that we are just not reaching the right families; we are not going to the places where the need is greatest. I praise certain Sure Start centres, which do outstanding outreach work, including, by the way, in my own constituency. I also welcome the current Government’s refocusing of efforts within Sure Start on the neediest families. However, it seems a little too neat to say that the gap has not narrowed only because we have not reached the places where the need is greatest. We must also consider what happens in early-years settings. The review of the early-years foundation stage is welcome, but we should not regard the job as done. We need to have a constant feedback loop of learning from what works best at all stages of education and care.
However, there is a bigger challenge yet, and that is the work force. Cathy Nutbrown’s recent report states:
“It must be a cause for concern that early years courses are often the easiest to enrol on and the courses that the students with the poorest academic records are sometimes steered towards.”
I will not argue that nursery care should be yet another “graduatised” profession, as some probably would, but we do have a work force challenge and one that it is too easy to duck or ignore. We are talking about the care of our children. We know that the countries least marred by social immobility tend to be those that have invested quite heavily in work force development at early-years level.
However, all that is comfort zone stuff compared with the really big challenge. Unless we are to accept that the age at which children go into a state care setting should get younger and younger and that the number of children doing that should get bigger and bigger, eventually we have to conclude that the point of greatest leverage—zero to three—happens mostly at home. That, of course, is painfully difficult territory for the state.
We know the things that make the difference: a healthy pregnancy, early attachment, a good diet, warm relationships, having books at home, being read to, spending time with the telly off and so on. We need to start by considering how to maximise the leverage from existing successful programmes. That involves health visitors, whose numbers are currently being expanded, but also programmes such as Bookstart and voluntary organisations such as Home Start and the great work that it does.
My hon. Friend the Member for South Northamptonshire (Andrea Leadsom) may take part in the debate later and, if so, will probably talk about parent-infant partnership programmes, such as OXPIP, the Oxford Parent Infant Project, and NorPIP, the Northamptonshire Parent Infant Partnership, and some of the great work that they do on early attachment.
I welcome the support from the Government for expansion of the family-nurse partnership programme. That is a great evidence-based programme, although I think that there some concerns in the field that the family-nurse partnership is based on the American—and confusingly named—nurse-family partnership. The family-nurse partnership is almost the same as the nurse-family partnership, but not quite. We must ensure that when we have these evidence-based programmes, they are truly following the pure model. Again, as with early-years settings, we need a constant feedback loop of learning—a repository for the knowledge of what works with these programmes. That is why it is important to aspire to something along the lines of the early intervention foundation recommended by the hon. Member for Nottingham North (Mr Allen).
However, just finding successful programmes is not enough. Quite often, the most successful programmes are, sadly, also the most costly, and quite often we have local programmes that work well on a small scale but may not be scalable to cope with much greater case loads. Often, too, it is the third and fourth quintiles—the families who do not have advantages but do not have severe disadvantages either—that get insufficient attention. We need affordable mass programmes that can address and help very large numbers of families. The five a day for child development programme recently recommended by CentreForum is very interesting in that regard.
Although zero to three may be the point of greatest leverage, thankfully it is not the end of the story. At school, great differences can be made to social mobility, because although statistically we see a link between parents’ income and social class and children’s income and social class, it is not actually a direct link. The links are, first, between parents’ income and social class and children’s educational attainment, and secondly, between children’s educational attainment and their own eventual income and social class. If we can break that loop and get kids from poorer backgrounds and more difficult backgrounds achieving well at school, it is perfectly possible to have outstanding social mobility.
The pupil premium, a great innovation from the Government, is a very important step, but of course it does not give the answer, only space and opportunity for the answer. It is critical to know how schools, and the education system more widely, should spend money for maximum impact. Therefore, I welcome very much the work of the Education Endowment Foundation and the Government’s support for it, and the fact that Ofsted will in future be measuring how schools are using the funds. I also welcome the Sutton Trust toolkit of strategies for effective learning, which goes through in some detail individual programmes and initiatives that work in schools to narrow the gap between rich and poor.
Policy makers have to be brave and willing to take on and explode myths that for politicians are difficult to talk about—in particular, for example, on class size. There really is not any evidence that over the relevant range, reducing class sizes helps either average attainment or in terms of narrowing the gap between rich and poor. Obviously, it does at a certain point—when we are talking about 12 kids in a class—but not over the relevant range.
The single most important factor is not how many people the person at the front of the class has in their class, but who that person is; the issue is about teachers and teaching. We recently had a Select Committee inquiry. It was going to be called “What Makes a Great Teacher?” but obviously when the Committee got hold of it, we made the title much duller; it was something like “attracting, retaining, developing”—and something else—“teachers”.
What came up time and again was the importance of great teachers and great teaching. We know it when we see it. The problem is that it is very difficult to see it and know it before the teacher is already in the school and teaching. That is why one of our recommendations was to make auditioning for teaching much more prevalent before people take on teacher training.
We also said that it is too high stakes a profession in many ways. Once someone has made the commitment to do a postgraduate certification in education or a three or four-year BEd, they have basically committed themselves to following that career for life. That puts off some people, who would be outstanding teachers, from coming into the profession, but it probably also traps some people in the profession, once they have committed that time and money. In most other careers these days, people’s expectation is that they might do it for two years, five years or 10 years, but not necessarily for 30 years.
It is often said that no one forgets a great teacher, and that is true. Sadly, it is also true that most of us can also remember one or two pretty rubbish ones. As well as attracting the best teachers into teaching, we must take on the task of raising the average quality of the teachers who are already there. I repeat that most are outstanding, but we must look afresh at continuing professional development and at helping teachers with later-in-life career choices if teaching is ultimately not for them.
The individual child needs to be inspired to aspire, which is where careers advice becomes so important. It is worth saying that I did not hear many good things said about Connexions until there was talk of change, when suddenly it became the best thing ever invented. There has never been a golden age of careers advice in schools. Most people, whether they are 30, 40, 50 or 70, will relate the time when they were advised to become a florist, a caterer for the RAF or something very unlike what they ended up doing.
I do not know about other Members, but when I was 13 or 14, I did not know what I wanted to do—well, I thought I knew, but I was wrong about what I would end up doing; I have not totally given up on being a rock star though, so we will see how it goes. Often, the best advice is to keep your options open, so subject choice is an important consideration.
The English baccalaureate has its fans and critics, but it has clearly demonstrated that it can steer young people towards qualifications and subjects that keep their options most open. I remain concerned about A-levels in that regard. We have the list of the facilitating A-level subjects from the Russell group—the ones that it, to paraphrase, takes seriously in university admissions.
When I meet very bright young people in my constituency and elsewhere, I get depressed when I ask, “What subjects are you doing?” and they reply, “Physics, chemistry and law” or “Physics, chemistry and music technology” and so on. Too many young people are effectively self-selecting out of Russell group-type institutions, even though they clearly have the intelligence to be admitted. What, along E-bac lines, could be done about that at A-level?
University is the single biggest determinant in career progression in later life, and of course attainment is key to that. Much is made of the fact that although only 7% of kids attend private schools, they make up 17% of students at Russell group universities and 34% at Oxbridge. The figures are a tiny bit misleading, however, because that 7% refers to an average across all ages. If we take only the young people between the ages of 16 and 18 studying A-levels, the figure almost doubles to 13%. Of those who have passed three A-levels at grade C or above, it goes up further to 19%. For a subject combination such as maths, physics and chemistry, it is 27%.
If we ask what percentage of kids who get three As or A*s are at private school, I am afraid that the answer is 32%, which is knocking on the door of that 34% Oxbridge figure and well above the Russell group figure. There is clearly a big challenge. As part of that, and as only a part of it, we cannot dodge—as much as we, as politicians, might like to—the stars to shine question in secondary education on how we nurture outstanding talent.
The grammar schools debate is divisive. Many right hon. and hon. Members are former grammar school children, which is perhaps unsurprising given the numbers and the age profile in the House. What is more surprising is the number of people who say, “I was at a grammar school and I do not think that I would be here today had I not been”. The abolition of grammar schools was certainly well intentioned and something for which there has been consensus, implicit or explicit, across the House.
Grammar schools were better funded and in better buildings and so on than secondary moderns. There is concern that in doing away with that inequality, another inequality widened between the families who could afford to send their children to private schools and those who could not. In reality, it is not a binary question; academic tailoring is a continuum on which selection at 11 is one extreme and generic mixed-ability teaching is the other, but along the way is setting, streaming, enrichment programmes, specialisation at 14 and different types of GCSEs and so on.
When people say, “I’d like my children to go to a grammar school”, they really mean, and if you prompt them they will say, “I want my children to go to a grammar school, where the head teacher knows all the children’s names, where the teachers wear suits, and where if I walk along the corridor with a teacher and they see a piece of litter, they stoop to pick it up.”
Such things are replicable, but the tragedy is that in far too many schools we are not delivering. I would not want selection to come back to the town I live, for example; there are two outstanding secondary schools, and it would be divisive were one to be a secondary modern and the other a grammar. More widely, and particularly in a world where we have great and increasing diversity in educational provision, there could be a place, across a wider area and in every major conurbation, for an academically selective school alongside a school that specialised in sport or music and so on.
I am taking too long, so I shall accelerate and finish. We also wanted to talk in our report about the things that we do not know, and I will end on that point. We were pleased to mark down all the things that we could say, but it became abundantly clear that critical information is missing from the debate on social mobility, starting with information on innate ability.
With social mobility, we are clearly talking about equalising chances for young people and trying to hold everything else constant. It would be intellectually crazy to suggest that there was no innate ability—in other words, inherited intelligence. There is clearly some, but if we ask academics how much of a child’s ability is nature and how much is nurture—innate versus developed—they tend to say that it is somewhere between 25% and 75%. That is a huge range with which to deal, and although we will never have certainty, a little more direction on how much there is to go after would be useful.
We know that what happens out of school matters at least as much as what happens in school. When we push people to say what they would do in terms of out-of-school activities to equalise opportunities for poorer kids versus richer kids, however, they do not seem to know. They know that there are successful activities, but not quite what they are or, most importantly, how to make people do them. We frequently find that opportunities are made available in the most challenging areas, but the take-up is very small.
We are told repeatedly that non-academic skills, such as leadership, teamwork and customer empathy, are at least as important as academic achievement—the so-called non-cognitive skills. If we push people to name a non-cognitive skill and tell us how to develop it and what would be on the course, everybody dries up a little. It is a generic concept, so more clarity on what those skills are, and which ones we should develop and how, would be welcome indeed.
This vital issue has a great deal of focus and attention in the public sphere. I welcome the appointment of Alan Milburn to the new commission with Neil O’Brien as his deputy. It will give great focus and direction. I also welcome the close attention of the Government and Ministers and the involvement of the Deputy Prime Minister, my right hon. Friend the Secretary of State for Education and, in particular, my right hon. Friend the Minister for Universities and Science. He is probably the one person who could possibly answer across the range of subject material.
I thank the Backbench Business Committee for the time for this debate. At that point, I will stop.
Mr Philip Hollobone (in the Chair)
I will call Hazel Blears in a moment. After she has spoken, I will explain how the rest of the debate will proceed. The first speaker after Hazel Blears will be Mark Garnier.
Hazel Blears (Salford and Eccles) (Lab)
It is a pleasure to be in Westminster Hall this afternoon with you, Mr Hollobone, as our Chair. I first thank the hon. Member for East Hampshire (Damian Hinds) for his tour de force on the interim report of the all-party group on social mobility. He illustrated not only the depth of his knowledge, but his personal commitment to and passion for the issue.
There are some issues in Parliament on which we take dramatically opposing views. We argue our corners and have some pretty intense disagreements. I am happy to say that that is not the case in the all-party group. That is an important point when we talk about social mobility, because social mobility matters to every Member of Parliament and every family in our constituencies. Yes, we will have different approaches and different policy prescriptions, but the absolute imperative is to ensure that we are utilising the skills, the talents, the passion and the commitment of everybody in our community, not just for their own personal fulfilment but for the competitiveness and the ability of our economy to thrive.
The hon. Member for East Hampshire has given us a really good overview of the subject, so I will concentrate on just a few of the issues. The all-party group discovered that opportunities outside school, such as those to widen networks, make connections and meet people that we would not normally meet, are key to raising ambition and aspiration, especially among young people; and that social mobility and the ability to get on does not stop at school, college or university. There is the opportunity for second chances and third chances. We must never write people off and say that that is all they can be. There is always the chance to get on later.
I want to talk about issues of personal resilience, confidence and self-esteem, which are often well taught in independent and private education establishments but not so well taught across the state system, yet they are key to people getting on. I pay tribute to our noble friend, Baroness Tyler, who has made a personal study of the subject and has done some excellent work. The whole area has not been particularly well explored, because it is less able to be analytically dissected and it is subject to a lot of anecdotal evidence. It is a rich seam for us to pursue.
Let me explain why I feel so passionate about this issue. We all come to this with our own particular stories. Just last week, I was contacted by a young man from my constituency. He has a degree and has written 300 letters to get a job. He has not had a single interview and he is absolutely desperate to know how to take the next step in his life. I think that it was the number 300 that rang so many bells for me and brought home so many memories. I left college with a law degree. I am not sure why I studied law, but I think that it was because both my parents had left school at 14. We did not have any professional people in our family. I went to do a law degree because I thought that was how people changed the world. As a lawyer, I rapidly discovered that I certainly could not change the world; I could only interpret the law. Then I realised that if I wanted to change the world, I would have to make the law, which is why I ended up in Parliament.
When I first graduated and I had done my Law Society examinations, I wrote precisely 300 letters to try to get an interview as a trainee solicitor. As a family, we knew absolutely nobody. My dad was a factory worker, and it was when his firm got taken over by a multinational that things changed. It was through his foreman, his foreman’s boss and his boss’s boss that I managed, unbelievably, to get an interview with the best law firm in Manchester, because it held the account for the multinational company.
I went for the interview; it was probably the most frightening experience of my life. It was far worse than a constituency selection meeting. I went to the top floor of a very grand office block in the city centre. I was met by the senior partner, so it was clear that this account was a serious matter to him in terms of his fee income. He was one of those elderly gentlemen who peer over half-moon glasses. He sat in a very high chair and we commenced the interview, which went incredibly well. Amazingly, we got on. We explored all the different parts of the law. I actually had some good commercial results in my various exams and he was interested in me. We got halfway through the interview and it felt like one of those moments in life when something really exciting is going to happen. My heart was pounding and I thought, “ I’m going to get this job. I have written 300 letters, I haven’t had a single interview and I am going to get this job.” I was overcome. He said to me, “Tell me, Miss Blears, this interview is going rather well, isn’t it? We are getting along fine, aren’t we? Just remind me what your father does in the company”. I said, “My father is a fitter and he works in the factory.” With that, he closed his leather folder, and said, “Good morning, Miss Blears, I think that I have heard enough.” He showed me the door.
That was one of those defining moments in life. I left the office, got into the lift and burst into tears—not for myself particularly, although I was upset. What he had done was insult my whole family, especially my father. He had exercised the power that he had, as a very senior professional individual, over a young, powerless person. If anything drove me into the arms of the Labour party, it was probably that experience. Many of us are shaped and formed by our experiences in that way. Luckily, I managed to get my articles and became a solicitor, eventually ending up in the British Cabinet, which is a strange journey.
That story explains why I feel so passionately about this issue. There are literally hundreds of thousands of young people in our communities who are full of talent, passion and ability, and because they do not know anybody, they cannot get a foot in the door. They cannot get on that first rung of the ladder. Once we give someone a chance, it is up to them after that; they will make what they are going to make of life. It is so unfair that even today, in this country and in many other countries, it is still who we know and not what we know. Government policy is nowhere near developed enough in this area because it is so difficult.
When Labour was in government and we were formulating the future jobs fund, one of the most stunning facts that came to me was that seven out of 10 people get their next job through somebody they know. That might not be the great professional job; it might be the plasterer’s job, the joiner’s job, a small company or a job with somebody in the community. Only one or two people get their next job through the jobcentre system, so why are we not spending more of our resource on expanding people’s networks, contacts and the number of people with whom they have relationships, because that will stand them in good stead for the rest of their lives? Instead, a functional and structured system often operates in jobcentres, which does not necessarily give people that richness of contacts.
In the days before we had iPhones and BlackBerrys, people often said that a filofax was worth as much to them as an undergraduate degree in terms of the progress that they would make in later life. It is very often those contacts that are made, particularly in the independent school sector, that can be called up because they may know somebody who knows somebody who can help. It may be one’s parents who can help or someone in the wider family. Yet so many people do not have those contacts.
Only 7% of people go to private school, but people from private schools account for more than a third of Members of Parliament, more than half of FTSE chief executives, half of our top journalists—and that is growing at an incredible rate—and still 70% of High Court judges, so we have a long way to go before we have more of a meritocracy and before we are utilising the skills and talents of our people.
If we look at what happens outside schools, we will find that very often there is top-up tutoring, especially in more affluent families, which gives people that head start in life. The six-week summer holiday for better-off families is often devoted to enrichment activities, sports, culture, art and drama. All those activities build the key skills around resilience, self-esteem and confidence. For children from poorer families, that six-week holiday is often a nightmare. Parents cannot find child care, which leaves children to their own devices day after day after day. It is a wasted period and there is a learning loss for those poorer children who find that they have fallen behind when they return to school in September. A much more attractive proposition is shorter terms and not such long holidays so that children can keep up with their learning.
On the later paths to mobility, we have heard some good evidence from employers—from Channel 4, which runs a talent programme for paid internships and from Wates Construction, which is offering work experience, apprenticeships and that next step to young people, often from very troubled backgrounds. We have more and more employers being prepared to take the risk, which is not inconsiderable for them, to take on ex-offenders and give them a chance at that first start in life. I have worked with Morrison’s supermarket in Salford. When the store was being set up, I said that I wanted 50% of the jobs for local people from this really tough estate. It said, “We can’t do 50%, Hazel.” I said that it simply had to, and we worked with the people incredibly closely. We managed to get 82% of the jobs in that store for the people from that estate, many of whom had never worked before, never had that chance and never believed that somebody would believe in them enough to give them an opportunity. I have no doubt that those people—particularly the young people—will have their life changed as they progress through to apprenticeships and hopefully to managerial positions in the future, but unless we had put in place a programme of pre-employment training, to get them to the point where they could actually turn up for an interview and present themselves properly, they would never have had that chance. There are great employers out there that are willing to give people a chance and willing to take a risk, and we need to do more to praise and highlight the really good employers in our country that are just as motivated as we politicians are on this agenda.
I absolutely welcome Alan Milburn’s appointment to the child poverty and social mobility commission; he will be a great force for good. I have ploughed through his first report, “Fair Access to Professional Careers”, which runs to several hundred pages. It is a very good report. I was particularly struck by his phrase that
“the glass ceiling has been scratched but not broken.”
I had a vision of all these hands pushing at that ceiling, and he is right that we really need to break through it. He highlights the fact that in the professions in which he has particularly taken an interest, such as law and medicine, we are still not making sufficient progress. He points out that 40% of law graduates are from the three highest socio-economic groups and only 14% are from the three lowest socio-economic groups, and that 48% of journalism students—I am not particularly on a crusade against the press in saying this—come from the highest socio-economic groups and only 14% from the three lowest socio-economic groups. In the days when becoming a journalist meant someone getting a job on the local paper and working their way up the system, those figures were very different indeed, and if we are creating a system where journalists and—I must say— politicians are increasingly coming from a narrow background, the political discourse and dialogue becomes an internal dialogue rather than one that engages the public.
I am pleased to say that law firms are doing their bit at the moment. As a former lawyer, I hope that my experience—the experience that I referred to earlier—is never repeated. There is also the PRIME initiative—the Prince’s Initiative for Mature Enterprise—as part of which 23 top law firms and the Sutton Trust have got together. The law firms have agreed that, for each training contract that they award over the next few years, they will put in place an equivalent work experience programme for somebody from a disadvantaged background, to try to get them up to the stage where they could realistically apply for a training programme. Many of the biggest law firms are absolutely focused on that programme, and I commend them for that.
As I say, I hope that nobody else experiences what I did, although I must say that when I was Secretary of State for Communities and Local Government I managed to go back to the particular law firm in question to do an event for it. The senior partner who had interviewed me had long retired, but the current senior partner was mortified when I told him my story. It was a great experience.
I want to say something about politics, because there is a problem in journalism but there is a big, big problem in politics, and we have a responsibility to try to lead on this issue. I have been particularly exercised by the increasing number of politicians who are coming into this place from what I have called a transmission belt: they work in Parliament for an MP; they become a special adviser; they are parachuted into a relatively safe seat at fairly short notice; and then they are fast-tracked into ministerial office and the Cabinet. I made a speech about this subject when I was in the Cabinet myself; I was not exactly the most popular person the next morning, as people can imagine. I said that I thought that process was bad for democracy, bad for policy making and bad for governance of the country. If everybody comes from the same background there is groupthink, and there needs to be challenge in policy making as well.
In 1979, just 3% of MPs said that they came from a political adviser-type background. According to House of Commons figures, by the last election that had risen to nearly 15%, and the Smith Institute’s latest research says that the figure is 25%. A quarter of all our MPs have come through the route that I have described and I believe that we are now creating a political elite, which makes the problem of people’s disaffection with politics ever more acute.
The Hansard Society has found that 30% of people feel completely ignored by decision makers and that 85% of people feel they have no influence over national decisions. In addition, the Speaker’s Conference found that people increasingly feel that MPs do not talk like them, do not look like them and have little connection with them.
There is something practical that we can do. For the last year, I have been working with colleagues from different parties—the hon. Member for East Dunbartonshire (Jo Swinson), from the Liberal Democrats, and the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), from the Conservative party—and with the Speaker, to set up the Speaker’s parliamentary placements scheme. We have raised a considerable amount of money from very good companies and our first 10 people started on the scheme last year; they are just about to graduate from it now. It has been inspiring to see people coming from completely different backgrounds into Parliament. They work four days a week with an MP. On a Friday, they take part in a fantastic programme put on by the House of Commons Commission, which is about how a Bill goes through Parliament, how to do research and statistics, personal development, public speaking and going out and taking visitors around the House of Commons. It has been amazing.
The people on that scheme include James, who was an unemployed joiner in Glasgow. He could not get a job, but he was passionate about his politics. He spent 10 months with my right hon. Friend the Leader of the Opposition. We have also had Matthew, a young man from Northern Ireland, who is a passionate Conservative. He spent time here and—fingers crossed—I think that he is about to get a full-time job with an MP, and if so his life will be very different in the future.
We are just about to open our recruitment for the second year of the scheme. So, if there is anybody out there who reads Hansard and thinks they would like to come into Parliament from a very different background to others, bringing something to our life here that helps to leaven the mix of people who might think about going into politics, I urge them to get in touch with the Social Mobility Foundation, which runs the scheme on our behalf. Equally, I say to MPs that if they are interested in taking one of these young people into their office and giving them the chance to see that politics really makes a difference, that is something practical that we can do about improving social mobility.
As I say, the Speaker’s scheme has been amazing. I did not think that it would actually get off the ground, but I hope that we now have some sustainability for the future. I am delighted to say that after I challenged the Deputy Prime Minister in our debate on his social mobility strategy—in which he mentioned our scheme without actually having given any money to it—he has now decided to commission a few places for people from low-income backgrounds who also have particular disabilities, and who therefore would perhaps find it doubly difficult to come and work here in Parliament. We are delighted to ensure that we can attract people to come along. That is the first bit of Government investment and I hope that we will see more of it in the future.
That is our national scheme. I just want to mention briefly one thing that I am doing in my local area. Like most MPs, I think that if we talk about national politics it is incumbent upon us to try to ensure that we do something practical—something that works—at a local level too. In Salford, we have set up a scheme called Kids without Connections, because I am getting so many young people now, such as the young man who wrote to me and said that he had applied for 300 jobs, who come to me and say, “You’re my last resort, Hazel. What can I do?” Like most MPs, I have very good contacts with the employers in my constituency: in construction; in retail; in hospitality; in catering; and in the public sector. We have now had a big event with all of our employers. We have 70 employers registered that are all prepared to give work experience to young people in my constituency, so that those young people can do two, three or perhaps four weeks of work experience over the summer. I have 150 young people who have volunteered. We are now doing what I suppose is the “speed dating”, which is matching the employers and the young people. We already have had a dozen jobs being offered—not just work experience placements, but a dozen real jobs—as a result of the programme. When the young people have done their work experience, the employers and the young people will come to Parliament for a reception, to celebrate their working together and to get an experience of Parliament.
That scheme is a very simple one and if anyone else is interested in the practicalities of making such a scheme happen, I must say that at least it gives the young people involved a taste of work and what it is like to be in an employment environment. Once again, it ensures that they will not simply settle and accept that their life will never be any different. That is something practical that we can do, and I pay tribute to Charlotte Chinn, who has been amazing in helping to make that scheme happen in my constituency. Supporting it is one of the most inspiring things that I do.
The final practical thing that I want to do is to mention an organisation called Future First; some Members might know about it already. It is relatively new, having been going now for a couple of years. What it tries to do is to set up—a very complicated phrase—“alumni networks for state schools”. In the private education sector, alumni networks are automatic. Current students at a school know the students who were there before them. Former students raise money, act as mentors or role models, come in and share their experiences at the school and consequently they enrich the school’s curriculum. That has never happened in state schools. But for the last couple of years, Future First has been organising programmes across London and they now want to expand across the country. What those programmes do is to track former pupils—using Facebook or Friends Reunited—to see whether they would be willing to come back into their former school, to share their experiences with the current students and act as role models. Amazingly, 30% of former pupils have said that they would love to do that. That is a potential resource of up to 10 million people in this country who would come back and be role models for state school students in the future.
I was struck by what one of the students said:
“In private schools, they’re told that they can conquer the world, they’re given motivation, they’re told they can win. We’re not told that in state schools so it’s harder for us”.
That is absolutely what it is like. Luckily, when I was growing up, my mum said, “You work hard: the world’s your oyster. You can be anything. You can do anything in the world.” If people do not have that push behind them from home, and do not get it in the school they attend, it is much more difficult to have the ambition and aspiration that will take them on their journey. The work that Future First does is incredibly valuable, and we have a huge untapped resource that we could draw on, to make the situation very different. As ever, we have a problem, but I like to think of practical solutions that we can bring to bear. I am sure that the Minister will be in the same place. It is important to have some programmes to point to that are making a difference, and try to scale them up.
I have been lucky in my life. I have met people at important points, who have guided me and shaped my life. They have encouraged me to do different things. For that I am incredibly grateful. Some of them were inspirational teachers who made a connection with their students and gave them a broader outlook on life. Some were people I met at work, and some were friends and family. I worry enormously, however, that many young people do not have that in their lives, and that their talents go to waste. I do not think we can allow that.
I have a couple of questions to which I would like the Minister’s response. First, what action is he taking to widen the networks of people from the poorest backgrounds? If we have any money to spend—and I know it is tight—I want it to be spent in a way that gets results, rather than on sustaining a system that does not really achieve.
I am very concerned about the advertising of unpaid internships. I do not mean four or six weeks’ work experience, but full-time jobs, where people are expected to turn up and do a series of proper tasks, and take on responsibilities, but get no pay. That is illegal in this country, and people with such jobs must be paid the minimum wage. Yet it is still lawful to advertise those unpaid, full-time, long term internships. That is a mismatch. If something is unlawful it should not be lawful to advertise it. I should like to hear the Minister’s response. Will he support more robust enforcement with respect to unlawful, unpaid internships, so that employers must pay the national minimum wage as they should?
Will he also support the establishment of alumni networks? I know that some money has been granted from the Cabinet Office social action fund, which is welcome, but it would be a practical and cheap way of making a difference.
Finally, will the Minister recognise some of the great employers that I have met in the past year, primarily through the Speaker’s placement scheme? The people who help and support us include Morrison’s supermarkets, Prudential, AXA, Aviva, the Royal Mail and Clifford Chance—every spectrum of corporate life. They are just as passionate about what we are doing as we are, and they make a difference. We should thank them and encourage others to take part too.
Mr Philip Hollobone (in the Chair)
I thank the debate’s two sponsors for opening the batting. I thought it might be helpful if I ran through how the debate will proceed. It must close at 5.30. The Opposition spokesman, Shabana Mahmood, will be called no later than 4.55, to speak for 15 minutes. The Minister will be called no later than 5.15, to speak for 15 minutes, and then Damian Hinds has two minutes to wind up.
Between now and the speech of Shabana Mahmood, there are seven hon. Members who have said they want to speak. That would give each of them 12 to 13 minutes. The running order will be Mark Garnier, Meg Hillier, Mark Pawsey, Mike Crockart, Jackie Doyle-Price, Kelvin Hopkins and Martin Vickers.
That may all change at 4 o’clock when the Chair changes, but until then that is going to be the order.
Mark Garnier (Wyre Forest) (Con)
I congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) and the right hon. Member for Salford and Eccles (Hazel Blears) on securing this important debate. The right hon. Lady will be delighted to hear that I have no background in politics, but may be disappointed that prior to coming to this place I was a hedge fund manager and investment banker. However, as a result, I tend to view my work here, and the world, through a financial prism. It is in that context that I want to speak this afternoon about social mobility and financial education.
Something that has struck me since I have been in this place is that when we consider education we still mean reading, writing and arithmetic, and how important it is to go to university. Yet we miss out the fundamental, basic core skill of financial literacy. We expect current and future generations to go out into the world, find a job, save for retirement, buy houses, take on debt, start and run businesses and bring in the next generation of their families with only the most rudimentary knowledge of how the financial and money systems work.
That is not to say that there is no financial education. Schools make efforts to provide it. I have been lucky enough in my capacity as a Member of Parliament to give such a lesson, at Baxter college in Kidderminster, where the kids I talked to engaged very well with the subject of money. I also witnessed a lesson given by RBS at King Charles school in Kidderminster. Bank staff teach years 7 and 8 how to use a bank and understand the basics of the banking system. I know that schools would like to do more in that area. I am in the process of setting up a group of volunteers to go into schools to provide financial education for local kids.
Even with that benevolent tailwind of good will from teachers, provision is patchy and sporadic. There are serious problems in this country because of financial illiteracy. I shall paint a slightly gloomy picture to take account of where we are now. For many years our constituents were bombarded with letters from banks and credit card companies, announcing pre-approval for a £10,000 loan, an opportunity to go on that life-changing Caribbean cruise or a chance to own that sports car that it is impossible to live without. All the while, even senior people in the country—I am not making any political point—were assuring us that the traditional economic cycles had somehow been changed.
The reality is that economic cycles will never change. There will always be an economic cycle that goes through the five stages of recovery, acceleration, boom, slowdown and recession. However, to maintain the illusion, we had irresponsible lending and, it now seems, as we have heard today, illegal activities around market abuse from the biggest banks, which is one of the most shocking things that we will hear while we are Members of Parliament.
To talk about irresponsible lending without addressing the other side of the coin is, however, only to half-address the problem. Taking out a 120% mortgage at the height of a property boom is irresponsible borrowing, and the banks could not lend irresponsibly were it not for irresponsible borrowing by successive consumers. However, here is the nub of the matter: is it fair to brand a consumer an irresponsible borrower, if he or she is not equipped with the knowledge to make a rational and informed decision about their borrowing? If someone does not have the knowledge to recognise the cynicism of the advertising campaigns and the short-termism of something like the fashion industry, how on earth can they make a sound judgment on the merits of a spending decision?
It is worth putting the country’s situation in perspective. Government debt, amassed over many years, stands at £1 trillion. Personal debt—the debt we collectively own among us—stands at just under £1.5 trillion. That is more than £56,000 for every household in the country. To put that into a wider context, I understand that half of all European personal debt lies within our shores, among a population representing about 10% of the population of Europe. Of that total debt, £55 billion is on credit cards.
The real worry to bear in mind is that I have outlined the situation at a time of super-low interest rates. The base rate has been at its present level for nearly five years, but that is totally abnormal. It is not even normal for a very low interest rate period, but over the five-year period, people have got used to ultra-low rates. The reality is that interest rates will undoubtedly rise, to a low interest rate environment. That means that the rise could happen before we get back to any semblance of a healthy economy. In a normal period of low interest rates, the base rate could rise from 3% to 4%. That, in simple terms, would increase the cost of borrowing by about one third; but if the base rate rises from its current level to a still low 2%, the cost of debt servicing rises fourfold. The implication is an astronomical rise in households’ debt costs.
We are talking about social mobility at a time when everything we are trying to achieve could be scuppered by the most basic movements in interest rates. It is vital that we try to head off such a disaster by providing advice, and we must also ensure that we never again face this potential catastrophe by training our next generation to engage in the economy in a far more educated way.
The immediate problem can be mitigated for some by website-based advice services. Some of the private ones, such as moneysavingexpert.com, provide good advice for those who can access and engage with them. That is an important point; not everyone can engage with the websites, because they do not understand even the basics. The Financial Services Authority’s efforts through the Money Advice Service are, at the moment, lamentable, but at least it is putting cash into debt advice services such as those provided by citizens advice bureaux.
If we are to avoid any further crises in household finances, we absolutely must introduce financial education into our curriculum. The demand for it is not being met. Some 97% of 11 to 17-year-olds think it is important, 80% of parents want their nine and 10-year-olds to learn about money and 66% of Britons think that financial lessons would have given them the resources to deal with their financial challenge. Given that 43% of parents do not know what an APR or a PPI is, it seems that those 66% of Britons are absolutely right that we need to teach people more.
As a former investment banker, even though I can dissect the Bayesian probability models that drive some black box hedge funds, my bank manager will testify, I am embarrassed to say, that I am completely incapable of balancing my cheque book every month. The all-party group on financial education for young people, of which I am vice-chairman, is calling for financial education to be put on the school curriculum.
I have painted a gloomy picture, but only because I want to reinforce the message that we cannot possibly expect people to achieve any form of social mobility without being able to engage with the oil that lubricates the engine of the economy in which we all live. If people are comfortable dealing with money and financial products, we have a confident population, equipped to do well in life, but if not, we trap people at best and, worse, in this complex financial world, we place them in danger of social failure.
I want to see financial literacy taught in two ways. First, I want to see the quantitative side being taught in maths, which not only will equip people to know whether they can afford something, but can bring maths to life. If the question, “Compounding 125 at 17% on 18 regular intervals while reducing the sum equally over those 18 intervals requires what discounting?” were asked as, “You want to buy a pair of football boots costing £125 on your credit card with an APR of 17%. What is your monthly repayment if you are to pay it off before they wear out in 18 months’ time?”, that would engage a lot more people in finding out how the maths works.
Mark Garnier
Absolutely. On the qualitative side, the question, “If I spend £125 on a pair of football boots, will I be able to play like David Beckham?” needs to be taught elsewhere, in personal, social, health and economic education, and in the wider curriculum. I discovered, to my cost, that the answer is no.
As time progresses, and we talk more about the subject, I am increasingly convinced that financial education needs to be not only included in the curriculum, but tested. Teachers who have huge pressures on their time naturally tend towards subjects in which there is testing, so if we do not test financial literacy there is a fear that it will not be put into the curriculum.
What we are trying to achieve is not just people being able to work out their bank and credit card balances. I want my constituents and all the people of this country to be able to work out problems such as that of a hypothetical individual who loses their job and lives in a rural community with £5,000 redundancy money to their name. I want people to be able to make the crucial decision about that individual’s future. Should they blow the money on a cheer-me-up holiday of a lifetime, or should they buy a car to seek work further afield? Should they use the money to retrain for something different, or should they invest it in a new business that they own and can drive forward, thus taking control of their own life?
The absolutely crucial engine to social mobility has to lie in financial literacy. That is why I will continue to urge the Government to put financial education on to the curriculum, and to test it.
Mr Philip Hollobone (in the Chair)
There has been a change to the running order, due to a late entry. It will now be: Meg Hillier, Mark Pawsey, Virendra Sharma, Mike Crockart, Jackie Doyle-Price, Kelvin Hopkins and Martin Vickers. But do not worry; you have an average of 11 minutes each.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) and the hon. Member for East Hampshire (Damian Hinds) on securing this vital debate. I think that on this occasion we have common ground, and we are all hon. Friends. It is easy to talk the talk, but I want to talk a bit about how we can walk the walk, in ensuring that we achieve some results.
I declare that I am now happily a vice-chair of the all-party group on social mobility. It is appropriate that I take on that responsibility because I represent one of the poorest boroughs in the country. I do not want to bombard Members with statistics, but it is important to set in context some of the reasons why I am particularly interested in this issue. The latest child poverty statistics from Her Majesty’s Revenue and Customs, from 2009, show that the London average for children living in poverty is 29.6%, and the national figure is 21%, whereas the figure for Hackney is more than double that, at nearly 46%.
A decade ago, Hackney schools were not delivering results; they were a byword for people fleeing Hackney. People were coming to see me about how they could get their children into schools outside the borough, but now they beg me to do anything I can to get their children into schools in Hackney. Through the London Challenge, and the local authority and elected mayor embracing every opportunity provided by any Government, we have new, fresh-start schools. The Labour Government provided us with academies and we have had another, along with a university technical college, agreed under this Government.
In Hackney in 2004, the figure for pupils achieving five A* to C grades, including maths and English, was 29%, and in 2011 it was 57%. There were some very high achieving schools, including Mossbourne community academy in my constituency, which achieved 84% such grades, and nine offers of places at Cambridge the year before last. A number of our schools are, of course, not yet at the GCSE stage because they were fresh starts. We are seeing huge achievement in schools. We are also seeing that background poverty is not an excuse for lower achievement, and that we can challenge that stereotypical assumption. With good rigour and good teaching in schools, we can achieve results.
Hackney may have its poverty, but there is no poverty of ambition, as the results show. Education maintenance allowance take-up was high in the borough, with 3,611 young people receiving it, and that was a significant factor. I met one young woman who said that on a Thursday she would use her allowance to put money on the electricity key, so that she could have light and heating in the house, for the family to live and for her to do her homework. The allowance was used for very basic things. In a debate a couple of weeks ago, I raised my concerns about what is happening to the young people who really need the support. Although there have been some attempts to bridge the gap, I am not yet convinced that those attempts will do what the education maintenance allowance did for young people in Hackney.
A really good example of what Hackney schools are achieving is that we are seeing huge results, even though the free school meals take-up at secondary school level represents 40% of pupils—in London as a whole the figure is 25%, and nationally it is 16%. Those figures are another indicator of the challenges but, in spite of that, 40% of Hackney pupils in maintained schools went into higher education in 2008-2009, according to the latest figures available from the Department for Business, Innovation and Skills.
The Minister will know that the statistics are not perfect, because tracking is difficult, and I completely endorse the points made by my right hon. Friend the Member for Salford and Eccles about having an alumni system, because there is not enough follow-through for young people. Nationally, the percentage of children on free school meals who go on to university is 17%, so we are achieving well in Hackney, with what might be described as a challenging cohort. There is a good track record, but improving educational results is clearly not enough.
From talking to young people, I have picked up that they very much need the kind of networks that my right hon. Friend the Member for Salford and Eccles talked about. I will say a little about that, and about why I have got involved in helping to develop the idea locally. Members might have read a book by Andrew Adonis—now Lord Adonis—entitled “A Class Act”.
The book is out of print, and I am urging him to update it. It highlights the closed nature of professions, which is an issue that has been brought bang up to date by the Government’s independent reviewer on social mobility, Alan Milburn, in his report entitled “Fair Access to Professional Careers”, which has already been cited. I will not repeat everything that the report says—I am sure many Members are familiar with it—but one thing it recognises is that professions will account for 83% of all new jobs in Britain in the next decade. Unless we get greater access to professions from across all groups, we will be cutting out an awful lot of people from new jobs.
Some professions have made good progress. In the civil service, for example, of the top 200 civil servants in 2012, 27% were privately educated, compared with 45% just three years ago in 2009. That has happened as a result not of this Government’s activities or even, to a degree, those of the previous Government, but of an organisation recognising that it did not represent the people whom it serves.
We need to look at the professions’ grip on how they recruit. I visited a school in Hackney the other week—I will touch on what I am doing with some schools—whose pupils said that they needed contacts, particularly in banking, an industry in which I was interested to hear the hon. Member for Wyre Forest (Mark Garnier) formerly worked. Some 90% of jobs in banking go to people who have already had some work experience, but those placements usually go to the children of partners or clients. That cuts out pretty much everybody in a Hackney school, yet we are on the edge of the City and have very good links with UBS, which sponsors an academy in Hackney, and with KPMG—another bank and accountancy firm—and the City of London, which both sponsor another academy. We must keep challenging, and I will touch on some of the work that I have been doing in that regard.
Another issue raised by Alan Milburn’s report is the desire to make internships paid positions and accessible to all. I want to focus on accessibility. I do not completely disagree with my right hon. Friend the Member for Salford and Eccles. We need properly paid internships, but my worry—we need to be careful about this—is that if that is the only route that we follow, we will move the point at which young people will be selected for those positions to the interview stage. Are all our young people ready for that? If we are going to do this properly, it is about not just securing payment for internships, but ensuring that young people are prepared so that they are not as nervous my right hon. Friend was when she went for her first interview. They need to be ready.
We have all heard horror stories about interviews and I want to share one that will sound unbelievable. I will not name the source, because it might embarrass him. A young person from another part of the country—not my own—was keen to study medicine and had an interview at Cambridge. He had done a lot of preparation, but when he turned up for the interview and walked into the room, he saw three men sitting on the floor, ready to conduct it. That is a recent example.
We have all heard stories like the one involving a tutor who threw a rugby ball when candidates entered the room to see whether they could catch it. If they caught it, they got a place, and if they converted it, they got a scholarship. Such stories may be anecdotal, but they demonstrate that there are issues with regard to how universities admit students. I will touch on that later, if I have time. As with internships, we need to look at all aspects of access, not just the money, and make sure that people feel comfortable.
Our local sixth form college in Hackney, BSix, has introduced something called the red room. It has kitted out a room in the college to make it look like an Oxbridge don’s study. It is book-lined, has low chairs and has a courtyard outside. A fellow from Oxford turns up every week to talk to pupils, teach them in the room and give them a feel of what it is like to be in such an environment.
Kelvin Hopkins (Luton North) (Lab)
I agree strongly with what my hon. Friend is saying. One of the points that I have made to our sixth form college is that one’s oral expression is absolutely key in interviews. So often it is those from private schools and the middle class who have an enormous advantage simply as a result of how they speak. Giving people the opportunity to learn a more elaborate way of speaking gives them much more of an advantage at interview.
Meg Hillier
Absolutely. That is important. The Government buy a lot of business from a lot of organisations, so I ask the Minister whether it would be possible to include a requirement in Government contracts to provide support to young people from the types of background under discussion.
Andrea Leadsom (South Northamptonshire) (Con)
May I make a quick plug for MPs recruiting apprentices to their own offices? I have had a fantastic experience with my first apprentice caseworker over the past year, and will shortly take on another one from a school in my constituency. It is a fantastic experience for them and for me.
Meg Hillier
I hear what the hon. Lady says; we could all set an example in that respect. The lack of diversity with regard to people applying for jobs in Parliament is an issue that we all could and should tackle in our recruitment.
I am sure that other Members will raise issues relating to access to university, but I want to highlight how the Open university is doing an awful lot to improve access and helping people progress from the OU to Russell group universities, which is important.
I want to talk briefly about what is happening with young people in Hackney. I have set up a networking programme called “Next Steps”, which is similar to the programme described by my right hon. Friend the Member for Salford and Eccles. It provides access to young people to build networks with professional and business people. So far, I have hosted one event—there will be another one next week—in which professionals taught young people about networks and provided the connections.
A young woman who wants to be a medical student had written to everyone she could think of to try to get a placement, but without success. I was able to find her one, however, because an MP’s address book—this might be true even if I were not an MP, but that is how I have progressed to this point in life—means that we have that access. We need to do more of that. Young people tell me, “We don’t want handouts; we want help. We want HR, not social responsibility.”
Hackney council’s children and young people scrutiny commission looked at raising aspirations and talked to young people themselves. Hackney youth parliament commissioned research of the views of young people in Hackney. They say—we should all listen to this—that they want better listening and engagement with young people when devising participation strategies. In other words, “Don’t tell us how to do it. Ask us what we want and what we need.” They also say that they want young people to be involved in the world of work, including improving the careers service.
I have high hopes for our careers service. As the hon. Member for East Hampshire said, careers services are never perfect, but I live in hope. The young people of Hackney also want the development of a world of work curriculum as part of personal, social, health and economic education. They also want to showcase opportunities for children, young people, carers and parents, and for them to include enterprise days, milk rounds, paid placements and so on. They know what they want and what their parents need to help them break through. We need to make sure that that happens.
Parental support can be challenging for parents, particularly those from backgrounds where there are no professional links and where English might not be their first language. Perhaps literacy in even their mother tongue is challenging and connections with their mother-tongue community are not great. Such people need support in understanding that there are good opportunities for their young people to pursue. The support of parents in making the right choices is very important, but unless we help educate parents, as well as provide support to young people, we will not make that breakthrough.
Mark Pawsey (Rugby) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. Like the other Members who have spoken, I congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) and the right hon. Member for Salford and Eccles (Hazel Blears) on securing this debate. My hon. Friend made an interesting speech, demonstrating his knowledge of and enthusiasm for the topic, and the right hon. Lady gave an interesting account of why it is so important to her.
It is great that there is cross-party consensus on the issue. We all agree that everybody in this country should be born with equal life chances, although, as my hon. Friend the Member for East Hampshire told us, in many instances the situation is going backwards. The cohort that he grew up with, who are in their 40s, have less social mobility than the cohort that I grew up with, who are in their 50s. It is beholden on the Government to equalise life chances so that everybody has the best possible chance of success.
I want to talk about a couple of issues: the Government’s troubled families initiative and my hopes for its success; and the value of education. Parliament’s troubled families support group consists of a number of Conservative MPs, including my hon. Friend and me, who have an interest in that area of policy and who support the Minister. I am pleased that my county council in Warwickshire has signed up early to the troubled families initiative and that, as a consequence, 800 families in my county—many of them in my constituency of Rugby—will get extra help.
The key ideas are to reduce truancy, get young people back into school and reduce youth and anti-social behaviour, as well as help adults back into work. The initiative has a payment-by-results mechanism, with up to £4,000 available for every family who are successfully turned around. That means that there is £3 million available to Warwickshire over the next three years. The council has already appointed a troubled families co-ordinator, and I am looking forward to meeting directors and officers of the council over the coming weeks to discuss how the process will work.
My hon. Friend articulated the importance of mobility when he spoke about social justice and economic growth. Such growth depends on the best deployment of resources. Many factors contribute to the problem, such as the care system, the welfare system, a lack of role models and regional inequalities, but, judging from Members remarks so far, the issue of education is to the fore.
That is a key part of the troubled families initiative: getting excluded children back into the classroom. Local authorities have to hit a target of achieving 85% attendance in schools for the children from the families involved, and fewer than three exclusions during a year. Those are tough targets for local councils to achieve, but such work is worth it given the importance of education in dealing with people’s life chances. The pupil premium has also been mentioned. I am proud that the Government have extended the remit of the pupil premium and are providing a total of £625 million this year and a further £1.25 billion next year in additional funding for children from disadvantaged backgrounds.
My hon. Friend the Member for East Hampshire said that it was inevitable that a Conservative Member would raise the matter of grammar schools. In this debate, so far, it will be me. I make no apologies for taking the opportunity to talk about the benefits of a selective education. I went to a grammar school in Rugby and there are three other MPs who also went to that school. In school, we rarely got to talk about the backgrounds of those we were at school with, but I was in a class with the sons of factory workers and mechanics, some of whom went on to set up their own businesses, to rise to senior positions in plcs, and to enter professions.
The issue of selective education is important because although there have been many improvements in schools since the 1960s, there are fewer opportunities for poorer children to access the very highest achieving schools available. Of course, it is up to each local area to decide on its constituent schools. I am proud that my constituency has an excellent system of selective education. However, in the area I represent, improvements could be made to the process of selection to ensure that we have a fairer result.
In the Warwickshire selection system, people should be able to opt out of the selection exam, rather than having the current opt-in system. I fully understand that some parents do not wish their child to have a selective education or for their child to take part in the exam. However, the children of many families who do not know about or understand registration deadlines or the forms to fill in miss out on an opportunity. In canvassing for local elections some time ago, I met a very bright 12-year-old whose parents told me that their child was denied the chance of a grammar school education simply because they did not manage to fill the forms in on time. That is a real tragedy and that issue is something I would like to see changed.
The current process whereby children take the selection exam in an exam centre rather than where they regularly go to school is also inappropriate. For youngsters aged 11, the pressure and anxiety to perform well can be exacerbated by unfamiliar surroundings. I would like the process of identifying those bright and capable children who are able to benefit from a selective education to take place in surroundings they are familiar with. I know that those are local decisions, but attention to both matters would help to improve social mobility.
Mr Graham Brady (Altrincham and Sale West) (Con)
As my hon. Friend might expect, I agree with everything he has been saying. One further point I would like to add to the list is the importance of state primary schools giving practice tests to all their pupils. That would mean pupils in state schools had the same experience as prep school pupils or those who have had the benefit of tutoring: they will have encountered the test before and will not be fazed by being confronted with a selection test they have not seen before.
Mark Pawsey
I entirely endorse my hon. Friend’s words. I support selective education as a driver of social mobility on the basis that it is made equally accessible to all children. There is a danger that the system is being taken advantage of by those who are able to do so, and I would like the playing field to be made as level as possible.
I would also like to talk about the role of fathers in the home and the strength that children can derive from a family unit. In this day and age, I recognise that those circumstances are not available for everyone. There is a strong role for fathers, but young people can also benefit from help with homework, summer camps and extra tutoring. People step in to provide support when fathers are absent. There are some great national schemes such as the Prince’s Trust and local organisations such as the Mayday Trust in my constituency. I want them to be given every help and support.
On the issue of education, it is entirely right that we place emphasis on the early years. However, there should also be influence on the later years. I was interested to hear the remarks of the right hon. Member for Salford and Eccles about second and third chances. The Government’s agenda on apprenticeships could contribute. The previous Government made a great deal about the percentage of school leavers going to university, but a university degree is not the sole route to success within a career; there can be more hands-on routes. Those who know a trade or a skill can use that as a route to the top of an organisation just as effectively as winning a degree. I want more recognition for those who go down that particular route.
As politicians, we knock on people’s doors and are often invited into their homes. We often see in the hallway and in the living room photographs of people—it may be their children or grandchildren—receiving their degree certificate. The question I often ask myself is: where is the equivalent celebration for those who have pursued a less academic route?
A couple of weeks ago, I was delighted to attend the Rugby apprentice of year award on national vocational qualification day. I acknowledge the great success of Lee Bradley in my constituency as the first recipient of that award. We need to have the same regard for those who take that route in their career as for those who take a more academic route.
I am delighted that that issue is being taken more seriously by business. Earlier today, I had the great pleasure to meet the midlands business woman of the year, Julie White, who runs a business called D-Drill. She puts a massive emphasis on apprentices. In fact, she is doing an apprenticeship herself, so that she knows exactly the work that the guys in her business are doing. She tells me that somebody in a very senior management role in her business was, some years ago, an apprentice.
In conclusion, I thank hon. Members who have contributed for their work. Great work is being done in the all-party group on social mobility, and I look forward to it continuing its work and effecting change in this very important area.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Thank you, Mr Hollobone, for accepting my late request to speak in the debate and giving me the opportunity to do so. I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on securing the debate, which is very important and close to everybody’s heart. The subject has brought all parties together, because everyone wants to see a decent and equal society. That is the positive side of the debate that we have seen today. I also congratulate all the previous speakers. I agree with every point they have raised and the issues they have discussed.
We all have our own experiences of life. I assure hon. Members that aspirations and beliefs do not stop at the age of 40, 50 or after 50—many of us still believe that there is a future for us. As I said, we all have experiences and stories to tell. Today, I will talk about my life and how I started my career. I will also mention a few of the hurdles I have faced. Many others may also have had such experiences.
To some people, it may be a surprise that I started my life in this country as a bus conductor. From that, I got to where I am now. During the many years of my working life, I had different experiences. I had my own aspirations and I wanted to ensure that I achieved something in life. However, not having been born here but having arrived when I was 20 years old, I also had to settle, so I faced a mixture of challenges. I wanted to achieve something, but there were barriers. The first barrier was a lack of knowledge and support. I had opportunities, and I was working, but I was sharing one room with a wife and child while trying to learn and gain qualifications.
I started in further education part-time through the Open university, to which my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) referred, then continued to study as a mature student. Imagine having a family, living in one room and looking after a child while trying to achieve academic qualifications. Over the years, we have come a long way. Many people have support and guidance from mentors and other individuals. As I was not born here and did not receive my basic education in this country, social mobility is an issue that goes to my heart. I also believe that without support and guidance—which I did not have at the time—it is difficult to achieve.
[Andrew Rosindell in the Chair]
Social mobility is a vast issue that should be addressed from birth and the earliest years. However, I will focus on the social mobility of our young people and how they grow up and enter the world of work. It can be boiled down to three key issues, which I will address in turn. First, are all young people aware of and exposed to the same opportunities, be they jobs, education or other opportunities? Unfortunately, many approaches to social mobility over the decades have treated it as a way for people to get out of the lower levels of society and move up to the highest stratum. That has meant that as promising young people from poor communities prove exceptions to the rule and do well for themselves, they leave their community or school to live or study elsewhere, where other successful people are, creating a divide that must be broken down. Young people of all backgrounds should be able to see others doing well in a host of professions and to learn from and share their experiences.
I do not want to criticise the present Government’s policies, but the reality is that policy changes have created problems and hurdles for young people from certain communities. When my children were growing up, careers advice services such as the doomed Connexions were a vital tool in exposing young people to the options available to them. However, as that programme has unfortunately faced the Government axe, young people must look online for inspiration, apparently to the National Careers Service. It is a good website, but it is not enough. People who have had the experience of going through the careers service will know that one-to-one, face-to-face advice, guidance and encouragement are totally different from reading a website and then looking for someone who might be in a position to give advice and guidance.
Secondly, do all young people have the skills and experience required to follow the path that they choose? It is all well and good inspiring someone and setting them on a certain path, but they must be able to measure up against the competition. I speak as a grandfather whose grandson is growing up and looking for that kind of support. Many families and individuals do not have the skills to give their grandchildren that I may have gained after many years’ experience of life.
Whatever school someone enters and whatever their background, were they taught the skills that they now require, and were they taught well enough to qualify for the opportunities that they are interested in? From a young age, children need a broad and engaging national curriculum to learn the skills and qualifications on which they may later rely. I am concerned that the Government’s decision to focus on a narrower range of academic subjects will be to the detriment of many. A balanced curriculum in which pupils are allowed to make their own choices is an important part of developing experience and skills appropriate to what they might want to do, testing different options and finding out what they are good at and enjoy.
I am concerned by a recent claim by the Institute for Fiscal Studies that Government spending on sixth-form colleges will decline by 17.8% between now and 2015. At a time when the education-leaving age is rising, that will put even greater pressure on individual providers. Added to that is the abolition of the education maintenance allowance, which in 2009-10 supported 600,000 pupils to stay in post-16 education or training. It will be replaced by a fund amounting to just 40% of the EMA’s original value. Post-16 education is a vital gateway into higher education or a job for many. Unquestionably, such vast cuts will detrimentally affect the number of people proceeding to higher education, the quality of education provided or both.
Not content with that, the Government have made further education cuts of 25% between now and 2015 for adult learners, who must now pay up front for the full cost of courses themselves or take on a fee loan. That will undoubtedly deter many adults from continuing or returning to education, and will have a disproportionate impact on women, who make up 64% of level 3 and higher qualifications. The National Union of Students cites research from the Learning and Skills Research Centre estimating that two thirds of learners would not consider using loans to fund learning under any circumstances. That move was made without adequate consultation, and I ask the Government to think again.
Thirdly, can young people freely access their chosen opportunity? Is their chosen university or course affordable for them and their family? Is their chosen company’s recruitment process open and fair? It is all well and good talking about creating career opportunities, but what about fairly distributing the opportunities already there?
Paid internships have been mentioned. As is all too evident in Parliament, they are the only way for many to gain any access to experience in politics, and in far too many other professions. I welcome the Government’s recent announcement that they will address the issue, but I seek clear and decisive action to see it through. To ask someone from a low-income family to travel to London, to find accommodation while here and, at the same time, to sacrifice the chance of paid work which would support their family is something that many would find impossible. Despite being active, passionate young people, with great qualifications and a burning ambition to work in their chosen industry, that simple barrier eliminates them from the race and prevents a potential future employer from benefiting from their talent, skills and experience.
Social mobility is a vast concept and one that I have barely touched on. I feel strongly that opportunities must be created for our young people but, more than that, they must be able to access equally and fairly those opportunities already out there and currently taken by such a small pool of people.
Jackie Doyle-Price (Thurrock) (Con)
It is a great pleasure to serve under your chairmanship, Mr Rosindell. It is also a great pleasure to follow the hon. Member for Ealing, Southall (Mr Sharma), who illustrated perfectly that some of the best examples of social mobility come from our immigrant community. The fact that they can show so much ambition and advancement, and take advantage of the opportunities available to them, is inspirational for all of us. We should celebrate them.
I was struck by the speech by the right hon. Member for Salford and Eccles (Hazel Blears), who is no longer in her place. Her back story illustrated that no matter how much ambition, ability and aspiration someone has—the desire to advance oneself—there are still barriers to be hit on that journey. Even with her force of personality, she found some of those intimidating. For all the policy initiatives that we can adopt, the biggest challenge is probably tackling those environmental and societal factors that act as the biggest inhibitors to social mobility.
My journey to this place was rather similar to the right hon. Lady’s. My parents also left school at 14, they had me when they were very young and the first few years of my life were impoverished. We lived in a two-up, two-down with no hot running water and an outside loo, and here I am addressing the mother of Parliaments. Perhaps the biggest message that I got from my parents growing up was, “We want your life to be better than ours.” That message stuck with me and drove that ambition from an early age, which gave me the incentive and the belief that my life could be better than theirs. I might well be better informed on this issue than on many of the other things that I talk about in the House.
I pay tribute to my hon. Friend the Member for East Hampshire (Damian Hinds). His speech, opening the debate, was a forensic tour de force of the challenges that we face. He brings the philosophical and thoughtful approach, while I go for the raw practicalities, but between all the contributions to the debate we will illuminate the subject and find a way to tackle some of the problems.
The starting point for me is to define what we mean by social mobility, and we have had some discussion of that. I believe it to be a society in which meritocracy is the key. The privilege afforded by where we are born has always been present in British society, and we would be naive to think that it will ever be altered. None the less, we should all endeavour to create those conditions in which people can achieve the best possible outcomes for themselves. Certainly we politicians should ensure that Government have in place no active inhibitor to people taking advantage of their opportunities.
The more immediate concern is that social mobility has declined in recent years. I want to dwell on some of the reasons for that, because often it is the unintended consequences of policies that, on the one hand, enhance mobility for some but, on the other hand, make it more difficult for others. The performance of our education system and the extent to which it encourages aspiration are crucial.
My hon. Friend referred to attendance at university as a key influence on social mobility, but I want to add a note of caution. Of course it is important for all those who are academically gifted to have the opportunity to study at university, but we also need to ensure that people understand that there are any number of routes to achieve given outcomes. In many cases, encouraging people to go to university will be a hindrance as much as a help. The simple reason is that now we have so many more graduates chasing an ever-tighter number of popular job vacancies.
We have had some discussion of internships, which I think have been fuelled by the rise in the number of graduates. The reality is that, with a bigger supply of graduates, the skill set that people can demonstrate and the connections that they have are what influence whether they can take advantage of the opportunities. As the right hon. Lady explained, she got her law degree but had to make 300 job applications because she was not part of the right network and had no one to open those doors. A real risk is that we are giving many young people a false perspective, because if they invest all that time and yet the job outcomes are not happening, maintaining their focus and ambition to continue is difficult.
One of the keys is to expand people’s horizons and to ensure that we have a different series of routes to achieve good education and the opportunity to get on. In that regard, the greater emphasis on high-quality technical and vocational schools that are seen as equivalent to an academic education is crucial. I pay tribute to the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), for the enthusiasm and passion that he is bringing to rejuvenating and strengthening apprenticeships. We need to see apprenticeships not only as something for school leavers but—as they can be and increasingly are—as the pathway to a long, intensive period of training and work, which can even take people into senior management roles. Practically all the major wealth creators in Thurrock have not been to university—most of them started out as apprentices, and that is characteristic of what happens in industrial areas.
While many of the decision makers in government focus on indicators and on the number of people going to university or on whether someone is above or below the average, I am quite relaxed about that. It is more important that we ensure that everyone has the opportunity to follow the path that they wish to, and get good-quality education and skills in doing so.
We also need to expand the opportunities in the school sector and, in that regard, I wholeheartedly welcome the expansion of university technical colleges and studio schools, which will encourage the development of the wider communication skills that people need to attract work. As the school age is raised to 18, we have a lot more opportunity to introduce that into the curriculum. We need to get into schools, to ensure that they are offering every available opportunity to the pupils to make the best of themselves, to meet their needs and to allow them to excel.
I want to bring a bit more personal experience into the story. As I mentioned, the key is what happens in practice—setting the policy is fine, but the delivery on the ground is what matters. This year, my little boy went up to secondary school. He is doing well—the teachers tell me that he is excelling at history and IT and he got the boy of the year award this week, so he is very proud—but in his first term he had a lengthy period of illness, which meant that he was absent. The school wrote to me and suggested that he should be taken out of his normal lessons and put on a programme that encouraged him to understand the need to attend school. Clearly, that was not appropriate on this occasion. The school had simply looked at attendance and thought, “Right, we’ll send a letter.” Later, when I went to parents’ evening and was told that my son was doing so well, I said, “Okay, so what are your policies towards children who are performing well and are gifted?” The school does not have any. It has a programme to ensure that pupils who do not attend do attend, but it does not have programmes in place to ensure that children who are doing well really excel. Schools need to look at the needs of their pupils in their entirety. They need to look at them on a pupil-focused basis and not treat them as numbers on a piece of paper.
For all our talk of policies and structures, I believe that people and role models will have the most decisive influence on whether children really get on. In my case, my eyes were opened one day at school at the end of a history lesson, when I had a robust discussion with my history teacher about the real role and nature of communism. He took me to one side and said, “Jackie, it’s all very well you and I having these arguments during lessons, but I think you really ought to participate in democracy, and use that as your outlet.” With that one conversation my life changed, and it was because that teacher had taken me to one side. I suddenly thought, life is not just about going through school, going to college, and becoming a secretary. I could do something different.
We can all play a role in this. We can go into schools, and inspire children by explaining that opportunities are available to them, and that they do not have to follow the path their parents took. With that in mind, I want to pay tribute to some of the initiatives in my constituency. Some of the rugby fans among us may have heard of Ralph Henderson MBE. He runs a programme in which he takes sporting stars into schools to make motivational speeches, which is a really good tool to encourage children to think that they can aim for the stars, and that if they have the focus, dedication and ambition, they can get there. In a couple of weeks, I will be sharing a platform with Derek Redmond and Ralph. Somehow I think the children will get more inspiration from them than from me, but I will do my best. We should support such programmes.
Mentoring is key, because young people need a secure environment and a relationship with people in which they can talk honestly and without any threat about the opportunities open to them. The reality is that if they are on an upward trajectory they will often not get that from their parents. They will only hear about the things their parents know. We must provide every opportunity to open the horizons and to give young people more chance to think.
The role of mentors is important to support young people, and to ensure that if they show ambition they are challenged. When I was thinking about going to university, my family, friends and neighbours asked me why I wanted to defer getting a job for three years when I could be earning money. It takes quite a robust young person to say that they want to do something. Access to a mentoring network is important.
Similarly, schools should not be dissuading people from having ambition. At my comprehensive school, no one was encouraged to apply to Oxford or Cambridge. In fact, they were actively told that it would be a waste of time. I applied to Durham university, and was told that I was setting my sights a little high. In my case, that was more of an incentive to push on, but not everyone is as bloody-minded as me. We must make sure that the poor ambition of school leaders does not hold young people back.
I could go on for ever, because this is a real passion of mine. This has been an excellent debate, and it is one of those occasions when we illustrate that on both sides of the House we really care. I just wish that more people could see debates such as this, instead of the yah-boo that goes on in the main Chamber. They would have much healthier respect for politicians if they did.
Kelvin Hopkins (Luton North) (Lab)
It is a pleasure, Mr Rosindell, to serve under your chairmanship. I apologise to hon. Members for not being here earlier, but I was speaking in the main Chamber in another debate. It is a great pleasure to follow the hon. Member for Thurrock (Jackie Doyle-Price), and I was fascinated to hear what she had to say. Her experience was similar to my wife’s experience. She came from a working-class family, and passed the 11-plus. Her parents did not understand what the 11-plus or GCSEs were, but she eventually went to teacher training college and became a teacher. However, she would never have been able to go through college had she not had two things: free tuition and a full grant. She would not have had any income from anywhere, but she received free tuition and a full grant. That was one reason why I spoke in this Room in 1998 to oppose the introduction of fees and charges for students, and the abolition of grants. That remains my position even now. I believe that we should restore free tuition and full grants for students.
I want to talk about the deeper divisions in our society, which I think still exist. The churn in social mobility is within the top 20%, 40% or even 60%. Our society is deeply divided between the elite academic layer and the great mass of people who have no aspiration and very little achievement. If one looks at the OECD statistics for educational achievement, we have the best at the top and the worst at the bottom. Something is profoundly wrong with what we do with our young people in that bottom 10%.
On a recent visit to Denmark with the European Scrutiny Committee, I spoke to politicians and officials about pupils speaking English. We were told that 95% of people in Denmark speak English. One cannot imagine 95% of people in Britain speaking any foreign language, apart from those who have come here from abroad with two languages. There is something different about Britain. I think that there are historic reasons for it, which have, I think, been touched on by George Orwell and other writers. We have preserved in aspic the divisions in our society, which go back to Shakespeare’s time. If we look at “A Midsummer’s Night Dream” and the attitude of the king and others when they are watching the play within a play performed by Bottom, the weaver, we can see that it is a case of, “Let us be nice to the simple folk.” That social division was vast then, but it is still recognisable today. We have not changed as other societies have changed.
I used to work as a research officer for the National and Local Government Officers association and was often trundled out to talk to visiting foreign groups. I was describing British society to some social workers from Hamburg. They were very uncomfortable and said, “By your definition, all Germans are middle class.” That was because their attitude to education and aspiration are so different from ours. They do not have such deep divisions.
I am chair of the all-party group on social science and policy. We recently had a breakfast seminar on social mobility, in which Professor Paul Gregg from Bristol university said that the divisions within our society are still there and that social mobility at the lower level has reduced rather than increased in recent years. I am strongly in favour of making education the best it can be and of ensuring that everyone learns, but there are still attitudinal divisions within our society. The hon. Member for Thurrock told us how her friends said, “Why are you bothering to go to university? Why not stay with us?” My wife had the same pressures. “You don’t want to go to school. You want to come and get a job and get some money in your pocket,” they said, but she said, “No, I want to be a teacher.” She had to fight against the attitude of her social class and family. That attitude was common in those days, and is still there today.
Bryan Gould, who was an MP many years ago, went back to New Zealand because, as he said, he was so depressed about the social divisions in Britain. There was this attitude, he said, that somehow education was “not for the likes of us”. There was deference. Instead of being angry about being in a lower social class, many just accepted their lot. He felt that that was deeply conservative and very depressing.
Clearly, we must have the best possible education. We also need to intervene to try and change our culture, and get it across to young people that the possibilities in life are much greater than the horizons that they are looking at, and that if they do study well at school and have the right education, they can expand their horizons; they can learn a foreign language and know about things.
I have so many anecdotes to tell because I have read about this subject for a long time. In the 1980s, the National Institute of Economic and Social Research did a lot of research on this matter and it had an exchange of teachers between Moscow, in the then Soviet Union, and London. The Russian teachers spoke English and were quite happy to come and teach here. The English teachers could not speak Russian, but they went to teach in Moscow. They came back and said that the standard of education in Moscow was astonishing. They said that the children were doing things at 16 that we do at university. The Russian teachers were asked what they thought about the English pupils. They said, “The children were very nice and we enjoyed teaching them, but they didn’t appear to know anything.” We have had serious problems in our education and in our culture, but people did not seem to worry about it. We have started to do things differently.
The advocacy of the hon. Member for Rugby (Mark Pawsey) for the 11-plus and selection is mistaken. They were a social divider, which hived off one in five of the population. In my family, passing the 11-plus and going to university were compulsory. My parents were academics, and therefore it was expected. The thought of failure was unacceptable. That was opposite to my wife’s experience. We can talk about such things.
The 11-plus divided families and friends, and gave people completely different attitudes to life and what they could expect from it. My theory, and it is only a theory, is that that division has rippled forward through generations. Those who went to university from working-class backgrounds became middle class and their children did the same; those who did not do so carried on with working-class culture. That cultural division has remained with us, which is one reason why I so oppose the 11-plus.
Mark Pawsey
On the hon. Gentleman’s last point, why has social mobility reduced since the abolition of the 11-plus?
Kelvin Hopkins
As I said, I think that the divisions have rippled forward. I think that we have also failed in education. We are addressing the problem now.
Hazel Blears
We had this debate in the all-party group. Does my hon. Friend agree that an implication of the 11-plus and a selective system is that the more academically able are inevitably creamed off? In the past, what was left was not a comprehensive school, or even a very good secondary school, but a secondary modern in which the choices that young people had were often very limited and directed specifically to the kinds of jobs that they were expected to get in the long term. They did not do a foreign language or English literature, but woodwork, metalwork and needlework. It was a very narrow curriculum, which was certainly not good for social mobility or the country as a whole.
Kelvin Hopkins
My right hon. Friend is right, and those divisions have continued. They have become more rigid due to the failures of our education system.
What I am going to say now will annoy teachers. What I wanted from comprehensive education was a grammar school education for everyone. We did not get it. At the same time as creating comprehensive schools, we introduced informal child-centred teaching methods, which were a disaster. We have had two or three generations of such methods, which are fine for kids from middle-class families, who have books, educated parents and extra tuition to get them through exams, but not fine for working-class kids whose only chance is school. They need rigour. We are now all talking about the need for rigour in schools, particularly in primary education.
We have made some terrible mistakes. The juxtaposition of comprehensive education with informal teaching methods and attitudes caused the problems. One can only look at what has happened on the continent of Europe—I do not have much time, but I want to tell hon. Members about one of my closest friends, who lives in France. His children go to French schools and the rigour for six and seven-year-olds is astonishing. We do not take that seriously. I have upset many of my wife’s dear friends. A head teacher at one of her schools said, “You’d have them all sitting quietly in rows, wouldn’t you?”, and I said, “What’s wrong with that?” It is interesting that we are now doing it in academies. We do not need to call a school “an academy” or change the nature of it, we need to change what is done in the classroom in the school.
We need to tell young people when they are very young, “You have a chance to have a life beyond your imagining, if you follow education. There are people who started where you are now, who have a life you cannot imagine. If you talk properly and learn well, you will have a more exciting and rewarding life, in every sense, not only financially and in terms of living standards. A more exciting and interesting life.” Getting that across to children when they are very young is vital. We need to say to them, “That’s why you’re going to sit down, be quiet and listen to me—because I’m going to make sure you have that good life.”
Mike Crockart (Edinburgh West) (LD)
It is a pleasure to speak under your chairmanship, Mr Rosindell. I thank the hon. Member for East Hampshire (Damian Hinds) and the right hon. Member for Salford and Eccles (Hazel Blears) for securing this important debate and for giving me my first opportunity to speak about social mobility since becoming one of the vice-chairs of the all-party social mobility group.
It is entirely appropriate that the debate takes place in Westminster Hall, as it was here, nearly 500 years ago, that King Henry VIII’s closest aide came to put a Bill for the relief of the poor before Parliament. The causes of poverty listed in that Bill included unemployment and bad upbringing. It provided for a works programme that compelled the able-bodied to work on projects such as road building, maintenance of fortresses and harbours and cleansing of watercourses, in return for a fair wage. Even child beggars were to be hired as apprentices to skilled craftsmen, offering them a chance of a future that they would otherwise never have had. The proposals were radical, but that quality was perhaps more pronounced because they were the brainchild of Thomas Cromwell, who was the King’s chief Minister, Earl of Essex and Master of the Rolls—but also the son of a blacksmith from Putney.
We should be clear about what we mean by social mobility. We are not talking about creating equality of income, or equality of experience. Our aim is to achieve equality of opportunity and a society in which individuals who grow up in poorer families can use their talent and effort to move up the socio-economic ladder. The problem is that people from low-income backgrounds find it extremely difficult to get on in life through education and employment. Now, as in 1535, poverty is the greatest barrier to social mobility and equality.
The all-party group’s report on social mobility showed that the prospects of half of all children born in the UK can be almost entirely linked to their parents’ socio-economic circumstances. Perhaps contrary to outward perception and certainly counter to the American dream, America and Britain have the highest intergenerational correlations between the social status of fathers and sons—47% in America and 50% in the UK, whereas, by comparison, in Denmark it is just 15% and in Australia 17%. I have no doubt that that is in large part down to educational attainment.
The BBC 1 programme “Who Do You Think You Are?” has sparked many people’s interest in examining their backgrounds and finding out about their predecessors—often with surprising results. I, too, have looked into my predecessors. I found it quite easy, helped by the fact that my father, Robert Crockart, had a father named Robert George Crockart, whose father was Robert Crockart—you can guess the rest, Mr Rosindell. My father was born in Methven, a small village outside Perth, and I have traced his direct predecessors back almost 400 years to the 1600s, when they all worked manually on the land around Methven, so there was no degree of geographic mobility, never mind social mobility—yet here I stand. The only difference is education and my being the first in my family to achieve a degree—and not even that good a degree, it has to be said. That is only one example, but one that I am sure is repeated many hundreds of times across the country. That is why I regard access to education and especially higher education as key in this debate.
Two days ago, as part of my party’s attempts to increase representative diversity, I was shadowed by a potential Liberal Democrat candidate from a poor background, who blogged about the experience afterwards and reminded me of a certain quote:
“I believe that access to higher education is a key enabler of social mobility and the best way to narrow the gap between the richest and poorest in society.”
It is a wonderful quote. It is from me. I do not want to open old wounds, but those words were written in my letter of resignation from Government over the increase in tuition fees. I did so not because of any pledge, but because of a personal understanding that knowing that a figure indicated a contingent liability rather than an actual debt was a differentiation that would be lost on many young people from backgrounds like mine.
Nevertheless, I think the Government are right to view the problem more widely and to take a life-cycle approach by examining issues and interventions from the early years all the way through to adulthood.
The Minister for Universities and Science (Mr David Willetts)
The hon. Gentleman rightly expresses the anxieties that people had at the time of our tuition fee and loan proposals. Does he take some encouragement from the UCAS evidence that applications from school leavers and 18-year-olds at college have barely fallen? Indeed, we are running at the second highest rate of applications ever, and, in particular, we cannot find any differential fall in applications. If anything, applications from young people from low-income backgrounds have held up slightly better than those from other groups.
Mike Crockart
I accept what my right hon. Friend is saying. The difficulty was always selling the detail of the proposals. I looked at the detail of the measures and there was much there to commend them and much improvement on what was there before. My worry was that this large amount known as a debt would turn people off. If that has not happened, because of the huge efforts made by many hon. Members in this place and elsewhere, that is to be welcomed, but it was a huge concern at the time.
Lots of other proposals are going ahead, such as universal credit and the Work programme, which the Joseph Rowntree Foundation has said:
“have the potential to really move things on…and to provide a better basis to help people into work.”
I hope that our policies to ensure that the tax system is fairer will also play their part in lessening the gap between the richest and poorest. Other initiatives coming from the youth contract aim to provide secure, fairly paid jobs for people with the real prospect of progression.
At this point, I have to state that I stand here a repentant sinner. On arrival at Westminster with a very tight budget and an unforgiving Independent Parliamentary Standards Authority standing behind me, I did what everyone else was doing and took on unpaid interns. However, my actions sat increasingly uncomfortably with me. Despite the quality and easy supply of people, it was simply indefensible to me to give opportunity in such a way that only a small minority of people were able to take advantage of it. I now have two paid apprentices, both of whom are sitting in the Public Gallery today: one is from the Speaker’s parliamentary placement scheme and one from the parliamentary academy’s new deal of the mind. I urge all hon. Members here and others who read Hansard tomorrow to find out about such schemes to widen opportunities to people who, because of their background, would not normally be able to take up positions here. As I say, those people could not be here if they were not paid. The good side of that is that my conscience is now at peace once again.
I am doing what I can to help in my constituency. A similar scheme to that outlined by the right hon. Member for Salford and Eccles has joined with the Department for Work and Pensions, Skills Development Scotland and Edinburgh Guarantee, which is run by the local council, to work with approximately 50 employers so far to create 100 paid training places for young people in 100 days. Youth contract funding makes such initiatives possible, and I urge hon. Members to get involved.
As the report on the seven key truths about social mobility states, the fact remains that
“the point of greatest leverage is at 0-3.”
Things such as a child’s development score at just 22 months can serve as an accurate predictor of educational outcomes at 26 years of age. Boys deemed to be at risk by nurses were two and a half times as likely to have criminal convictions as those in the not-at-risk group by the age of 21. It is clear that we must do much more to identify those at risk, intervene and ensure that they reach their potential.
I am anxious to allow the person speaking after me to have the full 10 minutes, so I will skip ahead and sum up by saying that social mobility is not only a matter of justice or fairness to individuals. Our country as a whole would benefit massively from increasing the fluidity of our society. When people are excluded from opportunities because of their background, we waste their talent and potential to contribute to our society in a meaningful way. We also risk being hugely out of touch with the majority of people if politicians, chief executives, judges, leading business figures and civil servants all have similar backgrounds, life experience and beliefs. Ninety per cent of MPs elected in 2010—my intake—went to university, and more than a third of them attended either Oxford or Cambridge. That contrasts with the general population: according to 2010 figures, only 31% of working-age adults in England were educated to university level.
In the 21st century, we are still discussing the issue that Thomas Cromwell’s draft Bill sought to address—changing the life chances of those born into poverty. Let this Parliament tackle the lack of social mobility in the UK with the same revolutionary zeal that he did—although perhaps without the beheading. Today’s debate is a good start.
Martin Vickers (Cleethorpes) (Con)
Thank you, Mr Rosindell, for calling me to speak. It is a pleasure to speak under your chairmanship.
I join others in congratulating my hon. Friend the Member for East Hampshire (Damian Hinds) on securing the debate. I also congratulate the members of the all-party group on social mobility who contributed to the report. I apologise that I was not present for the whole of the opening speech; like the hon. Member for Luton North (Kelvin Hopkins), I was taking part in the debate in the main Chamber. However, I attended the launch of the all-party group’s report a few weeks ago, so I have heard the full presentation, as it were, and taken note of it.
Social mobility is a fascinating subject and one in which I am particularly interested. We have heard so many life stories this afternoon that I almost expected someone—I nearly said Eamonn Andrews, but that would show my age—to appear, holding a red book and saying, “This is your life.” Hearing those stories has been truly fascinating and they have added greatly to the quality of the debate.
My main aim in speaking today is to contribute to the debate one particular thought about our school system, so I will not detain the House long. First, however, so as to avoid disappointing hon. Members and to help to explain my take on social mobility, I will give a quick resumé of where I come from.
Like many who have spoken today, I came from a working-class background. I was born in Cleethorpes, never dreaming that I would eventually become the Member of Parliament for that town. Like my hon. Friend the Member for Thurrock (Jackie Doyle-Price), I lived in a two-up, two-down rented property. When my parents were eventually allocated a council house in neighbouring Grimsby, they thought they were moving into Buckingham palace. Interestingly enough, and seemingly contrary to what we have been saying, we are living proof that social mobility does exist. The point, of course, is that it does not exist as widely as we would all like it to.
My hon. Friend the Member for Edinburgh West (Mike Crockart) spoke about the percentage of the new intake of MPs who went to university. That percentage includes me, even though it was the day after my 54th birthday that I graduated. In 1967, when I left Havelock school in Grimsby, there was no thought that I would go to university. My parents had pushed me into accepting—somewhat reluctantly—that I would stay on at school from 15 to 16 and do that extra year. That enabled me to take both CSEs and O-levels, which is interesting in view of the current debate on that subject, which I will return to shortly.
As has been said, in the 1960s and 1970s the opportunities for people to go to university were extremely limited. Not only was there no thought of my going to Oxbridge, but there was no thought of going to university full-stop. I progressed to the Grimsby college of technology, as it was then called, and did a business studies course. Thankfully, I was granted day release by my first employer to help me to do that course. That was the way forward for many people from a background like mine.
The school I attended—Havelock school in Grimsby—was a bilateral school. It had both a grammar stream and a secondary stream under the same roof, and there was movement between the two. I would say that, in reality, it was a perfect comprehensive. I was a borderline case in the 11-plus, as in so many things. My parents were somewhat disappointed, but they managed to secure an interview with the headmaster at Havelock in the hope that I could get into its S-stream—the special stream for borderline cases. Pupils could either stay in that stream or move into the grammar or the secondary stream. Those who were not particularly good at geography, for example, could take a CSE in that subject, but take an O-level in English if they were good at that. That arrangement seems to me the perfect bridge between the competing sides in the argument about grammar schools and two-tier exams. Not only did the school instil discipline—it was a disciplined environment—but it opened pupils’ eyes to opportunities. By present-day standards, the opportunities were limited—there was no real thought of 99% of the pupils going on to university—but the thought was instilled in them that they could progress beyond going to work “down t’dock”, as we said in Grimsby.
To digress for a moment, when we talk about declining education standards, I often wonder whether standards were all that high back then. A great many people in the Grimsby and Cleethorpes area simply went to work down on the docks, in the fishing industry, and down the road in Scunthorpe, the industry was steel. Those industries mopped up an enormous amount of unskilled labour, so the quality of education was never really tested.
Returning to my main theme, I wanted to throw into the argument the possibility of having bilateral schools—of perhaps allowing education authorities to consider that possibility and giving academies the freedom to form themselves into that structure. It is important that we extend social mobility across the board. Everyone needs opportunities, and schools are vital to providing them.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell, as it was to serve under that of Mr Hollobone earlier.
This is an extremely important subject, and I congratulate the hon. Member for East Hampshire (Damian Hinds) and my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on securing the debate, and on their excellent introduction, which helped to set it in a wide context. I pay tribute to the work of the all-party group on social mobility, and its excellent report, “Seven Key Truths about Social Mobility”, which has done much to inform the debate, both in Parliament and beyond.
The debate has been excellent and wide-ranging, with passionate speeches on both sides. The hon. Member for East Hampshire set, as I said, a strong context for the debate, and made the point that at each stage of the education and employment spectrum it is normal to blame the previous stages for social mobility problems. I can relate to that—I am sure that the Minister can too—because in my conversations about university admissions with vice-chancellors, they often say, with some justification, that what counts is what goes on before, rather than just what happens when they get involved.
My right hon. Friend the Member for Salford and Eccles made a powerful speech, in which she touched on the importance of personal skills, confidence, resilience and emotional well-being, which I will deal with towards the end of my speech. That is a much under-discussed part of the wider debate. I am also glad that she was able to get back to the firm that so cruelly rejected her. Given that she went on to become a Secretary of State, that is a great example of social justice in action.
The hon. Member for Wyre Forest (Mark Garnier) made a plea for financial education, which I endorse, although I must confess that I am not sure that I could do the sums he set out in his speech without the aid of a calculator—given the looks on the faces of some of the other hon. Members present, I am not sure they could either.
I welcome the involvement of my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) in the all-party group. Many of the issues that afflict her constituency also afflict mine. She is right that poverty should not mean a poverty of ambition, and we should all take that point forward.
The hon. Member for Rugby (Mark Pawsey) spoke powerfully about support for troubled families. He also spoke about grammar schools, and in Birmingham we also still have a grammar school system—I failed the 11-plus, which is a badge I wear with great pride. He made the important point that university is not the only route to social mobility, and we should celebrate other routes and life choices.
My hon. Friend the Member for Ealing, Southall (Mr Sharma) reflected powerfully on his own experiences as someone not born in this country. I was struck by what the hon. Member for Thurrock (Jackie Doyle-Price) told us about her parents saying, when she was younger, that they wanted her life to be better than theirs. That is a key point for all parliamentarians, and one reason why we get into this work is our desire to see the current generation do better than the one before it.
My hon. Friend the Member for Luton North (Kelvin Hopkins) spoke about the cultural change needed to get across to young people that their horizons are and can be much wider than they might think, might be told or might realise. He made the important link—something discussed in the all-party group report—between social mobility and teaching standards.
The hon. Member for Edinburgh West (Mike Crockart) confessed to having given unpaid internships in his office—I am glad he has moved towards paid ones—which raises the wider point of what we as Members of the House of Commons can do to promote internships going to people from a wider range of social backgrounds.
Finally, the hon. Member for Cleethorpes (Martin Vickers) reflected that the individual life stories of the Members who have spoken today have informed the debate and brought to life the issues that we are considering. That is important—particularly so with social mobility, above almost any other topic—because, as parliamentarians, we bring our life experience to what we debate.
I have a slight temptation to focus my remarks only on the relationship between higher education and social mobility, given that both the Minister and I have a education brief. I will do my best, however, to resist that temptation and to focus on some of the wider points as well.
In government, Labour did a lot to begin to fracture the link between people’s history and their destiny. Our policies focused on extending the ladders of opportunity, especially through the Sure Start programme and the right to free early-years education, which is important because we know—as the all-party group confirms—that the point of greatest leverage for social mobility is what happens between birth and the age of three. We dramatically increased support for schools with disadvantaged pupils, so the gaps in attainment between those from more and less advantaged backgrounds started to narrow. A recent university of Bristol study showed that family background had less influence on the results of those who took GCSEs in 2006 than it did on those who took the equivalent exams in 1986. The education maintenance allowance also dramatically increased participation rates post-16, and all of that sat alongside the expansion of higher education and the cementing of a widening participation agenda, which helped to make real gains in social mobility.
We made progress, but certainly not enough, and there is a long way to go. I am concerned that the cumulative effect of some of the Government’s current policies in education and higher education will set us on a backwards trend, with long-lasting and damaging consequences for social mobility. When the Minister responds, I will be grateful if he can tell us more about what the Government are doing to ensure that that is not the case in relation to four specific areas of policy.
First, in my experience—my hon. Friend the Member for Hackney South and Shoreditch made the same point—the removal of the EMA remains the biggest issue for young people in my constituency, directly affecting their ability to participate in education post-16.
Hazel Blears
My hon. Friend raises the issue about the education maintenance allowance, which we have discussed in the all-party parliamentary group. I am sure that she is aware that in Salford, several thousand young people were in receipt of the EMA. The situation now is that our local college has had to replace the EMA from its own reserves. It can manage to do that for a period of two years, but that is about to expire. As soon as the EMA was taken away, we saw the numbers of young people staying on at 16 decrease quite dramatically. As we used to be the worst place in the country for post-16 education, I share her concerns about the allowance, and I welcome her pressing the Minister on the matter. I hope that she will continue to do so.
Shabana Mahmood
I thank my right hon. Friend for that intervention. She is absolutely right and her constituency experience accords exactly with my own. Young people in my constituency use the EMA to pay for their travel—to be able physically to get to their place of learning—and books. I was really struck by the speech of my hon. Friend the Member for Hackney South and Shoreditch when she said that somebody used it to pay for their electricity key, which shows the different ways that the allowance was used and how damaging it is that it has now been lost. We will continue to press the Government on the impact on participation rates of the removal of EMA.
We have already touched on the second policy area—that is unsurprising given the higher education element of my role—which is the trebling of tuition fees. Although almost all the attention is focused on 18-year-old would-be graduates, one of my biggest concerns is the impact on mature students taking first degrees. The number of those applications is down 11.9%. Mature students making the decision to improve their life chances by going to university were largely responsible for the gains that were made in widening participation in higher education, and they are one of the main reasons why we got so close to the 50% target set by the previous Labour Government for participation in higher education. The important point that was raised in the debate today as well as in the all-party group’s report is that our social mobility story should not end at 18. What happens later is important, too, and the ability of mature students to go back into university is an important part of that.
Meg Hillier
In my constituency, we have seen a trend in which children are doing better at school, which is great news, but at 18 a lot of young women from particular backgrounds are getting good results and then dropping out. That is one reason why UBS bank helped to support an event that I held for young women. There is a cohort who are going off without a career path and then having to get back on to a career path after they have had children, which is much more difficult. That illustrates my hon. Friend’s point.
Shabana Mahmood
My hon. Friend is right. There is the drop-off, and then the difficult decision to get back in is really important.
We have seen the Government axe the Aimhigher scheme that was designed to widen participation in higher education. I am concerned that the national scholarship programme will not be an adequate replacement for it in money terms and that it also disadvantages universities that recruit a large number of students from backgrounds in which we want to widen participation. The programme is also based only on data in relation to free school meals, which misses out those who come from further education colleges and also mature students
Finally, let me turn to the changes in the provision of information, advice and guidance. High-quality and accessible information, advice and guidance is crucial for ensuring that all young people know of the opportunities that are open to them. Providing the right support can make the difference to young people in determining their future pathway. Proper information, advice and guidance should not be exclusively available to young people from better-off backgrounds. The Government must ask themselves whether the changes that they have introduced will ensure that proper advice and guidance is there for the many and not just the few. There will be a gap in provision this summer as the funding for Connexions has finished, but the replacement for schools will not be coming online until September.
David Mowat (Warrington South) (Con)
I was listening very carefully to the hon. Lady’s comments and to the catalogue of emerging policy. One of the elephants in the room on social mobility in our country is that we have a two-tier education system, with quite a high proportion of children going to independent schools and boarding schools. Much of that is allowed through tax subsidy or tax allowances. What is the Labour party’s position on the efficacy of that tax allowance in terms of social mobility?
Shabana Mahmood
I am not going to make tax policy on the hoof, but I would like to get to a position where independent and private schools are redundant because the same sort of education and quality of education is available in the state sector.
To finish my point about information, advice and guidance, there is real concern that good advice will not go to the most disadvantaged and those who need it most. Much of the work will now be done online, but we must recognise the importance not just of innovative high-quality and low-cost solutions, but the face-to-face element in the provision of advice and guidance. I endorse what my right hon. Friend the Member for Salford and Eccles said about the Government being able to learn more from organisations such as Future First, and schools throughout the country that are drawing on alumni to inspire and raise their pupils’ aspirations.
As I said at the beginning of my speech, I will not focus only on the brief that I shadow, because the debate is much wider. Social mobility is not just about changing the odds of young people from poor backgrounds making it to university. We must improve opportunities for those who do not make it to university. We must get away from the thinking that there is only one kind of success or only one pathway to success, and that everything else is a failure of some kind.
One of the biggest problems in our society is our collective and automatic assumption that if something is different it must be either better or worse. That holds us back, and the way in which we perpetuate class in our country is unnecessary baggage and very depressing. I would like to get rid of that, and two things jump out at me in relation to it: the value that we give to vocational education, and entrepreneurship.
First, vocational study should never be treated as a second-class option. The Government have a role to play in bringing that about, but the attitude of society as a whole is as important. I cannot help but be jealous of the position in Germany where middle-class parents boast about their kids doing great apprenticeships. We should do more to get to a place where vocational education is just as much a gold standard as academic education. We must make sure that there are good opportunities to switch between the two.
Secondly, entrepreneurship has an important role to play in increasing and improving social mobility. My boss, the shadow Secretary of State for Business, Innovation and Skills, recently made a speech about the link between entrepreneurship and social mobility. He told a powerful story of his father, who came to this country from Nigeria in the 1960s, and set up his own business. That gave his father opportunities that were denied to him elsewhere. It is clear that entrepreneurship has more of a role to play. I am pleased to see an increasing number of universities focusing on enterprise opportunities for their graduates and undergraduates, but we should guard against the “graduatisation” of entrepreneurship. It should remain an opportunity that is open to all in our society.
I want to pick up on the importance of the points made by my right hon. Friend the Member for Salford and Eccles about skills around confidence, emotional well-being and personal resilience—the so-called public school confidence skills—by reflecting on my experience. As hon. Members can see, I am an Asian woman. I am also a practising and observant Muslim. That is an important part of my identity and how I choose to live my life. I was born and raised in Small Heath in Birmingham, which is a very diverse city where many people who look like me live. In Small Heath particularly, many people are like me and believe in the same God as I do. The local school I went to had lots of people like me. I went to a different school to do A-levels, and it was more mixed, but there were still plenty of people like me. Nothing in my previous life experience had prepared me for my first night as a law undergraduate at Oxford, where I was the only non-white face in the junior common room. I was certainly the only Muslim woman in the whole college, which had an undergraduate body of 300. For someone to enter a room and find that they are the only one of their kind is a weird experience, even if they are self-confident, as I am. Apart from being weird, I also found it intimidating. It took me a solid month before I could enter any room in my college, such as the JCR or the hall for meals, without taking a deep breath and saying a silent prayer,
When I was qualifying to be a barrister, I experienced the same thing on my first day as a pupil barrister in chambers, although this time it did not take me a month to normalise to being the only one of my kind. It took me only a couple of weeks, which was a good downward trajectory because, by the time I got to Parliament, it meant that I was not afraid. In fact, it had become a depressingly normal part of my existence.
I raise that point because, while I was at university, I was involved in the Oxford access scheme. When I graduated, I taught as a volunteer at a supplementary school. I have done lots of mentoring of young people from my kind of background—my race background, my religious background and my socio-economic background—and the one thing that I always try to focus them on is not how to do the interview or the application, but a sense of self-confidence, by which I mean not just innate confidence in themselves, which they might have anyway, but the skill of faking confidence when they do not feel it. That is incredibly important. The techniques include taking a deep breath before entering a room and looking people in the eye. They also need to be physically robust in order to make their presence felt and to not be intimidated. What we call soft skills are not soft at all—if people do not have them, they are hard. It is difficult for people to take such things on board if they have not been a part of their previous experience. I would like us to think more deeply about what more we can do to bring those things about.
In conclusion, it is clear that we have to intensify and broaden our approach to social mobility in the future, not just because social justice demands it, but because our capacity for economic growth requires it.
The Minister for Universities and Science (Mr David Willetts)
Thank you, Mr Rosindell, for chairing the debate; I also thank Mr Hollobone, who was in the Chair before you. I congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) and the right hon. Member for Salford and Eccles (Hazel Blears) on doing an excellent job in bringing together the all-party group on social mobility.
My hon. Friend’s opening speech was excellent and included some great truths. It is true, for example, that everyone in the education system blames people in the stage behind for the problems that they face. I completely recognise that observation. He was also right to challenge some issues relating to social mobility, as was the right hon. Lady.
Perhaps the most interesting thing about this debate has been not so much the front-of-house stuff, but the back story—the personal accounts that we have heard from several Members of their own experiences. I will not share my complete personal back story, but I will say that a lot of my family also came from Small Heath in Birmingham, and one of these days I will compare notes with the hon. Member for Birmingham, Ladywood (Shabana Mahmood) on Birmingham and the trades in which my family worked.
I want to pick up on some of the important points raised by my hon. Friend the Member for East Hampshire, which are captured in the excellent report, “Seven Key Truths about Social Mobility”, which combines the best features of a think-tank pamphlet and a McKinsey PowerPoint presentation. He lists seven truths and I recognise a lot of them, but I would challenge him on two points in his report. The first is the statement:
“The point of greatest leverage for social mobility is what happens between the ages of 0 and 3”.
I realise that that is very much the view nowadays, as a result of which we have a different pattern of spending in Britain from the OECD average, with more spent on early years and less on other stages of the education process. We must beware of becoming Calvinists who think that everything is determined by early-year experiences. The Government’s approach in our report on social mobility, “Opening Doors, Breaking Barriers”, is to look at each stage of the life cycle. My hon. Friend the Member for Cleethorpes (Martin Vickers) made an important point about going to university and graduating at the age of 54. It is a reminder that nobody’s fate is determined by their earlier experience.
People have the opportunity to break free and take the initiative. I meet exceptional examples of that. To take a classic case, a lone parent, perhaps aged about 30, who left school at 16 and has been busy raising kids, begins to think about what they will do with the rest of their lives just when their kids are at secondary school or even older. They suddenly think, “With my experience, I could be a social worker, join the police or become a nurse.” They want to go to college and university to get the qualification to enable them to do that. That is the kind of opportunity we need to continue to provide.
There is an interaction between the different stages of social mobility, in that often one of the best things that we can do for a child aged nought to three is provide further or higher education for their parent. The experience of the parent having an opportunity as a mature student is often an incredible investment in the child as well. To provide higher-quality early-year experiences, it is important that we have better qualified staff in child care, which in turn requires further investment in apprenticeships and college and university courses. The more I look at it, the more I am persuaded of the interaction between experiences at different stages, rather than a special priority for one stage.
I agree with the vast majority of the report, but I am trying to identify some areas of challenge. I agree that university is the top determinant of later opportunities, so pre-18 attainment is key. It gives people an important opportunity. The debate in Britain about what follows is sometimes rather fraught. There are two extremes. In the Chinese model, everybody sits an exam at 18, and those with the top 100 marks go to the university of Beijing, the next 100 go to Shanghai, the next 100 go somewhere else and everything is ranked by the marks.
The other extreme is the American model, where Harvard or Princeton mould the class. Ivy league universities have a view about the mix of people they want. They look for people who play sport and those who do not. They think about ethnic mix, alumnae and donors. There is a host of criteria. Someone must have reached a certain academic level, of course, but the institutions are explicit: they are moulding the class because they think that doing so moulds the future of America. It helps to shape the people who will govern and have leadership roles in America.
In Britain, we are somewhere in between. I am a complete meritocrat on this issue, but I do not think that a university in Britain has ever simply used the marks at A-level as the only criterion; they also try to assess who has the greatest ability to benefit from going to university. One encouraging thing about university is that, if anything, it is the first stage of the education process where people from more disadvantaged backgrounds outperform, rather than underperform. That is something that universities take into account when they look at how to maximise people’s chances of getting a good degree—a first or a 2:1.
My hon. Friend the Member for East Hampshire made an excellent speech. He made a series of shrewd observations, which we will draw on as we develop our social mobility strategy. The right hon. Member for Salford and Eccles also made an excellent speech, with a shocking example of social attitudes: the solicitor who nearly offered her a job, but did not. I hope I am not complacent, but I think—and hope—that that view of the world has long since gone. In my experience, including chairing the group on access to the professions, the legal, medical and accountancy professions are desperate to reach out to the range of talent across the country, regardless of background.
The right hon. Lady asked three specific questions, which I will briefly respond to. She talked about what was happening to widen the networks of people from the poorest backgrounds. There are limits to what Governments can do, but we will launch the new Inspiring the Future programme next month, following the success of Speakers for Schools. It aims to get into schools, especially in the more deprived areas; people from a range of careers and jobs will open kids’ eyes to what the possibilities are. We already have 800 volunteers—people who have achieved something, who know about a job and who can explain it persuasively.
On internships and unpaid internships, and going back to the right hon. Lady’s pressure for networks, internships have become an important part of routes into work. Therefore, we have kept the Graduate Talent Pool, which began under the previous Labour Government; I have confirmed this week that we are keeping it for three years. It is a web-based service with information on internships for people who might not otherwise be part of a network that provides them with such information.
Since its launch, the site has carried 47,000 vacancies from 6,000 employers, and 73,000 graduates have registered. Due to concerns about the exploitation of interns, we have made it clear in a recent update of the site that we have added a quality assurance process for any new vacancy, to ensure that it offers a graduate-level internship opportunity and complies with minimum wage regulations.
More widely, I assure the right hon. Lady that we are clear about minimum wage obligations. If something is employment, with the obligations that come with employment, such as set hours when people are expected to attend the workplace, the minimum wage applies. The Government are conducting a targeted enforcement operation in sectors where internships are commonplace and where we are aware of advertisements for unpaid work experience.
The right hon. Lady’s third and final question was about great employers.
Hazel Blears
Before the Minister leaves the subject of internships, I should say that I asked about the current anomalous situation whereby it is still lawful to advertise unpaid internships that are clearly jobs with set hours. That seems to be a contradiction in terms: if it is unlawful to have the job unless it is paid the minimum wage, I cannot for the life of me understand why advertising such placements, which on the face of it contravene national minimum wage legislation, is permitted. Will he look at the issue of advertising for such posts?
Mr Willetts
I will look at the issue but, because of our commitment to freedom of speech in this country, the regulation of what we can say or advertise is rather different from the regulation of the minimum wage, for instance. We have a higher and more demanding criterion before we say, “This form of communication is banned.” When we are aware of advertisements for unpaid work experience, and when it looks as if a sector has become particularly active with those, we engage in targeted enforcement through Her Majesty’s Revenue and Customs.
On businesses, I refer briefly to the social mobility business compact that we have introduced. Some 140 businesses have signed up already, involving 2.5 million employees. That is absolutely to do with businesses committing themselves to drawing on the widest range of talents.
Let me refer to some of the other lively contributions to the debate, including from my hon. Friend the Member for Thurrock (Jackie Doyle-Price) on apprenticeships, which were also brought up by my hon. Friend the Member for Edinburgh West (Mike Crockart). We are absolutely clear that higher education should not be seen as the only route into a well paid job. It is important that the classic, vocational route is available.
Indeed, one of the things that I am doing in the working group on access to the professions is to see whether we can reopen some of those non-graduate routes into accountancy or law that used to exist and were perfectly legitimate in the past. Nowadays, they might involve employers at some point down the track sponsoring one of their employees through university as a mature student, to get some extra qualifications in finance or law—mature students who have already done some practical work as an employee might get even more out of the university course.
We are doing our best, working with the professions that will ultimately decide, to ensure that those routes are opened up again. My hon. Friend the Member for Thurrock rightly referred to the work of my excellent colleague, the Minister for Further Education, Skills and Lifelong Learning. The Government’s record in expanding apprenticeships is evidence that we really are committed to them. We are way ahead of our target, having added more than 200,000 apprenticeships since the coalition took office.
I am not sure whether I should stray into the remarks on grammar schools made by my hon. Friends the Member for Rugby (Mark Pawsey) and for Thurrock, but I will just very briefly observe that what worked in the past as a device for social mobility does not necessarily work today. In Birmingham, I did sit the 11-plus, in the days when all of us, at every local primary school, sat in our rows of desks and did the exam. Nowadays, there is more tuition for the 11-plus, and more people who go to private schools up to the age of 11 to get themselves taught to pass the exam.
Although we respect the decision in parts of the country to keep grammar schools, the evidence is that the number of children from low-income backgrounds who pass the 11-plus in those areas and go to grammar schools has, sadly, declined. It might be that the schools do not work in the way they used to—as an opportunity—and that is one reason why the Government do not propose a return to selective education. Within schools, streaming and setting are, of course, very effective devices.
This has been a wide-ranging debate, and I have tried not to focus solely on higher education, but I absolutely agree with the points about mature students, and it was great to have at least one such student identify himself. We should not think of higher education as something that people do just at the age of 18.
When we consider the evidence from UCAS applications, we look particularly carefully at what has been happening with mature students. There was a bit of a surge in their numbers two or three years ago, and it is a bit early to say whether there is an underlying pattern, but, as I said in my intervention on my hon. Friend the Member for Edinburgh West, despite the fears that people had about our fee proposals, the evidence so far from applications is encouraging.
My party—the Conservative Opposition, as it then was—was afraid that people would be put off applying when the then Labour Government introduced the £3,000 fees in 2005, and that is one reason why we voted against the measures. The evidence, however, was that the £3,000 fees did not have the feared effect, and that gave us some confidence that with a fees and loan system, in which no student had to pay up front, we could avoid such fears. The number of 18-year-olds is falling, due to a decline in the birth rate in the early ’90s. Allowing for the slight fall in the size of that cohort, the number of university applications from school leavers is down by about 2%, but the fall among school leavers from the poorest backgrounds is, if anything, rather less. We take some encouragement from that.
Finally, I say to my hon. Friend the Member for East Hampshire that the debate has been valuable. I am sorry that it has not been possible to cover all the excellent comments, but we will certainly draw on them as we develop the Government’s social mobility strategy.
Damian Hinds
This has been an excellent debate, and an opportunity to consider a wide range of issues, including work with troubled families, rigour at school, celebrating vocational routes, the role of student finance, and “HR, not social responsibility” at work, as the hon. Member for Hackney South and Shoreditch (Meg Hillier) said.
My hon. Friend the Member for Thurrock (Jackie Doyle-Price) reminded us of the power of individuals and the right hon. Member for Salford and Eccles reminded us of the crucial importance of one particular individual who appears in many of our personal stories: mum. She is the person who not only tells us that we can be all we want to be, but is there to make damned sure that we do whatever we need to do to get there. I am sure that we have all been struck by the personal stories, including the shadow Minister’s, and I will never forget the story of the man with the half-moon glasses. I hope that the stories remind us of some of the ways in which we have made great progress as a society on things such as racial and crass class prejudice.
I have been inspired—I hope that other Members have, too—by the work done by the many organisations, including PRIME, Future First and the Sutton Trust, and by many individual schools and teachers. What fellow Members are doing on apprenticeships, financial education and kids without careers is also inspiring.
I thank the Backbench Business Committee for allowing us to have this debate, and I particularly thank the Minister for the incredibly detailed and thoughtful way in which he directly addressed a number of the points that came up. He reminded us of how all the different issues interact, and that if we get everything right the whole will be that much greater than the sum of the parts. We have been reminded of how much there is to do, but also of the size of the opportunity.
Written Ministerial Statements
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Industrial Development Act 1982
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The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I would like to inform the House that the Government are today publishing a response to the consultation on modernising the Industrial Development Act 1982 (IDA). This confirms the Government intention to remove the automatic 100% assisted area status of Northern Ireland and to make a number of more technical revisions to update the IDA.
A revised IDA, updated to reflect current economic realities, will provide maximum flexibility for addressing economic disparities across the whole of the United Kingdom when drawing up the assisted areas map for 2014-20 and when offering aid.
Removing Northern Ireland’s automatic assisted area status will not in itself mean Northern Ireland losing its 100% coverage under the Commission’s regional aid guidelines and new assisted areas map for 2014-20. The UK Government will work with the Northern Ireland Executive to get the best outcome from the European level discussions and there will be further consultation on the new UK assisted area map.
A copy of the response document will be placed in the Libraries of both Houses and is available electronically on the BIS website:
http://www.bis.gov.uk/Consultations/revision-of-industrial-development-act-1982
VAT (Anomalies)
(11 years, 10 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
HM Revenue and Customs (HMRC) is today publishing its summary of responses to the consultation “VAT: Addressing Borderline Anomalies”. The consultation, launched on 21 March 2012, closed on 18 May 2012 and nearly 1,500 responses were received. The Government have set out some amendments to the initial proposals and further details are contained within the response document.
The changes to the VAT rules will be enacted through a new schedule to be introduced at the Report stage of the Finance Bill.
The summary of responses document is available on HMRC’s website and copies have been placed in the Libraries of both Houses.
Reserves (Call-Out Order)
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The Minister for the Armed Forces (Nick Harvey)
With the expiry of the call-out order made on 1 May 2011, a new order has been made under section 56(1 )(a) of the Reserve Forces Act 1996 to enable reservists to continue to be called out into permanent service as part of the United Kingdom’s contribution to the United Nations Forces in Cyprus (UNFICYP).
The new order is effective until 28 June 2013. Some 54 reservists are currently called out in support of UNFICYP. All 54 are serving in Cyprus.
National Employer Advisory Board
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The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
In accordance with the Cabinet Office’s guidance on public bodies, a review of the National Employer Advisory Board (NEAB) has been commissioned and work will commence in July 2012.
NEAB is an advisory non-departmental public body, sponsored by the Ministry of Defence (MOD), which provides informed but independent advice to Ministers and the MOD about how it can most effectively gain and maintain the support of the employers of Britain’s reserve forces. The review will consider the effectiveness of how the functions of the NEAB are currently delivered, whether there is a need for the function and for the advisory NDPB to continue, and if so, how the function might best be delivered in future.
The review is due to be completed later this year and I shall inform the House of its outcome.
Education Reform
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The Secretary of State for Education (Michael Gove)
I am today announcing the final arrangements for funding schools from 2013-14. This provides a vital step towards a national funding formula, which will create a funding system that is fair, logical and distributes extra funding towards pupils who need it the most.
We inherited a situation where there was inequality in the funding of schools, with similar schools or pupils in different locations attracting different levels of funding. I am determined to end this inequality and to create a fair and transparent system of funding for schools.
In March, I announced my intention to introduce a new national funding formula for schools during the next spending review period. This will ensure that similar pupils, no matter where they go to school in the country, attract similar levels of funding. To pave the way for this broader reform, I set out my intention to simplify the local funding arrangements for 2013-14 and consulted on some of those arrangements. I also announced a new approach to high needs funding that will help to improve transparency, quality and choice for young people and their families.
Following that consultation, I am today publishing a document—“School Funding Reform: Arrangements for 2013-14”—which confirms my final decisions. Copies of this document will be placed in the House Libraries. These new arrangements will move us towards a funding system which promotes choice and raises quality.
The announcement today provides the detail necessary to enable school budgets to be determined on a clearer and more transparent basis. It is a significant part in our continuing reform of the way schools are funded and will help us achieve our objective of raising the aspirations and attainment of all pupils.
Afghanistan
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 18th progress report on developments in Afghanistan since November 2010.
At the NATO summit in Chicago on 20 and 21 May, the international community demonstrated its enduring support to Afghanistan beyond the end of security transition. International security assistance force (ISAF) partners delivered on the commitments made at the Bonn conference with credible financial contributions to sustain the Afghan National Security Forces (ANSF) beyond the withdrawal of ISAF troops. They also agreed NATO’s long-term role in Afghanistan up to and beyond 2014. The summit sent a clear message to the Afghan people that we will not abandon them. It also sent a clear message to the insurgency that they cannot wait us out. The summit communiqué reaffirmed NATO’s commitment to full implementation of United Nations Security Council Resolution (UNSCR) 1325 on women, peace and security. It also endorsed a strategic progress report to make UNSCR 1325 an integral part of NATO-led operations and missions.
At Chicago, partners also noted the progress in security transition and welcomed the recent announcement of tranche three in May. They looked ahead to the mid-2013 milestone, the point at which the fifth and final tranche is expected to begin and the ANSF will take on lead security responsibility across the country. When transition completes at the end of 2014, the ANSF will have full security responsibility and ISAF will move away from a combat role.
My right hon. Friend the Secretary of State for International Development will attend the Tokyo conference on 8 July. It is vital for the Tokyo conference to deliver much-needed aid commitments. This will complement the security commitments made at Chicago, to ensure Afghanistan continues to develop long after international troops have departed.
We encourage all international partners to commit at Tokyo to stand by Afghanistan for the long-term and provide concrete aid pledges for at least the period up to 2017. The Afghan Government will have to demonstrate clearly that they are serious about fighting corruption and making key policy reforms, to persuade the international community to continue to provide assistance.
On 13 May, the Afghan Government announced the third tranche of areas to enter transition. Once tranche three begins, 75% of the Afghan population will be living in areas where ANSF have lead security responsibility. Tranche three, which includes a number of challenging areas, will include Nahr-e Saraj, the third and final area within the UK’s area of operation to begin transition. Lashkar Gah and Nad-e-Ali entered transition in tranches one and two respectively. Transition in these tranches has progressed well, with ANSF capability continuing to improve. The process remains on track for transition to complete in all areas of the country by the end of 2014.
I am placing the report in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk).
Overseas Territories
(11 years, 10 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Today I am publishing the Government’s White Paper on the “Overseas Territories: Security, Success and Sustainability”. This is the first review of the overseas territories since 1999 and it is the culmination of two years work and consultation.
We came to Government determined to renew and strengthen relationships with the overseas territories.
Our historical links go back more than four centuries. The territories comprise a quarter of a million people and 90% of the biodiversity of the UK and territories combined. They are valued constituent parts of the realm and we have a responsibility to ensure their security and good governance. We also want them to be vibrant and flourishing communities that proudly retain aspects of their British identity. This means upholding their rights of self-determination, helping them become economically independent and able to generate opportunities for their people, and protecting their extraordinary environmental heritage.
The Government take these responsibilities very seriously.
The White Paper has been developed across Government Departments and in consultation with the people and Governments of the territories. It sends an important signal of long-term commitment and engagement. It focuses on three goals and practical measures to achieve them.
First, it seeks to strengthen engagement between the United Kingdom and the territories. We want to deepen our co-operation and share expertise more widely. At a Government level, for the first time all Departments have agreed that they will take a lead in engaging with the territories in their respective areas of competence. Each has written its own paper on its work with the territories. We are launching a jubilee programme to support the exchange of expertise between public servants in the territories and the UK. We also want to build stronger links at political level. We are determined that the agenda set out in the White Paper will be driven forward by the UK and territory leaders together through a joint ministerial Council. This strategy goes beyond Government. It seeks to foster partnerships between the UK and the territories in the private sector, professional bodies and civil society.
Our second goal is to help the territories to improve governance, financial management and economic planning, where this is necessary.
We appreciate the remarkable diversity of the territories, each with their own specific attributes, opportunities and needs. In these times of global economic difficulty we all face common challenges: building more diverse and resilient economies, cutting public sector deficits, regulating business effectively, ensuring the sustainability of natural resources and protecting the environment. There are certain standards which we must all uphold, in particular in maintaining the rule of law and integrity in public life, building strong and successful communities and respecting human rights. This Government are determined to help the territories run themselves effectively, not to run them themselves, the territories have made considerable strides in their economic development. We are determined to support them and to ensure that those territories that still need assistance will remain a first call on Britain’s international development budget. We expect these territories to do all that is necessary to reduce over time their reliance on subsidies from the British taxpayer; and we expect all territory Governments to manage their public finances sustainably.
The third goal of our strategy is to improve the quality and range of support available to the territories. The Government are willing to make investments that will promote growth and economic independence in the aided territories. For example, the Department for International Development is spending up to £247 million on a project to construct an airport on St Helena. This will be a significant step on the path to self-sufficiency and will help the island to reduce its dependence on UK aid in the future.
We also want to help the territories build productive links with other countries and international organisations, particularly to make good use of support from the European Union and the Commonwealth. We will support this using the FCO’s overseas networks and relationships.
This year, we have celebrated a number of important landmarks relating to the territories. In January, we marked the centenary of Scott’s heroic journey to the south pole. Earlier this month, we welcomed territory leaders to Britain to celebrate the diamond jubilee. Two weeks ago, we commemorated the 30th anniversary of the end of the Falklands conflict in which British soldiers gave their lives to protect the Falkland Islanders’ right of self-determination. This White Paper is another major milestone—one that marks a new era of positive engagement between Britain and the overseas territories.
Care Quality Commission Market Report
(11 years, 10 months ago)
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The Minister of State, Department of Health (Mr Simon Burns)
The Care Quality Commission (CQC) has today published its first quarterly report on the provision of health and adult social care in England, “Market Report Issue 1: 2012”.
The market reports are designed by the CQC to:
provide an update on compliance in each of the sectors that CQC regulates on a quarterly basis;
identify themes and trends in each sector’s performance;
flag issues of non-compliance to providers and other bodies who have responsibility for the health and adult social care system; and
demonstrate the volume and effectiveness of CQC’s inspection and enforcement action.
The report published today presents the results of inspections of more than 14,000 services, between June 2011 and 31 March 2012, across all the sectors that CQC currently regulates: healthcare, adult social care and dental care. This and future reports will provide a snapshot of the compliance of providers against the essential safety and quality requirements.
This report also includes a special feature on maternity services and focuses on midwife staffing numbers. The Department of Health is moving toward a workforce where the focus will be increasingly on supporting the whole maternity team to make the best use of their contributions by using innovation and new technology to drive up the quality of care and deliver value for money.
The Centre for Workforce Intelligence has been asked by the Department of Health to undertake an in-depth study of the nursing and maternity workforce. The final report will be published in summer 2012.
“Market Report Issue I: 2012” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Human Fertilisation and Embryology Authority/Human Tissue Authority (Transfer of Functions)
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Health (Anne Milton)
The Department of Health is publishing a “Consultation on proposals to transfer functions from the Human Fertilisation and Embryology Authority and the Human Tissue Authority” today.
In “Liberating the NHS: Report of the arm’s length bodies review (2010)” the Department of Health set out its proposals for reducing bureaucracy and increasing efficiencies. This included transferring all functions from the Human Fertilisation and Embryology Authority and the Human Tissue Authority with a view to abolishing the two organisations by 2015. This consultation sets out options for taking this work forward. We welcome views and will use these to inform our thinking.
A copy of the “Consultation on proposals to transfer functions from the Human Fertilisation and Embryology Authority and the Human Tissue Authority” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Data Protection
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
My noble Friend the Minster of State, Ministry of Justice, Lord McNally, has made the following written ministerial statement:
Today, I will publish the Government’s summary of responses to their call for evidence on the European Commission’s new proposals for data protection.
On 25 January 2012, the European Commission published a draft data protection directive (covering the police and judicial sector) and a draft data protection regulation (mainly impacting on individuals, business, the public sector and charities). The Government’s call for evidence, which was launched on 7 February and concluded on 6 March 2012 sought evidence on the potential impact on the UK of both the proposed regulation and the proposed directive.
Some143 responses were received from across the public, private and third sectors, consumer groups and members of the public. In addition to inviting written responses to the call for evidence, officials from the Ministry of Justice took part in a series of bilateral discussions and roundtables to hear views from industry and rights groups.
Broadly, respondents to the call for evidence welcomed the opportunity for a revision of the current data protection framework. Rights groups and members of the general public welcomed the strengthening of individuals’ rights and greater transparency in the processing of personal data. However, businesses and some public sector organisations expressed their concerns about the additional burdens and unintended consequence stemming from the proposed regulation. The evidence received will help to inform the UK’s position for the ongoing negotiations of the EU data protection instruments.
At the same time as publishing this summary of responses, the Government will publish their impacts checklist of the proposed data protection instruments. Primarily, the checklists aim to assess the costs and benefits the proposed instruments could generate.
Negotiations are expected to continue at EU level until 2014, when the Government’s aim is to secure a data protection framework that is proportionate, and that minimises the burdens on businesses and other organisations, while giving individuals real protection in how their personal data are processed.
Copies of the summary of responses to the call for evidence and the impacts checklists will be placed in the Libraries of both Houses and on the Department’s website at: www.justice.gov.uk.
Employment, Social Policy, Health and Consumer Affairs Council
(11 years, 10 months ago)
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The Minister of State, Department for Work and Pensions (Chris Grayling)
The Employment, Social Policy, Health and Consumer Affairs Council met on 21 June 2012 in Luxembourg. I represented the United Kingdom.
The main discussion was a policy debate on the Europe 2020 strategy: contribution to the European Council (28 and 29 June 2012)—European semester. The presidency stated that it was vitally important for Europe to take ambitious reform measures and the Commission stressed the greater need for economic integration in Europe. I intervened to state that country specific recommendations (CSRs) were a key tool and needed to be ambitious and challenging but that they needed to be fully supported by evidence and be relevant to individual member states. I further stressed that the process for agreeing CSRs needed improvement and in particular, the Commission should show greater willingness to listen and accept changes where duly justified and supported by evidence.
There were progress reports on four topics; legislative initiatives for posting of workers; minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields); the principle of equal treatment of persons irrespective of religion or belief, disability, age or sexual orientation; and the European globalisation adjustment fund (EGF) (2014-20). On EGF, there was support from some member states to continue the fund in the next programming period while other disagreed. I intervened to state that the fund should be discontinued.
In addition, Ministers adopted two sets of Council conclusions, covering responding to the demographic challenges through enhanced participation in labour market and society by all, and gender equality and the environment: enhanced decision making, qualifications and competitiveness in the field of climate change mitigation policy in the EU.
Ministers reached a partial general approach on the programme for social change and innovation (PSCI) excluding the programme budget. I supported this, while tabling a minute statement stressing that, as the Danish presidency has made clear, progress in negotiating individual sectoral regulations should not prejudice the outcome of the overall multiannual financial framework discussion. Ministers also endorsed the main messages from the Social Protection Committee’s report on pensions’ adequacy.
Under any other business, the Commission provided information on national Roma integration strategies and the ratification and implementation of the UN convention on the rights of people with disabilities. The presidency provided information on conferences held during the Danish presidency. The Commission and presidency both reported on the G20 meeting of Labour and Employment Ministers, and finally, the Cypriot delegation outlined the work programme of their forthcoming presidency.
Right to Control (Pilot Scheme)
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
The current Right to Control pilot scheme is implemented by regulations which expire on 13 December 2012. The Government believe that the best way to get more evidence about the delivery of Right to Control is to extend the current pilot scheme for a further 12 months beyond December 2012. Accordingly, the Government are proposing to put in place that extension.
Later today the Department will launch a public consultation in which it asks for views about its proposed extension of the pilot scheme.
In line with requirements under part 2 of the Welfare Reform Act 2009 the Department will publish, for comment, draft regulations to enable the extension of the pilot scheme. Pending the results of the consultation it is our intention to lay the draft regulations before Parliament for approval in the autumn.
The consultation document, which includes the draft regulations, will be published later today on the Department for Work and Pensions website with details of the consultation process. I will also place a copy of the consultation document in the House Library later today.
Grand Committee
(11 years, 10 months ago)
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Arrangement of Business
(11 years, 10 months ago)
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The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Groceries Code Adjudicator Bill [HL]
(11 years, 10 months ago)
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Viscount Eccles
Viscount Eccles
My Lords, Amendment 37 would knock out Clause 9, or elements of Clause 9, so I will confine myself to speaking to Clause 9, which provides for enforcement using financial penalties. The clause is very important. It is probably the most important debating issue during the progress of the Bill. There is a wide range of views within the Committee about the clause, from my suggestion that it should be taken out altogether to the Government’s position that it should be discretionary, given the right amount of evidence, for the Secretary of State to introduce financial penalties and, on the other hand, that that discretion should be removed and that penalties should start as soon as the Bill is enacted.
Before Parliament agrees to a regime of fines—administrative or quasi-judicial fines—it is incumbent on us to give it careful thought and have sufficient evidence. It is a serious matter to give any regulator or adjudicator the power to impose fines. The clause comes against the background that the industry as a whole—the retail industry and its suppliers—has been enormously successful. If we want evidence of that, we have only to look at the Food and Drink Federation’s evidence, which says, look how wonderfully successful our members have been and what a fantastic contribution they are making to the economy. I am sure that that is right. As the Competition Commission stated, the general public have benefited hugely from the growth of the supermarkets, because of not only price but also choice. All sorts of things are available at reasonable prices to the general public which would not be there if it were not for the supermarket industry.
I quite accept that there have been bumps and glitches along the road, and no doubt there will continue to be. It is a very big industry with very tight margins. The Co-op’s net margin before tax is 2.8%. There is not a lot of room there and it is clear that, from time to time, there will be arguments about sums of money which we might not think considerable but which to a supermarket working on narrow margins are indeed considerable.
There is in our body politic a certain distaste for competition. We do not have many really competitive markets in this country—take a look at banking and quite a lot of other industries. Within the political body politic, there is also wariness about competition. It seems rather distasteful that people should fight so hard for business and to make that business more efficient. What type of behaviour by the supermarkets in breach of the GSCOP, the code of practice which is imposing excessive risk and unexpected cost on suppliers and leading to the ultimate disadvantage of the public—which is a straight rendering of the Competition Commission’s position—justifies the imposition of a system of fines?
In our last sitting the noble Lord, Lord Knight, very helpfully cited some examples of things that do not go as well as they should. His most striking example was the matter of delivery schedules. He started with a reference to notice periods, reasonable notice and the vagaries of supply. This matter is covered in the code of practice to this extent. If you will forgive me, I think that we should take note of what is in the code of practice. In part 1, under “Interpretation”, it states:
“Reasonable Notice means a period of notice, the reasonableness of which will depend on the circumstances of the individual case, including:
(a) the duration of the Supply Agreement to which the notice relates, or the frequency with which orders are placed by the Retailer for relevant Groceries”.
In his presentation the noble Lord, Lord Knight, said that there were some people with no contract. I think that that is absurd. I cannot understand why the representative bodies of the suppliers do not pull themselves together and make sure that their members do have supply contracts. If there is anything that a trade association could contribute to its membership, it would be good advice on how to get a contract that is enforceable. If suppliers are entering into contracts that are not enforceable, they had better get up to speed. I started taking orders for steel castings when I was 25, and the idea that I would have ever entered into a contract to supply anyone—the British Steel Corporation, for example, a very powerful body at that time—without anything written, is unthinkable.
The code goes on to state that,
“(b) the characteristics of the relevant Groceries including durability, seasonality”—
we are back to lettuce—
“and external factors affecting their production; (c) the value of any relevant order relative to the turnover of the Supplier in question; and (d) the overall impact of the information given in the notice”—
that is, the “reasonable notice” notice—
“on the business of the Supplier, to the extent that this is reasonably foreseeable by the Retailer”.
While the Competition Commission has taken this matter into account, it has had to handle it with what might be described as a certain amount of flexibility, because of the variability of the circumstances.
Part 3(3) of the code—and this of course is binding within all supply agreements—states:
“Variation of Supply Agreements and terms of supply
(1) Subject to paragraph 3(2), a Retailer must not vary any Supply Agreement retrospectively, and must not request or require that a Supplier consent to retrospective variations of any Supply Agreement.
(2) A Retailer may make an adjustment to terms of supply which has retroactive effect where the relevant Supply Agreement sets out clearly and unambiguously:
(a) any specific change of circumstances (such circumstances being outside the Retailer’s control) that will allow for such adjustments to be made; and
(b) detailed rules that will be used as the basis for calculating the adjustment to the terms of supply.
(3) If a Retailer has the right to vary a Supply Agreement unilaterally, it must give Reasonable Notice of any such variation to the Supplier”.
That is exactly why I have asked for the Office of Fair Trading to produce its reports. It has now had 20 compliance reports: two years’ worth, from 10 different supermarkets. It either believes those compliance reports or it does not. Those compliance reports either record breaches or alleged breaches of the code of practice under these paragraphs or they do not. For us to proceed without understanding the present situation is a dereliction of Parliament’s duty.
I welcomed the list suggested by the noble Lord, Lord Knight. I am not sure that jam with less sugar in it than some other jam is a subject that quite comes under the code, any more than pomegranate dust in chocolate does. I would just comment that exotic chocolates are mostly sold not through supermarkets, but through Thorntons or Hotel Chocolat. There are specialist retailers in exotic chocolates. Who else, one then asks, produces a list of those things which demonstrate a type of behaviour that might justify the introduction of an administrative penalty system? Does the OFT produce a list? It has been looking at this market. It has the power to refer what it thinks is anticompetitive to the Competition Commission. Does the Competition Commission have a list? Do the trade associations have a list? I have asked them all to let me know what they would like to see investigated. They have come back more or less with the same answer: their members will not tell them because they are too frightened.
Quite honestly, that will not do. It is not evidence. It is assertion and raises the question about suspicion. Do Her Majesty’s Government have a list? Do the Members of this Committee have a list? If there are lists, that is great—I am here to be convinced, as I think I said on Tuesday. At the moment the principle behind this clause is quite unsupported by evidence. What, the question becomes, about the clause itself? In detail it is very faulty. There is no maximum amount. We have no idea what the Secretary of State would do if there was a piece of secondary legislation. We do know that we have too much legislation. We have too much secondary legislation. Secondary legislation is not scrutinised properly. After that we have too much litigation. Here is this clause saying, “Oh well, go to the High Court or the Court of Session in Scotland”.
Does Parliament really want to set up another set of administrative fining, trying to fine big people who will have pretty good legal advice and pretty good arguments to put forward? Do you want them in court every five minutes? This does not seem to be in the public interest. The whole process is incredibly costly. The impact assessment does not begin to try to analyse how it would work and who would be charged what and what expenses in total would be incurred. It is a bland document. It says in various places that it is difficult to know how this will work and how that will work. However, it is worse than there being a lot of costs incurred. Who finally is going to pay? Times are what they are, and it is the least able to pay who ultimately will pay. The Co-op’s margin, as I said, is 2.8% before tax. Let us suppose that it is put to fines, goes to law and spends a lot of money—where will that cost end up? The answer is: in the prices in the shops. What can the 10 sensibly do but alter their margins? The best net margin is Marks and Spencer’s—although I have found it difficult to find out how that is split between clothing and food—at just over 6%. That is the highest margin that I can find.
Lord Knight of Weymouth
My Lords, with all respect to the noble Viscount, we have amendments coming up later regarding the powers to fine. All that we on this side want to do at this stage is say that he will not be surprised that we disagree with him, and that we will explore at greater length the reason why. Suffice to say that the Federation of Small Businesses, the National Farmers’ Union and the Country Land and Business Association, to name but three of the submissions that I have had, think that we should go further on the powers to fine than the Bill does. We have support from across the House; the noble Lords, Lord Razzall and Lord Teverson, my noble friends Lord Borrie and Lord Grantchester, and the noble Baronesses, Lady Randerson and Lady Byford, have all put their names to amendments that say that we should go further. We think that the status quo is the minimum. The Select Committees of BIS and Defra are also supportive of the powers to fine. I am happy to leave it to the Minister to persuade her noble friend that he should withdraw his amendment.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
There is a challenge to start the day on. Our discussion on my noble friend Lord Eccles’s amendment is the first discussion today on financial penalties although I know that we have more to come, as the noble Lord, Lord Knight, has just said. As I said at Second Reading, the Government believe that the enforcement methods of recommendations and requirements to publish—so-called “name and shame”—are likely to be sufficient to ensure a higher level of compliance with the code. However, should those powers be insufficient, it is important to have the reserve power of allowing the adjudicator to impose financial penalties.
Before I continue, I say to my noble friend that here he has someone who understands supermarkets and these large companies and how they work. I have said before and will say again that I was a supplier to six of the largest supermarket groups. I ran a successful and happy business during that time, but of course I did it in the 1980s and in those days there was no written contract for chilled food at all. I had no written contract, so every time I filled a lorry with £50,000-worth of smoked salmon or smoked mackerel I could not even get insurance on it because I did not have a contract that I could show anyone. I took a risk in making those journeys every day but it was advantageous to me to do so. I am fully aware, as are the Government, that there is a relationship between the supermarkets and their suppliers and, ultimately and inevitably, to the consumer.
The Secretary of State would not activate this power lightly. The process by which he could do so is set out in detail in Schedule 3, but key aspects include the fact that the Secretary of State may make such an order only if he or she thinks that the adjudicator’s other powers are inadequate, and that before making such an order the Secretary of State must consult a range of parties, including the large retailers and the representatives of suppliers and consumers. The Bill provides sufficient checks to ensure that the power is introduced only if it is genuinely needed.
Maintaining the possibility of imposing financial penalties is essential if we are to be confident that the adjudicator will have the necessary powers to enforce the groceries code. The noble Viscount, Lord Eccles, was worried about the reasons for not prescribing the maximum fine in the Bill. It is more appropriate that such a maximum be informed by experience; for example, of how much retailers might be gaining from non-compliance. This experience can be gained only once the adjudicator is operational. Should the Secretary of State make an order to introduce fines, the order must specify the maximum penalty that may be imposed or how the maximum penalty is to be calculated.
The very existence of the reserve power will contribute strongly to ensuring compliance with the groceries code. Large retailers will be conscious that there is the prospect of a swift introduction of financial penalties if there is evidence of significant non-compliance with the groceries code and the existing regime seems not to be sufficiently effective. Clearly, all large retailers will prefer to avoid this situation arising.
The Bill’s provisions on financial penalties both encourage compliance with the initial enforcement regime and provide an important reserve power should stronger methods of enforcement be necessary. I therefore propose that the provision stand part of the Bill and ask my noble friend to withdraw his amendment.
Viscount Eccles
My Lords, my noble friend starts from a zero base. If we read her words carefully in Hansard, we will find that it is as if we have no idea whether supermarkets are behaving in a fair-dealing way and we have to have in the locker a threat. Yet we have had a code of practice, which was thought not to be satisfactory and has been beefed up. I have heard nobody in this Committee say that the new code is unsatisfactory—I have heard the noble Lord, Lord Knight, suggest that it should be extended but I do not think that anybody has quarrelled with it. It has been in force for two years. All the 10 supermarkets have appointed compliance officers and all of them report publicly—with the exception of a German-owned supermarket that does not report publicly in this country—to the Office of Fair Trading. To say that we need the Bill to ensure compliance with the code is just wrong. We have all the evidence that we need to know whether the code is being complied with. Where other things are not being reported which either come under the code or could be thought to do so, I absolutely accept the need for their inclusion. It was for a list of those things that I was looking.
My noble friend’s taking on large orders for smoked fish with no written contract is beyond comment. She was obviously taking excessive risk, but it was not being passed on by the supermarkets, which no doubt would have been perfectly willing to enter into a written contract. She was undertaking that risk on her own account and I do not see what an adjudicator could do about that, except give some good advice.
Unfortunately, I am unsatisfied with the Minister’s reply and intend to raise the matter at the next stage of the Bill. Meanwhile, I beg leave to withdraw the amendment.
Lord Howard of Rising
“(2) A large retailer, subject to any enforcement measure set out in this section, may appeal against those measures to the Competition Appeals Tribunal.
(3) If the Adjudicator requires information to be published, the large retailer may appeal to the Competition Appeals Tribunal—
(a) prior to any information being published; or(b) following the publication of any information.”
Lord Howard of Rising
My Lords, Amendment 37A essentially would give the supermarkets a right to appeal if they felt that there was a miscarriage of justice or that something has not been done correctly. The adjudicator will be policeman, judge and jury. It seems wrong that there is not some form of mechanism whereby someone who feels that they have been wrongly treated should be able to have recourse. I am sure that the adjudicator will be brilliant but people make mistakes and mistakes are made. On the previous occasion when we were in Committee, the noble Lord, Lord Browne, spoke well on the need for things to be fair and to be seen to be fair. This is an extension of that argument.
I also think that the retailers we are talking about are above averagely susceptible to bad reputation. Naming and shaming is very effective and there should be a way in which they can stop that before it happens if there is likely to be a miscarriage of justice. Noble Lords may recall that during the passage of the Financial Services and Markets Act under the Labour Government, the noble Lord, Lord Saatchi, introduced a right of appeal. I am sure that the Conservative Party would not want to change that sort of precedent. In the interests of justice and fairness, I hope that the Minister will give full attention to what I have said. I beg to move.
Lord Borrie
My Lords, the noble Lord, Lord Howard of Rising, has made a significant point. He did not specifically mention one aspect of what he is proposing; namely, that in relation to appeals Clause 9(4) already provides for an appeal against the imposition of any financial penalty, which is the most serious penalty that might arise from the adjudicator’s decisions under this Bill.
Whereas the Bill states that the appeal is to the High Court in England and Wales and the Court of Session in Scotland, the noble Lord, Lord Howard of Rising, wants it to be to the Competition Appeal Tribunal. I can see a lot of point in that. After all, the adjudicator’s basis for action is to deal with the excessive risks which are transferred from the retailer to the supplier and the possibility of unexpected costs being shifted from one to the other. Given that those proposals emanated, as we all know, from a report of the Competition Commission, it may be very suitable that any appeal against an adjudicator’s financial penalty should be to the Competition Appeal Tribunal, as the noble Lord is suggesting, rather than the ordinary courts, if I may put it like that—the High Court and the Court of Session.
The Competition Appeal Tribunal has a president who is a High Court judge and specifically experienced in competition matters. The other members of the tribunal are lay members who are appointed because of their knowledge and experience of competition matters. The noble Lord, Lord Howard, has an excellent point but he wants to go further and allow an appeal not only against financial penalties but against any of the other powers of the adjudicator, such as naming and shaming or requiring information et cetera. I do not think, any more than those who devised the Bill think, that there needs to be an appeal on those matters or powers that the adjudicator may exercise.
Baroness Byford
My Lords, I must admit that when reading through the Bill very carefully, I am somewhat sympathetic to the proposal to have some form of appeal apart from that in Clause 9(4), which the noble Lord, Lord Borrie, just mentioned, where an appeal can be made directly to the High Court. I am grateful to my noble friend for tabling this amendment. I also share the concerns of the noble Lord, Lord Borrie, that it should not affect anything other than the severest penalty of fines. Mischief could be had by way of delay. I have followed proceedings on the Bill all the way through, and when amendments arise I will try to make sure that the issues are dealt with as quickly as possible. I wonder whether it might be helpful—it probably is not—if the provision were added before or after Clause 9(4) rather than in the place suggested by my noble friend Lord Howard of Rising. That might be a better place for it, if the Minister is inclined at all to be sympathetic to the idea. It is reasonable that retailers who are taken to court or held up on grounds of not adhering to the code should be able to appeal in some way. I am no lawyer but I would support having a lesser approach. However, the other one will still be there as well. I do not know how the Minister will respond to that.
Lord Browne of Ladyton
My Lords, I support the amendment in part. The complexity of the legislation is such that it takes a bit of figuring out to work out exactly what effect it will have on the regime that will otherwise persist. If I understand the ambition of the noble Lord, Lord Howard, it is to introduce a right of appeal on the part of a retailer in respect of any of the enforcement consequences and that those appeals should all be to the Competition Appeal Tribunal.
In the current structure of the Bill that seems to be unnecessary because there is no enforcement mechanism in respect of recommendations. The matter of whether or not recommendations are accepted is entirely for the retailer. The recommendation is made, which the retailer either accepts or does not, and there is no enforcement mechanism. We will come to my discontent with that structure in a later amendment today, I hope. There is no necessity for an appeal against a recommendation because the retailer is effectively its own appellate body in respect of a recommendation. Retailers can ignore it, and appear to be able to do so without consequence.
On the “naming and shaming”, which is the operative phrase used for the second of the enforcement mechanisms, I agree with the noble Lord that in commercial and reputational terms that could be much more significant for the retailer than a fine. If we get to fines in this structure, I expect that they will be substantial, otherwise they would be pointless. Naming and shaming could be significantly damaging to the reputation of a business built up over decades. I know that witnesses who have given evidence to the BIS Select Committee and been party to the discussions on these matters in the consultation period which has informed our deliberations have differing views on how retailers will respond to naming and shaming and whether it matters to them. I think that an argument can be made that it is a significant penalty and that, in fairness, there ought to be an opportunity for the retailer to have that decision reviewed or appealed in some way before it is implemented.
I note with some interest that the amendment moved by the noble Lord, Lord Howard, creates a right of appeal even after the penalty has been imposed. I can see the merit in that, but it seems to me that if we accept that there ought to be an appeal then we ought to stay the execution until the appeal takes places. There is no point in pardoning an already executed prisoner. That would be a pointless exercise in many ways apart from—well, I do not want to take the analogy too far.
To that extent I support the argument of the noble Lord, Lord Howard, and his amendment—so I support it in part. That may, in my experience of this Committee today, be the kiss of death to the proposed amendment, no matter how sensible or fair it is. The noble Lord has the advantage, of course, of the partial support of the noble Lord, Lord Borrie. That might persuade the Government that there is sense in the amendment, as that seems to be the touchstone in determining whether there will be a positive response from the Treasury Benches. However, the question—and I think it does a service to our consideration—feeds into our later deliberations on the issue of fines. I would just say in passing to the noble Viscount, Lord Eccles, that I agree with much of what he said. Although I do not agree with the reasons why he is making the arguments, I will try to explain later why I agree with much of what he said and why I think that it was really important. There is a fundamental systemic misconstruction in relation to fines in the middle of the Bill which we need to address.
The Committee’s deliberations so far are getting to the heart of the issue of the workability of this regime. I suggest, with respect, that it is incumbent on the Minister to explain why there is this differentiation in approach. Why are there three methods of enforcement? One of the methods is not enforcement at all but is simply a suggestion which can be accepted by the retailer. One is a fairly draconian consequence for a substantial business which will probably operate in all of our communities, and have a replication in all of our communities, but a consequence in which there is no system of appeal at all. The third method, and I will come to it in more detail later, either should be in the Bill or it should not be in the Bill—but it should not be halfway in—and that is financial penalties.
I would say, finally, that I am grateful to the noble Lord, Lord Howard, as I am also to my noble friend Lord Borrie, for their comments on expansion of the Competition Appeal Tribunal. I will need to go away and research the issue. When I first read the Bill I thought that adding to the workload of the already overworked High Court in England, Wales and Northern Ireland and the Court of Session in Scotland may not be a wise thing to do. It almost certainly will be an inordinately expensive process. There will have to be at least five or six wigs on each side of this argument when it gets to that level of debate. If this can be done much more efficiently through the Competition Appeal Tribunal and in a less litigious way then I would support it. However, I will go away and think about that. I suspect that we will have an opportunity at a later stage to deliberate on that, and I may find myself falling in foursquare behind the idea of an appeal to a Competition Appeal Tribunal as opposed to otherwise overworked courts.
Viscount Eccles
My Lords, I have an amendment in this group. Before I speak to it, however, I should like to say briefly that anything that would lower the cost of settling disputes is to be welcomed. The High Court is not to be welcomed in that regard. After all, the intention behind the code of practice was, and is, to provide a method for settling disputes that does not involve the courts or a tribunal at all. As I say, I still hope to find that the Committee can be persuaded that that is the best way of settling disputes.
My amendments go to the naming-and-shaming part of the enforcement by seeking to leave out specifying what information is to be published, how it must be published and the time by which it must be published. I have a later amendment that is a substitution because I would like the criteria that are to be used to cover the matter of publication to be in the guidance under Clause 12. I am on board with the adjudicator being in some form of sensible dialogue with the supermarket about what the information should be and how and when it should be published. However, Clause 8(2) is far too prescriptive and will lead to endless arguments. When we come to the matter of appeals, we have to remember that we do not actually have to write someone having a right to appeal into an Act of Parliament; there is nothing to stop them going to court if they want to do so and think they have a good case. I suggest to the Committee that we should be careful about making the Bill so adversarial, instead of looking for sensible and fair dealing and agreement.
Lord Browne of Ladyton
I agree with the noble Viscount that in the current environment it is impossible to stop people going to court. They will find a way to get to court, and that way will probably be judicial review. If one has sufficient resources behind one—we are talking here about the 10 biggest retailers in the country, and no one apart from the Government has resources that can match them—and feels strongly enough about an issue, one is entitled to find a way to get to court. The problem is that if Parliament does not allow a right of appeal then it will probably have to go by some form of judicial review. What is unsatisfactory about judicial review is that it deals with the process more than it deals with the content, although the content quite often enforces the process. Invariably, one then has to start again. Instead of concluding the matter, therefore, that may just cause it to start again at even greater expense. While the noble Viscount recognises that we cannot stop people going to court, I suggest that it is better if we can provide a sensible and efficient method of reviewing decisions that people who are aggrieved can take advantage of.
Viscount Eccles
My Lords, I completely agree. I am not trying to be prescriptive at all. All that I am saying is that if people feel that they are being unjustly dealt with and they have the resources, they will find some way of challenging what they think is that unjustifiable behaviour. We are debating this matter against the background that no one has yet been able to say what sort of behaviour by the supermarkets they want to see investigated by the adjudicator. If we knew that, we would be in a better position to decide how severe the enforcement procedures should be.
Lord Knight of Weymouth
My Lords, I rise in support of my noble friend Lord Browne’s position, which he articulated very well. The noble Lord, Lord Howard of Rising, has raised an interesting issue. The Competition Appeal Tribunal came into force in 2003 in order, as its website says:
“To hear appeals on the merits in respect of decisions made under the Competition Act … by the Office of Fair Trading … and the regulators in the telecommunications, electricity, gas, water, railways and air traffic services sectors”.
It does a few other things as well. The noble Lord is asking the Government a reasonable question about whether there should be an alternative to the court in respect of appeals. As my noble friend has said, this is about the merits of the decision as well as the process by which the decision has been made. I look forward to what the Minister has to say.
Baroness Wilcox
My Lords, much of the debate about sanctions today has focused on financial penalties. However, I value the opportunity to discuss the rationale behind the other enforcement powers available to the adjudicator. The noble Lord, Lord Howard of Rising, has brought forward two amendments which would together extend the right to a full merits appeal so that it applied to all the enforcement methods and would be to the Competition Appeal Tribunal. The Bill already provides for a full merits appeal to the court against financial penalties, if these are introduced. In the case of recommendations or the requirement to publish information, the Government believe that judicial review is more appropriate.
In the case of recommendations, it must be emphasised that these are non-binding on retailers. There is no consequence which follows if the retailer does not comply, other than the possibility of a further investigation, which could lead to the imposition of a further sanction only if a further breach of the code were found. We therefore believe that, in this case, a full merits appeal would be clearly inappropriate.
The Government acknowledge that for the requirement to publish information the arguments are more finely balanced. However, having considered this in depth, we believe that judicial review remains the most appropriate form of appeal. The reasons for this were set out in the Government’s response to the BIS Select Committee’s report. They include the independence and impartiality of the adjudicator and the breadth of matters that an investigation is likely to consider. The critical difference between the requirement to publish and a financial penalty is that in the latter case there is a very direct and immediate consequence for the retailer, whereas a publication of information is rather different. It should be remembered here that this information will not in itself determine that a retailer has any obligation to a particular supplier. The supplier would still need to bring his case to arbitration to seek damages or any other remedy.
Finally, we have also taken into account the implications that a full right of appeal against a mere requirement to publish could have for the effectiveness of the adjudicator. A full right of appeal, requiring the repetition of a detailed fact-finding exercise, could seriously delay the requirement to publish and so substantially diminish its impact. Taking these matters into account, the Government consider that a full right of appeal is needed only against financial penalties and that otherwise the possibility of judicial review by the court will be sufficient.
In addition, the noble Lord seeks to replace the principle of appeal to, or review by, the High Court or Court of Session with appeal to, or review by, the Competition Appeal Tribunal. While the adjudicator is being introduced on competition grounds, the details of the practices addressed by the groceries code are not the same as anti-trust cases or the other issues dealt with by the Competition Appeal Tribunal. The High Court or Court of Session in Scotland is therefore an appropriate place for such appeals to be heard.
However, I have listened to your Lordships today who support what the noble Lord, Lord Howard, has said or want to question this issue further. Therefore, I am willing to consider this point and will invite the noble Lord, Lord Howard, to a meeting, as well as any other noble Lords who spoke, including the noble Lords, Lord Borrie and Lord Browne, the noble Baroness, Lady Byford, and the noble Viscount, Lord Eccles.
I turn to the amendment proposed by the noble Viscount, Lord Eccles. The Bill contains clear requirements for the adjudicator as to what they must specify to the retailer if they require a retailer to publish information. The noble Lord has suggested that these be removed. I believe that it is important that if a retailer is being asked to publish information, it should be told what information it must publish, how the information should be published and the time by which it must be published. Otherwise, the instruction will be unclear or it could leave too much discretion to the retailer concerned. Given that this is a means of enforcement to be used following a breach of the code, I also believe that it is reasonable for the adjudicator to be able to specify what information is to be published, as well as when and where it is to be published.
Accepting this amendment would make the Bill less clear and would weaken one of the adjudicator’s means of enforcement. In asking the noble Lord, Lord Howard, to withdraw his amendment, I repeat my offer to him to meet me and my officials.
Lord Browne of Ladyton
I am grateful to the Minister for giving way; I have no desire to prolong proceedings this afternoon. In anticipating that the noble Lord, Lord Howard of Rising, might accept the invitation to discuss these matters further, I would welcome being a party to those discussions.
Will the Minister ask those advising her to take into account the interaction of Clause 8(3) with the expectation that review will be conducted by way of judicial review? That has the potential to create a multiplicity of actions that are entirely unnecessary. She indicated that there was effectively no enforcement mechanism in relation to naming and shaming. But there is such a mechanism, by way of injunction or specific performance, in Scotland. I can see a judge in the Court of Session in Scotland or in the High Court in England having an application before them and saying, “I cannot go into the merits of this case. They are for another forum”. A judicial review will be raised at the same time and the interaction between the two will have to be worked out by judges in the same courts involving enormous expense all because there is no appeal. That is inevitable.
Baroness Wilcox
I think that I may have an answer for the noble Lord now, but as we will be discussing this further we will come back to it. The requirement to publish needs an enforcement mechanism. We should not oust the rights to judicial review and therefore we need both. That is the answer that I am giving now. We shall take it into consideration with everything else. I want at least to be sure that I am giving an explanation that is clear. In the mean time, I ask my noble friend to withdraw the amendment.
Lord Howard of Rising
I thank noble Lords for their support, which is something that I am not really used to but is nevertheless very welcome. The essential difference is between financial penalties and naming and shaming. Those of us who are old enough to remember a certain gentleman referring to his jewellery being cheaper and not quite as good as a Marks and Spencer sandwich will know that that was the end of his business. It was finished. The businesses that we are talking about are very susceptible to reputation. They work on very thin margins and do not need many people to move for those to be affected. I am very grateful to the Minister for agreeing to look at the issue. When she does so, she will need to look at two or three ancillary points as they all tie in together. In the mean time, I beg leave to withdraw the amendment.
Lord Browne of Ladyton
“( ) In the event that a recommendation has not been followed, the Adjudicator may invoke the remaining enforcement measures referred to in section 6.”
Lord Browne of Ladyton
My Lords, the amendment addresses the issue referred to in the ninth report of the BIS Select Committee as “escalation of enforcement”. I am sure that the noble Baroness will be very familiar with that report. The issue is encapsulated with all the arguments in a couple of pages of that report, starting at paragraph 120.
If I have understood the Bill correctly—leaving aside the issue of fines which we will come to in some detail shortly—the Government propose that the adjudicator will have enforcement powers that include making recommendations and what has come to be known as naming and shaming. We have had a discussion about that so I shall not go back over it in any detail. If, however, the retailer involved ignores the enforcement mechanism of recommendations, there is nothing that the adjudicator can do except to bear it in mind for the next time. Or, if a further complaint resurrects that issue, I understand from what I have read that there is a possibility of further investigation and then of going back to the original set of penalties to see if an appropriate one can be imposed, taking into account that on the previous occasion the retailer ignored the lesser penalty which was designed to start the process off.
As with many other aspects of the Bill, I can see why the Government in seeking some form of light-touch regulation—although that phrase is out of fashion at the moment—have built an escalator into the Bill. I fundamentally disagree with this but the Government are seeking Parliament’s permission to do very ill defined things at some time in the future by way of a process that is totally inadequate: for example, by increasing the powers of the adjudicator in relation to fining. They are asking Parliament to give the adjudicator a similar type of power; that is, to be able to escalate their response as the record against an individual retailer builds up. I have proposed this amendment because that is totally unsatisfactory. It is inappropriate to ask Parliament to do that.
The much simpler answer to this is to say that if the adjudicator’s recommendations are ignored, the adjudicator should be able to escalate. They should be able to go back and say, “Well, I gave you a chance but you ignored me, so I’m now going to ratchet the penalty up because your behaviour in ignoring my recommendations has exacerbated the original behaviour”. As the noble Viscount, Lord Eccles, points out, it would be much better if we were doing all this against a body of evidence showing that that was how the retailers were behaving, but we are not. However, all that has been discussed and, it would appear, investigated over the best part of a decade, with recommendations having been made and accepted. There is quite significant support for this process, but if it is to mean anything there has to be some element of common sense about it.
It seems entirely inappropriate to leave the adjudicator in a position where, if their recommendations are ignored, the adjudicator either has to find some method of starting again or has to store that up for a later date, saying, “The next time that you come round, I will take that into account in the penalty that I will impose”. If the adjudicator ratchets up the naming and shaming, we may have to wait until we have these promised discussions about naming and shaming and other enforcement to find out whether the adjudicator will be in any stronger a position on that than on recommendations. Simply put, Clause 7 concerns “enforcement using recommendations”. There is no sanction provided in the event that recommendations are not followed. There needs to be a sanction and this amendment provides it from the Bill itself.
Interestingly enough, that is the Government’s position—or, at least, it was the position articulated by the Government’s Minister to the BIS Select Committee in his evidence. When Ed Davey gave evidence to the BIS Select Committee, he answered the question about this matter by saying that that was the Government’s expectation of the adjudicator. He had subsequently to explain that he was sticking by the mechanism in the Bill, but his intuitive position—the phrase that the Select Committee uses in recording and commentating on his evidence—was that the adjudicator should have the opportunity to escalate. He is right. The Government should be consistent with the intuitive position that their Minister holds and put to us legislation which reflects that, as this amendment would do. I beg to move.
The Lord Bishop of Wakefield
My Lords, I support the amendment. My commitment to the issues lying behind the legislation goes back a very long way. In terms of suppliers and retailers, it is rooted in the issues of the locality in which I have lived for the past nine or 10 years. This instinct has been reinforced by my experience more widely. Wherever possible, I have been trying to urge us to move forward on this and it is greatly encouraging to see that something is happening at last. At the root of this is the issue of the fairness of the market. Going back many years, when there were lots of debates about how effectively employers and employees were represented in the labour market, the key issues were its fairness and whether the balance of power was too strong in one direction or the other. That is the problem with which we are dealing. Anything that we can do to ensure that the legislation as finally enacted gives the adjudicator proper teeth so that abuses can be addressed. Some of the abuses that have come to my knowledge have been quite hair-raising. I hope that we support this amendment and that we make sure, if it appears that what is required is being ignored, that we allow the adjudicator the possibility of taking other forms of enforcement.
Lord Borrie
It is very useful to have the views of the right reverend Prelate the Bishop of Wakefield. He has attached his name to one or two amendments later, so we look forward to further contributions from him. I agree with my noble friend’s wish to ensure that if recommendations made by the adjudicator are not carried forward, he or she can come back to the Bill to see what other action can be taken, including the possibility of financial penalties.
Addressing a question to the Minister rather than to my noble friend, who proposed the amendment, Clause 6 states,
“the Adjudicator may take one or more of the following enforcement measures … recommendations … information to be published … impose financial penalties”.
I wonder whether the Bill already enables the adjudicator to go from one to the other if the first proposal—recommendations—is not accepted, or is it the Minister’s view that he can do only one of those things and not come back and open up lines of discussion as to whether one of the other measures can be taken later?
Baroness Byford
My Lords, I am grateful for this amendment. It gives me a chance to seek clarification yet again. My understanding from the noble Lord, Lord Borrie, was that the adjudicator would go choose between (a), (b) and (c). I did not think that it would be (a) or nothing, (b) or nothing, or (c) or nothing. I hope that as it stands it will be able to look at different ways of coming back to it.
I go back to an earlier contribution that I did not come in on. It keeps being said that there is little evidence. It is not surprising that there has not been much evidence in the past; that is why the Bill is necessary. In the past an individual supplier was the only person who could bring evidence. That individual supplier was known and future trading was very difficult.
Only this morning, I was in conversation with a vegetable supplier whom I happened to meet informally. She was telling me that one of the retailers she supplies had agreed a contract which had gone through, but, because the retailer thought that the circumstances were different, it had asked for a rebate on the contract that had been agreed. Surely that is extremely unacceptable. I hope that the Bill will deal with that. The reason that we have not had evidence is that people would not have come forward as the Bill will enable them to do.
Lord Howard of Rising
That is precisely what happened to me. I just said, “That’s fine. We won’t supply you any more”, and they said, “Fine, we will pay the full amount”. It is a commercial transaction between two commercial bodies.
Baroness Byford
I accept that, and in some instances it is possible, but sometimes with perishables it is not. If you take the contract away, what do you do with the goods? They are already lost. Although I accept my noble friend’s interjection, I do not agree with it because certain things have no shelf life; they are there or they are gone.
Lord Howard of Rising
My instance was strawberries, and I assure my noble friend that they have a very short shelf life.
Baroness Byford
Yes, but perhaps my noble friend was in a better position than that supplier; there was clearly a problem there.
I welcome the amendment and am glad that we have a chance to debate it. I hope that when we come to later amendments concerning fines, we will be able to strengthen the provisions. I do not know whether that will make this amendment unnecessary—I seek clarification on that, because I do not know the Minister’s point of view. If we fail later to strengthen the whole section on fines, the amendment will be extremely important.
Lord Knight of Weymouth
My Lords, I will not add to the excellent case made by my noble friend Lord Browne, but he has my support.
Baroness Wilcox
My Lords, the point raised by the noble Lord, Lord Browne of Ladyton, is important and the Government have considered it carefully. It was also raised by the Business Select Committee in pre-legislative scrutiny, as the noble Lord mentioned, and the Government amended the Bill in response. I take the opportunity to respond to the noble Lord, Lord Borrie, who asked whether the Bill already allows such escalation. That is not our intention. In Clause 6, subsections (a), (b) and (c) are not intended to be sequential. One or more measures would be imposed at the same time following one investigation. I hope that that is helpful.
The question is: what should be the adjudicator’s options if a retailer does not follow a recommendation? Before answering this question, I emphasise two things. First, recommendations are not mandatory. If they were, that would give too much power to the adjudicator: he or she could essentially tell retailers how to run their business. Recommendations are meant to be the lightest touch form of sanction, not the most severe. Secondly, there may be good reasons why a retailer has not followed a recommendation. For example, a retailer might decide that it can more effectively comply with the code using a different method than that recommended by the adjudicator.
Having said that, there must be some way in which the adjudicator can follow up recommendations. After considering the BIS Select Committee’s report, the Government chose to provide for this in three ways. First, Clause 7(2) requires the adjudicator to monitor whether a recommendation has been followed. Next, Schedule 2, paragraph 1(2) provides the adjudicator with powers to require information from a retailer for the purpose of monitoring whether a recommendation has been followed. Thirdly, Clause 4(1)(b) allows the adjudicator to begin a further investigation if there are reasonable grounds to suspect that a retailer has failed to follow a recommendation. It is possible that a failure to comply with a recommendation could indicate that a retailer was continuing to breach the code, but a new sanction could be imposed only if a further investigation found that this was the case. Taken together, these clauses provide an effective means for the adjudicator to follow up a recommendation while still being fair to the retailer in question.
My concern about the amendment in the name of the noble Lord, Lord Browne, is that to impose a new sanction without a second investigation could be unfair and damaging to the retailer. After all, just because it has not followed a recommendation does not mean that it has actually broken the code.
I hope that noble Lords will agree that the Bill as it stands already encapsulates the principle embodied by Amendment 40.
Lord Knight of Weymouth
With respect, I do not think that the Minister has properly addressed the notion that at some point, reluctant as the Government may be, they may agree to the adjudicator having the power to fine. If naming and shaming has not worked, then surely it is reasonable for the adjudicator to escalate to impose fines without having to reinvestigate, with all of the delay consequential to that, before using the power to fine. Is this just an indication that in reality the Government do not ever want to offer the adjudicator the power to fine?
Baroness Wilcox
That cannot be the case, because we have made an arrangement that fines can be imposed, though it will be the Secretary of State who allows that. Yes, if there is a continuing breach—not just a failure to follow a recommendation—obviously that would be the response.
Lord Browne of Ladyton
My Lords, I am extremely grateful to the right reverend Prelate the Bishop of Wakefield, my noble friend Lord Borrie, and the noble Baroness, Lady Byford, for their support. The noble Lord, Lord Borrie, is a very wise and knowledgeable man. At least, today he has displayed that; I am not sure if he was so consistent the other day. I am very grateful for his support, and I must at least be fairly near the right answer on this occasion.
The Minister’s response disappoints but does not surprise me, because there has been a consistent recommendation that the adjudicator should have the power to escalate right throughout all of the consultation process on the Bill. Indeed, the Business, Innovation and Skills Select Committee, at the end of its deliberations, supported escalation. I know that the Government’s position was not to support it.
Let me respond to the Minister in this way, as I am sure we will debate this again: in the first instance, if there is a recommendation, that means the retailer has—in the view of the adjudicator—broken the groceries code. We are starting from the point that the adjudicator is dealing with someone in breach of the code. The powers of enforcement following investigations cannot be imposed unless the adjudicator is satisfied that a large retailer has broken the groceries code.
Of course, failure to follow a recommendation is not evidence that a large retailer is continuing to break the groceries code. There may be any number of reasons why a large retailer may refuse to accept, carry out or respond to, a recommendation. I agree with the Minister in that regard. However, in her argument she said that the Government have granted the adjudicator the power, in those circumstances, to consider as part of the follow-up a yet further investigation, because a refusal to accept a recommendation will in some circumstances imply a continued breach of the code. Those are the only circumstances that I can see in the Bill where the adjudicator can initiate an investigation where he has no reasonable grounds to believe. It is the failure to follow a recommendation that gives him the power to institute the new investigation.
Baroness Wilcox
Before the noble Lord withdraws his amendment, to which he will no doubt return on Report, it might be useful for me to comment. It is possible for a retailer to have breached the code and the adjudicator to decide that a recommendation is enough. The adjudicator will not know for sure whether a failure to follow a recommendation is also a breach of the code. That will need to be further investigated to be fair to the retailer.
Lord Browne of Ladyton
I am very grateful to the noble Baroness who is utterly generous in responding to every point that is made in these debates. It is very helpful in understanding how this complicated system will work. Essentially, this is a plea to make this legislation less complicated. If it is occupying so much of our time in trying to work out what it all means, perhaps it is just too complicated and we are trying to be too clever. I beg leave to withdraw the amendment.
Baroness Randerson
Baroness Randerson
My Lords, Amendments 45 and 47 in my name relate to the ability to impose fines, which has been referred to and anticipated by several speakers today. Under the Bill, it is assumed that naming and shaming will be sufficient to bring errant retailers into line, which requires a specific second-stage decision by the Secretary of State for the adjudicator to be able to levy fines. I believe that this is a cumbersome process which will lead to delays, including, possibly, changing the behaviour of supermarkets. It would undermine the freedom and independence with which the adjudicator should be able to act.
The amendments in my name and those of my noble friends would remove references to the Secretary of State and would therefore allow the adjudicator to impose fines from the outset. Of course, the adjudicator does not have to impose a fine if he or she finds a breach of the code. He could simply admonish the retailer concerned and make recommendations. I fully accept that the loss of reputation for retailers would be the key punishment. A reputation takes years to build and can be lost in a day. Therefore, the loss of reputation will matter to them considerably. For some retailers, it may be that breaches are sufficiently frequent to justify fines. I believe that having to wait for the Secretary of State to make the decision to ensure that fines can be levied is lengthy, cumbersome and unnecessary.
The history of this legislation is rather tortuous. I say that with absolutely no criticism of my noble friend the Minister or this Government. I make no criticism of the previous Government. I am simply pointing out that it has taken years to get to this stage. We are now moving to a legislative basis. Let us not put any further hurdles in the way of a fully effective system.
The Deputy Chairman of Committees
I remind your Lordships that if this amendment is agreed to, I cannot call Amendment 46 because of pre-emption.
Baroness Byford
I shall speak to Amendment 46, which is in my name and that of the noble Lords, Lord Borrie, Lord Knight and Lord Grantchester. Here we come to the crux of the Bill. I am sure that the Minister has gathered that there is great support for the Bill. A couple of colleagues do not feel that way, but the majority of us want the Bill to succeed. I tabled the amendment because I felt that if the adjudicator has to go back to the Secretary of State, that will delay things. Briefings from the Food and Drink Federation, the NFU, the Federation of Small Businesses and the CLA all support the adjudicator being able to impose fines.
To cite the CLA’s brief, it believes that it should be the sole responsibility and a significant power of the adjudicator to impose financial penalties on large retailers where it is clear that there has been a serious breach of the groceries code and where the other two enforcement actions—making recommendations and requiring information to be published by a large retailer—are inadequate in relation to the nature and size of the breach. Indeed, it may very well be the case that a supplier will not be able to continue unless there is financial redress for the damages caused by the infringement. It believes that the Bill must make it clear that the adjudicator retains the power to impose financial penalties and that awards to those suppliers affected by the breach of the code by large retailers must come from the proposed consolidation fund.
My noble friend has just explained, but I reinforce my concern about delay if the Bill remains as drafted. One of the problems of suppliers is getting paid for things that they have supplied. I go back to the earlier comment of my noble friend Lord Howard of Rising when he said that it is up to the person who supplies to go away. The arrangement that I heard of this morning was done retrospectively. The contract had been agreed, the whole supply had been sold, so they could not say, “No, you cannot have it”, because they had already had it but were changing the ground and asking for a reduction in the agreed payment. They could not take the goods back, because they had been sold.
I am happy to support the lead amendment in the group, but if the Bill is to succeed, it must give the adjudicator the chance to impose financial penalties. Clause 9(1) clearly states, “The Adjudicator may”—it does not say that it must—
“enforce through imposing financial penalties”,
but only if it goes back to the Secretary of State. Is what is proposed the norm or have we taken a new step? Why is there that reluctance to allow the adjudicator to impose fines?
To go back to our earlier debate on appeals, if some form of appeals system is strengthened and if the amendment we debated earlier would assist, the requirement for it to go back to the Secretary of State would be even less needed than under the Bill as it stands.
The Lord Bishop of Wakefield
My Lords, once again I support the general tenor of the amendments. Some of the same issues that were raised by the noble Lord, Lord Browne of Ladyton, in the previous debate are here. It seems to be about complexity, and the ability to take action swiftly is crucial. The Minister talked about fairness to retailers but it seems to me that part of the issue is getting fairness into the system. There is a clear unfairness to suppliers and it is once again about trying to change the culture and address the question of balance within the market.
I shall give two examples. The first concerns an individual retailer who insisted that a particular supplier of dairy products must, if he wanted to continue to be a supplier across the board of this very large retailer, pay a premium of £150,000. Without that premium the products would no longer be retailed in a very large number of stores within the chain. The supplier refused for two reasons. First, he felt that there was a lack of morality in the demand and secondly, he could not afford to do it. Happily he was switched on enough to be in touch with people who immediately complained that they could no longer get the products. In our marvellous electronic world, he was able to send them down the road to another local retailer. That is one example with one retailer.
The other example, which we all know about only too well, has been a continuing debate in the past 10 years on the issue of milk suppliers and getting a fair price for milk. Here it involves not just one retailer but a series of retailers acting together in their own best interests. I can understand their best interests. Perhaps if I were one of them I might want to push the same line. But in the end, it has the effect of driving suppliers into an impossible position.
First, we need swift action because it soon becomes clear that whatever legislation we produce is effectively weak as it gets pushed back all the time. Secondly, I take the debate about naming and shaming, and costs, but I only have to refer noble Lords to yesterday’s news about Barclays Bank. Whether the management of that bank will survive in their present roles, I have no idea, but it will not do them very much good to find that they have to pay £290 million in fines. I am not suggesting that we are talking about that level of fine here, but unless there are serious mandatory controls, we shall enact legislation that in principle is thoroughly positive and good, but which in practice does not get the market more evenly balanced.
Lord Borrie
My Lords, I am very happy to follow the right reverend Prelate as I agree entirely with everything that he said. He gave useful examples. I attached my name to the amendment tabled by the noble Baroness, Lady Byford, because I was convinced—I think I said something like this at Second Reading—that this provision should be in the Bill rather than there being just a possibility of a statutory instrument being laid at some later stage, with all the delays and question marks that that would involve. It should be in the Bill that there is a possibility of a financial penalty.
The noble Baroness, Lady Randerson, used a word with which I entirely agree, saying that the Government’s approach by not putting the power in the Bill is cumbersome. It is a cumbersome way of going about things. I am so glad that the noble Viscount, Lord Eccles, is here. If I may refer to some of the things he said earlier this afternoon, if this power goes into the Bill, I do not envisage the adjudicator taking a great deal of time thinking about penalties, the amount, and all the rest of it. I use a word most often used in criminal law, which I hope will appeal to my noble friend—deterrence. The possibility of a financial penalty —whether anywhere near that imposed by the Financial Services Authority on the bank yesterday—has a deterrent effect that is extremely important. The adjudicator will not be judged on the amounts of fines that he imposes to prove that he is a good or a useful man in his post—he will be judged as much by the effect of his powers upon the industry.
Lord Browne of Ladyton
My Lords, my understanding of both these amendments is that they are intended to have the same effect. One may be more elegant than the other, but I think that they probably have the same effect, and I support both.
I do not intend to rehearse the arguments that the noble Baroness who moved the amendment made comprehensively. However, there are some other points that are worth making, and points that we have debated already this afternoon which are worth drawing on.
First, the noble Viscount, Lord Eccles, as we began our deliberations this afternoon, encapsulated the problem at the heart of the Bill in relation to penalties. He set out quite fairly the fine as a penalty and enforcement mechanism, and the choices that face the Committee and Parliament in relation to the Bill. Either we have a piece of legislation that includes financial penalties or we do not—or, because of the road that the Government have gone down, we have a piece of legislation that kind of includes financial penalties.
However, the decision on whether these financial penalties will ever become operative lies outwith the control of those who are being asked to legislate—other than that they will, by the interaction of Clause 9, Schedule 3 and, I think, Clause 23, get an opportunity, via a statutory instrument, to have a short debate which will probably be conducted with very few people in the room, in a comparatively short time and with no power to amend. If the Secretary of State comes to the view that the history of the adjudicator’s experience thus far reveals that the operative penalties—the recommendations and the naming and shaming—have proved to be insufficient, these financial penalties can be activated.
That means that, in terms of this Bill, we cannot have any debate on what level of penalty is appropriate, what sort of circumstances would trigger a penalty as opposed to one of the other enforcement mechanisms or whether we would like rules to be made so that violations of the code can be differentiated by their nature and attract different types of penalties. I do not think that that is constitutionally appropriate. Given the nature of the sort of penalty that we must expect, it is not appropriate for Parliament to be denied the opportunity to have such a debate if the penalty is to be meaningful. I say that because this code can be enforced only against the top 10 retailers in the country. These are enormous businesses. If financial penalties are to have any effect on them, they will have to be significant.
However, there is a much more concerning issue about this construction. I am sure that the noble Baroness—or those advising her—may say, or even be able to find, an example of where something similar was done in the past in order to support doing it again—although the example will probably turn out not to have been extraordinarily successful. I am sure that in responding the Minister will say that Parliament has supervision of this to the extent that it allows this mechanism and that it is entirely proportionate—and I am sure that the word “proportionate” will be used regularly in the response. Of course, the mechanism does not give Parliament any role if it disagrees with the Secretary of State’s persisting view that financial penalties are not appropriate.
The Secretary of State holds all the cards now. The Secretary of State is constrained by this to allow financial penalties only if he concludes that the other powers are inadequate. If the Secretary of State does not conclude that, how are they accountable to Parliament? How on earth can Parliament make the Secretary of State accountable in terms of these mechanisms for not triggering this power, other than the inadequate process of Questions or maybe a Question for Short Debate? There is no mechanism whereby Parliament can say, “This is not what we intended. There are egregious breaches of this going on and the Secretary of State is not willing to trigger this power”, and that is inappropriate. There is not even a continuing method for amending this legislation or a clause that can be resurrected in some fashion. There is just no method for making the Secretary of State accountable for a continuing failure to recognise what is going on and to leave a piece of legislation ineffective because a part of it has not been enacted.
Lord Teverson
My Lords, when first I was looking forward to reading the Bill, there were two areas that I felt were of key importance. One was that we managed to expand the number of people who could bring a case to the adjudicator for the adjudicator to judge from then on, and that was well satisfied by the Government and the Minister in our discussions on the previous Committee day. The other area is this one: is this an adjudicator that counts or one that is there merely for form? Yes, there may be a question of reputation, but not all retailers are that concerned about reputation in every sense. This is a powerful tool and we know that the restricted population of these retailers is going to be sensitive to it but, to show that Parliament and the Government are serious in this legislation, there has to be a direct ability on the part of the adjudicator to be able to make fines. It is a measure of whether this is a serious creation of an appointment. It is for that reason that the amendment put forward by my noble friends is important and goes to the heart of making the Bill something that the industry on both sides will pay attention to. On that basis, I hope that the Minister’s response will be positive.
Lord Knight of Weymouth
My Lords, we were very pleased to put our names to the amendment in the name of the noble Baroness, Lady Byford, and support the noble Baroness, Lady Randerson, as well. Should the Minister, with her charm and grace, agree to these amendments, then Schedule 3 will be unnecessary, so this is the stand part debate as well. As we have heard, the adjudicator has the power to fine retailers, subject to permission—I think that my noble friend Lord Browne made good points in respect of that. We will go on to talk about the cumbersome number of hurdles that must be breached in Schedule 3 in a later debate. Schedule 3 sets out a hugely drawn-out process, which will do nothing to instil much-needed confidence in those farmers and small businesses that may have been severely affected by retailers that breached the code. We are grateful to the right reverend Prelate the Bishop of Wakefield for giving us some more examples. We need those people to have confidence in the adjudicator. The noble Lord, Lord Teverson, is right to say that giving that adjudicator the power to fine from day one would give a strong indication that Parliament and government are serious about this adjudicator being able to take on these extremely powerful retailers. As it stands, however, it is likely that fines for anti-competitive practices are even further away than 2015, given the hurdles that would have to be gone through based on Schedule 3.
Viscount Eccles
Before my noble friend replies, perhaps I may just say that whatever my view of the proper fate for Clause 9, and however the Bill turns out, I think that the message sent out by these debates to an industry attempting to provide the best possible service to the public is a very important one. I should like to say two more things. On the production of milk, it is a problem. God gave dairy farmers different natural resources. Some dairy farmers need one leg shorter than the other; some do not have to have that disadvantage. The production of milk in this country has nevertheless been remarkably stable over the past five years. There has been no decline. In other markets farmers in general are doing rather well. For example, rapeseed is extremely successful at the moment and so is the production of beef. Dairy products as a whole do not provide an adequate argument. Finally, I think that there have been just one or two references in this debate to the costs of all this—the noble Lord, Lord Browne, made some reference to cost—and there has been absolutely no reference to who ends up paying.
Baroness Wilcox
My Lords, the question of financial penalties has been one of the most hotly debated throughout the development of this policy. As the BIS Select Committee acknowledged at pre-legislative scrutiny, the point is finely balanced. The Government believe that the remedies already provided—to recommend changes and compel the offending retailer to publish information about the breach of the code—will be sufficient and will provide a more proportionate means of enforcement. In a highly competitive market, these powers, in particular the ability to name and shame large supermarkets, will be effective in enforcing the code. If naming and shaming had ceased to be news there would be a good argument that it was inadequate, but it is news. Big supermarkets competing with each other will not wish to see themselves named and shamed in front of their competitors, who would be only too delighted.
Furthermore, as I mentioned earlier, the very existence of the reserve power to fine will contribute strongly to ensuring compliance with the groceries code. Large retailers will be conscious that there is the prospect of the swift introduction of financial penalties if there is evidence of significant non-compliance with the groceries code and the existing regime seems not to be sufficiently effective.
Lord Knight of Weymouth
I am grateful to the Minister. She uses the word “swift”. How long does she think it would take?
Baroness Wilcox
I am so sorry. Did you say that I was speaking too swiftly?
Lord Knight of Weymouth
The Minister used the word “swift” in her response just now. I would be grateful if she could indicate how long she thinks it will take.
Baroness Wilcox
It is a very good question but I am not sure that I have an answer—but I will come to it.
As I was saying, the very existence of the reserve power to fine will contribute strongly to ensuring compliance with the groceries code. Large retailers will be conscious that there is the prospect of the swift introduction of financial penalties if there is evidence of significant non-compliance with the groceries code and the existing regime seems not to be sufficiently effective. Clearly all large retailers will prefer to avoid such penalties being introduced. In answer to a question asked by my noble friend Lady Byford, we already have a strong right of appeal to the court on the merits against financial penalties.
One of the final points concerned culture and the Bill’s intention. The right reverend Prelate the Bishop of Wakefield mentioned the word “culture” and I was very pleased to hear it because that is really what much of this is all about. We do not want to punish retailers, as that does not really help suppliers or consumers. We want to bring about a culture change to ensure that the code is consistently followed. An adjudicator exercising proportionate powers provided that the strong fining powers are there in reserve has the best chance of achieving this change of culture. On the other hand, the introduction of fines from the outset would be far more likely to bring about an antagonistic relationship with heavy penalties imposed and retailers appealing every decision.
The noble Lord, Lord Browne, asked whether it is right to hand all the cards to the adjudicator now without the benefit of experience as to whether they are all needed. I respect that there are strongly held views on this issue. However, I believe that introducing the Bill as it stands will bring about the best result for suppliers. If fines prove necessary they can be quickly introduced, and I will be happy to discuss the mechanisms for doing so in a future grouping when we consider Schedule 3. I do not think that it would benefit the Committee to deal with those questions now. I therefore simply ask the noble Baroness to withdraw the amendment.
Lord Knight of Weymouth
I am grateful to the Minister. With respect, although I understand that we will come on to discuss Amendments 50 and 51 to Schedule 3, when the terms will be quickly and swiftly explained, perhaps the Minister could say—just to help us in the context of this debate—how many months she thinks it will take to go through the processes in Schedule 3.
Baroness Wilcox
How do the Government plan to streamline the process of introducing the fines? Is that what the noble Lord is asking? I cannot give a definitive answer now as we need to discuss it in more detail before the next stage of the Bill. That would be the right way to do it, if the noble Lord does not mind. I can give one more answer, which I think is to the question asked by the noble Lord, Lord Browne. The Delegated Powers and Regulatory Reform Committee ruled that the procedures were appropriate and the Secretary of State can regularly be held to account at departmental Questions if he does not introduce the fines when Parliament considers them necessary. That partly answers the noble Lord’s question. If the noble Lord, Lord Knight, can wait until we consider Schedule 3, all will be revealed. I ask the noble Baroness to withdraw the amendment.
Baroness Randerson
My Lords, I thank the Minister for her detailed response. I also thank noble Lords who have spoken in this short debate in support of the amendments. I especially thank my noble friend Lady Byford for her very similar amendment aimed at the same thing. However, I am afraid that I am not reassured so far. Perhaps the answer will come when we get the definition of “swift” in the context of Schedule 3. I am not so far reassured that this process is not cumbersome. I retain the view that fines will have an important deterrent effect and that that effect will be sharpened if the fines are ready to be levied rather than subject to the approval of the Secretary of State.
The noble Lord, Lord Browne, made an important point. He said that the Bill does not give Parliament a role if the Secretary of State holds the view that there should not be financial penalties, although Parliament’s will is that there should be financial penalties—in other words, if the adjudicator’s report shows that the provision is not working as the Government optimistically believe that it will. The noble Lord, Lord Knight, pointed out that the practical implication of Schedule 3 is that fines will be levied in 2015 at the earliest. The Minister may well contradict that, but I would be very concerned if that were the case.
Baroness Byford
My Lords, I think that I have an old Marshalled List. The debate on Schedule 3 stand part is coming later, is it not?
Lord De Mauley
My Lords, perhaps I may suggest that this would be an appropriate moment to break for 10 minutes, until 4.12 pm.
Lord Grantchester
Lord Grantchester
My Lords, the issue of proceeds of fines has become prominent since last year, when the Office of Fair Trading fined certain supermarkets for raising their prices in 2003 in response to a concerted push-up on prices from dairy suppliers through their processors. Dairy farmers were responding to very low returns. The supply chain was being receptive and wished to respond without disturbing the competitive status quo. The supermarkets wanted a sustainable supply chain but the Office of Fair Trading, with its primary concern focused on prices to the consumer, fined the supermarkets, with the proceeds going to the Exchequer. That took further resources out of the supply chain, which brought it great alarm, and many in the dairy industry thought that this was unfair and counterproductive.
I will not comment further, as I understand that this case may yet be unresolved. However, the proceeds of fines levied on supermarkets for anti-competitive behaviour in a supply chain can be seen, in many regards, as different from those for most other wrong-doing. The Consolidated Fund helps taxpayers, not consumers. The complainants insist on anonymity. Rather than take money out of the grocery trade, surely we could be more imaginative.
We have doubts about whether the Government ever intend the adjudicator to levy a fine. If, on reflection, the Government find their nerve and agree that the adjudicator’s powers need to have teeth, the industry may be looking at significant sums of money if the level of fines is to have some meaning to supermarkets with multi-million pound turnovers. The proportionality of fines to the offence should also be taken into account. Have the Government done any thinking on this? Our amendment offers scope to undertake more positive action.
In early February, the House debated the report of Sub-Committee D of the European Union Committee, Innovation in EU Agriculture. The report’s main conclusion was that the UK must show leadership within the EU in order to develop a strategic approach to food production. The CAP budget should be rebalanced to increase allocation to research and innovation. All sides of the House, including the Government, welcomed the report. We have a wonderful opportunity to increase innovation in our groceries supply chain with proceeds from fines. “Innovation” includes all aspects of development in farming and the supply chain, technological development, product development, and marketing. The amendment at this stage does not seek to name a specific recipient, but rather to seek agreement to this idea.
Much of the innovation in farming originates in the supply industries that provide farming inputs: genetics of crops and animals, plant protection, animal health products and treatments, plant and machinery, and a range of expert services for financial, technical, environmental and marketing purposes. The BBSRC—Biotechnology and Biological Sciences Research Council—and the Technology Strategy Board urgently need to reposition UK agriculture at the forefront of technological advance. As an alternative, we have the Agricultural and Horticultural Development Board, as well as sector centres of excellence such as the dairy innovation centre.
The noble Lord, Lord Knight, received only today a letter from the Minister, dated 29 May, following our debate at Second Reading. In the letter, which the noble Lord has shared with me, the Minister mentions where money should go. I quote:
“There is … a risk that if the funds were earmarked for funding groceries supply chain initiatives this could lead to lobbying or even litigation over who the most suitable recipient was”.
I am not sure whether we need at this stage to specify in the Bill where precisely the money should go—the area is surely sufficient. Could that not be included as an amendment to secondary legislation under Schedule 3? Other examples do not seem to have caused a problem. For example, the regional growth fund is quite able to make awards without challenge. We have mentioned this idea to stakeholders in the industry and have received encouragement to explore this option with the Minister.
The Groceries Supply Code of Practice was needed precisely because anti-competitive behaviour stifled innovation. What better way to promote innovation in the supply chain than by using the money raised in fines from such behaviour to undertake this work? It would be the best way to provide redress to suppliers, who must be assured of confidentiality if they are to come forward without fear of reprisal. It is a pro-growth measure; pro-supplier and pro-consumer: a win-win-win. I beg to move.
Lord Teverson
My Lords, I shall speak to my Amendment 49. There is an opportunity here, as the noble Lord, Lord Grantchester has said, to be a little more innovative. I have certainly put down one suggestion in my own amendment, though I am not saying that it is exactly the right way to go. At this stage, we are talking about the principle.
I know that the Government are often concerned about what they would see as creeping hypothecation, and that fines should generally go into the Consolidated Fund. However, I was interested to read the Statement today from my right honourable friend the Chancellor of the Exchequer about the Barclays crisis, where he stated that fines paid to the FSA are used to reduce the annual levy on other financial institutions. We have an example there of where such fines do not go into the Consolidated Fund, as pointed out very conveniently by the Chancellor. If anyone knows about these Treasury issues, it is probably him—we hope, at least.
The Chancellor goes on to say that he wants to change that, and that proceeds of fines should go back into the Consolidated Fund. The reason that he is iffy about that system is that the money goes back to the financial sector. Here, we are not suggesting that it should go back to the rest of the retail sector; we are suggesting it should go to the people whom this Bill is trying to protect and promote—that is, the supply chain. There is an opportunity here for innovation, for goodwill and for common sense. I do not think that it will be the end of the Treasury trying to meet its targets in reducing the public debt. It will not be that significant, but it will be important to the industry.
The Lord Bishop of Wakefield
My Lords, I need to leave fairly soon, so I want to add something about this particular suggestion. I want to address also a broader point, since this is tied into the whole issue of financial penalties.
I was grateful to the Minister for her comment about changing culture. This is another small way in which the culture might be changed. But the crucial issue we need to grasp is that changing any culture will require whether we like it or not—and it is not a pleasant word—coercion. That is at the heart of much of what we are saying here. I do not know enough about the latest statistics to be able to respond to what the noble Viscount, Lord Eccles said a few moments ago, but, certainly, in our part of the world dairy farms are still closing and, certainly, an analysis of the past 10 years would show that the capacity for milk production has reduced. I do not know what the figures are for importing milk, but I think they have gone up significantly over these years.
All these things lead us back to innovation, which seems to be a key word to use. It is a positive word. It goes back to changing cultures and is not about punishing people. It is about trying to find a proper balance within the market, so that suppliers and retailers are doing something which has a synthesising effect: they are working together. Therefore, I hope very much that some sort of response will come from the Government at this stage. If it does not, I fear that these same questions will be asked on Report. I would gently support this pair of amendments, but in the end they push us back to the same issues that we have been looking at. If we do not face those issues, we shall still end up in a situation where we do not alter the present culture.
Viscount Eccles
Before the right reverend Prelate sits down, can I ask him whether he believes that coercion is the only way to change culture?
The Lord Bishop of Wakefield
No. It depends on what you mean by “coercion”, which can mean something very unpleasant indeed. It does mean that people will not necessarily change the way that they operate simply because we ask them to be nicer. That is the point. We know that, otherwise we would not have produced the sort of legislation that we are debating today. Even if we do not go down some of the roads that we have been debating, the whole Bill seems imply that the adjudicator must have some powers by which the present situation is changed. How you want to use the word “coercion” is another matter. I would not want it to be overpressed. After all, the worst form of coercion always leads to war and that is not what we are talking about—we are talking about precisely the opposite—but it will need firmness and robustness.
Baroness Wilcox
My Lords, the amendments being discussed here are very interesting. However, in considering them it is important to remember the purpose of the financial penalties. The financial penalties in this context, if they are imposed, are supposed to be punitive rather than restitutory or to fund any particular activity.
The amendments of my noble friends Lord Teverson and Lord Razzall raise two difficulties with regard to paying any of the proceeds to a supplier. First and most fundamentally, an investigation does not determine the liability of a retailer with respect to any individual supplier. Given this fact, it would be inappropriate to pay all or part of the fine to the supplier. Any supplier who did wish to reclaim damages from a retailer would be able to do so using the arbitration provision in Clause 2.
The second reason is linked to the climate of fear. One of the key drivers of this Bill is the need to address this problem. One of the principal reasons for investigations, as they are set out in the Bill, is to allow suppliers to complain in confidence to the adjudicator, who can then carry out an independent investigation. If an adjudicator began making payments to individual suppliers, it would become obvious who had complained and open up those suppliers to potential retribution from a retailer.
I turn to the amendments of the noble Lords, Lord Knight of Weymouth and Lord Grantchester. Given that financial penalties are a civil sanction, it would be inappropriate for financial penalties to be paid to a supplier or to a third party which did work that supported the groceries sector. In accordance with the standard principles of managing public money, financial penalties are therefore to be paid to the Consolidated Fund.
Lord Knight of Weymouth
I have a quick question. If the proceeds of funds were transferred, let us say, to the regional growth fund for it to distribute, would that be in order?
Baroness Wilcox
I think not; I shall go back again. Given that financial penalties are a civil sanction, it would be inappropriate for financial penalties to be paid to a supplier or to a third party which did work that supported the groceries sector. I must refer back to the standard procedures for managing public money. Standard practice for such penalties is that they are paid into the Consolidated Fund. This is in accordance with common practice elsewhere in competition regulation. Fines imposed by the Office of Fair Trading are also paid into the Consolidated Fund.
Baroness Wilcox
I hope that my answer satisfies the noble Lord, Lord Grantchester. I ask him, therefore, to withdraw his amendment.
Lord Grantchester
I thank the noble Baroness for her words and I will read very carefully through Hansard. We will confer and no doubt bring the amendment back, perhaps by exploring it in another way, because the supply chain is rather keen that such an opportunity is made available. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees
In this group, if Amendment 51 is agreed to, I cannot call Amendments 52 to 54 inclusive and if Amendment 52 is agreed to, I cannot call Amendments 53 or 54 due to pre-emption.
Amendment 50
Lord Knight of Weymouth
Lord Knight of Weymouth
My Lords, if I am following correctly where we have got to, I am moving Amendment 50, which is in my name, and speaking to Amendments 51, 63 and 64. These are all amendments to Schedule 3 or Clause 12 and are to try to streamline the process, should we be unsuccessful in persuading the Government to have powers to fine from day one. In the exchange that we had on earlier amendments I got the impression from the Minister that she may be minded to concede a little on this, so I will be extremely brief to give her maximum time to elucidate on whatever concession she may or may not have available.
I remind the Committee that my understanding of how things stand is that the adjudicator would be established and would operate without fines. They would then perhaps do some investigations and find that they are not really having much of an effect with naming and shaming, so would recommend to the Secretary of State that the powers to fine would be useful to him or her. The Secretary of State would then make an order under Clause 9 but would have to consult a variety of people on whether to make such an order, as set out in paragraph 6 of Schedule 3. The order would then be published and we would have the time taken by Parliament to consider it. Eventually, it would be passed—at which point, the adjudicator has to issue guidance as to how he or she would then use the financial penalties and consult on that guidance. At the end of all that, the adjudicator would be able to use those powers to fine. In my judgment, that would take at least a couple of years, probably more, which is why I mentioned 2015 earlier. I am delighted, however, that the Minister is about to tell us that it is going to be a lot better.
Baroness Randerson
My Lords, I want to refer to Amendment 52 in my name. I will also be brief, as I am sure noble Lords will be relieved to hear. My amendment would simply remove paragraph 6 from Schedule 3. It fits neatly with my previous amendment, to which I spoke, because it removes the cumbersome nature of the consultation. Regarding the list of people to be consulted, in my experience with legislation the moment that you start being as precise as this is, the very next year it is out of date. Then you have to change the list by secondary legislation or amendments, and so on. It is also a strange list because it starts by being very precise and then goes on in very general terms:
“one or more persons appearing to the Secretary of State to represent the interests of suppliers”.
There is the same in relation to consumers and then, finally,
“(g) any other person the Secretary of State thinks appropriate”.
Why not just have general consultation and leave who is consulted to the common sense of the Secretary of State? Why not move to a much swifter process than this cumbersome list indicates? I urge the Minister to take this opportunity to think again about this aspect of the Bill.
Lord Knight of Weymouth
I apologise to the Committee. I should have set out what we are proposing as the streamlining. In essence, we are suggesting in Amendments 63 and 64 that the adjudicator could publish straight away the draft guidance about how they might use the financial penalties, so that we at least remove that stage in the process. I am looking forward to hearing what is said.
Viscount Eccles
Will the Minister make clear whether the consultation would necessarily include a 12-week period in which anyone who wanted to put in representations could do so? That is ordinary practice for the processing of a statutory instrument.
Lord Browne of Ladyton
It would be helpful to the Committee if the Minister were able to indicate the scale of fines that the Government have in mind if these financial penalties were ever activated. I cannot imagine that we have got this far without the Government having some idea of what the scale of those fines is likely to be. If we do not know, we are significantly disadvantaged in our debates about what this power masks, because it masks quite a lot from what I can see in the schedule.
Viscount Eccles
I fully agree with that. What industry needs is certainty. What it cannot live with is uncertainty. It needs to have as many of the factors that are going to influence what it does and the way it does it as settled as possible. Uncertainty is the enemy of good business.
Baroness Wilcox
My Lords, as has been mentioned, I listened very carefully at Second Reading when the subject of Schedule 3 was discussed. I know that many noble Lords feel that the process set out there is too clunky—I think that was the word that was used—and bureaucratic, and that it should be simpler and quicker. I assure the Committee that it was not the intention of the Government to introduce a clunky process, so this is something we are willing to look at, and if it is clunky we will need to amend it.
However, while the Government are willing to consider amendments in this area, I feel that those that have been laid today go a bit too far. In particular, the Government believe that financial penalties should be available only if the other powers are inadequate. After all, if the other powers are adequate, why do we need fines? We should not seek to punish the supermarkets for the sake of it, given the strong contribution that they make to the UK economy and to employment.
Similarly, I feel that stripping out consultation altogether is not appropriate for a significant measure. Evidence is important and consultation takes only three months. I believe it would be more appropriate to look to streamline and simplify that consultation process rather than eliminating it altogether.
The noble Lords, Lord Knight and Lord Grantchester, have put forward two amendments, both requiring draft guidance on financial penalties to be published within a year of the adjudicator being introduced. These amendments are identical except that one requires consultation and one does not. I will therefore address the principle of both together.
The publication of guidance is intended to ensure that those dealing with the adjudicator have a proper understanding of how it will act and of what is expected of them. Draft guidance on a power that the adjudicator does not have would not provide such clarity. Rather, we need to find a way to streamline the production of guidance if it is necessary, rather than producing it in advance.
I can answer two questions. To the noble Viscount, Lord Eccles, yes, the consultation will be carried out in the usual way. I hope that that is reassuring. To the noble Lord, Lord Browne, the reason for not prescribing the maximum fine in the Bill is that it is more appropriate that such a maximum be informed by experience—for example, how much retailers may be gaining from non-compliance. That experience can be gained only once the adjudicator is operational. Should the Secretary of State make an order to introduce fines, that order must specify the maximum penalty that may be imposed or how it is to be calculated.
I would like to discuss those points in more detail with the noble Lords who proposed the amendments before the next stage of the Bill, and the Government will carefully consider whether we want to bring back an amendment on the subject. With that, I ask the noble Lord to withdraw his amendment.
Lord Knight of Weymouth
I am most grateful to the noble Baroness for that commitment to discuss and the potential commitment—if a potential commitment is possible—to a government amendment. Although I am disappointed by some things that she said, I will not pick up on those but quit while I am ahead, even if it is only by a nose. I look forward to exploring with her how to make this a swift process, in common with her speaking note earlier. I therefore beg leave to withdraw the amendment.
Baroness Wilcox
Baroness Wilcox
My Lords, I shall set out the reasoning behind the amendment. As well as moving Amendment 54, I shall speak to government Amendments 91, 109, 113, 115 to 117, 119, 120 and 123 as well, as they are all establishing the same principle.
The adjudicator is intended to uphold the groceries code, which applies to those retailers specifically named in the groceries supply order. The code also applies to their subsidiaries, as Article 4(4) of the groceries supply order provides that each designated retailer will procure that its subsidiaries comply with the order. That means in particular that subsidiaries that deal with suppliers should incorporate the code into their supply agreements and then comply with it.
The Government’s policy has always been that that the adjudicator’s functions should apply to whichever companies in the retailer groups enter supply agreements and are bound by the code. However, since the Bill’s publication, we have realised that it is drafted in a way that technically would not allow the adjudicator to investigate subsidiaries or deal with any breaches of the code by subsidiaries. The amendment will correct that anomaly.
The main change is simply to include subsidiaries in the definition of “large retailer” in Clause 22. The other changes are to ensure that a more limited definition—that is, parent companies only—still applies in certain clauses. In particular, when specifying which companies have to pay the levy and which would have to be consulted, it would not make sense to include subsidiaries. I hope that noble Lords will agree that this amendment is technical, intended to deliver the policy as originally envisaged rather than to extend it, and will be able to give it their support. I beg to move.
Baroness Byford
My Lords, I think I am at the right place. I gave notice that we intend to oppose the Question that Schedule 3 be the Third Schedule to the Bill. All of us in the Room have debated this matter very fully this afternoon, and I do not propose to go through it again. I have also heard the response from the Minister that she wished to take it away and think about it. I want it recorded that, at the moment, we are looking to have some alterations to the schedule as it currently stands. I do not know if the Minister wanted to respond but if she could clarify the fact that she will take this away and think about it, I would withdraw my opposition. I hope I am correct.
Lord Knight of Weymouth
My Lords, while the Minister assesses whether there is a speaking note for the stand part debate on Schedule 3, and in addition to what we have already said, the other aspect of the schedule that I would like her to think about as she ruminates on it is that at the moment it is entirely with the Secretary of State as to whether the Secretary of State thinks that the adjudicator’s other powers are inadequate. Select Committees and other parliamentarians should have some voice within that. That is something else that she might want to think about.
Baroness Wilcox
We have already discussed the introduction of fines in detail and I made a commitment to discuss that in more detail.
Baroness Byford
I am very grateful to the Minister for that reply. In those circumstances, I withdraw my opposition.
Viscount Eccles
My Lords, perhaps unsurprisingly, Clause 10 causes me quite a lot of concern. We are debating the anticompetitive effect of imposing unexpected costs on suppliers. Now, in this clause, we will impose unexpected costs on retailers, so Parliament is doing something that the Competition Commission considers to be anticompetitive. We are doing this because of a number of factors. As I understand it, it is not the intention that the adjudicator should mount an investigation when a supplier has lodged a complaint against a retailer. That matter will go its normal course under the code of practice. The complaints that trigger investigations come either anonymously or from a trade association. Of course, there are provisions in the Bill for people to agree that they can be named, but in general it might well be that they do not.
I have heard it said that one investigation that might take place and would be, as it were, between a dispute between a supplier and a retailer, and a full-scale Office of Fair Trading/Competition Commission inquiry, is an inquiry into pig meat. I am not quite sure where I heard that but it might have been at Second Reading or somewhere. I think that it was said at the time that if there were an investigation into some alleged breaches of the code of practice in relation to pig meat, then it might be sensible for the adjudicator to bring in other forms of meat—that might be lamb or beef. If that were to happen, the next question is how many suppliers and retailers he would bring into the investigation, and how far back up the supply chain he would go. My understanding is that the adjudicator is free to do whatever he or she considers is the best way to proceed. Eventually, a report will come out that, of course, respects anonymity. The adjudicator now sends out a series of bills, not necessarily just to an individual retailer, as the clause specifies, but possibly to three or even 10 of them, whatever the number may be. Those retailers are then responsible for meeting the costs.
There is a requirement to specify the grounds, how much is to be paid, and by when. The grounds must be quite tricky if anonymity in the supply chain is going to be preserved, so I do not think that they will be very detailed. Also, they might be quite historic in the sense that if a really thorough investigation is undertaken into pig meat and other types of meat, it could easily take around 18 months. There is an appeal process, which is absolutely as it should be, but it is quite difficult to appeal unless you are provided with information about how the costs were reached in the first place. I worry about this clause and I am looking for guidance.
I want to make one other point which is similar to something I said earlier. This kind of clause attempts to portray what is happening as if no one is suffering. The consumer is not paying, the taxpayer is not paying, but the supermarkets are paying—and of course they can afford to do so. It is a populist move. The trouble is that if the supermarkets pay and their net margins are, as is the case for the Co-op, 2.8%, they will pass the costs on by increasing their prices. They do not have much of an alternative because they need to make a return on capital in order to keep on refurbishing their stores and opening new ones, so they do not have many options. I would ask this: where is the right place for these costs to fall? My answer to that is that the less regressive place would be the taxpayer. I do not think that these costs should be passed on to the supermarkets—
Lord Knight of Weymouth
I promised myself that I would not intervene on the noble Viscount, but he has been speaking for about five minutes. Is he aware that Tesco, as the largest of the retailers in this country, will have made, in the time that he has been talking, a profit of around £22,500? Perhaps Tesco could afford to pay these costs out of some of its profits.
Viscount Eccles
It is certainly true that Tesco has a higher margin than the Co-op. Its net margin before tax is around 5%. It also just happens that its margin in the UK is slightly lower than its average margin because it achieves somewhat better margins abroad. The size of Tesco’s profits is, in my view, irrelevant. Tesco is running a business that needs to achieve a margin on which it pays taxes, and it needs to make a return on the capital employed, which of course is very large. The Tesco store around the corner from where I live has just been completely reconfigured, perhaps I may say, to the advantage of the consumer. There are now more goods in the store and there is not much room to move around. In fact, if you go there between 12 pm and 2 pm, you are mown down by members of the Civil Service buying sandwiches for lunch. Nevertheless, in its broadest sense, Tesco provides an extremely good service to the public. Quoting arbitrary sums of money does not recognise the reality of life. It is to take a mythological position to say that because people are making quite a lot of money, they can always afford to pay all the costs that are thrust upon them.
If Parliament wills that there should be an adjudicator, that he or she should sit in the Office of Fair Trading, conduct investigations, have a staff and cost money, then rather than having an endless argument about how it defends invoices it has sent for investigation costs, it would be much better if they were paid out of taxes—out of the combined OFT and adjudicator budget—and do not fall on the elderly ladies with their small shopping baskets whom I see in another supermarket, called Sainsbury’s, who cannot afford to pay more for what they are getting there. The taxpayer has broader shoulders than the consumer. I beg to move.
Lord Teverson
I congratulate the Government on this clause. It is balanced, it puts the costs where they should be and acts as a break on frivolous claims and complaints. I do not understand the argument about it putting up prices, because if that is the case it is because we have an oligopolistic market. The way that markets work is that the price is set not by the cost of fines but by competition in the market and the crossing of supply and demand. If we have competition in that market—that is a big “if” and I will come back to it in a minute—the individual firm takes a hit on the fine, but it cannot put up the price because there is competition in that market. That sector argues very strongly that there is strong competition in that market, so it does not affect price. That is fundamental capitalist economics. If there is a problem, it is because there is insufficient competition in the grocery market. Frankly, if that is the case, the remedy is not here, but is clearly somewhere else altogether—in the Competition Commission or whatever follows it following any legislation this year.
As I said at Second Reading, I am a great advocate of multiple retailers. They have brought a great deal of benefit to this country, although there may be downsides as well. It is clear that if people cause the costs of an investigation, it should take responsibility for them. That is absolutely the right way to do it, and the clause reflects that. If you believe that fines will put up costs, you have to go to something other than fines. What do you go to? I do not think you go back to taxpayers. That is impossible. You would have to go back to an FSA-type system where you have approved people and you disqualify them from being in the grocery trade, but there is no way that that would work. Otherwise, I suppose you put them in jail under the criminal code, and that is clearly utterly inappropriate. I congratulate the Government on the clause. It is absolutely balanced and correct.
Lord Browne of Ladyton
I am pleased to follow the noble Lord, Lord Teverson. I think his answer to the noble Viscount, Lord Eccles, was exactly correct about the interaction of financial penalties and the truth of the noble Viscount’s arguments about the efficiency of competition. We cannot make a decision about these issues based on an entirely arbitrary judgment about what aspects of the finances of this business are relevant to this decision and ignoring the others. The noble Viscount is right about that, but he has to apply that logic to himself. He cannot say that it is all about margins and not about the scale and nature of these businesses and the amount of profit that they earn, because they are relevant to this.
That having been said, this is a very odd clause given other parts of this legislation because, however you dress this up, this is a financial penalty. I asked the noble Baroness a simple question: what scale of financial penalty are the Government prepared to countenance in relation to this legislation? The answer that I got was, “Without the experience of the adjudicator working, we have no idea”. The adjudicator has been given a blank cheque without any experience.
Viscount Eccles
I am listening intently. Will the noble Lord, Lord Browne, deal with the issue of anonymity? If my amendment were accepted, if the adjudicator believed that one retailer had breached the code, I can see that it would still be complicated but not quite as complicated. If the adjudicator has a duty to preserve anonymity, I cannot see how he could do so without widening the investigation in such a way that means it is not easy for people to identify who is being investigated. At that point, the investigation costs go up and the way of presenting them so that they are eventually paid by whatever means becomes much more difficult. How would the noble Lord deal with the dimension of anonymity?
Lord Browne of Ladyton
I do not know if I am grateful to the noble Viscount for asking me that question. If I were standing where the noble Baroness is, then I would feel I had to answer it. The only answer I can give the noble Viscount is that I will think about it. However, I suggest that for the purposes of the Committee, the fact that it is not easy to answer makes the point that he wishes to make.
There are all sorts of complexities about this legislation, many of which are necessary. I believe that anonymity at the heart of this process is necessary to build confidence in it and ensure that people come forward in this unequal bargaining position. The noble Viscount himself said that the consequences of people being exposed may be significant for them as suppliers to the retail industry. However, all of these complexities are going to keep the adjudicator awake at night in any event. This complex structure that we are creating—and we are all now willing participants in this if we do not speak out against it—is taking a reasonably good idea, which could be delivered simply, and complicating it beyond all belief. It is so complicated now, and I have taken such an interest in this over the last couple of weeks, that I might go back into practising in the legal profession, because I can see opportunities here that were not there when I practised before, and niche practices are places to make decent money now in the legal profession.
I do not support the argument that the noble Viscount puts forward, because I think costs should fall. The nature and scale of what we are dealing with here is such that if people cause this draconian step to have to be taken, then they deserve all they get in my view. They should then have to go out and compete in the market in order to make that money up in some other way.
There is another point about this clause that disturbs me, which is the part that the noble Lord, Lord Teverson, likes and is designed to avoid vexatious complaints. This is entirely the wrong way to go about this. We should be saying that the adjudicator should stop vexatious complaints and not pursue them. I cannot believe that we will be satisfied if we appoint somebody to be the adjudicator who has to resort, after an investigation, to imposing the costs of the investigation on to a vexatious complainer. I want an adjudicator who says, “I have looked at this, it is vexatious and I am not doing it”.
Lord Teverson
I am not going to present the Minister’s case, but it seems that the whole way that the early part of the legislation is written, which we dealt with in the previous sitting, was that the adjudicator is under no obligation to pursue anything that he or she feels is vexatious. That is inherent in the Bill, hence you then move on to this. I take the noble Lord’s point.
Lord Browne of Ladyton
I am grateful to the noble Lord and I think he has got my point. It seems to me that we ought to front-load the assessment of vexatiousness and not leave this bit at the end, as if somehow it balances everything and makes it appear much better than it is. We should give the adjudicator the power to say to people who bring complaints that are vexatious or without merit—and that will be revealed very quickly—“I am not taking these any further and that’s it”. People have to have confidence in this. The decisions that we want the adjudicator to make in relation to this issue will be decisions of moment and will have to be serious and important points. We do not want an adjudicator running around doing lots of small investigations. We want one or two key investigations that go to the heart of the inequities in this market, which people want the Government and Parliament to address. The previous Government started to do that. I am uncomfortable with this particular clause for a number of reasons but am grateful to it because it exposes the false logic of a lot of the rest of the provisions of this Bill.
Baroness Wilcox
My Lords, I understand my noble friend Lord Eccles’s reluctance to see individual retailers or complainants having to pay the costs of investigations. However, I think this is justified in both cases and take this opportunity to explain why this clause should stand part of the Bill.
In the case of retailers, they can be required to pay the costs of investigations only if the adjudicator is satisfied that they have broken the code. In this situation, the need for investigation and enforcement follows from their actions. It would seem unfair on retailers who have not breached the code to incur additional costs through a general levy when there is a party who clearly bears responsibility for the costs being incurred. I know from our debate at Second Reading that many noble Lords feel strongly that the costs should fall on those who breach the code rather than those who do not, wherever possible.
This is not a financial penalty or a blank cheque; it simply ensures that if a retailer breaches the code, the cost of the investigation can be borne by them, not by the other nine retailers. In the case of costs being borne by complainants, the Bill is clear that they can be expected to pay the costs of an investigation only if the adjudicator is satisfied that their complaint was vexatious or wholly without merit. That is a strong test directed at clearly irresponsible complainants rather than simply erroneous or weak ones. Without such a power, individuals might be motivated to make complaints that they know to be false or completely unjustified, wasting the adjudicator’s resources and placing unfair burdens on the retailers it investigates. Of course, the adjudicator should not pursue a case that he or she knows to be vexatious, but that may not be clear at the outset. That is simply a safeguard in case an investigation turns out to have been based on vexatious complaints.
Finally, I note that in each case, the clause says that the adjudicator may require a party to pay the costs of investigation. That is strictly discretionary. For instance, if a breach was found in a retailer but it was understood to be a matter of simple error, the adjudicator might decide that it would be disproportionate to require it to pay all of the costs. I hope that helps the noble Lord, and I support the Question that the clause stand part of the Bill.
Viscount Eccles
My Lords, I start with a technical question about the wording of the clause to which I am not looking for an immediate answer. It states that the adjudicator may,
“require a large retailer to pay some or all of the costs of an investigation”.
It is not self-evident that that means only the adjudicator’s costs. Of course, a lot of the cost will fall on third parties, including the retailer, and there are bound to be a lot of costs. My proposal that suspicion should be replaced with belief would go a long way to create more certainty about the adjudicator’s ability to turn down not just vexatious complaints but complaints for which there is too little evidence. It is my perception that when the Bill becomes law, a lot of cases will be brought for which the evidence will be sketchy, and the adjudicator will have to use his or her best judgment.
If those considerations can be given some thought and we can have a more—I criticise myself here—coherent and consensual discussion at the next stage, I withdraw my objection to the Question.
Lord Howard of Rising
Lord Howard of Rising
The amendment would enable both retailers and suppliers to request advice and get it from the adjudicator. As expressed at the moment, it is voluntary for the adjudicator to give guidance. It would be most unfair to either side if they were not in a position to get advice if they requested it. We all know that there is an existing code, but there may be times when the adjudicator may take a slightly different view; he may interpret something differently. It would be quite extraordinary if the people who were going to be bound by this, and bound by his decisions, are not in a position to be able to ask him how they should go about their business. It is very difficult to abide by the rules if the person making and interpreting those rules is not prepared to say what action should be taken in order to comply with them. This is especially so during the initial period, when there may be differences of opinion. I beg to move.
Lord Browne of Ladyton
My Lords, I shall speak to Amendment 57 in this group, standing in my name. A number of references have been made to the importance of the adjudicator as the driver of a changed culture. I have heard the adjudicator’s role referred to as a role which the Government hope will develop into a role operated by the person in the country who knows the code best. Clearly, that person and that office is the place that people should be able to look to for advice and guidance, because it will be the repository of the best advice and guidance about the code.
Consequently, I support the amendment of the noble Lord, Lord Howard of Rising, that the adjudicator should be required to give advice to those people. As the Minister said, the expectation is that a culture of changed practice will be created rather than a culture of litigation. If the adjudicator is required to provide the advice, that is an element of changing the culture. As I have already said, at Second Reading the Minister referred early on to the fact that anybody can make a complaint to the adjudicator. In winding up the debate—it is Column 764, for the purpose of the Official Report—she made reference to the importance of the public and to their desire for this area of commerce to operate in a way that addressed their expectations but which was also fair.
The public therefore have a role to play in this. They can make a complaint; they are consumers of the whole objective of improving the competition of this part of the economy. However, they are excluded from the list of people to whom the adjudicator can give advice. It seems contradictory to encourage anybody, including any member of the public, to make a complaint but not give the adjudicator the statutory power to give advice to the public. I have amended this, therefore, to include the public in the list of bodies. The noble Baroness is right that the public will want to know and understand how this code operates. Without the vires or the powers, the adjudicator will not be able to give them advice. The adjudicator ought to be able to do it.
Baroness Wilcox
My Lords, providing advice and guidance will be important in the adjudicator’s role of promoting compliance with the groceries code. I understand, therefore, why my noble friend Lord Howard of Rising wishes to see a requirement on the adjudicator to provide advice and why the noble Lord, Lord Browne of Ladyton, wishes such advice to be available to the public as well as to retailers and suppliers. I agree with the noble Lord, so it is important that the adjudicator clarifies certain issues around how he or she will work and indeed, how the public as well as suppliers and retailers will have an interest in this.
However, under Clause 12 the adjudicator has a duty to provide guidance on how he or she will investigate and has powers to provide further guidance on any issue related to the code. This guidance will be published and available to all. It is therefore the most suitable format for any obligatory communication by the adjudicator and is the best way for the adjudicator to deal with the public. Conversely, advice is more likely to be given on an individual basis to clarify specific issues with retailers and suppliers. It is likely to be given where the adjudicator notices that certain retailers or suppliers do not have a clear understanding of the code. It is also likely to be given to retailers or suppliers who are not sure whether a specific practice that is relevant to them is within the code. Advice is therefore suited to individual, potentially technical discussions of the code with those to whom the code is more directly relevant—suppliers and retailers. Any statements of general principles can be made through the power in Clause 12 to provide guidance, and those statements will be available to the public.
On whether the provision of advice should be mandatory, the adjudicator would normally be expected to provide advice when it is requested. However, the adjudicator will have a limited budget and will need to prioritise their work accordingly. It is therefore appropriate that they should have the freedom to choose whether in a particular instance giving advice is the best way of encouraging retailers to comply with the code. There could also be circumstances when giving advice would be inappropriate; for example, due to a conflict of interest. I ask noble Lords not to press their amendments.
Lord Browne of Ladyton
Perhaps I may ask the Minister a relatively simple question. If a member of the public thinks that he or she is in possession of knowledge that should support a complaint to the adjudicator, are they entitled to phone the adjudicator’s office and ask for advice as to whether that is appropriate? If not, is it common sense?
Baroness Wilcox
I do not imagine that the adjudicator will put up a barrier to people telephoning and asking questions. I imagine that they will have with them a group of people who will be able to assist anyone who comes. Looking at the adjudicator’s incidental powers, they may do anything that is calculated to facilitate the carrying-out of their functions, or is conducive or incidental to it. It is not for Ministers to interfere at this stage with how the adjudicator decides to work. I think that that covers the noble Lord’s question.
Lord Browne of Ladyton
It does indeed, and I am very grateful to the Minister for her immediate response, but she may want to compare that response with the one that she gave to my attempt to add the public to those who can get advice. It seems that the answer now is not that there are two types of communication, one appropriate to retailers or suppliers and another, which we are supposed to find in Clause 12, appropriate to the public. The answer is actually that the way in which the Bill has been drafted allows the adjudicator to give advice to the public if he or she wishes to do so. It would therefore appear that my amendment is unnecessary and that all the other responses I have just received, suggesting that it was inappropriate, are not correct.
Lord Howard of Rising
I thank the Minister for her reply, but there remains an essential difference. Under Clause 12, the adjudicator chooses what he will give guidance on. Should there be a point on which he has not given guidance and on which either the retailer or the supplier would like guidance, it would be completely contrary to any form of natural justice if they could not get it. If the guidance under Clause 12 is so absolutely brilliant, nobody is going to ask him for it under Clause 11. Should he make a mistake or omit something which he should have included, he has to be made to give an answer. That is the fundamental point.
The noble Baroness said that you have got to look at the costs of all these things. As it stands, the adjudicator has an unlimited budget. I will return to this later in our deliberations on the Bill, but I have seen no cap. The adjudicator can turn around and say to the supermarkets, “Let’s have a bit more, mate”. I beg leave to withdraw the amendment, but I will come back to it later.
Viscount Eccles
“(ba) the criteria that the Office of Fair Trading intends to adopt towards the content and timing of information to be published under section 8(2);”
Viscount Eccles
My Lords, I will be brief with this one. This is my substitute for the words that I wish to see left out in Clause 8, which are,
“specifying—
(a) what information is to be published;
(b) how it must be published; and
(c) the time by which it must be published”.
I suggested to the Committee that that was too prescriptive, but I quite accept that retailers need to know how the publishing of what has been described as naming and shaming information will take place. It would be much more appropriately included in guidance. That is why I have suggested the addition to the subjects on which the adjudicator must publish guidance and the criteria that the adjudicator—I have to amend my amendment, because I was still fighting for the Office of Fair Trading at the time—
“intends to adopt towards the content and timing of information to be published under section 8(2)”.
I put that in because I am keen to remove as much of what might be called the prescriptive, mandatory or antagonistic features of this Bill as possible, and to try to engender as much co-operation, discussion and agreement as we possibly can.
If we are going, finally, to depart from self-regulation for other forms of regulation at the same time as I am supporting a Government who claim that they are a deregulating Government, we should try to make sure that the very sensible code of practice is applied by agreement and not coercion, if I may come back to that word. This is just another small attempt to get into the Bill words which encourage co-operation rather than depending upon coercion. I beg to move.
Lord Howard of Rising
My Lords, my amendment in this group is along the lines of my previous one, such that the adjudicator “must” publish guidance. It seems absolutely inconceivable that he is not compelled to give guidance and to publish it. Imagine him refusing to let retailers know what steps they have to take to comply with his code. Another point here is one of natural justice. The adjudicator is paid by the retailers. The least that he could do is to provide them with the information on how he is going to treat them; after all, they are footing the bill. As I have said before, his interpretation may be different on these things. However, rather than waste the Committee’s time repeating the arguments, I will leave it at that.
Lord True
My Lords, having listened with great interest to nearly two days of discussion on the Bill, it does not look as if I am going to be able to trouble the scorers during the rest of the day. I should declare that I have no interest to declare in these matters. However, I feel that the point made by my noble friend Lord Howard of Rising and supported by the noble Lord, Lord Browne, is compelling. As the leader of a local authority, if I published a parking order and then did not publish guidance about what people had to do to comply with it, or if the authority did not put up notices or signs approved by the Department for Transport, the authority would be taken to court very quickly and would be acting improperly and unfairly. Concerning Clause 12(3)(b) in particular, not to require the adjudicator to give guidance on,
“steps that large retailers need to take … to comply with the … Code”,
seems an offence against natural justice. I apologise for breaking my long silence but of the many things we have discussed, this is the one where I hope that my noble friend will listen to my noble friends Lord Howard of Rising and Lord Eccles and the noble Lord, Lord Browne, who is opposite.
Baroness Wilcox
My Lords, the guidance provided by the adjudicator will help to ensure that all interested parties have a proper understanding of what they can expect of the adjudicator. Several noble Lords have brought forward amendments on what should be included in the guidance or on how that guidance should be produced.
With regard to the amendment moved by my noble friend Lord Eccles, the adjudicator will already have to publish guidance on how he or she will decide which enforcement powers, if any, to use. The adjudicator will also have powers to provide more specific guidance on how exactly he or she will go about requiring a retailer in breach of the code to publish information. However, I do not believe that the adjudicator should have to publish guidance on how he or she will approach the publication of information before such investigations can be started, especially as the approach to publication might be dependent on what breach is discovered. We must balance the need for retailers and suppliers to be informed of the principles under which the adjudicator is working with the need for the adjudicator to be able to start working promptly.
The noble Lord, Lord Howard of Rising, has tabled two amendments that I would like to address. The first is on the requirement for the adjudicator to publish guidance on a range of matters set out in Clause 12(3). Here I note that the requirement to publish guidance in Clause 12(1) is focused on specific issues, and under Clause 12(5) the requirement to publish information is given the context of a specific timetable. The adjudicator should be required to publish guidance, and he or she has to. Clause 12(1) states:
“The Adjudicator must publish guidance about —
(a) the criteria that the Adjudicator intends to adopt in deciding whether to carry out investigations;
(b) the practices and procedures that the Adjudicator intends to adopt in carrying out investigations; and
(c) the criteria that the Adjudicator intends to adopt in choosing whether to use the enforcement powers and which ones”.
While other guidance is valuable, it is not clear what would be achieved by a general requirement to publish guidance on broad topics such as the application of any provision of the code. Rather, these overarching topics are intended to indicate likely areas of guidance and ensure that the adjudicator can give guidance when the need arises.
Regarding my noble friend’s second amendment, guidance can relate to a wide range of the adjudicator’s activities and functions. It would be inappropriate to include a requirement to consult retailers without equivalent requirements to consult supplier representatives and other interested parties, which would create further bureaucracy, something that I am sure we would all try to avoid. This change is not necessary, given that the Bill already requires the adjudicator to consult any person whom he or she considers appropriate. I hope that that is helpful to noble Lords and I ask my noble friend to withdraw his amendment.
Viscount Eccles
My Lords, I am not quite sure how to put this, but I think the Committee is being let down. Once again we are being told that we are starting from a zero base, that nobody knows anything about the operation of the code and that the adjudicator will start with a blank sheet of paper. The code came into effect on 4 February 2010, having been published in 2009. All 10 supermarkets have gone through the procedures that it requires them to go through. They have included it in their conditions of purchase and sale; they have appointed compliance officers; and they have made two sets of annual reports to the Office of Fair Trading. Disputes have been running in the past 24 months and disputes have been settled.
To say that there is no base of information that the Government can rely on in drafting the details of this Bill and that before deciding how guidance should be given they have to wait for the adjudicator is indefensible. I will return to this on Report. I hope that before then there is some rethinking about the position under the code, instead of us being told time and time again that it is as if the code did not exist. I beg leave to withdraw the amendment.
Lord Knight of Weymouth
“( ) The report must include an evaluation by the Adjudicator of how well the code is working.”
Lord Knight of Weymouth
My Lords, in moving Amendment 78, in order to ease time a little, I shall speak to Amendment 82 in the next group, and in support of Amendment 87C tabled by the noble Baroness, Lady Randerson, which I support very much. They are all in connection with the annual report in Clause 14. Amendment 78 proposes that instead of reporting only when it occurs to the adjudicator that there is an issue on the code, he should have to report every year on the code’s effectiveness. That would be a more active stance and follows our concern that it should be a living code that is thought about regularly to make sure that it is always fit for purpose.
Amendment 82 reflects our wish that Parliament should have more of a role in respect of the adjudicator. Although we appreciate that the annual report, once given to the Secretary of State, would then be published and that Parliament would get a copy, it would be more satisfactory for Parliament to be listed as one of the organisations to which the annual report would be submitted.
Finally, in support of Amendment 87C, we think that the people who pay the levy to fund the adjudicator should be able to see clearly what are the operating costs. Whether they are paying a reasonable sum for the running of the adjudicator should be transparent. If Amendment 87C is accepted, so that the manner in which the levy is calculated by the adjudicator is regularly reviewed, that will provide the transparency that ensures that the adjudicator is not operating in a frivolous fashion. On that basis, I hope that the Minister is listening, as ever, and I beg to move.
Baroness Randerson
My Lords, I shall speak to the three amendments tabled in my name in this group, Amendments 85A, 85B and 87C. I shall take Amendments 85A and 85B first. As the Bill stands, the Secretary of State will review the adjudicator’s performance initially after two years and then every three years. The amendments provide that that review should take place initially within a year and then annually. We believe that the proposed two-year review period is too long before we hear anything about the achievements of and progress made by the adjudicator, and that a period of three years between reviews is too long.
If the adjudicator is doing well, retailers will change their culture and behaviour, and three years is a long time with no judgment on how the adjudicator is working. As I said earlier, it has taken a long time to get to this stage. It has taken six or seven years to get this far, so we need to know how the new system is working sooner than two years after the adjudicator has been established. I point out to noble Lords that, under the groceries code, retailers have to submit compliance reports to the OFT within 10 weeks of the end of every working year, so why should the adjudicator not report to the Secretary of State or be reviewed by him every year?
I turn briefly to Amendment 87C. Clause 15(4) sets out the detail of what the review must cover. This amendment would add a new paragraph (c) that would ensure that the Secretary of State considered both the funding for the adjudicator and how the levy was calculated. This introduces what is in many ways a different issue. It concerns the equity of a levy that is to be established on the basis that it will be set at a flat rate. This amendment introduces the concept that the levy might vary according to the amount of work done by the adjudicator in respect of each of the supermarket chains. In other words, those retailers who trouble the adjudicator a great deal by generating a lot of work—because there are a lot of complaints about them—will pay more than those retailers who generate hardly any complaints. Further, a flat-rate levy would not reflect the relative size of the different supermarket chains.
We do not have time to do so today but it would be interesting to look at the relative size of the 10 large retailers. Although they are the 10 largest, the biggest is significantly larger than the smallest of them. The flat-rate levy does not seem to reflect that. It will nurture a sense of unfairness among the retailers if there is no movement from a flat rate to a levy that reflects the amount of business that they have brought to the adjudicator—if I could put it that way. The Minister may give us some words of reassurance on this but, as a probing amendment, it is important to raise the issue this afternoon.
Lord Borrie
My Lords, I speak to Amendments 87A and 87B in this group. They stand in the names of the noble Earl, Lord Sandwich, and the right reverend Prelate the Bishop of Wakefield, who are unable to be here, so, as the third name, I am here to speak to the amendments.
As the noble Baroness, Lady Randerson, said, Clause 15 deals with the supervision of the adjudicator and his work and performance by the Secretary of State’s reviews. The times of the reviews were discussed just a moment ago by the noble Baroness. I sympathise and agree with the points that she made. The amendments of the noble Earl, Lord Sandwich, the right reverend Prelate and me are designed to link the Secretary of State’s reviews of the adjudicator’s work with the original objectives of the Competition Commission for the code. One of the objectives of the groceries code was to stop the transfer by supermarkets to suppliers of excessive risks and unexpected costs. The amendments would spell that out in the Bill.
Amendment 87B is concerned with the level of the climate of fear among the supplier community and would recognise it as a potential factor that might impinge upon the adjudicator’s ability to fulfil his or her functions. In particular, it is possible that the supplier climate of fear might be a reason for zero action by the adjudicator—but that is not a reason to abolish the adjudicator. Rather, the adjudicator would need to improve his or her processes in the light of the supplier context. We have not yet come to Clause 16, which deals with the possibility of transferring the adjudicator’s functions or even of abolishing the adjudicator, but it is plain, as we shall see, that the Secretary of State’s reviews of the adjudicator’s work may be grounds for activity on the part of the Secretary of State under Clause 16.
The point of Amendments 87A and 87B is to clarify the grounds on which the adjudicator might be reviewed or criticised by the Secretary of State and to make clear in the Bill that there is an important link—which one wants to spell out because it is not there at the moment—between the original objectives of the groceries code and the actual work of the adjudicator, which is of course reviewed from time to time.
Baroness Wilcox
My Lords, regarding the amendments tabled by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, the purpose of the annual report is to provide and publish a factual description of the adjudicator’s activities. This increases the adjudicator’s transparency to scrutiny and helps suppliers, retailers and other interested parties to understand the adjudicator’s role and functions. The noble Lords have suggested that the report should include an assessment of how well the code is functioning. I understand from previous debates and discussions that they are enthusiastic to ensure we have what they are calling a living code. However, this amendment is not a suitable way to provide for it. As I said before, the annual report as it stands is a simple description of the adjudicator’s activities. Amendment 78 would make the writing of the annual report a much greater strain on the adjudicator’s resources. More fundamentally, the adjudicator does not have responsibility for keeping the code under review. That is a matter for the Office of Fair Trading, although the adjudicator has a statutory duty to recommend changes to the authorities where she or he considers such changes appropriate.
With regard to the amendments tabled by the noble Lord, Lord Borrie, I fully agree that it is important that in this review the Secretary of State should consider any factors that have prevented the adjudicator from effectively enforcing the code, and that the purpose of the groceries code is to prevent the transfer of excessive risks and unexpected costs to suppliers. However, I do not agree that it is necessary to set this out explicitly in the Bill. I believe that the existing provision, that the Secretary of State must,
“assess how effective the Adjudicator has been in enforcing the … Code”,
provides the Secretary of State with the appropriate remit to carry out a thorough triennial review. This can include an assessment of any factors that have hindered the effectiveness of the adjudicator.
My noble friend Lady Randerson proposed another amendment requiring the Secretary of State to consider the funding of the adjudicator and, in particular, the manner in which the levy is calculated. As the Secretary of State must give consent to any levy, an explicit requirement to consider this would be unnecessary. I will be happy to discuss my noble friend’s amendment further when we address levy funding in the 30th group of amendments. In general we should avoid specifying areas for the Secretary of State to consider in his review of the adjudicator, unless setting them out in statute is clearly necessary. A long list of issues to consider in the review is more likely to be treated as exhaustive, whereas the current drafting makes it clear that the Secretary of State is considering the adjudicator in broadly defined terms.
Finally, my noble friends Lady Randerson, Lord Razzall and Lord Teverson have tabled two amendments, which together would mean that the adjudicator was reviewed after each year. We of course believe that the adjudicator should face proper scrutiny from the Government and Parliament. However, this must be balanced with both the need for the adjudicator to be independent and the practicalities of such frequent reviews. The adjudicator is expected to undertake only a few reviews a year and to report on their work once each year. This does not provide a very broad basis for the Secretary of State to consider how much the adjudicator’s powers have been exercised and how effective the adjudicator has been in enforcing the code. Therefore, it would be unlikely that each review could make very clear or authoritative judgements. Allowing three years will, we feel, provide a broader range of evidence to be considered.
Annual review would also mean consultation in each year of the adjudicator, the Competition Commission, the Office of Fair Trading, all 10 large retailers, one or more supplier representatives, one or more consumer representatives and any other appropriate person. As well as providing a burden on them to respond, this would be likely to reduce the quality of each of these consultation responses, further weakening the scrutiny of the adjudicator. It is not customary to undertake reviews of independent office-holders so regularly, and introducing annual reviews in this case might bring into question the adjudicator’s independence from the Government.
One further amendment has been proposed by the noble Lords, Lord Knight of Weymouth and Lord Grantchester, to the effect that a copy of the adjudicator’s annual report should be sent to Parliament. I set out in an earlier response to the noble Lord, Lord Browne, why I did not believe it would be appropriate to send a copy of the report to the devolved Governments, as this is not a devolved matter. A copy going to Parliament, however, could have merit. I emphasise that the adjudicator will already publish the report, so this would not be a question of making additional information available to Parliament but would simply emphasise that the adjudicator’s work should be open to parliamentary scrutiny.
I would like to give this matter further consideration, both on the principle and, if this is appropriate, on how precisely it is delivered—for instance, whether it should be a matter of simply sending a copy to Parliament or if it would be more suitable to place a copy in the House Libraries or lay it before Parliament. I am therefore happy to discuss this matter further with the noble Lords concerned before the next stage of the Bill. I hope that has gone some way towards answering the questions in the amendments that were put down, and I ask noble Lords to withdraw them.
Lord Knight of Weymouth
I am relatively satisfied with that response and am happy to beg leave to withdraw the amendment.
Baroness Wilcox
Lord De Mauley
My Lords, noble Lords will appreciate that the target was to finish the Committee stage of the Bill this evening. There have been discussions among the usual channels, taking into account the position of the staff of the House. The usual channels propose to continue debate on the Bill until 7 pm, with the hope of completing the Committee stage.
Amendment 93
Viscount Eccles
Viscount Eccles
My Lords, this is a small matter of equity. Clause 15(4)(a) concerns information that may be considered when deciding whether to investigate. It confines the adjudicator to a fairly narrow range of people involved in the industry. My amendment proposes to add, to the information provided by a supplier, the words “or a retailer”. It seems perfectly possible that a retailer will have information about the operation of the code and possible breaches of it, which means that they would like to provide information. I think that they should have that opportunity in any event. I beg to move.
Lord Knight of Weymouth
My Lords, I shall speak to my Amendments 95 and 123A. The issue we are raising is that, as the Bill is currently written, it would appear that when the workings of the adjudicator are reviewed—this is specifically in relation to the ability of third parties such as trade associations to make representations and complaints to the adjudicator—and if the review decides that the arrangement is not working well and wants to change it, all that the Bill currently allows the Secretary of State to do is to completely remove the ability of third parties to complain to the adjudicator. It is a very black and white position: either all third parties can complain or all third parties cannot complain.
These amendments seek to give the Secretary of State the ability by order to list specific third parties who would still be allowed to submit information to the adjudicator. Should irresponsible third parties abuse the right that the legislation gives them to submit information to the adjudicator, the Secretary of State could restrict the number of third parties to those that behave responsibly. This would be a pragmatic way for the Secretary of State to operate should the review disclose something that he is unhappy about.
Amendment 123A simply seeks that the affirmative resolution rather than the negative resolution is used in order to give Parliament extra scrutiny if the Secretary of State wants to limit the number of individuals permitted to submit information to the adjudicator. I beg to move.
Lord Teverson
My Lords, Amendment 94 is quite straightforward: it seeks to insert a new paragraph in proposed new Section 4A(1) which allows for the adjudicator to consider,
“information provided by a trade association”.
Trade associations are important and should be involved in the structure of the Bill, and the amendment would involve them in this part of the work delineated by the Bill. It is as straightforward as that.
Baroness Wilcox
My Lords, I am grateful to noble Lords who have raised the important issue of what any restrictions on the sources of information under Clause 15(10) should involve. The Government hope and believe that third parties such as trade associations will provide information to the adjudicator in a responsible and helpful way and that this clause will never need to be activated. Nevertheless, it is important that we give proper scrutiny to the details of how the clause can be activated and what it should include.
The clause as drafted provides the most suitable way to restrict information. The sources that would still be allowed to provide information are those identified as most suitable by the Government following their consideration of pre-legislative scrutiny by the Business, Innovation and Skills Select Committee. These have been carefully considered as sources that could provide useful information without the risk of the adjudicator being deluged with complex but essentially weak complaints.
My noble friend Lord Eccles suggested that retailers should be included in the list of sources of information. Clearly retailers will have relevant information about whether a breach has occurred and this will be central to investigations. However, the place for this to be heard is in investigations, where the adjudicator can seek relevant information without revealing details of complaints. The decision to start an investigation is based on complaints or other information giving reasonable grounds to suspect that the code has been breached, not on an attempt to weigh all the arguments.
My noble friends Lord Razzall and Lord Teverson suggest that trade associations should be added to the list. However, trade associations are the primary group that this power to limit the sources of information is intended to address. The power has been introduced in the light of concerns that trade associations might raise complex but unjustified complaints. This could put a strain on the adjudicator’s time and resources, as well as unnecessary burdens on the retailers.
The noble Lords, Lord Knight and Lord Grantchester, suggest that the Secretary of State should be able to specify sources through guidance. However, such an extension would be a more serious matter than is suited for guidance, which the adjudicator must “take account of” but which is not strictly binding.
Clause 15(10) has been deliberately written to restrict the sources of information to those that are most likely to have information regarding a breach of the code. This will ensure that trade associations and other third parties have a clear incentive to act responsibly. It would be invidious to put the Secretary of State in a position where he or she had to pick which third parties or classes of third party were responsible and which were not, and such an amendment could lead to the very lobbying and campaigning that we hope to avoid.
Finally, the noble Lords, Lord Knight and Lord Grantchester, have also proposed an amendment to Clause 23 that is relevant here. It would mean that Clause 15(10) required an affirmative resolution. Throughout the Bill we have striven to ensure that a suitable level of parliamentary scrutiny is provided for any orders.
The Government believe that the negative procedure is suitable here as the content of the order is very clearly defined in the Bill, and because an order can be made only as the result of a triennial review involving widespread consultation. The Delegated Powers Committee considered this order specifically and confirmed that it was satisfied with our reasons for this being a negative procedure.
I hope that these answers to the amendments have been helpful. I therefore ask the noble Lord to withdraw his amendment.
Lord Browne of Ladyton
Lord Browne of Ladyton
My Lords, I do not think I shall detain the Committee for very long. I am hopeful that the Minister will have a simple answer to this particular problem.
The amendments are designed to do two things: they would extend the obligation of confidentiality beyond the adjudicator to his or her deputy and staff, and would provide a criminal sanction for a breach of the obligation of confidentiality. The arguments are comparatively simple. Clause 18, on a straightforward reading, limits the obligation of confidentiality to the adjudicator. If that reading is correct then this is far too narrow. The persons connected to the adjudicator should also be covered by the statutory provision, and these include, at the very least, the deputy adjudicator and the adjudicator’s staff.
The obligation of confidentiality in Clause 18, with the wording that has been adopted, can be argued to be discretionary rather than mandatory, and the amendment deleting the word “may” and inserting the word “must” clarifies that the obligation is mandatory. Amendments 102 and 103 are consequential amendments on those two provisions.
The obligation provided by Clause 18 must be enforceable, and in my view the provision of a statutory offence will ensure that the obligation is respected. I beg to move.
Baroness Wilcox
My Lords, the duty of the adjudicator to keep complainants’ identities confidential is central to this Bill. The initial market investigation, consultation and pre-legislative scrutiny all indicated that suppliers would be reluctant to complain if they thought that they would be identified, and noble Lords have made the same point in the House. The protection of the identity of parties to arbitration is likewise important. The proposed amendments on confidentiality therefore need careful consideration.
The noble Lord, Lord Browne of Ladyton, proposed a number of amendments with the clear aim of making the requirement on the adjudicator to maintain confidentiality as tough as possible. I agree that this needs to be a strong requirement. However, I believe that the Bill already achieves this.
Two of the amendments in the name of the noble Lord, Lord Browne of Ladyton, specify that the adjudicator “must not” rather than “may not” make unauthorised disclosures of information that might break confidentiality. I am confident that “may not” and “must not” have the same force here. The words “may not” are intended to be prohibitive: the adjudicator is in either instance required to refrain from making unauthorised disclosures.
Another two amendments in the name of the noble Lord, Lord Browne, specify that the duty to maintain confidentiality also applies to the deputy adjudicator and any staff. I agree completely with this as a matter of principle. However, the Government are confident that the deputy adjudicator and staff seconded to the adjudicator would already be bound by the duty of confidentiality as set out in the Bill and that therefore the amendment is unnecessary.
The noble Lord’s final amendment on this clause makes any knowing breach of confidentiality by the adjudicator or his or her staff an offence and introduces fines for anyone found guilty of such an offence. I do not believe that the threat of fines is necessary to make the adjudicator act responsibly. The adjudicator will be a public authority and will be bound to take the responsibilities under Clause 18 very seriously, as well as being bound to respect the human rights to privacy of the relevant parties. It is true that there is no sanction for breach expressed in Clause 18 but a breach would be a breach of statutory duty by the adjudicator and would in principle enable a person who suffered from a breach to claim damages from the adjudicator or to seek an injunction to prevent the disclosure if the person knew in advance.
I do not think that my noble friend Lord Eccles will be speaking to his amendments.
Baroness Wilcox
I therefore would ask the noble Lord, Lord Browne, to withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am reassured by the noble Baroness’s comprehensive response, and now that her words are on the record, it will be very clear that the requirement of confidentiality applies not just to the adjudicator, as the Bill states, but to the deputy adjudicator and the staff. In making a plea for plain English, which is where we started our debate, I wonder why we do not just say what we mean in legislation, in order that we do not have to read Hansard to find out that it applies to other people. A few words here would not cost us that much. If “may not” can have as strong a construction as “must not” and the Government prefer “may not” when they mean “must not”, I am content with that as well. However, I still think that it would be better if we said what we meant rather than left it to what lawyers understand of these things.
I am impressed by the Minister’s confidence that in future this confidentiality will be respected. I have had the privilege to hold some quite significant offices in government and I have discovered, sometimes to my frustration, that where one expects confidentiality most is where one least gets it. We have a media industry that substantially operates on the basis of leaks. These stories will be of interest to many people. They will sustain the front pages of newspapers that are competing with an internet that is utterly uncontrollable. I would not be surprised if very quickly we find that trying to stem leaks out of these investigations is a problem, and I believe that we will regret that we did not put down a criminal offence to discourage that. In the current circumstances, though, and at this time of day, I do not intend to insist on this any further. I beg leave to withdraw the amendment.
Lord Borrie
Lord Borrie
My Lords, the origin of the Bill, as we all know, stems from a Competition Commission report that found fault with major supermarkets in ways that I shall not trouble to delineate now. It seems appropriate that the levy should be imposed on major supermarkets to pay for the financing of the groceries code adjudicator’s position and office. However, I prefer the wording of the amendment of my noble friend Lord Knight, so I will not push my amendment. I certainly will not push the point about not requiring the Secretary of State’s consent.
Lord Knight of Weymouth
My Lords, I shall speak to Amendments 108 and 112, and to Amendment 121, which refers to Clause 20, because it is related to the same point. For the sake of efficiency I will do it in that way. Indeed, I shall speak in relative support of the amendment of my noble friend Lord Borrie. I am relaxed about whether the wording is “must” or “shall”. I am sure that there are parliamentary draftsmen who have a very strong opinion on the most effective word as long as the meaning remains. For the sake of plain English we need to be clear about what we are doing here in Parliament. I believe that it is the Government’s intention that the adjudicator’s office should be fully funded by the levy on the major retailers and that the taxpayer should not fund it. If that is the Government’s intention they should say so and be clear in the Bill in the same way as they are about other bodies that are funded by levies. That clarity would help everybody and that is what the amendments would do.
Amendment 121 to Clause 20 would remove the option for the Secretary of State to make grants to the adjudicator so that, again, the office would be fully funded by the major retailers. That is all that that amendment would do. Amendment 112 would remove the provision for a flat rate levy from the 10 major retailers and replace it with a requirement for the levy to be calculated in proportion to annual turnover. As we have heard, there is a significant difference between the sizes of major retailers whose turnover is more than £1 billion. I think that it would be fairer, certainly initially, for the levy to reflect turnover. It may be that in time the levy would reflect those retailers that occupy the most time for the adjudicator and cause the highest number of substantiated complaints and investigations. However, for now, relative to turnover is a better solution. As I recall I think that that was what the Competition Commission recommended. I look forward to a willing Minister.
Lord Howard of Rising
I shall speak to Amendment 110A in this group, which seeks to impose some form of parliamentary discipline on the amounts of money that the adjudicator can charge. In effect, the adjudicator is imposing a tax. That is, he is compulsorily taking money from private organisations to fund his office. It would be unreasonable for such power not to be overseen. There is provision in the Bill for the Secretary of State to do so, but a parliamentary order—we all know that they are, in effect, rubber stamps—would at least give Parliament the benefit of being able to look at what is happening and comment on it. There will then be some form of external discipline over the adjudicator when he decides how much money—some call it a levy but I call it a tax—the retailers should pay.
Baroness Randerson
My Lords, I shall speak to Amendment 111A, which would amend Clause 19 by removing subsection (5) and replacing it with a new subsection. This concerns the same issue of the flat-rate levy. Clause 19(5) specifies that it should be the same for all retailers unless the Secretary of State decides otherwise and makes an order that allows it to reflect expense and time. My amendment does away with the first phase of the flat-rate levy. It is on very much the same ground as other amendments in this group. Mine would enable the Secretary of State to decide the criteria that should be applied for a variable levy.
I repeat what I said on Amendment 87C, which referred to this issue. There is a basic problem in that a flat-rate levy will not change behaviour because there will be no reward to retailers for avoiding getting into trouble and behaving well. We need to start on a strong footing and, as the noble Lord, Lord Knight, has just said, on an equitable footing that reflects the size of the different retailers. I am conscious that the Minister has said that she will deal with this issue when she responds to this group of amendments.
Lord Teverson
My Lords, I shall speak to Amendment 114, which is very straightforward. Under Clause 19(5), the Secretary of State must make an order to allow the adjudicator to differentiate. My noble friend Lord Razzall and I believe that the adjudicator should have this direct ability. Again, we have this indirect method of making decisions through the Secretary of State. I am sure that the Secretary of State has far more important things to do than decide the specific division of the levy among the small population of large retailers. If we are to have a serious adjudicator, we should give that person the authority to undertake that task. If we feel that the adjudicator’s decisions are wrong, I am sure that other provisions in the Bill will ensure that that is communicated to him or her.
Baroness Wilcox
My Lords, many noble Lords have given close consideration to how the levy to fund the adjudicator should be raised. The noble Lords, Lord Borrie, Lord Knight of Weymouth and Lord Grantchester, proposed similar amendments, respectively suggesting that the Bill should specify that the adjudicator “must” or “shall”, rather than “may”, levy funds from the retailers. I agree with the principle that the adjudicator should raise its funds from the retailers. This is intended as the adjudicator’s primary funding source. Other forms of income, such as payment for the cost of individual investigations or loans and grants from the Secretary of State, are intended to be secondary.
However, simply specifying that raising funds is obligatory would not have a clear outcome unless the Bill specified when the adjudicator must do so. The current drafting is intended to allow the adjudicator to levy funds whenever he or she deems it necessary, not to impose a schedule of when he or she may or must raise funds. I believe that we agree on the principle that the adjudicator should be funded by the retailers, but I also believe that the current drafting gives the adjudicator greater flexibility and is preferable.
The noble Lord, Lord Borrie, proposed a further amendment removing the need for the Secretary of State to give consent before a levy is raised. I am sympathetic to the principles of avoiding unnecessary hurdles and the need for independence for the adjudicator. However, this amendment would give the adjudicator a completely free hand to raise funds from the retailers without the oversight of Ministers. The Secretary of State needs only to give consent and may not direct the adjudicator to raise any levy, but some accountability is necessary.
The noble Lords, Lord Knight of Weymouth and Lord Grantchester, proposed that the levy should initially be divided according to the large retailers’ turnover. That possibility was considered during pre-legislative scrutiny, but the Government believe that it would be unfair to assume that a retailer’s size correlates with how much it breaches the code or with how much of the adjudicator’s resource it is likely to demand. The principle of fairly sharing the cost of the adjudicator is better served by the ability to vary the payments of retailers based on the estimated expense and time of dealing with them in the light of experience.
I turn to Amendment 110A, tabled by my noble friend Lord Howard of Rising. This would require an order to be made before a levy is imposed, and would mean that consultation must take place before imposing the levy and before any subsequent increase in the levy. I believe that unnecessary bureaucracy should be avoided wherever possible. The Government’s intention to fund this body via a levy has been clearly set out in previous consultations and policy documents; the mechanism for a levy and how it is to be imposed can be read from the Bill. I therefore see no need to require the imposition of an order, or for a further round of consultation, before imposing the levy, particularly when the levy is subject to the approval of the Secretary of State and not simply at the adjudicator’s discretion.
On my noble friend’s question about limiting the amount of the levy, a limit on how much can be raised could tie the hands of the adjudicator, particularly if there was a costly appeal for which funds were needed. The fact that the Secretary of State must approve each levy is an assurance that it will not be misused.
This brings me to Amendment 114, tabled by my noble friends Lord Razzall and Lord Teverson. This would remove the requirement for the Secretary of State to make an order before the adjudicator can vary the way the levy is made. Given the principles of avoiding bureaucracy that I have just set out, I am willing to look again at whether an order is necessary before a levy can be varied in the proportionate way set out in the latter part of subsection (5). The fact that individual levies would still need to be approved by the Secretary of State could provide an adequate safeguard, and I will happily discuss this issue further with my noble friends Lord Razzall and Lord Teverson before the next stage of the Bill. I hope that the noble Baroness, Lady Randerson, will also be happy to discuss this issue, as I believe that her amendment shares the same objective of avoiding bureaucratic delay. However, the Government feel that varying the levy should be a matter for the independent adjudicator and that the role of the Secretary of State should be simply to give consent.
Lord Knight of Weymouth
My Lords, I think that my noble friend Lord Borrie has already said that he will withdraw his amendment in favour of mine and I will be happy not to press mine. I am slightly disappointed in the Minister’s answer. Particularly if there are fines that are then paid to the Consolidated Fund, she is opening up the Secretary of State for considerable lobbying from the major retailers, who will say, “Well, you’ve just had a whole load of our money, so can we just waive the levy for the next year because you’ve already got the funds for the adjudicator?”. That would create some weird incentives and disincentives. It would be much more straightforward to be clear right from the outset. I know that she will reflect on that and I am happy to withdraw my amendment.
Baroness Wilcox
Baroness Wilcox
Baroness Wilcox
Lord Howard of Rising
Lord Howard of Rising
I will not keep the Committee long as I am mindful of the 7 pm deadline. The idea that the adjudicator might have a surplus is a triumph of hope over experience, rather like divorcing and getting married again. However, if there is a reasonable surplus—there should probably be a minimum above which this does not have to operate—it should be returned to those people who have paid it or, the following year, they should have a corresponding reduction. I beg to move.
Baroness Wilcox
My Lords, the Government’s intention in giving the adjudicator discretion over whether to repay retailers at the end of the year is to avoid unnecessary bureaucracy where the adjudicator is required to repay retailers before then immediately raising further funds from them. I believe that noble Lords on all sides of the House are supportive of the adjudicator being able to carry on his or her work with as little bureaucratic burden as possible, especially as in this case the burden would fall on the retailers as well as the adjudicator. I therefore ask the noble Lord to withdraw his amendment, if he feels that this is a good explanation.
Lord Howard of Rising
I thank the noble Baroness. I suggest that if there is a large surplus, it should be deducted from the following year. That would save the bureaucracy. I beg leave to withdraw the amendment.
Baroness Wilcox
“specified retailer” means a retailer mentioned in Article 4(1)(a) or (b) of the Groceries Supply Order;”
Lord True
My Lords, I apologise that I was not able to be present at Second Reading because of a local authority meeting. I am also sorry to detain the Committee on an issue that is not solely related to this Bill at this late hour. However, I hope, given the length of the proceedings and that it will take a little time to develop my argument, that Members of the Committee will be indulgent. It is the first opportunity that we have had to comment in detail on a matter that I understand is intended by some to be a pilot to many—if not all—Bills in future. I refer to so-called plain English—or, rather, those cheery questions in italics added above the normal side headings in Bills. My noble friend Lady Byford said at Second Reading, at col. 742 of Hansard on 22 May, that she found these headings “folksy” and not very helpful. The noble Lord, Lord Knight of Weymouth, said at col. 760 that he rather liked them and found that they helped clarity. I do not think that they help clarity.
I tabled amendments to remove Clauses 19 and 21 because I was advised by the Public Bill Office that this was the only way that a Member could raise this question and I did not want to hold up consideration of the rest of the Bill. However, I think that it merits some attention. I have no idea where these new headings come from. I have seen that they are a pilot for plain English legislation, but it seems to me that they must emanate from some quite high-up person in government—one of those well meaning men or women with time on their hands and clearly unworldly enough to think that the public might want to read Bills while sitting alongside me on what I hope will be the 7.33 to Twickenham.
As I was not able to speak at Second Reading, I gave my noble friend Lady Wilcox notice that I would question this approach. I did not want her to worry that by opposing Clause 19 I was opposing the whole Bill—whatever I think of the Bill, that is not my aim. My noble friend, with typical courtesy, sent me a swift reply. She told me that the intention was to make legislation more accessible to the public. Her letter referred to the demands of accessibility. I am not sure who they are coming from, but once again I see the smiley face of the high-up person in government come up before my eyes. My noble friend was kind enough not to dismiss my fear that there might be issues of logical consistency, questions on the interpretation of parliamentary intent and, indeed, the risk of value judgments that could emerge if this process spreads. I will illustrate briefly what I mean.
The heading above Clause 19 reads:
“How is the Adjudicator funded?”.
I think that means “funding” in plain English, substituting one word for the well meaning, accessible five.
However, that is not my main point. How many hours in this Committee and others do we spend debating “shall”, “may” or “must” amendments? Big questions turn on those words, and Parliament rightly considers very carefully the appropriateness of each. As regards this clause, the noble Lord, Lord Borrie, has suggested “must” for “may” in line 5; the noble Lord, Lord Knight of Weymouth, has suggested “shall” for “may”; and my noble friend Lord Howard of Rising has just suggested a “must” for “may”. I am not taking a stand on any of those debates.
The Bill is clearly drafted with a “may” in the funding power it affords to the adjudicator. It implies that he did not necessarily take a levy; nor, indeed, need the Secretary of State give consent, grants or loans. Yet the accessible heading says:
“How is the Adjudicator funded?”—
and not “How may the Adjudicator be funded?”. Some might ask, what is the intention of the Government or Parliament? Is it that he will be funded come what may—as the heading implies—or that he may secure funding, as the text of the Bill suggests? I think this is a circle that you can square.
However, we in Parliament do not have the power to amend such headings; that is why I have had to table a clause stand part amendment rather than suggest leaving out “is” and putting in “may”. To my knowledge, presently the courts do not construct any arguments on the basis of descriptive headings in a Bill. But when a new practice comes into the writing of law—and in Bills more high-profile than this—could some creative lawyers bear to stand idly by? What happens when, as here, a heading says that something “is to be done” and the Bill says it “may be done”?
Lord De Mauley
I hate to intervene on my noble friend. Perhaps it would be going too far to suggest that he is verging on a Second Reading speech, which I would not want to do that. I happen to know that my noble friend has some quite comforting words to give that might enable him to abbreviate his speech on this clause stand part debate.
Lord Browne of Ladyton
Perhaps the noble Lord will allow me to interrupt him, the comfort is to be found if he simply looks at it. The heading applies to Clauses 19 and 20, so the funding that comes from the public purse and the Secretary of State is encompassed under this heading. This is how the adjudicator is to be funded.
Lord True
My Lords, I hear what my noble friend says, and I am conscious that everybody needs to go. It is a great pity when a Member wishes to raise a point of substance on the way in which law is written—something that this House is here to deal with—he is very swiftly interrupted by a member of his Front Bench. I will try to accelerate my remarks, having been patient in this Committee.
I hear what the noble Lord, Lord Browne, says, but to answer his point, let us look at the heading on page 5, line 21:
“How is the Adjudicator supervised?”.
That smothers in obscurity the power to abolish the adjudicator in Clause 16. Only Clause 15 is about supervision, yet this Committee has been concerned about abolition. What value judgment is this, when the Bill highlights supervision and passes over abolition?
Above Clause 21, the heading reads:
“Will this law mean other changes to the law?”,
which I will now speak to. This is a nonsense, because when the Bill is commenced what is in Clause 21 will already be law, so that will just lie on the Bill as an otiose and rather foolish idea.
Finally, I will give one more example before I accept the strictures and sit down. However, I will, having been made to sit down, return to this matter on Report, and I will also listen very carefully to what my noble friend says. This matter is intended to help electronic access to legislation. If you look at the heading,
“How does the Adjudicator handle information?”,
the normal practice is that when you click on a heading on an electronic screen, the screen shows text starting from the point of the heading. Why, then, does this heading come above Clause 18 and not above Clause 17, which covers the Secretary of State’s right to require information from the adjudicator? Surely, anyone interested in how information is handled should be signposted to that new power for the Executive. Who decided to put the heading there and not above Clause 17, and why can Parliament have no say in the matter?
I will sit down now, but I submit that potentially significant issues are raised by this new practice, and I apologise, after eight and a half hours of proceedings on this, for venturing to speak for eight minutes.
Baroness Wilcox
My Lords, this is the first time that I have had occasion to respond to the noble Lord, Lord True. I know the noble Lord to be an elegant wordsmith with a passion for our beautiful language, so I would not, therefore, take lightly anything that he has said, even if he feels that he has had to be a little briefer than he would have wished.
Regarding the points that the noble Lord has raised, they are both interesting and technical. They are points on which I will seek legal advice, and I will make sure that when I return he is a happier person than he is today. I am happy to speak to him about this before the next stage of the Bill, and I therefore wonder if he would be prepared to withdraw his amendment.
Lord Howard of Rising
Could I just point out to the Minister that this is as much a point of principle as it is of detail? The point of principle should be addressed, and that is not necessarily something that concerns only lawyers, but Members of this House and Members of Parliament in general.
Lord Knight of Weymouth
My Lords, my suggestion to the Minister is that it might be helpful for her to write to the Committee, and in particular to address the very valid point that the noble Lord, Lord True, has raised; namely, that Parliament cannot amend these words. I am happy with the words in this Bill, but if this is a pilot, it would be interesting to hear the views of those conducting the pilot as to whether any consideration has been given to us being able to amend those words.
Lord True
I thank my noble friend and other noble Lords, in particular the noble Lord, Lord Knight of Weymouth. It is reasonable for a parliamentarian to raise a point of principle in relation to law-making at the first opportunity that he has. I am grateful for the indulgence of the Committee. As I said, I do not necessarily think that some of these are clear-cut cases, but there is enough doubt and uncertainty raised by this procedure. A parliamentarian must place on record in Hansard for the attention of Members of both Houses something that potentially affects the way in which Parliament is able to deal with legislation. With those comments, I beg leave to withdraw my opposition to the clause and will not oppose the Question that Clause 21 stand part.
Baroness Wilcox
Lord Howard of Rising
“( ) This Act will cease to have effect following the second review period required under section 15, unless a statutory instrument disapplying the provisions of this subsection has been laid before and approved by a resolution of both Houses of Parliament before the end of the second review period.”
Lord Howard of Rising
My Lords, I speak to this amendment, which introduces a sunset clause. This should please the Minister, as it is in line with government policy both to have sunset clauses in new legislation and to get rid of quangos. Two for the price of one, as a supermarket might put it. A sunset clause is necessary because during our debate I found myself, as a businessman, a supplier to supermarkets and a farmer, drawing different conclusions from those expressed by other noble Lords. My noble friend Lord Eccles has already commented on some of the examples quoted by the noble Lord, Lord Knight, in his robust defence of the necessity of having an adjudicator. Putting aside the fact that most of the examples were provided by pressure groups—which brings to mind the famous phrase, “They would say that, wouldn’t they?”— I would like to touch on the tales of woe about the cavalier treatment of new product development by supermarkets, quoted by the noble Lord. I do not believe that they stand up.
If a product is unfairly rejected by a supermarket, and it is a good or profitable product, it will be saleable to another supermarket. In fact, it will probably be grabbed with alacrity. If the product is not good enough to be sold to any other supermarkets, the promoter of the new product has made a bad commercial judgment. It is not the business of government to provide underwriting for commerce.
Supermarkets are always competing to provide something new and better. This is self-evident. As was said on a number of occasions at Second Reading, in the past 30 years there has been an explosion of foods available at supermarkets, without a corresponding increase in prices. That can have been achieved only by retailers constantly looking for new and innovative products. Supermarkets are constantly looking for good new products and these will find a market, if not with one supermarket, then with another. I believe—I speak as someone directly connected with supermarket supply—that this new quango will be expensive and will contribute absolutely nothing except increased costs to shoppers, who will be the ultimate payers of those costs. It is only sensible to have a finite date—which, after all, can be extended if I am proved wrong and the quango does end up making a contribution to food retailing.
Baroness Wilcox
My Lords, the Government in general support the use of sunset clauses to avoid the risk of overregulation and to ensure that regulators remain in place only where they are strictly needed. However, the Bill already contains provision for sunset and review, in that the adjudicator must be reviewed every three years and can, following such a review, be abolished if the Secretary of State considers it appropriate. Many noble Lords have expressed their desire to ensure that any power of the Secretary of State to amend the adjudicator’s powers or functions should be subject to proper scrutiny, and the Government believe that the Bill provides for that. To remove the same scrutiny for the cessation of the Act would therefore be disproportionate.
The Bill is fully in line with the Government’s broader policy on sunset and review. Therefore, I think that the job is done and I ask the noble Lord to withdraw his amendment.
House of Lords
Economy: Deficit Reduction
(11 years, 10 months ago)
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Lord Barnett
To ask Her Majesty’s Government whether they remain of the opinion that their deficit reduction plan has been the right policy for the United Kingdom; and, if so, why.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, tackling the large deficit that this Government inherited was, and is, necessary to restore public finances to a sustainable path. Reversing the historic rise in public debt will strengthen the UK’s medium-term growth prospects.
Lord Barnett
My Lords, has the Minister seen the OECD’s latest figures, which show that when the Government took office in 2010 our net debt in that year was 53.9% of GDP, while in Germany it was 52.2%? By 2013, next year, they say that UK debt will be 74%, although it is likely to be higher now in the light of the latest figures, while Germany’s will still be 50.5%. The budget deficit was serious, of course, but it cannot be blamed for those figures. Does the Minister not agree that those figures show that the real reason behind this is that Germany had growth, whereas the Chancellor’s deficit reduction plan deliberately had no growth? In those circumstances, can we now expect another U-turn, shortly I hope, to provide some capital for structural expenditure, which might just help to kick-start a bit of a revival?
Lord Sassoon
My Lords, the debt figures that the noble Lord, Lord Barnett, recited precisely illustrate the structural deficit challenge that we inherited from the previous Government. We have already reduced the current budget deficit from 11% to 8% of GDP in two years, but there is much more to do, and we will do it. We will be reducing borrowing by £155 billion a year by 2016-7, compared to what it otherwise might have been under another Government. We will keep on with that task.
Lord Sharkey
My Lords, the Oxfam report, The Perfect Storm, published two weeks ago, says:
“The combination in the UK of economic stagnation and public spending cuts is causing substantial hardship to people living in poverty”.
In view of this, could the Minister tell the House what plans the Government have in place to mitigate the effects of their deficit reduction programme on our most deprived groups and communities?
Lord Sassoon
My Lords, I can assure my noble friend that the Government are committed both through the changes that we are making to the income tax system and to other public expenditure decisions to protect the vulnerable and reward those who choose to work, particularly at the lower income levels. So we have, for example, the uprating of benefits by 5.2% more than average earnings growth to protect people from rising prices; reforms to the tax credit system, so that we are tackling the deficit in a fair way; uprating the child tax credits, so that families see an increase of £135 per child this year as well as £180 over inflation last year; changes to personal allowances, which will benefit 25 million people, taking 260,000 people out of income tax altogether; and the fairness premium at £7.2 billion—I could go on. My noble friend is right, and I can confirm that this will be very much at the forefront of the Government’s thinking.
Lord Peston
My Lords, bearing in mind that the Lords reform Bill is predicated on the Government’s view that your Lordships’ House lacks legitimacy, I congratulate the Minister on his willingness—at least on this occasion—to answer our questions, albeit not very satisfactorily. I hope he continues with that.
On the substantive issue, has the Minister seen the Governor of the Bank of England’s latest, extraordinarily pessimistic forecast about the likely status of what one would have called the real economy—as opposed to the financial economy? Bearing in mind that most of the Government’s expenditure cuts have not yet been made, surely the governor in his pessimism is actually not being pessimistic enough. Does the noble Lord agree?
Lord Sassoon
My Lords, I think that the Governor of the Bank of England is, as always, being very realistic and clear about the nature of the dangers that we continue to face particularly because of the eurozone crisis. This is precisely why we will stick to the fiscal course that we have charted; why it is supported by the IMF, the OECD and business organisations here; and why it is that we have 10-year interests at 1.7 per cent. We will do nothing to jeopardise that position in the face of the very real dangers that the governor points out.
Lord Ryder of Wensum
My Lords, leaving aside the welcome reductions in corporation tax, will my noble friend please remind your Lordships of the three main supply-side measures promoted by the Treasury to encourage growth?
Lord Sassoon
My Lords, the first thing that we need to do to support growth is to continue to have companies and individuals confident that we will stick to a responsible course and keep interest rates low. It is from this that all else flows. As well as tight fiscal discipline, it is important that we have a loose monetary discipline. That is the right policy prescription. We will target our other efforts into making sure that education, infrastructure and each of the key drivers of medium-term sustainable growth are supported in all that we do as a Government.
Lord Low of Dalston
My Lords, the Minister has referred to the reduction of the deficit from 11% to 8% of GDP. However, is it not the case that the deficit on current spending has hardly changed over the course of the last year and that almost all the reduction in the total deficit has come from cuts in investment spending?
Lord Sassoon
No, my Lords, that is not correct. Last year, Government departments came in with underspends of some £6 billion—and that was certainly not all capital spending. What my right honourable friend the Chancellor was able to do this week by cutting fuel duty, putting £550 million back into the pockets of hard-working families, illustrates how we are able to use underspends and put them to very good use where they are most valuable to our people.
Lord Davies of Oldham
My Lords, can the Minister explain why the Prime Minister was the only leader of a nation attending the G20 whose country was in recession? If he is talking about inheritance, does he recall the fact that, in 2010, this Government inherited a 2 per cent growth rate and now it is nought?
Lord Sassoon
My Lords, we face very difficult challenges. For all the deficit reduction that we have done, this country still has a budget deficit higher than Greece, Portugal and Spain. Yet we have interest rates that are very much lower and the confidence of the markets, and it is off that base that sustainable growth will come.
Armed Forces Day
(11 years, 10 months ago)
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Lord Rosser
To ask Her Majesty’s Government what level of financial or other form of support they are providing for Armed Forces Day on Saturday 30 June.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, the Government are supporting this Saturday’s Armed Forces Day in many different ways. Members of the Armed Forces are involved in events up and down the country, from parades to fly-pasts, including the national event in Plymouth. As well as meeting the costs of this participation, the Ministry of Defence has made grants of some £223,000 to help communities to organise their own events. In addition, reservists were invited to wear their uniforms to work yesterday, and Armed Forces veterans were encouraged to wear their veterans’ badge. As part of the build-up to Armed Forces Day, show your support flags will be flown on all government buildings and town halls, and some local authorities are taking the opportunity to sign up to their own community covenants. This all adds up to a wide-ranging celebration of what our Armed Forces bring to this country.
Lord Rosser
My Lords, yesterday we had a Question about discrimination against our Armed Forces, and another example has been reported in the press this morning. Earlier this week, we saw Ben Parkinson carrying the Olympic torch through Doncaster. He suffered appalling injuries in Afghanistan in 2006—the loss of both legs, and brain and back injuries, which are euphemistically described as life-changing injuries. Ben Parkinson carried the torch for 300 metres. It took him 25 minutes to complete the walk. It was an act of great determination, guts and, yes, courage.
It is so that we can express our thanks, gratitude and support to our Armed Forces and veterans, and the enormous sacrifices that so many have made on our behalf, including giving their lives, that we have Armed Forces Day. In thanking the Minister for his comprehensive reply, may I ask whether the Government will review the levels of future support that we as a nation give, in whatever form, to Armed Forces Day to ensure that the crucial role undertaken on our behalf and the sacrifices made by our Armed Forces continue to be fully understood and appreciated, including by the minority of individuals and organisations who knowingly or unknowingly still discriminate against Armed Forces personnel?
Lord Astor of Hever
My Lords, the Armed Forces will be very grateful for the Opposition’s continued support, and I share the noble Lord’s admiration for the courage of Ben Parkinson in Doncaster. With regard to discrimination, the Cabinet sub-committee on the Armed Forces covenant, chaired by Oliver Letwin, will oversee work across government and ensure that momentum on all strands of the covenant is maintained. The noble Lord asked whether we are doing enough to spread the message. Armed Forces Day now has over 1 million followers on Facebook, and this shows just how much the day has caught the imagination of people in this country. We will keep the level of assistance that we provide under review. However, one of the most remarkable features of Armed Forces Day is the way in which the lead is being taken by communities themselves, rather than here in Whitehall.
Lord Dannatt
My Lords, it fairly reflects the view of those who are serving, have served in or are veterans of our Armed Forces when they say how grateful they are for the upsurge in support from the British public over the past four or five years for what they have been doing. However, there are genuine concerns about the sustainability of Armed Forces Day, notwithstanding the Minister’s previous Answer. Will he consider asking his officials to conduct a survey in the coming months of the number of cities, towns and communities that have laid on activities for this Armed Forces Day, compare them with the activities on Remembrance Sunday and the remembrance period, and try to validate the thought that a better model for the sustainable recognition of our Armed Forces in the future might be to combine on one day—probably in November—the celebration of those who have served our nation in uniform with remembering the sacrifice of those who have lost their lives?
Lord Astor of Hever
My Lords, I will certainly take the noble Lord’s suggestion back to my department. I can assure him that I have a list here of all the events taking place throughout the country, and there seems to be a great deal of enthusiasm from all sections of the country.
Lord Palmer of Childs Hill
In replying to a debate on 19 June about Armed Forces Day, my honourable friend the Parliamentary Under-Secretary of State for Defence said:
“former service personnel were encouraged to wear a veterans’ badge”.—[Official Report, Commons, 19/6/12; col. 194WH.]
Does my noble friend feel that the time has come to stop prevaricating in committees and to introduce a national defence medal to be awarded on application to all those who have served our country in the Armed Forces, and to cut all red tape and allow our service personnel to proudly wear all medals awarded to them by other nations?
Lord Astor of Hever
My Lords, the independent review by Sir John Holmes of the rules applicable to the awarding of military medals is currently under way. He is considering all known campaigns for medals, including the case for a national defence medal, and will report reasonably soon.
Lord Davies of Stamford
I know the noble Lord is a great supporter of our Armed Forces and stands up for them on many occasions. Will he therefore join me in condemning the absolutely despicable behaviour of the publican of Browns bar in Coventry the other day who refused to admit two soldiers, who had been taking part in a military funeral, because they were wearing their uniforms? Will he look again at the recommendations—there were 40 in all—of the national recognition of the Armed Forces inquiry in the last Parliament? One of those recommendations was that we should outlaw discrimination against armed services personnel and provide the same kind of protection that we provide against discrimination on grounds of sex, race, sexuality or disability, so that these incidents never happen again.
Lord Astor of Hever
My Lords, I agree entirely with what the noble Lord said about that terrible act in the bar at the time of the funeral of the serviceman who was killed. I pay tribute to the noble Lord, Lord Davies, who commissioned the report of inquiry into national recognition of the Armed Forces when he was Defence Minister, which of course led to the setting up of Armed Forces Day.
Lord Burnett
Will my noble friend explain the role to be taken by the reserve forces on Armed Forces Day, and will he elaborate a little further on the involvement of the great city of Plymouth on Armed Forces Day?
Lord Astor of Hever
My Lords, Wear Your Uniform to Work Day took place yesterday, when all reservist and cadet organisations were encouraged to wear their uniform to work to highlight their important role in the defence of our country. The Plymouth event promises to be a spectacular occasion, with a tri-service parade; a fly-past by Typhoons, historic aircraft and the Red Arrows; a steam-past led by HMS “Argyll”; and lots of other service equipment on show. I am delighted that the city of Plymouth has fully embraced its opportunity to host the national event this year.
Small and Medium-sized Enterprises: Foreign Languages
(11 years, 10 months ago)
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Lord Harrison
To ask Her Majesty’s Government what assistance they provide to help small and medium sized enterprises which export their products and services to acquire foreign language expertise.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, UK Trade and Investment provides a subsidised service, available to SMEs, which helps them to overcome language and cultural barriers in overseas markets. The service can provide a bespoke written report with in-depth advice and information on types of language learning and rates, and on recruiting students and foreign nationals to provide in-house language skills. The service also signposts companies to professional bodies such as the Chartered Institute of Linguists and the Association for Language Learning when they wish to select a provider for foreign language training.
Lord Harrison
My Lords, the House would welcome further information about what sounds a very valuable addition. However, given the recent parlous decline in British exports—attributable in part, according to Professor Steven Hagen of the University of Wales, to the failure of British firms to acquire language skills—and given that only three out of 100 British firms have any kind of language management strategy, will the noble Baroness start to set tongues wagging in the small business community in favour of learning languages? Will she ensure that the languages unearthed and mobilised during the forthcoming Olympics, especially those found among our ethnic representation, can be used to help small businesses, so that British exporters, unlike the British Government, can ensure that they are not speechless in the face of a widening Europe and a widening world?
Baroness Wilcox
Right—information on the Export Communications Review, along with all other UKTI services, will be available at Olympic business-related events. Details of the help that will be available have already gone out. We certainly wish to use the opportunity to make sure that people from our small and medium-sized businesses meet as many people from foreign businesses as possible. We are very fortunate in this country in having a multicultural society—I think that in London alone more than 300 languages are spoken. Very often it is just a case of making sure that small and medium-sized businesses realise that there are agencies that can provide their employees with the languages that they need. It is not just a matter of a requirement to learn a language; understanding the culture of the country that you are going to is also important. The French that you speak needs to be not just the French that you learnt at school but the language of the culture. UK Trade and Investment goes into small businesses with a subsidised programme to help them understand how to take their products forward by making sure that they are aware of the culture of the country they are visiting.
Baroness Coussins
My Lords, does the Minister recognise the success of language NVQs in preparing students for using languages at work, especially in the SME sector? Will she undertake to meet her DfE colleagues to tell them how much UK businesses value these language NVQs and ask that these qualifications continue to count towards a school’s performance points for the EBacc after 2013?
Baroness Wilcox
I will certainly take up that suggestion from the noble Baroness.
Lord Geddes
My Lords, I declare an interest as life president of Trinity College London, the worldwide examination body in English for speakers of other languages. Does my noble friend agree about the vital importance of foreign languages for British speakers and that it is equally important for UK Ltd that the reverse applies—that those who are not conversant with English learn to speak it better?
Baroness Wilcox
I am very impressed to hear that my noble friend is the head of such an august organisation and am only too delighted to know that he is there. I will support him in everything that he does in taking us forward, making sure that we get the growth that we need and that we can all communicate widely.
Lord Mitchell
My Lords, I shall be 70 on my next birthday and this is my first time at the Dispatch Box—all of which goes to show that in your Lordships’ House anything is possible. SMEs, very surprisingly, have been doing well recently in the area of exports. In particular, 27% of total exports to the European Union now come from this sector. However, I believe that we can do very much better. What plans do the Government have to encourage even more small companies to export?
Baroness Wilcox
If anyone would like to look up UKTI on the web to find out what is available to everyone, they will see that it is doing an absolutely marvellous job. When I came to answer this Question, I was delighted to see just how much it was doing, including being able to provide bespoke services. Small and medium-sized businesses often need to gain an all-round understanding of how to behave when they get to another country, and that is why this service is available to them. It is subsidised, and businesses can also have a review themselves. I welcome the noble Lord to the Dispatch Box.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
I think that we should hear from my noble friend Lord Cotter.
Lord Cotter
I congratulate the Minister very much on her comprehensive Answer to the Question. The points that she made and the answers she gave were very good indeed. It is important that there should be publicity about what is available, but often there is not enough. It is also important that schools, as well as businesses, provide education in languages, and that further education colleges provide special lessons in business-orientated languages, particularly Chinese and Spanish.
Baroness Wilcox
Of course I agree with my noble friend. He will know that last week we announced our proposals for the primary national curriculum. The teaching of a foreign language will be compulsory throughout key stage 2, and that will include Latin and Greek.
Taxation: Avoidance
(11 years, 10 months ago)
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Lord Clinton-Davis
To ask Her Majesty’s Government what action they are taking regarding the use of devices to avoid or minimise the payment of taxation.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the Government act as soon as they become aware of schemes to avoid tax and challenge those by every means available. In the past year, seven schemes have been closed down with immediate effect, and since 2010 the Government have litigated some 30 avoidance cases. The Government are now consulting on a general anti-abuse rule and extending the successful Disclosure of Tax Avoidance Schemes regime to ensure that even more schemes are disclosed.
Lord Clinton-Davis
I thank the Minister for that reply. Is it not the case that thousands of extremely rich people are engaged in tax avoidance schemes and that the country is suffering a heavy loss as a result—some £25 billion? Is there not a case for setting up an all-party committee to look into this atrocious situation, which continues? What the Minister said deals with only part of the problem, not the whole problem.
Lord Sassoon
My Lords, I certainly agree with the noble Lord, Lord Clinton-Davis, about the seriousness of the problem. That is why the Government—and HMRC in particular—are tackling it with all the available weapons. I stress that the Disclosure of Tax Avoidance Schemes regime, which was introduced by the previous Government in 2004, has been a successful part of that. Of the total tax gap, that is estimated to be around £35 billion, £5 billion is estimated to be as a result of avoidance. It is important to be clear on the figures.
In relation to schemes of wealthy individuals, the K2 and Icebreaker schemes, which have had much recent publicity, are under investigation by HMRC. HMRC and, of course, the Government want to make sure that everyone, wealthy or not, pays a fair amount of tax. HMRC has rolled out some very specific initiatives within its High Net Worth Unit in order tackle even more vigorously the particular challenges around individuals of high net worth.
Lord Forsyth of Drumlean
Does my noble friend agree that the best way to avoid people coming up with complex tax avoidance schemes is to have simpler, lower taxes—which will maximise revenue and obviate the need for people to use their energies in this way—and concentrate on creating wealth and growth in our economy?
Lord Sassoon
As a general proposition, I very much share the view of my noble friend.
Lord Sassoon
My Lords, I am always prepared to consider every suggestion that comes up in your Lordships’ House. However, I think that one is getting a little radical and I cannot promise him much early progress on it.
Lord Dykes
Will my noble friend bear in mind that, as tax avoidance and evasion from the UK is at least 15 times greater than social security abuse and fraud, that the Government should therefore be 15 times more energetic in dealing with tax avoidance and evasion than they are with social security?
Lord Sassoon
My Lords, I do think that we are comparing apples and pears. We will be vigorous on both fronts. In relation to tax avoidance, HMRC has reassigned some £900 million of its expenditure within the spending round to tackle this issue. We should also remember that while the tax gap in the UK is £35 billion—about 8% of liabilities—it compares well on an international comparison. For example, the equivalent in the US is 14% and in Sweden 10%. So, yes, there are big numbers to be played for, but good progress is being made.
Lord Davies of Oldham
The House may have been encouraged by the Minister’s initial constructive response but past practice does not seem to quite measure up to his optimism. He commended the legislation passed by the Labour Government in 2004 under which accountants have to submit to Her Majesty’s Revenue and Customs any scheme which leads to tax avoidance. Was this implemented in the famous case of the comedian Jimmy Carr? Did his accountant inform HMRC? If so, what was done about it? If he did not, when are the Government going to act?
Lord Sassoon
My Lords, individual taxpayer confidentiality is very important. It is the prime reason why we are certainly not going to see individual tax returns published and, therefore, I am not going to comment on an individual case. That particular case has had a great deal of airing in the past couple of weeks.
The Earl of Listowel
Is the Minister aware of the job that charities do for their donors by picking out case histories of how their donations can make a difference to particular families and children? Might not Her Majesty’s Customs and Revenue do more to inform taxpayers about the value for money that they get in paying for services? It could give a specific example of, say, a bright graduate, recruited into the teaching profession, making a difference to particular children in an inner city area? The graduate could then say, “I am so grateful for the money that trained me and for the difference that I have been able to make to these children”. There are many concrete examples of the difference that taxpayers’ money makes to individuals, children and families.
Lord Sassoon
I agree with the noble Earl that the voluntary and charitable sectors make an enormous contribution. Often they deliver more cost-effective and better quality services than public bodies and the tax regime around charities supports that. That is precisely why we are so keen to drive forward philanthropy and a tax system to support it. I share the noble Earl’s sentiments.
Electoral Registration and Administration Bill
Business of the House
(11 years, 10 months ago)
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Lord Strathclyde
That leave be given to advance the Motion to approve the Draft Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012 from Wednesday 4 July to Monday 2 July.
Draft Communications Data Bill
The Chairman of Committees
That the Commons message of 21 June be considered and that a Committee of six Lords be appointed to join with the Committee appointed by the Commons to consider and report on the draft Communications Data Bill presented to both Houses on 14 June (Cm 8359) and that the Committee should report on the draft Bill by 30 November 2012;
That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
L Armstrong of Ilminster, L Blencathra, B Cohen of Pimlico, L Faulks, L Jones, L Strasburger;
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;
That the Committee have power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have leave to report from time to time;
That the Committee have power to adjourn from place to place within the United Kingdom;
That the reports of the Committee from time to time shall be printed, regardless of any adjournment of the House; and
That the evidence taken by the Committee shall, if the Committee so wishes, be published.
English Cathedrals
(11 years, 10 months ago)
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Lord Cormack
That this House takes note of the future of English cathedrals.
Lord Cormack
My Lords, I beg to move that the House notes the future of English cathedrals. In doing so, I cast no aspersions on cathedrals in Wales, Scotland or Northern Ireland: I wish to concentrate today on the cathedrals of the established Church of England.
I am delighted to have this opportunity and I am most grateful to those colleagues in all parts of your Lordships’ House who have put their names down to speak. I am particularly glad that I will be followed in the debate by the noble Baroness, Lady Andrews, the distinguished chairman of English Heritage, who has made such a magnificent contribution to causes about which we both care deeply. I am also very glad that the right reverend Prelate the Bishop of Worcester has put his name down to make his maiden speech. I am sure the House looks forward to what he has to say.
After I leave the Chamber I shall be going to King’s Cross to catch the train to Newark. It will stop at Peterborough and I will see the cathedral there. If I had the time, I could alight and go and admire the tomb of Catherine of Aragon. I could even get a train to Ely to see that glorious lantern tower rising above the fenland. In fact, I shall get off at Newark and go to my home in Lincoln.
I hope that the House will forgive me if I beg leave to agree with Pugin, Ruskin and Alec Clifton-Taylor that Lincoln is the fairest cathedral of them all. Of course, if I stayed on the train, I could go to York, that most magnificent and greatest in size of all our Gothic cathedrals, and admire the wonderful stained glass windows. I could continue to Durham, where the noblest Romanesque building in this country dominates the landscape—
“Half church of God, half castle ‘gainst the Scot”,
as Sir Walter Scott said.
However, I will not be able to do any of those things today.
I want to reflect briefly on the importance of our English cathedrals. We could all agree that one comes closest to the soul and story of a nation in its great buildings. That is nowhere truer than in our wonderful English cathedrals, especially the pre-Reformation cathedrals and those ancient foundations that were designated cathedrals either in the 16th century or after. However, we are talking not just of noble historic buildings of often unsurpassable beauty but of living, breathing, vibrant buildings, and it is important that we recognise that. They are centres of worship; that is their primary purpose, and those of us who are Christians, particularly those of us who are members of the Anglican Church, will always regard that as their primary purpose.
However, they are centres not just of worship but of music, craftsmanship and of their individual communities. I seek in this debate to underline the continuing contribution of the 42 diocesan cathedrals of England—plus, of course, the two royal peculiars of Westminster Abbey and St George’s, Windsor, which are always taken together—to rejoice at what they are and what they represent, and to stress how crucial it is that their future should be secure. We rightly talk and behave as if they belong to us all, and as cathedrals of the established church they do. Each week around 40,000 people worship in our cathedrals; last Christmas season something like a million people worshipped in the cathedrals of this land.
However, it is not just for their services that we regard them as we do. Last week I had the honour of convening a meeting between parliamentarians from both Houses and deans of English cathedrals. A number of your Lordships who are in the Chamber today were present at that meeting. It was a very interesting occasion because we were reminded by those who have the daily charge of our cathedrals what a key role they play in the social, cultural, civic and national life of England. We heard about Bradford Cathedral—not perhaps the most distinguished architecturally, although it is a very fine building, but a church where people of all communities, and faith communities in particular, are able to come together for mutual fellowship and sustenance.
We heard about Wells Cathedral—Wells, that wonderful small city, surrounded by marvellous countryside that nevertheless has many problems within it. We heard from the dean how Wells ministers to that rural community. We were reminded about how often cathedrals are the centres for concerts, exhibitions and graduation ceremonies. Only three weeks ago I went to Southwell Cathedral. There was a graduation ceremony taking place when I arrived. I went to see the exhibition to mark the 350th anniversary of the Book of Common Prayer and the Diamond Jubilee of Her Majesty the Queen. I talked to the dean and became conscious of how that cathedral, in a very small city, was the focal point for miles around. We were reminded at the meeting last week of how, at moments of sadness and rejoicing, a cathedral was a place where people came together. One thought of Soham and Ely and, on a much happier note, every cathedral in England this year has had a special service to mark the Diamond Jubilee of Her Majesty the Queen.
However, when all too easily we take for granted the beauty and dignity of our cathedrals and their surroundings, we also tend to take for granted the glory of the music and the excellence of the craftsmanship. Even the fact that cathedrals continuously patronise the arts in the best possible way tends to be taken for granted, too. I was delighted when a couple of years ago English Heritage published a document that concentrated on the new things which have been built in and around our cathedrals, highlighting in particular the sculpture in Lincoln and the magnificent tower at Bury St Edmunds, which people now talk of as if it had been there for centuries. When we take these things for granted, we ought to remind ourselves that they do not just happen; they all come at a price.
I am glad that we do not have the French system where all the fabric of religious buildings is vested in the state. That would be a great pity, and I know of no dean and do not yet know of any bishop—perhaps I will be disabused today—who takes a different view. The pride and sense of local patriotism that leads to fundraising through a sense of belonging to a community are absolutely irreplaceable and beyond price. But we have to recognise that there is no automatic direct funding from the state to support our cathedrals, nor is there such funding from the Church Commissioners. They provide for the stipend of the dean and two canons, but that is about all. To a large degree the cathedrals are still self-financing. As the Dean of Lincoln Cathedral, Philip Buckler, said to me earlier this week, cathedrals value their independence but not their isolation.
Things are better than they were. When I entered another place in 1970, there were no state grants at all. I served on the Historic Buildings Council and we were expressly forbidden to give grants to places of worship. I introduced a Bill to provide state aid for parish churches. The campaign was successful and it was followed by one for cathedrals. We are all glad and grateful for that. We are particularly grateful to English Heritage for what it has done, and I shall say a word or two more about that in a moment. But although things are better than they were, there are still real problems. This year we had the VAT bombshell in the Budget. The Chancellor has responded and we are grateful.
Listed places of worship will continue to benefit, but let us remember that each cathedral is at the centre of a series of buildings. Almost every cathedral has a close, just as we have our minster yard in Lincoln. The cathedral is responsible for the upkeep and maintenance of often incredibly important medieval and later buildings. The VAT exemption does not touch anything other than the actual place of worship. It is also limited to the year 2015, so there is no certainty of continuity. That is a pity and a great worry to those who are concerned with these issues. Money from the Heritage Lottery Fund, for which again we are all grateful, can go to interpretive schemes and to new extensions but not to the maintenance of the actual fabric of the cathedral.
All this must be seen in a context where, as we speak, Canterbury Cathedral, the mother church of the Church of England, will need £50 million over the next five years. Lichfield, which used to be my diocesan cathedral, has had to raise and spend £5 million over the past five years and will need another £7 million in the five years ahead. At Lincoln we will need £16 million over the next 10 years. All this is in addition to the £50,000 a week that it costs to keep the cathedral open. It is a similar figure in Winchester and many other places.
English Heritage has been put in a very difficult position. It has had its own grant reduced. That has meant that the carefully worked out strategy between it and the cathedrals has been to a degree undermined. That is partly because of diversion of resources to the Olympic Games. We have to face up to that. The Heritage Lottery Fund has also had resources that might have been devoted to some of the causes that are dear to us in the Chamber today diverted to the Olympic project. I wish the Olympics every success but there has been a distortion of priorities in recent years that needs to be put right.
We must recognise in all of this the positive contribution that cathedrals make to the local and national economy, music, craftsmanship and employment. Although it is wrong to define the importance of our cathedrals in terms of tourism, we must remember that those who bring so much much-needed money and, indirectly, employment to our country are attracted by our great buildings. They are attracted particularly to the great country houses and cathedrals of this country.
I make a plea to the Minister that she should discuss this matter with the Chancellor, the Culture Secretary and others. I would like to see a more generous interpretation of the VAT exemptions. That is crucially important. In Lichfield, the dean has pointed out to me that one project alone is likely to cost another £500,000 as a result of recently announced changes. That money is not easily found.
I pitch my request at a very modest level. I would like £50 million provided as an endowment for the cathedrals of England over the next five years, with the money given to and channelled through English Heritage, which has the expertise to liaise and to distribute it. That would be a particularly appropriate gesture in the year of the Diamond Jubilee, bearing in mind that the Queen is after all Supreme Governor of the Church of England. I do not think that many people in the land who appreciate things of enduring beauty and wealth, whatever their religious persuasion, would begrudge that very modest sum. I would like to feel that we could have a promise that that will be discussed. Of course, my noble friend cannot make an exact promise at the Dispatch Box.
There are two enduring images of this country perhaps above all others: Constable’s painting of Salisbury with the spire above the meadows and, from a more recent period, the picture of St Paul’s in the Blitz, rising above the smoke. No nation can afford to call itself civilised if it allows the spire of Salisbury or the dome of St Paul’s to be put at risk.
Baroness Andrews
My Lords, it is a great privilege to follow the noble Lord and to congratulate him on securing the debate. He has been an amazingly effective champion for aspects of our heritage. I very much welcome what he said today and am grateful for the generous remarks he made both about English Heritage and my stewardship of it. I very much endorse what he asked the Minister for; it is not easy for us to ask in our own name for additional funding. To make such a case is commendable because English Heritage is known to have world-class expertise and judgment in these affairs. If the House will allow me, I will talk a little about our work in respect of cathedrals. Of course, I declare my interest as chair.
It is significant that the idea of the cathedral has a much wider currency than the notion of a building or even of one faith. When we say that something is cathedral-like we mean that it is of extraordinary scale and splendour. It makes us wonder in awe at how it was constructed and by whom. When we see the traces of those early and brilliant builders, designers and engineers, we understand that both faith and genius transcend time. These places are indeed held in trust for ever and for everyone, so they obviously occupy the pinnacle of our work at English Heritage in many different ways. It is a privilege for me, as chair of English Heritage, to have the opportunity to visit so many, and to do so in the company of the people who love, cherish and know more about them: the deans, the conservation architects, the craftspeople, and indeed people from English Heritage itself, who are very fine historians. When I visit them I also get a sense of the challenges that they face, and the ambitions that they hold for the future. In his speech, the noble Lord, Lord Cormack, displayed a wonderful balance between celebration and concern about the sorts of issues that cathedrals now face, and the choices before them; choices that include opening the doors ever wider to more diverse, more challenged communities, and the responsibility for those communities that cathedrals have held over the centuries.
In my excursions I go to some very high places, to see for myself the work that is being done on the exteriors of cathedrals. The other day I was clinging on to the Norman ironwork on the great Norman windows of Canterbury Cathedral. When I managed to get down from the scaffolding I went down to the workshops to see how the glass is being conserved, and saw the extraordinary delicacy of the work being done. I also recently crawled over the roof over the Chapter House of Westminster Abbey and saw how the Victorian engineers had tried very hard to improve on what their medieval predecessors had done, and how they had found that the engineering genius of the medieval craftsmen was in some ways so much superior to their own. It is wonderful that we maintain those traditions of celebrating in stone the work of the craftsman. On the Chapter House finial you will now find the faces of the modern stonemasons who did the work—including a Sikh, who led the team—looking very sternly up Whitehall.
The work of restoration and repair—conservation of brick, glass, wood, paintings, silver and so much else—is endless and expensive. The good news is that our cathedrals, due to the loving care and craftsmanship of which the noble Lord, Lord Cormack, has spoken, have never been in better shape. That makes the scale of the challenge for the future rather immense. The story spans two decades, from the first fabric survey that English Heritage did in 1991, which revealed that £164 million needed to be spent on repair and rescue over the next decade, to our updating survey in 2009, which was repeated in partnership with the Association of English Cathedrals and the Catholic Church’s Patrimony Committee. In 1991, when we did the work, it was perfectly clear that many cathedrals, as measured against our buildings at risk register, were classified as being at risk of loss of their historic fabric—in short, they were buildings at risk. In 2009, the survey revealed that the overall state of repair had improved dramatically.
How had this been done? Well, of course it has taken a great deal of money, and I will give your Lordships some figures. However, it has also required a great deal of partnership and focus to address what needed doing after the alarming diagnosis in 1991. Funding was then made available from the Government, with which English Heritage constructed a dedicated grant scheme, and that ran until the last offers were made in 2009-10. Grants worth £48.6 million were made available to 518 cathedrals. Indeed, five cathedrals, which presented the greatest challenges—Salisbury, Lincoln, Ely, Worcester and Liverpool—received almost £20 million. The partners in this massive effort were the Wolfson Foundation, which helped us toward the end of the scheme, and of course, the Heritage Lottery Fund, which gave £45 million to over 100 cathedrals.
We are, therefore, genuinely all in this together. I pay tribute to the Cathedrals and Church Buildings Division of the Church of England—and in particular to Janet Gough—for the partnerships that it has brokered with partners such as the Wolfson Fund, the Pilgrim Trust and others in order to finance the Cathedral Fabric Repair Fund.
We have done different things. We at English Heritage address the urgent repairs: the high level stonework, the roofing and rainwater goods. It is not glamorous work, but my word, it is very important, because without that, nothing else can be achieved. Many of the Heritage Lottery Fund projects have supported not only conservation, but wider public access, and the enjoyment and understanding of our cathedrals. For example, £10.5 million went to the York Minster Revealed project, which is not only securing the great east window, but is showing every visitor who is interested how glass is conserved, £2 million went to restore Birmingham’s cathedral graveyard to its 18th century design and Durham cathedral has received a first stage pass to celebrate the Venerable Bede and the arrival of the Lindisfarne Gospels.
Where are we now? The 2009 survey revealed that there had been dramatic improvements, but that another £110 million was necessary over the new decade for ongoing care and maintenance. For example, £63 million was necessary for just five cathedrals: Canterbury, Chichester, Lincoln, Salisbury and York. English Heritage continues to be engaged with Lincoln because of the scale of the challenge. We have recently given £750,000. However, that grant has finished and we have turned our focus to areas of equal concern to the Anglican church and other faiths—parish churches and churches in the community—and the enormous challenge there, and I am pleased to say that Lincoln is now the only cathedral on the risk register.
So much has depended upon the skill and craftsmanship of the people at work. I have the pleasure of seeing it regularly. For example, in Hereford, in a lean-to shed, three apprentices—apprentices are often female these days, and often young—working just as the medieval stone masons did, carve and do the facing work in front of all the visitors who cross the precinct. It is indeed a medieval scene. These skills are being inspired and nurtured by our cathedrals, and I am delighted to say that there are increasing numbers of schemes for training and recognising these crafts because historic building skills do not belong in the past. They have as much potential for growth and are as much of an assistance to our economy and to the creation of jobs as many of our other building crafts. That is where cathedrals fit in to the national economic challenge. They are places of prayer and watchfulness, but they are also places capable of generating huge prosperity. In 2004, it was estimated that their economic impact was about £150 million.
Facing these future challenges is the way in which English Heritage wants to engage with cathedrals. Our immediate responsibility is for the protection of the fabric, hence our concern about metal theft and the guidance we have produced for cathedrals and places of worship on how to tackle it, our concern about the impact of VAT, which the noble Lord, Lord Cormack, described very concisely and well, and our continuing concern with VAT. This is not a problem that is going to go away, particularly in relation to charities that are looking after listed buildings with very little support and scope and even to owners of historic homes.
We also work with cathedrals to help them realise their highest ambitions for the future. For example, our work Creativity and Care celebrated Michael Hopkin’s magnificent extension to Norwich Cathedral, but it also points out that the mundane can be made beautiful: for example, the new fire doors at Winchester Cathedral. The challenge to every cathedral today is to remake itself as the heart and spirit of the community and to provide the cafes, lavatories, bookshops and educational spaces that enable people to feel that they belong there and understand the place and to become what Frank Field called,
“wise and willing midwives to future glories”.
We celebrated that in Creativity and Care. I remember the magnificent Tom Denny windows in Hereford Cathedral and the magnificent new font in Salisbury Cathedral. Our funding may not be what it was, but our spirit is as buoyant and passionate as ever about pursuing the partnership that cathedrals want from English Heritage, and we are happy and proud to provide it.
Baroness Garden of Frognal
My Lords, the timing is tight on speeches in this debate, so I would be very grateful if noble Lords will restrict their comments to 10 minutes.
Lord Tyler
My Lords, I congratulate my noble friend very sincerely on obtaining this debate, and I am delighted and humbled to take part. By comparison with him, I am a very ordinary Anglican. I am particularly grateful to be able to follow the noble Baroness, Lady Andrews, because she has led the English Heritage programme, not just in this field, of course, but in other fields, with great success and distinction. There is wide appreciation, which I share, of the fact that English cathedrals have an historical and continuing role not only as centres for active Christianity in our communities but as great historic buildings of wide architectural and cultural significance.
If I have any right to speak in this debate, it is as a failed architect. I had to draw cathedrals as a student and then went on to be a senior member of the RIBA staff. More importantly, as an ordinary man in the pew, I have had the most extraordinary experiences in various cathedrals. I witnessed the ordination of my two brothers in Guildford and Wells Cathedrals—an interesting contrast there. I remember taking my mother, who lost two of her much beloved elder brothers in the First World War, to a performance of the “War Requiem” in Exeter Cathedral, which was both a great cultural and religious occasion and very moving for both of us. As a humble Anglican, I witnessed a great movement forward when seven women priests were ordained in Truro Cathedral.
My only family connection with your Lordships’ House is my ancestor Bishop Jonathan Trelawny, who was one of the seven bishops who were arraigned for seditious libel and acquitted in Westminster Hall in 1688 and then triggered the Glorious Revolution. He was described by James II as the most saucy of them all. I have suggested to my family that that might be an epitaph when I go. His picture is in the Peers’ Guest Room in the House. He is the one with the Beatles haircut at the far end.
Previously, during the Reformation—I am also a failed historian—Thomas Cromwell persuaded Henry VIII that he could legitimise the nationalisation of the church, its cathedrals and its wealth, removing its temporal power and so making it concentrate on the spiritual needs of the nation. It may be thought from the theme of this debate that there are those who think it is now payback time. I do not believe that that is true, but nevertheless think that it is right for Parliament to take a real responsibility for the future of this great heritage.
There are some important dilemmas for both the church and Parliament. Our established church is the established church only for England, as is apparent from the Motion of the noble Lord, Lord Cormack. As a good unionist, I think that those who represent other parts of the United Kingdom may have a legitimate reason for expressing some concern about the treatment of the heritage of the different denominations and the different churches. As my noble friend said earlier, the cathedrals belong to us all, but there may be some queries as to who “all” is in that respect.
That is not, however, the big dilemma for either the church or the Government, because the cathedrals are an important part of our heritage. Yet I as an Anglican and the church itself are proud of the independence of the church from the state. We believe, I think rightly, that faith should be an important part of our national life but should not be nationalised by the lay state, the whole body politic of which has to be strictly faith-neutral. Yet the church is rightly looking for recognition of its role in conserving priceless parts of our cultural and physical heritage, as both my noble friend and the noble Baroness, Lady Andrews, have been saying.
My noble friend referred to the French situation. I do not think that any of us want to emulate that. That is the wrong way to go. The noble Lord’s French history is better than mine, as I know to my cost, but I think that the French situation goes back to Napoleon, who wanted to separate dramatically the state from the church. There is no established church in France, yet there the state recognises its responsibility to its national heritage and therefore its major contribution to the maintenance and conservation of all the French cathedrals.
As has already been said, there is the important issue of the Government’s and therefore Parliament’s treatment of financial support for conservation. The noble Baroness referred, as did my noble friend, to the VAT situation. I will spend only a couple of minutes on that to avoid repetition and to keep within my time limit. The VAT treatment of historic buildings, not exclusively cathedrals, is a sorry saga that goes back many years. In the excellent briefing from the Lords Library on the future of English cathedrals, there are no less than 16 pages of updates on the treatment of VAT on historic buildings, particularly churches and cathedrals. The end of the brief from the House of Commons Library says of the Listed Places of Worship Grant Scheme, which is how the Government have sought to square the circle of reducing the exemptions and then having to pay by other means:
“Further details on how the extended scheme will operate will be published shortly”.
The confusion and lack of clarity continue to this day, even weeks after the 2012 Budget, when it was thought that this situation would be clarified and improved.
From my discussions with members of the chapters of various cathedrals I know that they are looking principally for clarity at the moment. On this issue and others, we are often told that we are all in it together. Yes, in a period of austerity it is difficult to find new resources, but the very simplicity or otherwise of such schemes as the Listed Places of Worship Grant Scheme is having a very disturbing effect on the chapters and on other organisations responsible for historic buildings, not least some of the great parish churches, which are having an equally difficult time and with which I have also been in contact.
I hope that this will not be thought to be so politically correct as to be incorrect in your Lordships’ House, but I welcome the fact that we now see some women being promoted into the responsible positions in the chapters of our cathedrals. They bring new life, approaches and, perhaps, intuition to managing the very difficult situation that many of the chapters face.
The Church of England and those responsible for many other historic and religious buildings deserve from Parliament at least an improvement in the clarity and speed with which decisions are taken by the Government. In that respect at least, I hope my noble friend’s debate today will draw the attention of the Government and my noble friend on the Front Bench to the anxiety that many of us in many parts of the United Kingdom feel. We deserve to do better by those who are responsible for such an important part of our cultural, architectural and religious heritage.
The Lord Bishop of Birmingham
My Lords, I am grateful to the noble Lord, Lord Cormack, for the opportunity to celebrate the good news of our English cathedrals. He will understand that if you want to find a Birmingham cathedral, you are more likely to come to it by the future HS2 rather than by a leisurely trip up the east coast. What you will find there is a jewel by Thomas Archer, who built St Philip’s parish church on the highest point of the burgeoning new town that would fuel the industrial expansion of Britain. It was built in 1715. That building is now in the heart of the commercial and professional centre of the largest UK city outside London. It is an oasis of prayer to which people, whether visitors or citizens, come day by day to enjoy a beautiful space in which our new dean, Catherine Ogle, says you can do only one thing, and have that enhanced by the magnificent Burne-Jones stained glass windows.
At the same time, as we will probably hear again today, the choral tradition in Birmingham is of a very high standard, to the extent that Hamish Pringle recently commissioned a new choral work, based—the noble Lord, Lord Cormack, will be pleased to know—on the King James version of John, chapter 1, verses 1 to 14, which is available for parish churches as well as high days in the cathedral. The work of a new young composer, Alexander Campkin, is thus in the heart of one of our great commercial cities.
Of course, as your Lordships may know, the number of young people applying to join cathedral choirs has increased by 6.8% over the past 12 months. That is the obvious but, across England, a living cathedral is a place of civic, cultural and inter-faith engagement. We find that no less so in Birmingham than across the country. It is also a springboard for, if I may indulge this phrase, growing confident Christians in our urban and rural areas. You will find programmes not just about engagement with the regional bankers and Chatham House seminars, following the difficulties in the debate about capitalism last year, but programmes that encourage practising Christians at work to examine what it means to live well in our local community.
That is just one example of what is happening all over the country in our 42 cathedrals. We are seeing, as your Lordships will again know, a steady increase in regular congregational attendance of some 3% a year. That has been going on over the past 10 years. Furthermore, special events and regular public and civic events are even more popular than they have been for years. In 2011, for example, over 3,000 special services attracted 1 million people, and 1.84 million attended public or civic services. Our cathedrals have approximately 12 million visitors a year. They have 15,000 volunteers, people who give up their time freely to enable these places, about which we have heard that the heritage is so important, to be places of living prayer, worship and community engagement. Over 300,000 children attend our cathedrals for educational purposes during their curriculum learning in term-time.
As you look around the country—I hope that we will hear more about this from others in a moment—you will find particular things happening as the cycle of events goes on. We have heard that Coventry Cathedral has just celebrated its 50th anniversary. Of course, it has a distinctive contribution, as so many cathedrals do. In this case, it is the Community of the Cross of Nails, a world-wide gift of reconciliation in a troubled world. In Winchester, the Winchester Bible is now redisplayed. In Truro, the cathedral has been engaged in a county-wide renewal through Inspire Cornwall.
We have heard from several speakers already that this comes with a huge implication for resources. When noble Lords reflect on the age, scale and complexity of the buildings, it will not surprise them that it is estimated that some £100 million over 10 years needs to be spent across the country in ordinary cyclical repairs. I am not talking about the marvellous things that are inspired by English Heritage and other grant-making bodies, but £100 million over 10 years just to keep thing in place. Indeed, since 1991, at least £250 million of repair works alone has been carried out in English cathedrals. Of course, you can follow all this up in the English Heritage Fabric Needs survey. We have been reminded that there is no core state funding for English cathedrals. I am not going to go down that route myself but, while new work and exciting developments are funded generously, routine repairs are much more difficult. There is still a gap between the cathedral’s division grant and the overall cost that has to be paid every year.
Cathedrals are enormous, historic, heritage, prayerful, worshipful places of sanctuary for people who are shy of religion. They are places where people can come and rediscover wonder and awe, both through art and music, and, simply, the power of prayer. Their role in the life of our nation’s cities is immeasurable: civic, cultural and spiritual. It will be a huge boost to the confidence and morale of all these people who are involved, hundreds of thousands of them, in our cathedrals to hear Her Majesty’s Government give a ringing endorsement to our cathedrals in every aspect of public policy.
Baroness Byford
My Lords, I must begin by declaring my interest as I have recently been appointed chairman of Leicester Cathedral council. I congratulate my noble friend Lord Cormack on successfully achieving this balloted debate. He has spoken clearly and passionately about the important role of English cathedrals in today’s society.
Lincoln Cathedral, built in 1092, stands high on the hill overlooking the city of Lincoln and is, indeed, an impressive building. Its dean claims that it is arguably the finest gothic building in Europe. It attracts visitors from around the world. Some come to see its historic past and enjoy its architecture while others come to find a place of peace and quiet to reflect and pray.
Leicester Cathedral cannot begin to compete as it was only back in 1927 that the parish church of St Martin’s became our cathedral. What we can do is offer a warm welcome to all our visitors, whether they are people of faith or none. Over the years, Leicester Cathedral has become recognised as the place that brings together people from all faiths, a centre that attracts civic services, cultural events and, indeed, only last Saturday held our Armed Forces Day service. I hope the cathedral is seen as being there for everyone in the city and county and not just for Christian worshippers. I believe that we are there to offer a variety of daily services, but also to expand our important mission work and support Bishop Tim in his work throughout the diocese.
You can imagine our great joy when, shortly before Christmas, we learnt that Her Majesty wished to open her jubilee celebrations with a visit to Leicester early in March. Our city is truly multicultural. We have many faith groups within the community and we wished to organise a service of thanksgiving and celebration that recognised that diversity. The day for Her Majesty began at De Montfort University, from there to the cathedral, followed by lunch at St Martin’s House and, finally, a walk through the main streets of the city. It was truly a day to be long remembered and at the heart of the day was the service at Leicester Cathedral. Here, the second poorest cathedral was involved in a remarkable day.
I believe that all cathedrals, both large and small, have a crucial place in today’s society. What we should be is a place where tourists, believers and all those seeking quiet reflection feel equally at home. The cathedral is there for all, open to all, an inspiration to all. Leicester Cathedral is open daily and holds services throughout the day and, of course, is busy at weekends too. However, it is more than simply a place of worship. If one looks at the many projects that the cathedral organises, one is amazed that so few can achieve so much.
We are a centre for Christian education and a base for outreach within the city and county, supporting a wide range of community projects. Christ’s calling challenges us to go out in his name and we do just that. In Leicester, we support particular projects working among asylum seekers and refugees. We run a street pastor scheme at the weekends. The Leicester Cathedral community has developed links with the local ecumenical church charity, The Bridge: From Homelessness to Hope, which recognises significant need in the city where the number of homeless has increased over the past few months.
These are but a few of the projects undertaken by a small staff of only 11.98 full-time equivalents, supported by some 138 volunteers. Our religious education officer continues work with primary schools, through the faith journey, which links the work of the cathedral with our Sikh, Jain and Buddhist near neighbours, enabling members of those communities to talk about their own faith journey and to share in our experiences. The work of our choristers’ outreach programme has enabled 14 schools to host weekly workshops, and more than 500 children came to the cathedral for one of these events.
None of this important work could be achieved without the enthusiasm and dedication of both stipendiary and lay members. I would like to record my thanks to our dean, Vivienne Faull, and her team for their hard work, faith and dedication. The cathedral is a real focus in the city and the county, so it is not surprising that it has been the chosen venue for major services in the city and county, as the right reverend Prelate the Bishop of Birmingham said was true in Birmingham. The St Patrick’s Day service, our Armed Forces Day service, which was held last Saturday, the civic service to remember 9/11, 10 years on, and the High Sherif’s service for Leicestershire and Rutland are but a few that I have time to include.
For all this activity, the cathedral faces real challenges, many of them revolving around finance. Unlike some cities, the Leicester Cathedral parish community is small, and we have constantly to look at new ways of running what is a business. That may sound very commercial but, in truth, we have to look at what we do and how we finance our work. This short debate has given me the opportunity to talk about some of the work undertaken by a very small cathedral. It would be lovely to share the experience, and perhaps the difficulties, of Lincoln. But Leicester Cathedral has carved out for itself a real role, and will continue its work into the future.
Lord Howarth of Newport
I add with great pleasure my thanks to the noble Lord, Lord Cormack—I can hardly restrain myself from calling him my noble friend—for providing us with this opportunity to reflect on the contribution that cathedrals make to our national life and how it can be sustained. For me, personally, it is axiomatic that it is a very important question. I grew up in the cathedral city of Winchester and was educated at the cathedral choir school. I now live in the cathedral city of Norwich, where we have two great cathedrals. Not only do we have the magnificent historic Anglican cathedral, where the right reverend Prelate the Bishop of Wakefield was dean before his translation, but we are also blessed with the presence of the great Roman Catholic cathedral of St John the Baptist. Canon Duckett wrote to the 15th Duke of Norfolk to tell him of,
“our present great need of a new church”,
and ventured the exclamation and prayer:
“Oh, that God would inspire your grace to build one for us”.
And that is exactly what happened. George Gilbert Scott Jr was the architect—he was the son of George Gilbert Scott Sr, the architect of St Pancras station, which many people also believe to be a cathedral. The great church in Norwich was constructed between 1884 and 1910 in a consistently pure and beautiful early English gothic style, and was finally consecrated as a cathedral in 1976.
Between my beginning and my end, I had the privilege to represent another cathedral city, Newport in Monmouthshire. We were in the diocese of Monmouthshire, and St Woolos is the cathedral of that diocese.
For centuries, the cathedrals have shaped and expressed the spiritual, cultural and civic life of our country. They continue to do so and, as has been noted, they also contribute to our economy in attracting very large numbers of tourists. I am not a religious person, and it is hardly for me to talk of the spiritual value of our cathedrals, but non-believers also value the continuity, calm and beauty that the cathedrals afford us. The magnificence of the King James Bible and the cadences of Cranmer’s collects—on which the most reverend Prelate the Archbishop of Canterbury made some very illuminating remarks in a recent talk—are all part of the ceremony of our national life and our private solace. Of course, there are other vernacular versions, which no doubt rightly have their place.
Forty of the cathedrals of the Church of England are grade 1 listed buildings. Canterbury and Durham Cathedrals are world heritage sites. Our cathedrals are a fountainhead of music. After 60 years, I am still haunted by the extraordinarily beautiful anthem “Remember Now Thy Creator”—the words of Ecclesiastes set to music by Charles Steggall and sung by the choir in Winchester Cathedral—and uplifted when I remember the sounds of Stanford in B flat. When I was Minister for the Arts and Heritage, a brace of deans came to see me from Hereford and Southwark to share with me their anxieties about the cathedral choir schools and the problems of maintaining them. Sadly the Arts Council was deeply uninterested in their problem but the cathedrals found other ways and I understand that now, every week, more than 1,000 boys and 800 girls sing choral services. My successors did better than I did. I am pleased to say that the Government contributed £1 million a year, over four years, from 2008, towards the chorister outreach programme to enable choirmasters and choristers to visit schools. Some 60,000 children have had that benefit and around 1,600 teachers have been trained in how to teach choral singing. It would be good if, even in these straightened times, public funds could be found for a number of scholarships to enable children from poor families to attend cathedral choir schools.
The libraries and archives of our cathedrals are great repositories of the national memory. In Norwich, Camberwell College of Arts students have the opportunity of a placement in which they survey the bindings of the books in the great cathedral library. The noble Lord, Lord Cormack, drew attention to the importance of cathedrals in sustaining heritage and traditional skills in this country and I pay tribute to him personally for all that he has done to support the maintaining of these skills.
The right reverend Prelate the Bishop of Birmingham drew our attention to the impressive statistic that 300,000 children attended educational events at cathedrals in 2011. There is, I would think, no subject in the national curriculum that it is not possible to teach by using the resources that cathedrals provide. Of course many of our cathedrals—in fact I would imagine all of them—are engaged in outreach and Christian care work. I mention simply one example: the day centre for homeless and vulnerable people within the precincts of Sheffield Cathedral. We use the phrase “cathedral cities”. Cathedrals of this country engage and express the civic and the public realm. Again, the right reverend Prelate the Bishop of Birmingham told us that no fewer than an estimated £1.84 million people attended civic and public events in cathedrals in 2011. It is interesting that the Occupy movement decided that it would base its protests at four English cathedrals—not perhaps a very happy experience for all concerned; the jubilee celebrations more recently were a much better one.
In Britain, as the noble Lords, Lord Cormack and Lord Tyler, reminded us, it is not our practice to nationalise our sacred and historic buildings—at any rate, not since the time of Thomas Cromwell. The cathedrals are independent ecclesiastical corporations and take responsibility for themselves. However, there are also responsibilities that should properly fall upon the community and the state. The noble Baroness, Lady Andrews, told us of the 2009 cathedral fabric needs survey, which found that more than £100 million-worth of repairs needed to be planned for over the next 10 years. I understand that the buildings division of the Church of England is only able to contribute around £750,000 towards those needs, so there is a decanal cash flow problem of formidable proportions in a country that is not getting any richer.
The cathedrals, as we have all acknowledged, provide immense benefits to the secular realm. What is the reciprocal responsibility of the secular realm? The communities, of which Cathedrals are at the heart, rise to this responsibility. Congregations and wider circles of local people are very happy to contribute what they can. I pay a tribute to the noble Lord, Lord MacGregor of Pulham Market, who leads the fundraising campaign for Norwich Cathedral. He very much regrets that he cannot be here today because he is engaged in another public duty. The capacities of local communities to raise money to support their cathedrals of course vary. There is an inescapable responsibility on the state.
Over 19 years, English Heritage’s grants for cathedrals scheme contributed, I believe, £52 million towards this very important purpose, latterly supported, with its customary imagination and generosity, by the Wolfson Foundation. English Heritage has now been placed in a position in which it cannot afford to continue with a fund dedicated for this purpose. The Heritage Lottery Fund has also contributed £44.5 million to help the cathedrals since 1995. As our compatriots in these desolate times are consoling themselves by playing the lottery in some considerable numbers, we can anticipate that heritage lottery funding will be quite buoyant, so that is a source of hope.
However, it is not enough for the Government to rely upon the lottery to fulfil the public obligation. The Public Accounts Committee in 2009 urged that the Government should provide core funding for our cathedrals, on the analogy of the grant in aid that the Government provide for the national museums. If we think about it, it is strange to reflect that the National Railway Museum in York is subsidised by the Government to enable it to maintain free entry, whereas York Minster, without public support, has felt it necessary to charge. I admire the National Railway Museum in York but which of these institutions is of greater cultural importance to our country?
No doubt the Minister will say to me that we have a terrible problem with the deficit and that we have to cut it. But I would say that, when there is such a radical recasting of public expenditure, we need to think deeply about the proper responsibilities of the state. I hope that the state will accept that it has an inescapable responsibility to ensure that there is a decent public contribution to support our cathedrals. The public assume that there is. They would be shocked to know that there was not.
I do not want to overrun my time so I will not add to what other noble Lords have said about VAT. However, I hope that the Government will strenuously renew negotiations with the European Union to enable the anomaly between VAT on repairs and VAT on alterations to be removed. As the Government have graciously reconsidered some aspects of their recent Budget, I hope that they will also reconsider their very lamentable decision to increase VAT on alterations to 20 per cent because that will hurt cathedrals very badly, particularly when they come to develop educational or visitor facilities within their listed buildings. I look forward, therefore, to a fully considered statement of the Government’s view of their responsibilities towards our cathedrals when the Minister replies.
Lord Newby
For the benefit of the House, I remind your Lordships that this is a strictly time-limited debate and that when the clock says “10” that means that the time limit is up.
The Lord Bishop of Worcester
My Lords, I am delighted to have the opportunity to make a maiden speech today. I begin by expressing my heartfelt thanks to your Lordships for the welcome that I have received. I am very grateful to them, as I am to the staff of the House, for their help.
To make a maiden speech only three days after being introduced into the House might be thought of as being just a little precipitous. However, I like to think that it is providential that this Motion concerning cathedrals should appear today, since cathedrals are very close to my heart and they have been, literally, for most of my life. I spent most of my teenage years living almost within sight of Canterbury Cathedral and then three years living only yards from Durham Cathedral as an undergraduate. I was ordained in the cathedral of the Bishop of Chichester, whose place I take in this House, and who gave stalwart service to both his cathedral and the House. I ministered for seven very happy years as a canon residentiary at Ely and now live closer to my Cathedral in Worcester than anyone else in what I believe is the only private dwelling that has ever appeared on a bank note.
It could be argued that cathedrals loom larger, literally in every sense, in my life than in the lives of most people. However, my experience tells me that cathedrals are a crucial and enriching part of the lives of countless people who have not had the good fortune to be as closely associated with them as have I. Further, cathedrals are a living and precious part of our architectural, historical, cultural and spiritual heritage.
I support pretty much everything that has been said in the debate so far, and I hope that that will be my continuing experience in debates in this House. I take exception to only one thing—I cannot agree with Alec Clifton-Taylor’s assessment of Lincoln Cathedral, glorious though that building is, but I would refer your Lordships to his statement that medieval cathedrals are,
“the supreme expression of English architecture”.
I am sure that he would have had a good word to say also about Birmingham, Wakefield and Leicester Cathedrals—as he would about our great 19th century and 20th century Catholic cathedrals.
My own cathedral of Worcester stands at the heart of a diocese that has been in existence since 680. I am its 113th bishop and the present glorious building dates from 1184 when my sainted predecessor Wulfstan oversaw the demolition of the Saxon building. The iconic view of it from Worcester county cricket ground, standing high above the River Severn, is famous the world over and is dear to countless people in Worcestershire and Dudley—the area now covered by the diocese of Worcester—who feel committed to their mother church. Many of them will, with me, have the opportunity to welcome Her Majesty the Queen to the cathedral in just a few days’ time.
The fabric of the building, like that of most English cathedrals, is arguably in a better state than it has ever been, thanks to mammoth fundraising and indispensable grants from English Heritage, to which reference has been made. What will happen in the future, with no direct government funding, is a source of anxiety, to say the least. The problem with the lottery is that it is as its name suggests. I describe myself as an expert in lottery applications—all of them failed.
Cathedrals are not just architectural gems but hugely significant active symbols of our common religious and spiritual heritage. They are visited each year by increasing numbers of people with varying religious affiliations. I think it could be said that all these people have a real, if not expressly articulated, sense of the spiritual. Cathedrals have been described by the novelist Susan Hill as being:
“At the still point of the turning world”.
Reading the prayers left by those who have lit candles in cathedrals makes it clear that they can enable deep feelings to surface and be articulated. Cathedrals generate many millions of pounds for our economy but are not, of course, simply tourist attractions. They are vibrant hubs of culture and spirituality. Last year in Worcester, the ticket sales for the Three Choirs festival, the oldest of its kind in the world dating from the early 18th century, were higher than they have ever been. That was just one event in very many that included drama and art, as well as much fabulous music and civic occasions.
At the heart of the life of our cathedrals lies their choral tradition, which is one of their most glorious and remarkable features. I remind your Lordships that until the Reformation, choral foundations were universal throughout Europe, but England is now the only country left with such a tradition intact. In France, Spain, Germany and Italy they have all but disappeared. In Italy, an English choir had to be imported to Palestrina’s own church, the Santa Maria Maggiore in Rome, to mark a significant anniversary of his death. In this country, cathedral music has not only survived against the financial odds but improved. Alongside the daily round of worship, it enriches myriad special services and events to which thousands come, and during which architecture, words and music combine to provide a feast for the senses which feeds the whole person at a much deeper level than can be articulated in mere words.
Cathedrals are the places where bishops have their teaching seats, and they are great centres of education for people of all faiths and none, to which reference has already been made in this debate. The majority employs a qualified education officer and thousands of children are welcomed each year for outstanding learning experiences. Cathedrals have vast educational potential, much of which is tapped, as a result of their architectural, historical and social significance, their aesthetic and artistic merit, and the fact that they are the home to vibrant Christian communities. Last year, more than 3,000 educational events were laid on by cathedrals. It is not just children and young people who benefit. Debates and lectures are laid on for adults about issues of common concern to church and society. Only just over a week ago the Director of Public Prosecutions gave a lecture in Worcester Cathedral on the law and the media, in which he considered the question of the public interest.
I could wax lyrical about cathedrals for a very long time but the basic point that I want to emphasis is that cathedrals offer something that is most definitely in the public interest in all sorts of areas. They are a precious part of the inheritance of this nation and enrich our common life immeasurably. In conclusion, I repeat my thanks for the welcome that I have received from your Lordships and urge that this House should indeed take note of the future of English cathedrals but, in so doing, I urge that they should be valued, cherished and supported.
Lord Black of Brentwood
My Lords, it is a great honour to be able to follow the right reverend Prelate the Bishop of Worcester and to congratulate him on a formidable and elegant maiden speech that blended so perfectly his own experiences with the challenges of public policy. We can see from his speech what a great asset he is going to be to your Lordships’ House.
Indeed, at a time when Members of this House are under a degree of scrutiny, the right reverend Prelate exemplifies the very characteristics that make this House so special, for his range of interests and expertise is as diverse as it is deep. In fact, he began his career as a chemistry teacher, which will suit him well for our debates on scientific issues. He then became a teacher at Harrow School, trying to instil into his pupils—he would have failed with me—the basics of chemistry. That will make him a natural for debates on education, an area on which he touched today. After Harrow, he spent six years as vicar of an inner city parish at St Luke’s, Wallsend, giving him a perspective on inner city issues and social responsibility that will be much valued in this House. He has a deep interest in international affairs, too. As a longstanding member of the World Development Movement, he will be a natural in dealing with international development issues. Finally, he is president of Worcestershire County Cricket Club; he is thereby a shoe-in for sports debates. In short, the right reverend Prelate is an all-rounder whose contributions we look forward to with great eagerness.
We are all indebted to the noble Lord, Lord Cormack, for securing this debate, which has relevance and importance for every region of our country, every diocese and every parish. I am particularly pleased to take part because it gives me an opportunity to talk about two cathedrals in Essex close to my heart, and what they can tell us about the future of cathedrals across England.
I am from Brentwood, which is at the heart of the Roman Catholic diocese of Brentwood, a diocese that, quite uniquely, is exactly coterminous with the Church of England diocese of Chelmsford. Both towns have exceptionally fine cathedrals. In Brentwood, the cathedral dates back to 1861, when it was just a parish church. It was raised to cathedral status in 1917. The cathedral in Chelmsford has more venerable roots, with the first church on its site founded over 800 years ago. It became a cathedral in 1914, when the diocese of Chelmsford was created to meet the needs of the urban population east of London. Both cathedrals have changed considerably over time. Brentwood’s magnificent cathedral was substantially enlarged between 1989 and 1991 in the Italianate style by Quinlan Terry. Taking his inspiration from the classical Renaissance, this cathedral is one of the master architect’s greatest works and one of the finest buildings in Essex.
Chelmsford’s cathedral has grown more organically, with new stained glass windows in the 19th century along with a rebuilt nave and enriched porch in 1953 to mark the bonds between America and Britain in the Second World War. It now has, in the 21st century, a magnificent collection of modern art.
Both these buildings underline how cathedrals grow alongside their communities, reflecting the changes in society and constantly updating themselves, as the noble Lord, Lord Cormack, said, to remain relevant, vibrant and the focal point of the diocese they serve.
The Bishop of Brentwood, Bishop Thomas McMahon, a man of huge importance to civic life in the towns and villages of Essex, has written that a cathedral takes its name from the Greek word for chair, cathedra, from which the bishop presides as the “shepherd of the diocese”. As well as being the parish church for those who live nearby, cathedrals stand as the fulcrum of worship for local people. In Bishop Thomas’s words, they stand there,
“to proclaim and celebrate the Christian mysteries in an environment of excellence and beauty”.
In other words, they are of vital importance to the cultural and spiritual fabric of our nation and need to be cherished.
However, cathedrals, as we have heard, are not just about buildings so much as the people who are in them. The central point I want to raise, and one on which a number of noble Lords, including the noble Lord, Lord Howarth of Newport, have touched, is about the importance of church music and the choirs and organists who provide it. Our cathedral choirs are as much a part of the rich heritage that nurtures our communities as the buildings they sing in. At this point I must declare an interest as a member of the Council of the Royal College of Music.
Both the cathedrals I have talked about have prestigious choirs. Brentwood’s was formed in 1984 and over the years has undertaken tours throughout Europe. Just a few weeks ago, a young man who is a member of the choir and a Brentwood schoolboy, Harry John, was one of just 40 young people in the Diamond Choir that sang for Her Majesty the Queen at St Paul’s. In Chelmsford, an innovative choral foundation, formed in 1994, supports the work of its excellent choir, which brings world-class skills right to the heart of local communities. As the very reverend Peter Judd, Dean of Chelmsford, has said,
“when the psalm is being sung … one is privileged to be in the presence of something exquisite—rather like standing in front of an utterly beautiful painting in the National Gallery, except our Choir does not sing in central London, it is happening here in Chelmsford every day”.
Cathedral choirs perform three vital roles in our cultural life. First, they keep alive and flourishing the tradition of English church music, which is one of this country’s shining artistic achievements, dating back to the remarkable output of Byrd, Tallis, Gibbons and Purcell, and in more recent years, of course, Wesley, Bairstow, Parry and Vaughan Williams. Our cathedrals, choirs and organists have all played a central role in fostering that tradition. In the 18th century, a choirboy from Gloucester Cathedral, William Hayes, went on to become a significant composer and a pivotal figure in English musical history. Three centuries later, one of our greatest choral composers, Herbert Howells, an alumnus of the RCM, learnt his musical trade from the organist Herbert Brewer, also at Gloucester Cathedral. Charles Wood had a similar start to musical life at Armagh Cathedral. Their experience, and that of many others, testifies to the importance of local music teaching and experience in nurturing great national talent.
Secondly, they provide for those who worship at cathedrals, or are simply visiting them, something magical and mystical that lies beyond mere words. They enhance the experience of visiting our cathedrals, as indeed so many other churches, in a way nothing else can. Great buildings need great music. And the music—some of the most sublime works ever written—needs these buildings.
Thirdly, they provide real beacons of artistic excellence in their local communities. They attract new audiences to cathedrals, encourage local composers, act as a magnet for visiting musicians and provide a cultural experience that nothing else can in the same way. As Professor Robin Leaver, an internationally recognised hymnologist, has so pithily put it, church musicians are not simply there to produce,
“nice noises at various points in worship”,
but are cultural ambassadors in their own right. Equally importantly, cathedral choirs often give boys, and increasingly girls, their first taste of high-level music-making. Many go on to successful musical careers. There can be no better start to a musical life than experience in a cathedral choir.
However, cathedral choirs face challenges as much as our cathedrals do. They can prosper only if they have secure and comfortable environments in which to practise. As the English Heritage Creativity and Care report, which we have heard about today, highlighted:
“It takes resources to maintain a proud and ancient choral tradition: resources and space”.
They also need a functioning organ—perhaps the most expensive musical instrument to maintain—and dedicated teachers who so often work on a purely voluntary basis. I was delighted that the right reverend Prelate the Bishop of Birmingham talked about volunteers. They are of such huge importance. A cathedral such as Chelmsford depends on 480 volunteers to keep it going and we need to do more to cherish them.
Above all, there is a challenge to ensure that there are sufficient numbers of church musicians entering the profession to meet the needs not just of the cathedrals but the parishes that form the bedrock of the diocese. Across the world, more churches are chasing fewer music graduates. The teaching of music, particularly in our state schools, is a real issue here, although I suspect that is a subject for another debate.
Many of our cathedrals are, quite rightly, moving now to secure the future of church music and they need our support. I think in particular of the new music resource centre at Wells Cathedral, which we have heard about today, and the new Song School at Chester Cathedral. These are just the sorts of initiatives that are required to secure the future of cathedral choirs and of the proud English choral tradition.
The noble Lord, Lord Cormack, has done us a huge service by securing this debate today. Our cathedrals, with their choirs, are one of the jewels in the crown of our national life. It is right that we celebrate them, recognise the challenges that lie ahead and seek to identify ways in which they can be supported. As the right reverend Prelate the Bishop of Birmingham said earlier, a ringing endorsement from your Lordships’ House today would be a splendid way to start.
Baroness Sherlock
My Lords, I am delighted to take this opportunity to speak today about Britain’s best building. I agree with a great deal of what the noble Lord, Lord Cormack, said, with the exception of his very touching, if ultimately misguided, conviction that Lincoln Cathedral is the fairest in the country. You need not take my word for it—in a survey by the Guardian last year, Durham Cathedral came out with a ringing success, with 62% of people voting it the best building in Britain. That capitalised on its success a decade earlier, when the BBC had a similar poll and again Durham Cathedral was Britain’s favourite building. It is not hard to see why. One of the cathedral canons described one of the joys of her ministry as watching one of the many parties of schoolchildren who arrive. They come in a long crocodile, with two children hand in hand at the front. As the first children walk in, they gasp at the sheer scale and stop dead, so that the crocodile piles like dominoes as the rest keep coming in behind them. They struggle to make sense of the sheer splendour of the space. It had a very similar effect on me the first time I walked in. Strangely, the nave of the cathedral is not just enormous, it is somehow intimate. The current and rather wonderful Dean of Durham described the nave as being,
“large enough to lift our vision but intimate enough to hold us and affirm our humanity”.
In some ways, that is what cathedrals do in general, not simply architecturally.
As many noble Lords will know, Durham Cathedral was built on the site where monks bearing the body of the great northern saint, St Cuthbert, came and finally settled after travelling to escape Vikings. They had been moving around with Cuthbert’s relics and the Lindisfarne Gospels—which we look forward to welcoming home soon, at least briefly—and finally stopped after coming to a bend in the River Wear and getting stuck behind a milkmaid and a dun cow. When Cuthbert’s body refused to go any further at that point, they took this as a sign that they had chosen the right place. I am delighted that they chose such a beautiful spot, although I am sure the right reverend Prelate the Bishop of Worcester would be with me in saying that every now and again one might wish they had chosen a flatter spot. I was delighted to hear his maiden speech. It was eloquent and articulate, and I can only conclude that his undergraduate studies must have served him well. He is most welcome.
Durham Cathedral is more than an architectural marvel; it is a sacred space with a wonderful choir, which sings at eight services a week. However, that tradition is not just for a privileged minority. Durham Cathedral set up a wonderful music outreach programme, in which choristers went out to local primary schools across the county and sang for the children and then with the children. Over a period of weeks, the children would learn the music and then come together with other schools in a wonderful concert in the cathedral, which would be full of proud mums and dads who had never expected to hear their children sing music of this quality in a space such as that. It has been a wonderful developmental experience. In fact, one child who came to the cathedral with his school in exactly that fashion saw this, went back and told his mum and dad that this was what he wanted to do and some time later—two years ago—he became BBC Young Chorister of the Year. Since then, he has sung in Downing Street, at the Albert Hall and with Katherine Jenkins, and all because the school visited Durham Cathedral.
The cathedral draws people to itself from all over the world but it is also a centre for Durham itself. I went to Durham in 2006 to take a course at the university for just a year and I am still there—it has that effect on people. When I came to the end of the course, I graduated in the cathedral—an experience that many people have. During the Lumiere festival—a festival of light—the cathedral was completely filled with sculptures of light and flame, so anyone who thinks that our cathedrals are overly risk-averse or in any way scared by health and safety issues should visit Durham.
Some 120,000 people came to the Lumiere festival but 600,000 go through Durham Cathedral every year. For me, one of the great highlights of the year is the annual Durham Miners’ Gala—or the “Big Meeting”, as it is known locally—every July, when thousands of people descend on the city from across the county. This is where the traditional mining culture and trade union heritage of the county are celebrated. Even though the pits have closed, people come from every village and march through with their own brass band and banner. These are still markers of identity for the communities and the people in them. There is a service in the cathedral, the bands are marched in and the banners are paraded. When there is a new banner, the community brings it in for the bishop to bless. Last year, regrettably, we saw the 60th anniversary of the colliery disaster at Easington, in which 83 men and boys lost their lives. The Easington banner was trimmed with black and it was brought in so that the cathedral could mark that aspect of the community experience as well.
As the right reverend Prelates have said, people also bring their individual and private troubles to the cathedral. Every day, many people come in to light candles, write prayers or just sit in the quiet space. The volunteer chaplains at Durham, as elsewhere, hear all kinds of stories. There might be a soldier coming in to pray before being sent to Afghanistan, or perhaps bereaved people who do not have a faith but do not know where else to take their grief coming to the cathedral, trusting that they can somehow be held in that space. That is what a cathedral can be and what Durham certainly is—at the heart of a community to celebrate its joys, as the noble Lord, Lord Cormack, said, and to hold people in times of sorrow, to be with them and to provide a way for them to express that sorrow and be held as a community.
However, none of this is easy. It takes hundreds of staff and hundreds of volunteers. All kinds of people come through the cathedral. I am a tutor at St Chad’s College at Durham University. We, like every other college, have our annual St Chad’s Day service in the cathedral. During the service, students bring to the altar to be blessed emblems of their everyday student life, including sporting equipment, musical instruments, even the odd book, and this year, for no obviously discernible reason, a life-size cut-out of President Obama. All aspects of life are taken up and can be blessed and celebrated.
It seems to me that that role of community-gathering by institutions at the heart of our communities is one that the state has a responsibility to support in some way. Despite the fact that this is Britain’s best-loved building, was founded more than 900 years ago and is, as my noble friend Lord Howarth of Newport said, on a UN World Heritage Site, it does not have any regular government funding. The £60,000 a week that it costs to maintain the cathedral and its associated buildings and ministries has to be found by the incredibly enterprising but, surely by now, tiring dean and chapter. I applaud them for being able to do this without charging the public to come into the cathedral. It is an incredibly difficult struggle every single week. However, if people had to pay to get in, it would be hard to see either how the individuals would feel able to use it in the way that I have described or how it could fulfil that role at the heart of the community which is so powerful for our city.
When the Minister considers her response to the debate, can she give us any comfort at all regarding how the state can recognise its responsibilities? I thought that the suggestion from the noble Lord, Lord Cormack, was excellent and I would encourage her to reflect on it. Perhaps she could start an endowment to which others could be encouraged to contribute. Durham is a very poor county, yet people find the money to celebrate the cathedral. However, the cathedral is not just for us; it is for the entire nation and it is one of Europe’s architectural treasures.
Finally, I know that the Minister has an interest in Durham, and that might encourage her to visit the city at some point and to look around the cathedral. However, I urge any noble Lord or anyone reading this debate who has an interest in this matter to step into their cathedral, if they have not done so previously, to see what it can provide in an era when the gathering institutions in our communities are under threat. These can be spaces that welcome everybody, raise our vision and, at the same time, affirm and hold us in our humanity.
The Lord Bishop of Wakefield
My Lords, I cannot hope to come up to the same standards of energy and enthusiasm that we have just had from the noble Baroness, Lady Sherlock. However, I begin by saying that, as with my friend the right reverend Bishop of Worcester, whose excellent maiden speech we have just heard, cathedrals lie very close to my heart, so I am very grateful to the noble Lord, Lord Cormack, for making this debate possible.
I have spent 15 years of my life working in two very different cathedrals. For seven years I was a residentiary canon at Portsmouth, a parish-church cathedral in an urban setting right next to the great naval dockyard. Then, for eight years, I was dean of Norwich, a magnificent medieval cathedral, to which we have already heard reference, and one of the two greatest Romanesque churches in England. I am not vying for it to be the top one but it is certainly as good as Durham.
Cathedrals offer an extraordinary variety of experience, as I shall note later. There is one brief vignette which focuses something of this and which for me seemed bizarre. During my time at Norwich, we celebrated the 900th anniversary of the diocese and cathedral. Anglia Railways kindly agreed to call one of its locomotives “Norwich Cathedral”. That was very good news, but it was the final denouement of this tale to which I want to advert. At the end of the year, I was invited to Norwich station for the denaming ceremony. That seemed to me quite baffling. Most of the Anglia Railways locomotives took their names from significant places in the north-west of England, where they had previously toiled—names such as “Vulcan Foundry” and “City of Preston”. Here was “Norwich Cathedral”, named after the single greatest focus of tourism in East Anglia, with more than half a million people passing through our doors each year, and we were taking the name off the locomotive. That is an interesting reflection on how people do not always see the significance of these great buildings.
For all the talk of the decline of religion, cathedrals remain enormous magnets for all sorts and conditions of people, as we have already heard. In a recent essay on church growth, it was noted that alongside the growth in the size of congregations, mentioned earlier by my friend the right reverend Bishop of Birmingham, the spend was £91 million in cathedrals alone, and the total impact on the wider localities was more than £150 million. However, church growth just touches the fringes of the impact of these places. They are the contemporary equivalent of common ground. They are open to all who come—all can graze in their pastures, as it were. Indeed, the variety of expressions of their impact is clear in the myriad people who consider themselves to be stakeholders.
Many organisations and individuals ask to use our cathedrals—from civic services to Rotary International, and from local businesses to voluntary sector agencies. However, these stakeholders—and there are myriad others—are matched by the diverse reasons for visits by individuals. Some come as tourists; others as pilgrims. Some come for silence and solace in the face of life’s difficulties and challenges. Many is the conversation I have had in cathedrals with people in places of sadness in their lives. Some come with the explicit hope of talking and meeting up with others, so a guide in a cathedral has to be immensely sensitive, knowing when people might want to speak and when they might not. Of course, some come as aficionados of architecture, while others come simply to celebrate the place, the city in which they live.
I remember being in Norwich Cathedral one morning when a chap who had been thrown out of his house by his wife—probably for very good reasons—came up to me and said, “Ooh, it’s a big place you’ve got here, isn’t it?” It was interesting that he had lived in Norwich all his life and had never been in the building before. What was it that brought him there? Well, I just mentioned that.
In Norwich—to focus there a little longer—it is the cathedral, the university and the football team, of course, that somehow give the city its character, its personality and its status. Cathedrals give a city their soul. Cathedrals belong to everyone. In both Portsmouth and Norwich, people of other religions and people of no religious faith will talk of “our cathedral”.
Often cathedrals work with other agencies to nourish a city’s flourishing. In Norwich we co-operated with Delia Smith, the queen of cookery, in a centenary service for Norwich City football club. By good providence we even had what passed for Canaries robes of yellow and green to match the occasion.
Cathedrals, too, have been the seed-bed for the nourishing of music in our nation. We have heard so much already in this debate about the quality of cathedral music. Most significant as well is that so many of our really talented classical musicians, people now at the top of their tree in their profession—not related particularly to church matters—started their musical careers in cathedral choirs. This essential work needs to continue via proper financial support. I was very pleased to hear the noble Lord, Lord Howarth, say how important this remains, not just for our cathedrals but for the whole heritage and tradition of good music in our country.
For all these reasons, I am acutely aware of the need to respond to any moves that may undermine these great flagships of the spirit. As we have already heard many times, a month or two ago a change in the VAT regulations threatened to undermine the very breadth of what cathedrals offer. It is the alterations, adaptations and modifications of these buildings that make them speak more effectively to our own generation, so I am very thankful that we are being given respite in that area, at least for three years. However, as the noble Lord, Lord Cormack, and the noble Baroness, Lady Andrews, have said, I hope we can be reassured further that that respite will continue well beyond that time; not only do we not get proper funding, but having to pay VAT would actually take funding away from us. Therefore we are grateful for the shift on VAT and for the extra grants available.
Still, however, the issue of adequate state funding for essential maintenance and conservation is crucial. I absolutely agree with the noble Lord, Lord Cormack; I would not want the situation to be as it is in France. Nevertheless, as we have heard, English Heritage’s budget is always under pressure and now cathedrals are placed alongside other churches in an open market. We are enormously grateful for all that it has done, and I am enormously grateful to the noble Baroness, Lady Andrews, who has been greatly supportive in our diocese. I look forward to welcoming her again in the near future.
Let us go for the £50 million that the noble Lord, Lord Cormack, asked for. If you compare it with the amount of money in terms of the fuel excise duty that has been so much in the news in the last few days, or, indeed, the £1.3 billion that will go to the European Union—doubtless for good reasons—£50 million is as nothing.
Like all organisations, as well as facing outside threats, the Church of England is always capable of shooting itself in the foot. The Dioceses Commission needs to be careful not to threaten to undermine the very raison d’être of cathedrals. Merging dioceses easily dissolves important local loyalties and takes away the point of these buildings as the focus of a bishop's ministry and the character and personality of a locality. Present plans in our part of England aim to keep cathedrals for the moment even if the dioceses merge; but what will be the logic, and for how long could two or three cathedrals be justified in one diocese?
Furthermore such changes seem to ignore the essential reason for the existence of cathedrals. They are the home of the cathedra, as we have been reminded—the seat of a bishop. We need smaller, not larger, dioceses, each with one cathedral, the teaching seat of the bishop who is the focus of unity for the church in that place. As others have said, the essential reason for cathedrals is for the worship of Almighty God; that is the beginning and the end of them.
Let me end with one further telling vignette. It relates to that extraordinary outflow of emotion on the death of Diana, Princess of Wales. We opened our doors in Norwich—where I was at the time—from dawn until dusk, and I saw one woman enter the building, light a candle and pray for 10 minutes. On her way out of the cathedral she thanked me for making the great church available and said, “I am not religious or anything, but I had to come”. I reckon that 10 minutes of prayer and a lighted candle feels a pretty religious thing to do. Whatever she thought she was doing, such an act and expression of commitment is but one of so many reasons why we must work even harder not only to preserve our cathedrals but to make their ministry and service to a whole community more effective than ever. I, too, look forward to a great statement of confidence in the Government supporting our cathedrals and I hope that they might think carefully about that £50 million.
Baroness Warwick of Undercliffe
My Lords, I add my thanks to the noble Lord, Lord Cormack, for introducing this debate and, indeed, for the way in which he has championed our national heritage over many years. I speak with much less authority on this subject than other speakers, but I am delighted to contribute to a debate that has sparked such knowledge and passion, and to take the opportunity to congratulate the right reverend Prelate the Bishop of Worcester on a moving and illuminating maiden speech.
As has been said already, England’s cathedrals are some of the greatest ancient buildings in Europe. Whether ancient or more modern, each is often the largest, most architecturally complex, most archaeologically sensitive and most visited building in its town or city. While our cathedrals are first and foremost places of Christian worship, they are also cultural centres and tourist attractions. They are at once places of pilgrimage and public buildings that host great national or civic events. They are prayerful spaces that also host community events and busy cafés.
Beautiful and breathtaking their architecture may be, but as the Church of England points out, these buildings are not just heritage landmarks but contribute to the wider community in diverse ways. Often they are the only local space of any size with public access, hosting concerts, lectures and degree ceremonies; and, of course, they are still used for their original purpose. Attendance at regular weekly services in Church of England cathedrals has increased over the past decade, as the right reverend Prelate the Bishop of Birmingham said.
The number of volunteers involved in the mission and ministry of cathedrals on a regular basis has increased by 24% to 14,500—an average of 345 volunteers for every cathedral. They are truly part of the big society. Last year more than 250,000 children attended educational events at a cathedral, with Westminster Abbey adding a further 12,000 to that nationwide figure. Just under 10,000 children are being educated at schools associated with cathedrals, and more than 2,000 of these children and adults are involved week by week in providing cathedral music.
Other noble Lords provided many examples of the contribution of cathedrals to the community—I will not repeat them. They all demonstrate our cathedrals’ continuing active role in people’s lives. This also means meeting legislative requirements and offering modern facilities. It is for this reason that I support the long-running campaign by the Church of England’s General Synod to cut the rate of VAT on church repairs and maintenance. The former Council for the Care of Churches argued that,
“charging VAT on repairs … encourages unnecessary alterations and discourages … good conservation”.
The distinction between repairs and maintenance on the one hand and alterations on the other is artificial and complex to administer.
Like other noble Lords today, I welcome the recent rethink by the Chancellor of the ill conceived proposal to introduce VAT on alterations and improvements made to churches and cathedrals. Cathedral deans—who can generally be relied on to speak their minds—were quick to point out that the tax would not mean more money for the Government but less maintenance for historic buildings. Adding 20% to the already fearsome costs of keeping open our great cathedrals—let alone keeping on top of major repairs—would have made this work completely unmanageable.
As the majority of alterations to listed church buildings take place in order to improve access to them and to broaden their use by the wider community, the Chancellor’s U-turn is entirely right and proper. By increasing the annual budget of the Listed Places of Worship Grant Scheme by £30 million and amending its scope to fully compensate churches for the impact of removing VAT relief from alteration work, he has acknowledged the importance of these buildings, which, of course, should never have been overlooked in the first place. However, concern remains. Although the proposals in the Budget will have an impact mostly on alterations to listed church buildings as distinct from repairs, the Church of England is nevertheless concerned that the money available to reimburse churches for VAT charged for repair work will also be affected as a consequence of the extra demands placed on the Listed Places of Worship Grant Scheme.
I echo the noble Lord, Lord Cormack, and ask the Minister how confident she is that the £30 million will cover the additional costs borne by listed places of worship following the VAT change. Can she also be confident that the additional resources will enable 100% compensation for repair and maintenance costs eligible under the current grant scheme? I ask because I want to see more of the life-enhancing alterations so magnificently exemplified by Wells Cathedral in Somerset—a cathedral I love visiting—as well as by others in English Heritage’s report, Creativity and Care.
The report shows how thoughtfully and sensitively some of our cathedrals have been adapted and developed to remain relevant today. I, too, pay tribute to the superb contribution to this work made by my noble friend Lady Andrews. At Wells there are some 1,700-plus services, concerts, educational visits and other events organised by the cathedral each year. That amounts to about five events a day, each attracting a different public. Yet until recently the cathedral had no adequate toilet, no disabled access to many areas of the cathedral church, no education area for visiting school groups and an overcrowded restaurant.
All that has changed following one of the biggest building programmes at a medieval cathedral since the Reformation. Unblocking the pilgrims’ porch—in medieval times the main entrance to the building—has allowed access between the precinct, the cloister and the church. A new cloister provides a reception area, an expanded shop and a first-floor restaurant. It took seven years to get permissions and, in total, the work cost £7 million, much of it coming from the Sainsbury and Garfield Weston Foundations and the Heritage Lottery Fund. The end result is a triumph of 21st-century vision and sensitivity, magnificently balancing the building’s significance with the needs of modern users.
A cathedral in my home county of Yorkshire also supplies a wonderful example of where the money has been found to make alterations that serve a 21st-century community. The Leeds Roman Catholic Cathedral, built in the early years of the 20th century, now has some very modern new facilities. A thoroughgoing clean of the interior in 2005 transformed the grime of my childhood to light-filled glory. Some 25% of the £2.4 million cost was gathered by fundraising within a relatively small and not particularly wealthy diocese. Another example is York Minster, where an innovative project by the York Glaziers Trust has transformed the Bedern chapel, a medieval building in the close which I recall as merely a ruin. Winning a Heritage Lottery Fund bid in 2006 led to new flooring and a new ceiling, and CCTV that allows visitors to watch the work at close hand.
To keep our cathedrals relevant takes money, vision and commitment. This has always been so. As Frank Field pointed out, the process of refitting our cathedrals for the future has never stopped. For that process to continue today, funding is vital, as so many other contributors to the debate emphasised. So, too, of course are goodwill and volunteers.
It is not only our cathedrals that are extraordinary; so are many of the 14,000 listed places of worship in England, as other noble Lords attested. Anglican churches alone form 45% of the grade 1 listed buildings in England. In 2006, necessary repairs to all listed places of worship in England were estimated to cost £185 million a year. It is worth noting that of the money spent on the repairs, 70% was raised by congregations and local communities.
The Listed Places of Worship Grant Scheme, now totalling £42 million, is only guaranteed for the next three years. We need to know that our extraordinary legacy of cathedral buildings will be safe on our watch and that they will be given the best chance of seeing out the next thousand years. I join with other noble Lords in hoping that the Minister will be able to offer hope that the state will continue to provide its part of the necessary funding.
Lord Rowe-Beddoe
My Lords, I acknowledge with gratitude the House’s indulgence in allowing me to speak in the gap. I congratulate the noble Lord, Lord Cormack, on securing the debate. I shall not attempt to continue his elegantly described train journey through the cathedral cities of east England, but I will speak about the six great cathedrals of Wales.
I declare an interest as chairman of the Representative Body of the Church in Wales and an interest as a grateful recipient of an early education as a boarding choirboy and organ student at the Cathedral School, Llandaff, the only professional cathedral school in Wales. As the right reverend Prelate the Bishop of Worcester referred to in his excellent maiden speech, cathedral music must never ever be underestimated as a core of the cultural life of our country.
Our cathedrals in Wales range in scale from the small but perfectly formed St Asaph, now situated in the United Kingdom’s newest city, to the imposing grandeur of St David’s, a cradle of Christianity in these islands since the 6th century and declared a centre of pilgrimage by Pope Calixtus in 1123. Our newest cathedrals in Brecon and Newport are well established as key places in civic and social life; and Llandaff, a remarkable mixture of old and new, now hosts the largest organ built in this country for the past 100 years. It was beautifully demonstrated this April at a jubilee thanksgiving service in the presence of Her Gracious Majesty the Queen.
However, cathedrals will face even greater challenges in the coming years as they, as centres of excellence, continue the process of adaptation to serve an array of faith, community and outreach projects. The most recent announcements on VAT, while welcome, are still confusing and uncertain, as the noble Lord, Lord Tyler, and others have suggested. If grant provisions for returning in grant the equivalent of VAT are not retained—not only in this Parliament, as promised, but beyond—the implications are most serious. The award-winning creation of the cloisters at St David’s Cathedral, for example, would have been nigh impossible to realise if full VAT had been imposed on all the costs involved.
As the noble Baroness said, cathedrals, like all churches, face serious threats from metal theft. It is vital to continue our efforts to eradicate this crime wave. The Private Member’s Bill recently introduced in the other place is therefore greatly to be encouraged.
Lord Stevenson of Balmacara
My Lords, I congratulate the noble Lord, Lord Cormack, on securing the debate and thank all noble Lords who have contributed to it.
I was struck by the suggestion made by my noble friend Lady Andrews that the word “cathedral” has, in some senses, become detached from its relationship to buildings and can be used in other contexts in order to give a sense of scale and impact of the event being described. This debate could be called cathedral-like in the sense that we have ranged wide, with knowledge and expertise, across the histories of our cathedrals and the contribution that they make to our society.
We have benefited tremendously from the expertise around the House today. I have already mentioned my noble friend Lady Andrews, who does so much in her capacity as chair of English Heritage—she has been congratulated on her work throughout the debate—and there were also, of course, the detailed contributions of the right reverend Prelates. They have taken us into the day-to-day living in cathedrals and how that impacts on local communities, and given impressive snapshots of the work that they do.
I congratulate the right reverend Prelate the Bishop of Worcester on his maiden speech. He said that it was providential that he had come up to the House a few days before this event and that he was able to make his maiden speech, unlike so many of us who skulk around for several months wondering how on earth we are going to do it. We wait for an appropriate debate to come along, and what happens? Is it in two or three days? He was able to come up and wow us all with his contribution, which was so eloquent—as it would be, of course, from a fellow chemist.
In my researches for this I was very pleased to note that Worcester Cathedral had a Bishop Wilfrid in the early 700s and again in the 920s. There has been none since then; I am not offering, but it is time that the Wilfrids of this world struck back.
I should declare that as a Scottish Presbyterian, raised in a slightly different tradition, I am probably not the best person to address this topic today. However, we do have cathedrals. I was in Dornoch Cathedral only recently, while on holiday, and I have also in a recent lifetime sung regularly in St Giles’ Cathedral in Edinburgh and attended concerts in St Magnus Cathedral in Kirkwall. We have also heard about the cathedrals in Wales.
It is clear that, in making speeches such as this, one has to reflect on one’s experiences in these amazing buildings because of their scale, their impact and the contribution they make. Very few of us have been able to avoid addressing that as we have spoken. I suppose that I am to add to that. I now live regularly in England, although I do go back to Scotland; my cathedral highlight was probably singing, as part of a concert, Tallis’s motet “Spem in Alium” in Bath Abbey—not a cathedral in that sense, but close enough to count for this debate. It was a fantastic occasion.
Somehow cathedrals seem to attract people to visit them. We have agreed that there are 42 of them. I happened in my research to come across a story in the Sun newspaper recently about an English Heritage worker who has visited all 42 of England’s Anglican cathedrals and licked every one. He now plans to carry on licking in Scotland, Ireland and Wales. He said:
“We’ve no idea why the bet was centred on licking cathedrals—it just was. I’ve tasted a lot of new places”.
The cathedrals of Britain span the millennium, from the cathedrals dating from the 1100s to the modern cathedrals found in Liverpool and Coventry. As we have heard, they display a wide array of architectural styles, from early English Gothic to the majesty of the Renaissance at St Paul’s and the 1960s modernism in Liverpool. In the Middle Ages and up to the Reformation in the 1500s, the church enjoyed enormous power and wealth, and cathedrals are eloquent symbols of the dominant place it still holds in British society.
This debate has provided three strands of concern. The first is the question of whether our cathedrals can continue to be both ecclesiastical and, as it has been said, “common ground” places for our people. The evidence is pretty good. The worry is how we can continue to fund them in the way they are currently perceived. Many of us have talked about the places of worship scheme and I have some questions for the Minister at the end of what I have to say.
The noble Lord, Lord Cormack, said that the soul of a country was in its buildings and that we could not call ourselves civilised if the spire of Salisbury or the wonderful vision of St Paul’s in London were ever at risk. Cathedrals are living, vibrant buildings, and as we have heard they make a contribution to local communities not just with spiritual and other work but in economic terms. It is very difficult to believe that we would continue to operate in society with our weddings, our funerals, our christenings, our graduations and even in the jubilee without using our cathedrals as a centre of much of the focus of our activity. Several noble Lords have spoken very movingly about the music in cathedrals and the contribution that has been made over the years to the musical life of our country. However, as we have been warned, we must not take this for granted. We must certainly celebrate our cathedrals—we must cherish, value and support them—but we must also express our concerns to those who have the authority to ensure that they continue.
A recent BBC survey found that representatives of almost half the cathedrals in England that responded to the survey were concerned about meeting running costs in two years’ time. Despite financial concerns, only nine of the cathedrals charge a mandatory entrance fee. We have heard a bit about Durham Cathedral already from my noble friend Lady Sherlock. Durham Cathedral does not charge for entry but asks visitors to make a £5 donation towards running costs, which are about £60,000 a week. Despite the request, on average visitors donate 32p each. There is obviously a huge gap. The quandary there—this is my second point—is that the question of what cathedrals are raises the question of whether there should be a charge. The chapter at Durham has obviously discussed the idea of charging for entry “many times”. However, as the BBC report says, the chapter felt that the cathedral was a public place where people should have free access for prayer and worship.
As we have heard, in England cathedrals can obtain funding from a range of agencies, including the Heritage Lottery Fund, or HLF, and English Heritage. On the latest figures, at the last grant announcement in January, HLF had requests totalling £27 million and gave out £10.3 million, so it was oversubscribed 2.6 times. We have also heard that English Heritage has seen the amount that it has to give in grants reduced from £25.9 million in 2010-11 to £15.4 million in 2012-13 as a result of government funding cuts.
There has been an interesting campaign about the way in which VAT is levied on church repairs; a number of earlier speakers mentioned that. I have taken two or three of their points, because I think they are relevant to the general questions about how we address this.
The case was made in a paper from the Church of England’s General Synod that since the largest portion of the grant aid available to support cathedrals comes from public funds, it is rather wasteful that much of the money is then recycled back to the Government through VAT. That is an important point. It has also been pointed out that the Government take more from the VAT charged on restoration works than they contribute in grants through their various bodies. There is also, of course, the more generic point that charging VAT is a disincentive to potential donors, since people are reluctant to give money that they know will end up being paid as tax.
We have some questions for the Minister and would be grateful to have them answered at the end of this debate. One of the problems about funding the church arises from the question of whether there can be a reduction specifically of VAT on church repairs and alterations. I understand that in December 2010 the current Government stated that they saw “no realistic prospect” of an agreement at EU level to allow for historic church repairs to be zero-rated. Can the Minister confirm that the Government have now given up attempting to get this concession?
In December 2010 the Government announced that the listed places of worship scheme will continue until 2014-15, with a fixed annual budget of £12 million. However, in the Second Reading debate on the Finance Bill, the Chief Secretary to the Treasury announced that he would increase the listed places of worship scheme by £5 million a year to enable churches that have alterations to benefit from the scheme and not to be adversely affected. That took us up to £17 million per annum. I have one more loop before I get to the final figure.
The Church Commissioners said that we had got to “an insecure and inadequate solution” and that the potential VAT cost faced by the Church of England could be as much as £20 million a year. At the start of the new Session, therefore, the Chancellor announced that the Government would provide an extra £30 million a year for this scheme. He said:
“That will be 100% compensation, exactly as we promised in the Budget, for the additional cost borne by churches for alterations. It should also go a long way towards helping the situation on repairs and maintenance, where in recent years they have not been able to get 100% compensation”.—[Official Report, Commons, 17/5/12; col. 731.]
Could the Minister confirm the exact figure? My noble friend Lady Warwick said that it was £42 million per year. I make it £47 million per year. It would be nice to have an exact figure. In addition, that would make HMT the biggest funder of ecclesiastical buildings in the country, which is great; a slightly novel situation. Again, it would be interesting to confirm two things that relate to that. What did the Chancellor mean when he said that this additional grant would go a “long way” towards helping the situation on repairs? Are all alterations and repairs now to be covered by that, and if so, is it the Minister’s view that the £47 million—or £42 million, whatever it is—is now sufficient?
A final and important point is this: do the Government now believe that they have all funding in place, and will they now let the funding continue to operate, as this scheme was due to end in 2015? We would be grateful for the final word on that.
Baroness Northover
My Lords, I start by thanking my noble friend Lord Cormack for securing this debate on the important issue of the future of English cathedrals. His background in this area, as others have noted, is formidable. We have also heard from many other noble Lords with great expertise, including the noble Baroness, Lady Andrews, the chair of English Heritage, and from those with long personal involvement with cathedrals. That was shown in the outstanding maiden speech of the right reverend Prelate the Bishop of Worcester and by many others. We have also heard from two former choristers, as they identified themselves: the noble Lords, Lord Howarth and Lord Rowe-Beddoe. There is a huge debt to acknowledge.
Cathedrals represent part of our most important cultural heritage. Our ancient cathedrals hark back to an earlier age of achievement and are an example of the rich architectural treasure that we must safeguard as well as enjoy. For centuries, cathedrals have been very visible signs of our Christian heritage. One need only travel towards Chichester or Salisbury to get some idea of how extraordinary the distant spires must have been in earlier, less mechanised times or industrialised eras, or to see Durham from the train. I am not going to get into a debate as to which of these amazing cathedrals should be at the head of a league table because they all have their wonders and they are all astonishing.
In medieval times they were centres of learning as well as a source of inspiration through art and architecture, and of course they were frequently the goal for pilgrims. Their ravaging at the time of the Reformation must have been traumatising for those around. Their architecture is undoubtedly some of the greatest work this country has ever produced and their impact should not be underestimated. It was excellent to hear from the noble Baroness, Lady Andrews, about the continuity of craftsmanship that helps to support our cathedrals. The noble Baroness, Lady Sherlock, mentioned the Venerable Bede. His Ecclesiastical History of the English People, which I read in Latin during my history degree, shows that the cathedral’s role as a home for items of historical significance has hardly declined over the centuries.
Cathedrals are still at the centre of Christian life, serving their local communities and visitors, as several noble Lords said. They help visitors make sense of one strand of our history. Cathedrals work closely with local schools, offering visits and courses. They are also a natural focal point for their surrounding areas and those working in them today often reach out to the wider society around them, seeking to support mothers with young children, homeless people and the local economy. Many noble Lords, particularly my noble friend Lady Byford and the right reverend Prelates the Bishops of Birmingham, Worcester and Wakefield, outlined the social impact of cathedrals today.
Preserving and maintaining such massive and outstanding buildings, most of which date back hundreds of years, is clearly a significant challenge. I have noted the different way of funding in France that was mentioned by several noble Lords. Speakers said that they did not want religious buildings to be vested in the state. There seems to be general agreement that that is not the way to do this, and therefore we must ask how best the state can engage. Recently, a number of important restoration projects were undertaken. The noble Baroness, Lady Andrews, referred to the York Minster Revealed project, which secured the conservation of the Great East Window. The Heritage Lottery Fund has already committed £10.5 million to the project. Earlier this year the fund gave a “first round pass” of more than £10 million to Winchester Cathedral for urgent works. From a total figure of more than £44.5 million of funding to cathedral projects since 1995, more than £25 million has been directed by the Heritage Lottery Fund towards the conservation of physical fabric—external stonework, stained glass, internal floors, monuments and screens. Cathedrals are encouraged to apply for funding through the fund’s open programmes, where grants of between £10,000 and £5 million can be obtained.
We have heard quite a bit about what English Heritage has been doing. In 1991 it established a dedicated grant scheme for cathedrals. We heard about how that came about and its amazing effect as it ran through to 2010. It offered £48.6 million, together with an additional £2.9 million from the Wolfson Foundation, which has also been referred to, towards the cost of repairs. Subsequently, English Heritage stopped the dedicated scheme as its 2009 cathedral fabric survey indicated that the overall state of repair of our cathedrals had improved dramatically. It is extremely encouraging to know that. Lincoln remains the only cathedral on the at-risk register, and English Heritage is supporting it. It is therefore important to note that we can be reassured that when the problems were flagged up, Governments of different persuasions took them seriously. English Heritage took forward the work. The position of cathedrals, and to a lesser degree parish churches, has been stabilised, and the debate can be set in that context. This is a very important issue, but at least the situation is more stable than it was at the beginning of the 1990s.
DCMS has a number of schemes that cathedrals can access. This year the department has allocated a one-off £1.1 million capital grant for listed places of worship. This has been allocated to the Church of England and the National Churches Trust to distribute to buildings of all denominations and faiths across the UK. The Heritage Lottery Fund focuses funding on the non-fabric aspects of buildings. For example, a £475,000 grant was awarded to the partnership between Lincoln Cathedral and Lincolnshire County Council to ensure sufficient trainees to conserve the built heritage in the area. That is extremely important.
I will move on to VAT, to which noble Lords referred. In the 2012 Budget, the Government announced that from 1 October of this year the current zero VAT rate for approved alterations to listed buildings would be replaced by the standard rate of VAT. When this was announced, the Government also committed to extending the DCMS listed places of worship grant scheme to cover any resulting VAT costs incurred by listed places of worship for alterations following the change. Listed places of worship, including cathedrals, were already eligible for grants towards VAT costs on repairs and maintenance through the scheme. It was therefore logical to extend the grant scheme to cover alterations in time for when the VAT treatment of alterations and repairs is put on the same footing. The Church of England, on behalf of all faith groups, provided evidence to the Government that further funding was needed to enable the scheme to offset successfully the impact of the VAT change. The right reverend Prelate the Bishop of London led the discussions with the Treasury, and I thank him for doing so.
Following those discussions, the Government announced that they would provide an additional £30 million of funding per year for the duration of this Parliament for the scheme. This brings the total annual funding available up to £42 million per year and will come into effect when the VAT rate applied to alterations to listed buildings changes. In answer to the noble Baroness, Lady Warwick, the noble Lord, Lord Stevenson, and others, we are confident that this additional funding will fully cover the additional costs borne by listed places of worship following the VAT change. The additional resources will also enable full compensation for repair and maintenance costs eligible under the current listed places of worship grant scheme from the beginning of this financial year. Cathedrals of all denominations across the country will be able to benefit from this funding.
Baroness Northover
I think it is best if I proceed because this is a time-limited debate, and I hope that I will cover most of the issues. If I am not able to do so, I will write to noble Lords.
Lord Howarth of Newport
I am most grateful to the noble Baroness. Will she remind her right honourable friend the Chancellor that if he increases the rate of VAT on alterations to listed buildings from zero to 20%, it will be an irrevocable step? Under European Union law, future Chancellors will not be able to roll back on that. While we are all immensely appreciative of the £100 million that was previously provided to help listed places of worship through the listed places of worship grant scheme, along with the additional £30 million that has now been promised, the continuation of a stop-gap remedy on a time-limited basis is no substitute for a proper policy.
Baroness Northover
As I mentioned to the noble Lord, this is a time-limited debate. I am coming on to other issues in a minute. I will make sure that all the issues raised in the debate are flagged up not only with DCMS—which I am temporarily covering for in the debate; it is a great pleasure to do so—but also with the Treasury. He can be reassured about that. If there are any issues that I do not pick up in my answers, I will respond to them after the debate.
I want to pick up some of the issues that noble Lords raised in the debate. Music was a key theme in various speeches, if noble Lords will excuse the mixed metaphor. It is probably rare for one to get goose bumps in debates in the House of Lords but as the noble Lord, Lord Howarth, mentioned the specific pieces of music that we can hear in cathedrals I am afraid that that is what I got. We all recognise the importance of music in cathedrals. My noble friend Lord Black made the case that great buildings need great music. They certainly have it and we recognise the importance of making sure that it is sustained. As I mentioned, we heard from two choristers. The noble Lord, Lord Howarth, and my noble friend Lord Black urged support for music.
I emphasise that the Department for Education’s music and dance scheme will this year provide just over £200,000 for around 100 bursary schemes at independent choir schools through the choir schools’ scholarship scheme established in 1991. I hope that noble Lords will be pleased to hear that. Last year the scheme provided funding for choristers at a range of cathedrals including Westminster Cathedral, York Minster, Canterbury, Lincoln and Christ Church, Oxford. I need not say that choristers are a valued part of the music and dance scheme. The Department for Education will continue to support that scheme.
It was also striking to hear what is happening with education in cathedrals. I knew something of this and of course we know of their long history and significance in the medieval period. It was encouraging to hear from my noble friend Lady Byford, the right reverend prelate the Bishop of Worcester, the noble Baronesses, Lady Sherlock and Lady Warwick, and others how important cathedrals are in terms of education for today’s children.
We also recognise how important the cathedrals are for our tourism industry. The noble Baroness, Lady Andrews, emphasised the significance of that and we are acutely aware of it: we value it greatly. I mentioned but will reiterate, particularly to my noble friend Lord Cormack, that I will flag up the concerns expressed today both to DCMS and the Treasury. My noble friend mentioned a £50 million endowment fund for the care of cathedrals which should be given to English Heritage. I noticed the noble Baroness, Lady Andrews, welcomed that notion, which did not surprise me. As I mentioned before, the Government have committed an additional £30 million a year to the listed places of worship scheme and £500 million to heritage organisations over this spending period.
My noble friend Lord Cormack and others asked whether the listed places of worship scheme would come to an end in 2015. It is not limited in that way and does not need to end then. It is guaranteed to the end of this Parliament. We have a fixed term and so we know that that will be until 2015, but the scheme may continue after that. I am sure that what noble Lords have said today will feed into the discussions that any future Government may have.
My noble friend Lord Tyler flagged up that he felt that the details of the listed places of worship scheme were not as clear as they might be. DCMS and HMT are currently carrying out a consultation with stakeholders on the details of that extended scheme. It is extremely important that that is happening so that we can make sure that everything is covered as it should be. As one would expect, the Church of England has been closely involved in discussions and the design of the scheme so far.
The noble Baroness, Lady Warwick, the noble Lord, Lord Stevenson, and others asked how confident we were that the £30 million would be sufficient. The Church of England provided the Government with evidence on the impact of the VAT changes. DCMS, the Treasury and the Church have expressed confidence that this will cover the additional costs following the VAT change and will enable 100% compensation for the repair and maintenance costs currently eligible under the scheme.
In summary, I again affirm that the Government are very much committed to supporting the preservation of cathedrals, just as we are committed to preserving the rest of our historic environment. We offer support for cathedrals through English Heritage, the Heritage Lottery Fund, the listed places of worship scheme and the DCMS capital grant, as well as schemes run by other departments. DCMS has committed more than £500 million to heritage organisations across the spending period and recently secured an extension to the listed places of worship scheme. The Government agree that it is important that cathedrals are looked after properly and provide a great deal of support for this.
This has been a stunning debate. It has taken us out of the amazing building of the House of Lords and, in our imaginations, around these cathedrals—even if they compete with each other over which is the most stunning. That was an unusual feature for a debate but made this a very important and enjoyable one. There can be no doubting the commitment to our cathedrals of those in the Chamber or of the Government.
Lord Cormack
My Lords, I am grateful to the Minister. I am told that I only have two minutes. I would love to mention every speech but I thank all those who took part in what was a wide-ranging, passionately felt and very well informed debate. I am extremely grateful. I must single out the noble Baroness, Lady Andrews, whose presence has been much appreciated by us all. What she said was even more appreciated. I must also mention with great delight the maiden speech of the right reverend Prelate the Bishop of Worcester. As my noble friend Lord Black said in his remarkable speech, it augurs well and we look forward to the right reverend Prelate’s future contributions.
This debate has united the House in expressing concern for these glorious buildings. There might be slight differences of opinion as to which is top of the list but that matters not a jot. We are talking about some of the most glorious buildings not only in this country or Europe but in the world. I derived some comfort when the Minister said that she wanted to ensure that they were safeguarded as well as enjoyed. Grateful as we all are for what she said, I hope that she will reinforce the request for the £50 million endowment. It is a very tiny sum in the national budget, as others indicated. I very much hope that something will come of that. The sums we are talking of are small.
One of the recurring themes of the debate was the wonderful contribution of choral music and the crucial importance of maintaining that tradition, which means so much to us all. When I go to Lincoln for choral evensong, as I do every day when I am there, I come away feeling inspired, refreshed and invigorated by what I have heard, and by the solemnity of the surroundings in which the glorious music took place. I feel the same on a Sunday morning after sung matins. I am delighted by the good Prayer Book services in Lincoln. I thank all noble Lords for what they said in the debate and am most grateful to them for underlining the importance of this glorious built heritage of ours.
FSA Investigation into LIBOR
(11 years, 10 months ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I will now repeat a Statement made by my right honourable friend the Chancellor of the Exchequer in another place.
“Mr Speaker, I would like to update the House on the Financial Services Authority’s investigation into the manipulation of the setting of the LIBOR and EURIBOR interest rates and the Government’s response.
The London Interbank Offered Rate or ‘LIBOR’ and the Euro Interbank Offered Rate or ‘EURIBOR’ are the benchmark reference rates that are fundamental to the workings of the UK, European and international financial markets, including markets in interest rate derivatives contracts. These contracts may sound exotic, but they are the bread and butter of our financial system and are used by businesses and public authorities every day, and they affect the mortgage payments and loan rates of millions of families and hundreds of thousands of firms, large and small. LIBOR and EURIBOR are by far the most prevalent benchmark reference rates used in euro, US dollar and sterling interest rate derivatives contracts. The outstanding interest rate contracts alone are estimated to be worth $554 trillion.
Yesterday, the FSA published notice that Barclays had, on numerous occasions, acted inappropriately and breached principles 2, 3 and 5 of the FSA’s Principles for Businesses. As a result, the FSA has imposed a financial penalty of £59.5 million on Barclays. In other words, the FSA reports that this bank, on numerous occasions, did not conduct its business with due skill, care and diligence. The bank did not take reasonable care to organise its affairs responsibly and effectively, with adequate risk management systems, and it did not observe proper standards of market conduct. As the FSA puts it,
‘Barclays’ misconduct … created the risk that the integrity of LIBOR and EURIBOR would be called into question and that confidence in or the stability of the UK financial system would be threatened’.
Barclays is not alone in this. The FSA is continuing to investigate the conduct of a number of other banks in relation to LIBOR. The FSA continues to commit significant resources to its investigations into potential attempts to manipulate LIBOR, and it continues to work with its counterparts overseas and with other authorities in the UK. The investigations concern a number of institutions both based in the UK and overseas, but it is already clear that the FSA’s investigation demonstrates systematic failures at the heart of the financial system at the time.
I want to thank Adair Turner and the team at the FSA for a very thorough piece of work. However, it begs three vital questions. First, how were such failures allowed to continue undetected and unchecked—particularly in the two years before the financial crisis, when the FSA is clear that the most serious breaches occurred, and the only motive was greed? Secondly, what changes are needed to our regulatory system in the future to prevent such abuse occurring again, and to make sure that the authorities have every power they need to hold those responsible fully to account? Thirdly, what further investigations are required into the activities at Barclays, what sanctions are available, and what questions must their chief executive answer?
First, the FSA report is a shocking indictment of the culture at banks like Barclays in the run-up to the financial crisis. The e-mail exchanges between derivative traders and the LIBOR submitters read like an epitaph to an age of irresponsibility. Through 2005, 2006, and early 2007, we see evidence of systematic greed at the expense of financial integrity and stability. They knew that what they were doing was wrong: ‘Keep a secret’, one trader tells another in February 2007, ‘If you breathe a word of this, I’m not telling you anything else’. Yet no one at Barclays prevents them, no one in the tripartite regulatory system knows anything about it, and the Government of the day were, literally, clueless about what was going on.
The FSA is clear that the most serious breaches of its Principles for Businesses occurred in the years leading up to the financial crisis. Once the crisis is under way, Barclays’ concern switches from the greed of traders to concern from the management about the reputational risk to the firm. Barclays itself raises concerns about the LIBOR with the FSA in late 2007 and 2008. Yes, the financial system was experiencing a severe stress, and markets were frozen. However, it is clear that Barclays—and potentially other banks—was still in flagrant breach of its duty to observe proper standards of market conduct and to give citizens and businesses in this country and elsewhere proper transparent information about the true price of money. Britain’s tripartite system of regulation failed us in war and in peace—and the country has paid a heavy price for that.
That brings me to the second question of how we can prevent this from ever happening again. This Government are getting rid of the whole tripartite system. The Financial Services Bill now before Parliament will create a new, far tougher regulatory system. A new Financial Conduct Authority will focus, razor-like, on market abuse and protecting consumers. We have been reviewing with the FSA and the Bank of England the operation of the LIBOR regime—which was not regulated under the last Government’s Financial Services and Markets Act. The market is already changing and the role of LIBOR is changing with it. As part of our review into LIBOR and the strength of the financial regulatory architecture, we will examine if there are any gaps in the criminal regime inherited by this Government and we will take the necessary steps to address them.
I cannot comment on possible criminal investigations for individuals involved in this activity. The authorities are exploring every avenue open to them, but shockingly, the scope of the FSA’s criminal powers granted by the previous Government does not extend to being able to impose criminal sanctions for manipulation of LIBOR. As part of our review into LIBOR and the strength of the financial regulatory architecture, we are examining whether strengthening the criminal sanctions regime for market abuse and market manipulation is warranted, and if so, we will provide for these powers quickly. In addition, next week the Government will publish a consultation in response to the report on the failure of RBS, and will consider the possibility of criminal sanctions for directors of failed banks where there is proven criminal negligence.
Under the previous Government’s regime, fines paid to the FSA are used to reduce the annual levy other financial institutions are asked to pay. I am far from convinced that in all cases this is the best use of the money. We are considering amendments to the Financial Services Bill that ensure that fines of this nature go to help the taxpaying public, not the financial industry. I have also asked my officials urgently to investigate whether this legislation could be applied to the fine imposed on Barclays. However, it is clear that what happened in Barclays and potentially other banks was completely unacceptable, and that it is symptomatic of a financial system that elevated greed above all other concerns, and brought our economy to its knees. That brings me to the final point.
As I say, a number of individuals are under formal investigation by the FSA, and this number is expected to increase as the investigations continue. The Serious Fraud Office is aware of the matters under investigation, and there are ongoing discussions between the FSA and the SFO about the evidence as it develops. As far as the chief executive of Barclays is concerned, he has some very serious questions to answer today. What did he know, and when did he know it? Who in the Barclays management is involved, and who, therefore, should pay the price? It is quite right that the Treasury Select Committee has asked him to appear urgently to account for himself and for his bank. We all want to hear his answers.
The story of irresponsibility is not over yet. Our financial services should be a source of economic strength and national pride for this country. However, failures in our banks and financial system have cost the country billions and put thousands out of work. Those responsible should be held responsible. We want our financial services to support the creation of jobs and prosperity for millions. This Government are sweeping away the regulatory system that failed. They will protect taxpayers, punish wrong-doing, and put right the wrongs of the age of irresponsibility.”
My Lords, that concludes the Statement.
Lord Tunnicliffe
My Lords, I thank the Minister for repeating the Statement made in the other place. I would like to open by saying a little about the role of this House. It is probable that we will have to take account of today’s events in amendments to the Financial Services Bill. My view of the first day in Committee on the Financial Services Bill was that it was pretty apolitical and very much about getting the right result for the country. I hope that we can carry on in that way. We will do what we can to co-operate on bringing in any changes. We must, through the usual channels, make sure that there will be time to scrutinise properly.
Turning to yesterday’s events, the first area I shall touch on is what is to be done. The Government have claimed that the Financial Services Bill would have created a different result and would have markedly improved the situation. In the Statement, there is no illustration of what that means. I would value the Minister setting out briefly what parts of the Bill are going to change. I have done my best to try to understand the Bill, and I do not see the obvious areas, but if they are there, we will help get them into law and make sure they happen. If the Minister will set those things out, it would be valuable to the House.
Secondly—I shall stop the numbers because they will go on for ever—the regulation of LIBOR and its derivatives was rejected in the other place by the Minister. I am not quite sure what the Statement says. I think it says that the Government are thinking about it. I would hope that the Minister would be a little firmer than that. Surely these things, which are so important, must come into the regulatory regime and must do so soon.
The Statement talks about criminal sanctions. Criminal sanctions are extraordinarily difficult to bring about because of the burden of criminal law. It is fair to say that you cannot find them in the current legislation, and yes, okay, it is our fault—I hope my leaders do not hear me say that. One of the reasons is that it is extraordinarily difficult to bring criminal sanctions into an area such as this where the criminal burden of proof is so high, but if the Minister can illustrate with a few examples what criminal sanctions the Government are thinking about, once again, we will listen to his remarks very attentively.
Let us move on to the victims. The Statement referred to, I think, millions of families and thousands of businesses. These people have probably lost out financially. What are the Government proposing to do about recompensing them? Are they going to bring in any law, or at least address the balance between shareholders and customers in this very difficult area of financial services? This is a scandal akin to the PPI scandal, and we have to recognise its size.
There is the issue of balance. Forgive me, but I will keep coming back to it. There is the concept that the law should contain a duty of care to customers. We are not yet at that point in the Bill, but I would welcome the views of the Minister about whether we should move across that spectrum towards customers having legal rights if, through their processes, the financial institutions they are trading with have put them at an unreasonable disadvantage. It will be difficult to frame, but we have to think about this balance and we have to be in a situation—for a number of reasons that I will come on to—where victims have real care. Finally in this section, the Financial Services Bill is a good vehicle. It will need co-operation, but we encourage the Government to do it. We must do it in a highly scrutinised way.
What is going to happen to those responsible? I am sure that if there are criminal routes, they will be taken. I point out to Members of the House that, frankly, this is not for the Government. Criminal actions and criminal prosecutions are for the appropriate prosecuting authorities, and I hope we can trust those authorities to pursue any criminal sanctions with due vigour. We would expect nothing less of them, and we will be deeply critical if they do not. The FSA probably has powers short of criminal sanctions against individuals to stop them holding office and so on. It would be valuable if the Minister could lay out a little detail. Are they available? How will they be applied?
The real sanction in this case will be in the hands of the Barclays board. It is for that board to act, and to show it is acting, in a way that sends a message that this bank is going to change how it behaves. The tests set out by the Chancellor are incomplete. It is not a matter of what the chief executive knew or when he knew it; it is what action he took to make sure that he was seeking to know and that there were processes in place to assure him that proper responsible actions were being taken by his traders. Donald Rumsfeld ruminated on this. I cannot quote him exactly, but he said something quite profound: you are responsible not just for your errors but for foreseen risks and also for foreseeable risks. Foreseeable risks are risks where, by having the right structures and systems, you can look into the future and make sure that you have got it right. That is what good auditors do, it is what good risk managers do, and it is what this bank should have been doing. It should have seen these risks much earlier.
We come finally to culture change. I have been in the culture change business. I have not run a great bank, but I ran what I consider to be a great institution that is responsible for 2 million people a day and for their lives. Less than a year before I took over, it had killed 31 people. The result was that the boss at the time was fired, after a proper inquiry, his boss was fired, and I ended up head of that organisation. The key change we made was to ensure that everybody was personally responsible. If a death occurred on the Underground, it was my responsibility. It was my responsibility not to check the particular area, but to be able to assure myself that I had done all that was reasonably practical for such a thing not to happen. Indeed, on most occasions one finds that one has learnt something or has to do something more, but all the way through the management chain individuals have to be personally responsible. That burden of responsibility to probity failed in this case.
In addition, we have to look at the bonus structure. We do not talk about bonuses bluntly enough. Frankly, you introduce bonuses to change behaviours. You change behaviours in what is arguably an acceptably benign way. You get people to work longer hours, with more vigour, to be more inventive and so on, but unfortunately a bonus culture will push you to the edge of regulation. When you do that, you have to make sure that the systems are in place to prevent that push beyond the edge of regulation. That requires enormous care and is an enormous responsibility for the board.
The culture must change in the banking industry and it must change from the top. This board must be seen to take decisive action, as indeed must all boards. This is a very, very serious day. This leaves a stain on Britain. Let us be frank about it: before today, people believed that bankers were greedy and stupid, and, sadly, they now know that they are dishonest. For the financial centre of Europe, that is a pretty unhappy combination. We are calling for the strongest punishment for those who have broken trust and broken the law, tough regulation to prevent such practices and a culture change in our banking industry. We must get our economy working, and we must remove this stain on our reputation and repair it. We on these Benches will do all we can to bring that about as quickly as possible.
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Tunnicliffe, for confirming the Opposition’s support for possible amendments to the Financial Services Bill to reflect these matters and for his frank admission that there may be lacunae in the law that now need to be plugged.
The noble Lord, Lord Tunnicliffe, asked what the Bill will do to improve matters. First, we are creating a focused conduct regulator, the FCA, which will supervise in a much more focused way than the FSA the conduct of markets because it will not have all of the prudential side to look at. The FCA’s operational objective of protecting and enhancing market integrity goes to the heart of our discussion. Because it is a self-standing body, the FCA will create a different culture and risk appetite. It will take a tougher, more proactive and more focused approach to these sorts of issues and there will be specific powers that we will discuss in detail through the Bill’s proceedings. For example, in circumstances like this, the new power of the FCA to disclose the fact that a warning notice in respect of a disciplinary matter has been issued means that the FCA will be able to disclose that it is taking action at a much earlier stage in an investigation than the FSA. So the new structure will be much better suited to dealing with this sort of problem.
There is also a lot of ongoing work to review how the LIBOR-setting process works. There are consultants involved with the BBA and the panel banks working with the FCA. There is a supervisory committee for this work on which the Treasury sits as a non-voting member but providing strategic steer for the work. I would expect findings to be published from that review within the next few months. There are all sorts of ideas floating around, such as changing the LIBOR data to actual trading data rather than the submission basis we have now and whether there should be a new LIBOR code and so on. So there are a lot of ideas, the work is well advanced and will be reported in the next few months.
The criminal law ought to be the last stage. As the noble Lord said, we have to get the culture right within the banks. We have to have appropriate powers in the FCA to be able to detect things as early as possible and take action. We need to see whether there are any gaps in the criminal law. As with the forthcoming report into RBS, there will be a consultation on whether there should be new criminal sanctions on negligent directors of failed banks. So this is very much on our mind.
The noble Lord then asked about people who have lost money. This is a difficult issue because it is not possible to know whether LIBOR has been manipulated on any particular day. It will be impossible to know what the effect of the attempted manipulation has been, if any. It is a complicated rate-setting process which means that half of the submissions that go in are excluded from the calculation. So some of these fraudulent or incorrect rates that went in—I should not presume anything that hints at criminality; that is for others—may not have got into the calculation. So we do not know whether people have benefited because the rate went up higher or lower than it should have been. People could have either benefited or lost out; it is not clear.
The noble Lord made some interesting observations about culture and management and so on. My right honourable friend did not want to list all the questions that the Treasury Committee will no doubt ask of the chief executive of Barclays but I am sure they will include one or two of the questions that the noble Lord put.
Lastly, the noble Lord talked about the stain on the banking industry. It is important to say that, although it is indeed a stain on the banking industry and that it has significant effects on London and the UK, there are also banks under investigation that are not British or headquartered and managed from the UK. There were regulatory failures in the run-up and through the financial crisis in the US and other countries. So, yes, it is a serious day for the banking industry; yes, there is a stain that needs to be dealt with; and yes, London needs to clean up its act but it is not only the UK that is involved in this.
Baroness Kramer
My Lords, the public are rightly outraged by the manipulation of interest rates and Europe is going to look more suspiciously at London just at a time when we are trying to protect the City. So there are great issues at stake.
Will the Minister explain why the FSA’s fine on Barclays is so small? As far as the company is concerned, £59.5 million is a freckle and far less than the fine in the United States. Surely it is not the senior regulator in this case. Why are there no sanctions at all—we are not just talking about criminal sanctions—against anybody senior? It is one thing to go after the traders but systematic mismanagement and manipulation of the market over four years surely affects senior people and has to engage them. The questions are to be asked by the Treasury Select Committee, which is an outstanding Committee, but surely they should be coming from the regulator with the ability to follow with direct sanctions.
Lastly, it is crucial that the Financial Services Bill is looked at again because, although we have a new form of regulator coming in the FCA, which I hope will be rigorous and effective, we must ensure in this Bill that the regulator has real teeth so that there is fear when that regulator looks again at this kind of mismanagement, and a fundamental change in behaviour.
Lord Sassoon
My Lords, I share the concerns of my noble friend. This is the largest fine ever imposed by the FSA. The US comes at this in a different way in many respects so the seriousness of the issue is demonstrated by the size of the fine in relation to anything else that has ever been done by the FSA in this country. It is the largest. The FSA sets the fines and it should do so. This has to be an independent process and I am sure nobody would want the Government involved in it.
As far as the investigations are concerned, my noble friend may be jumping ahead of the ongoing investigations by the FSA and SFO. I do not know where they will come out or who will be involved, but those investigations are going on. As for a powerful regulator for the future that is able to do this, I could not agree with her more. The FSA model completely failed. As I have already explained, the Financial Conduct Authority will be focused and will have as a core objective the integrity of markets. It will be much better placed to deal with these kinds of problems as they come up in future.
Lord Morris of Aberavon
My Lords, when I was a young barrister, I occasionally prosecuted, on behalf of the Board of Trade, persons thought to be unfit to be directors of a public company. Those cases, as I recollect, were not all that difficult. The Minister has mentioned criminal sanctions, where of course the burden of proof is the usual one and it is high. Without prejudice to a particular case, is similar procedure still available to prevent directors holding positions in future on the grounds of unfitness?
Lord Sassoon
My Lords, I am grateful to the noble and learned Lord. As I said, we have concerns about the question of directors, particularly directors of banks, to make sure that the regime is appropriate and tough enough. The regime for directors of banks, because of the special nature of their role, should be looked at on its own merits. That is why it is timely that the RBS report and consultation, going very much to this point, will be published next week by the Treasury. I hope that we will get a debate going about what is appropriate in terms of the special regime that might be appropriate for directors of failed banks if they are shown to have behaved negligently.
Baroness O'Cathain
My Lords, the Statement says that this was going on throughout 2005, 2006 and early 2007. Was it stopped in 2007, or has it been going on since then? I wonder whether it has been going on for another five years. If so, what do my Government propose that we should be doing? Can we actually believe these people?
Lord Sassoon
My Lords, on the particular case, the FSA report sets out what was going on. The important point for my noble friend is that the point of highlighting the dates which my noble friend gave was that this activity was going on before the financial crisis. It was going on in an atmosphere of greed in what were perceived to be the good times. When the financial crisis hit, the activity of the individuals at Barclays was motivated by something else, which was to do with the reputation and standing of Barclays in the market. The particular relevance of those earlier dates was to distinguish what then happened during the later period, in the financial crisis.
As the FSA and other regulators’ investigations go on, they will tell us more about the extent and duration of these activities. Given that the banks have been on warning of this for a period, I would like to think that they have taken significant steps to clean up their activity. We want to make sure that, as I have described with this ongoing review of the LIBOR system, the system is appropriate to the new market circumstances.
Lord Radice
As a former chairman of the Treasury Select Committee, I of course strongly support the idea of its investigation. Does the Minister agree that if the executives of Barclays did not know what was going on, they ought to consider their position? If they did know what was going on, they ought to resign immediately.
Lord Sassoon
My Lords, the noble Lord, Lord Radice, makes some good points, which I am sure the chief executive of Barclays will be pressed on when he comes before the successors to the noble Lord on the Treasury Select Committee.
Lord Hughes of Woodside
My Lords, in the Minister’s Statement he repeatedly says that there were failures of the regulatory system and it was matter of greed, and so on and so forth. What was going on was not a failure. It was deliberate criminal deceit. Under those circumstances, how can the Minister possibly say that criminal charges should be the last resort rather than the first resort? By all means, let us try to tidy up the system. In view of what appears to be absolute, outright criminality, we should recall that fraudsters rely on the fact that they will escape the law through such mealy-mouthed words.
Lord Sassoon
My Lords, I am certainly not going to jump to premature conclusions which are not for the Government—or, I suggest, other Members of this House—to jump to, about what is or is not criminal activity. I have made it quite clear in repeating my right honourable friend’s Statement that investigations continue by the FSA and the Serious Fraud Office. We will hear the views of the appropriate authorities in due course on these matters, but those investigations are ongoing.
Lord McAvoy
My Lords, from every noble Lord and noble Baroness who has spoken there has been consensus on the seriousness of this, and also about making sure that the appropriate steps are taken to, at the very least, prevent a repeat of it. However, moving forward should be done on the basis of honesty and not scoring cheap points. It is regrettable that the Minister used the word “clueless” to describe the previous Government. If the Government want consensus, as everyone who has spoken does, they should make sure that there is no repeat of that, or they might be asked what measures their party proposed during that time.
Lord Sassoon
My Lords, during earlier parts of today, I have criticised the former Government’s behaviour and policies on certain matters. I have commended certain things that they had done. In this case, I stand by the words of my right honourable friend the Chancellor.
Lord Foster of Bishop Auckland
Does the Minister agree that the apparently noble gesture of the directors of Barclays in waiving their bonuses this year is not good enough? I will be pretentious and say that we, the people, demand that they pay back every bit of the bonuses for the years in question.
While we are talking about this, I cannot remember—because I have been in this place for so long—whether the process of deregulation was begun by the Minister’s Government. It was the noble Baroness herself who elevated greed to a virtue. Then the whole international financial consensus pleaded with us all for soft-touch regulation. That is what they got. We were wrong, but they were wrong for exploiting it. They, and not the two Governments who have been involved, are culpable.
Lord Sassoon
My Lords, on the noble Lord’s first point, I am sure that the board of the bank in question will listen to his views on bonus matters. That is principally a matter for the board of Barclays Bank to consider.
The noble Lord, Lord McAvoy, has said that we should not get too far into prior history here. There is a risk that I will get drawn into these matters. It was Mr Gordon Brown and Mr Ed Balls who espoused very explicitly the virtues of light-touch regulation, and that was the environment in which these traders operated.
Lord Empey
My Lords, LIBOR rates could not have been interfered with by one institution alone. There would have to be accomplices. I therefore presume that that is one of the directions in which the investigation will go.
Is the time ever going to come again in this country when someone takes professional responsibility for what is going on, leaving aside the criminal activities that will be pursued by the regulatory authorities? Is no one going to take professional responsibility and suffer a professional sanction if they are found in default?
Finally, sadly, we as taxpayers own substantial numbers of banks. Can the Minister assure the House that there is no such activity in institutions that are owned or partly owned by the taxpayer?
Lord Sassoon
My Lords, on the first point made by the noble Lord, Lord Empey, as I have said, other banks are being looked at by the relevant supervisory authorities here and in other countries. All that is ongoing. I very much endorse what the noble Lord has to say about the profession taking responsibility. If the banking industry wants to be thought of as a profession, clearly it should think about how it re-establishes professional standards. I speak as a chairman of the ifs School of Finance, the former Institute of Bankers, so I feel very strongly about that and believe that the profession needs to think about it very clearly.
I am not aware of public authorities being involved. I can be pretty clear that no public body is involved in any way in the LIBOR-setting regime and therefore in what we are discussing this afternoon.
Lord Lea of Crondall
My Lords, would the noble Lord remind us of the basis of company law? In whose interests are the banks supposed to be operating? Is it, in some sense, the public interest, the customer’s interest, the worker’s interest? Whose interest is being served by the banks? Is he satisfied that there is now a general perception in this country that it is not like that at all and that the banks are operating in the interest of some people at the top of the banks?
Lord Sassoon
My Lords, I think the issue here is that, whatever the law says about the way in which the banks have to operate, the behaviour that has been exposed in this case is that of naked greed, and that is completely unacceptable whatever the legal framework. It is at heart an ethical question as much as anything else, as I see it, and is quite independent of the legal framework around it. Whatever the requirements of the boards vis-à-vis shareholders and other parties, at the heart of this—as has been exposed very clearly by these extraordinary e-mails—were individuals behaving in a most extraordinary way.
Lord Marlesford
My Lords, is not one of the most serious aspects of this whole thing the potential economic consequences that are going to come from the reputational damage to the City of London, which is so important to the British economy? Would he agree that the only way of restoring reputation from malfeasance is to seek out and deal very publicly with those who are responsible? Does he remember—I remember all too well, as I declare myself to have been a victim of it—the malfeasance in Lloyd’s of London, which was never really sorted out because no one was held to book and certainly no one suffered any particular penalty that I can recollect. One thing that they seem to be able to do in the United States is to deal very severely with individuals who are found to have misbehaved from positions of great financial responsibility.
Lord Sassoon
My Lords, I completely agree with my noble friend Lord Marlesford that the reputational consequences here are very serious. I stress the point that this is not simply a London or a UK banks’ issue as it appears. The inquiries clearly cover other regulators and other banks and we will see where they go. However, it is precisely because of the significant reputational damage that the Chancellor has come forward immediately with his response, which I repeated this afternoon.
On the question of Lloyd’s of London, without repeating the tortured and difficult history there, it is worth saying that after a long and difficult period for that market, Lloyd’s of London is at the forefront again of the world’s specialist insurance market. It has a critical position and is, I believe, stronger than ever. While we certainly do not want to go through a long and difficult period, as Lloyd’s of London did, it does show that well-regulated markets in London are capable of leading the way in innovation and value-adding in financial markets.
Lord James of Blackheath
I make one observation, perhaps as a correction of the comment made by the noble Lord, Lord Marlesford. I speak as the former chairman of the committee that created Equitas for the solution of the Lloyd’s of London problem and put in place the Equitas solution. The difficulties with Lloyd’s of London were caused, to a very large extent, by another great failure of regulation by a parallel market in America. It was not wholly a United Kingdom problem. The problems of Lloyd’s of London were exacerbated to an alarming extent by the failure of the US authorities to regulate the clubs that were put together for litigation purposes on a group class action basis relating to asbestosis, which allowed open, free entry to anyone who wanted to join, regardless of the fact that they had never been near a scrap of asbestos in their whole life. This is what created the enormity of the problem. It was a massive failure of regulation by the USA authorities that undermined a major institution, and we should not forget that. These things are never isolated.
Lord Sassoon
My Lords, I am always interested by my noble friend Lord James of Blackheath’s sometimes remarkable interventions. I think we are a little off the LIBOR case at the moment.
Education and Training: People with Hidden Disabilities
(11 years, 10 months ago)
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Lord Addington
That this House takes note of accessible education and training for those with hidden disabilities such as dyslexia and autism.
Lord Addington
My Lords, first, I thank everyone who has taken the trouble to put their names down for this debate. I must also declare a series of interests. I am not only dyslexic but vice-president of the British Dyslexia Association and patron of the Adult Dyslexia Organisation, and I work for Microlink, a company that provides support for those with disabilities and of which I am chairman.
When I linked autism and dyslexia and included them in hidden disabilities, the main point that I was trying to make was that anything that is not easily spotted at the start of the educational process, whenever someone chooses to take that, leads to problems if it impedes one’s learning or classroom situation. How early one gets in and identifies the problem is crucial.
I will say only a few words on autism, starting with Asperger’s, for the simple reason that there are many people in the Chamber who know far more about the subject and can talk from greater depth of knowledge than I will ever be able to. Those with Asperger’s, who are on the edge of a spectrum, are often identified later as a result of interaction with other people outside the home when it becomes less difficult to spot. This would be made much easier if someone was trained in the initial stages of education and in the classroom, and indeed if that training was not a limited introduction, to be able to spot it later on as problems start to manifest themselves, often simply because they were not dealt with earlier.
The problems of social interaction—taking things too literally; not being able to communicate properly; non-verbal communication, which is so important even when talking in this Chamber—create other problems if they are not picked up. We must have someone who can recognise these problems and get in earlier. I am really calling for people to be trained throughout the education process to pick these up. Also, education and training are supposed to be lifelong. All conditions for which there is not this embedded knowledge, and even sometimes when there is, are going to be spotted later on in life. Therefore, we must not limit ourselves to training just in the education sector.
I appreciate that the noble Lord, Lord Hill, may find himself having questions directed at him that might go to BIS, to the Department for Work and Pensions, or to the Department of Health—certainly in the case of autism. We had a little exchange earlier in the week when he asked what the best lead department would be to drive something. I suggest that when it comes to some of these conditions, the Department for Education could be of the most benefit, certainly for dyslexics. The basic few examples that I have given for autism and dyslexia are very clearly there.
A good point is dyslexia, because the problem occurs when one starts to use written language. Dyslexia, which I believe means “difficulty with words” in Greek, becomes apparent of course when one starts to learn to read and write. To access all forms of education and training in our society as we are going through, one has to have those two basic skills. If you do not deal with those, you are at an eternal disadvantage.
This situation is getting more prominent—I was about to say worse—for the simple reason that as we formalise our skill base more, measure it and try to support people, there are more and more occasions when you have to write something down or react to written information. Whether it is on paper or on the screen, that requirement is always there. There is a greater emphasis on the written paper in the modern driving test, as opposed to the one that I took. I do not have to go on much further because we can all think of examples. That is what we have if we do not deal with the situation for certain people.
It is reckoned that 10% of the population are on the dyslexia spectrum. I think it is 1% for autism. We could have mentioned many other hidden spectrums, such as ADHD, dyspraxia and dyscalculia. We are probably getting up to about 15% without trying. I do not know what that percentage is in every classroom, but it is a very high one, so we must have a degree of knowledge based in that classroom for early intervention.
Why have I brought this matter forward at this present time? It is because we are having a look at the whole special educational needs sector—we are coming down the track. The Government have made proposals. However, I do not know whether this was intentional—I hope that it was not—but the people concerned with these non-obvious disabilities have heard warning bells rung by some of the language that was used. This may be a chance for the Minister to muffle those bells a little in the process of his speech. I refer to things like, “We will concentrate on things and get a whole cross-departmental approach towards making sure that people go through. We will cut down the number of people on the special educational needs register. We will concentrate better”.
Unless we have people with expertise based in the front, identifying the problem, we cannot do these things. Even if we redefine someone with dyslexia as not having a special educational need, because the system can use it, they are still dyslexic, and dyslexic throughout their lives. It is not something that you get rid of; it is a disability and it is to do with the organisation of your brain. It is there for ever, as I know to my cost.
Aside from this, going into my personal history, I wonder how many other people in this Chamber have been congratulated on their improving handwriting on Christmas cards in their forties.
Lord Addington
My noble friend says “the opposite”. I look forward to hearing from him later on.
It is something that stays with you, and you have a different developmental pattern. Sir Jim Rose said in his report:
“Dyslexia is a learning difficulty that primarily affects the skills involved in accurate and fluent word reading and spelling … Characteristic features of dyslexia are difficulties in phonological awareness”—
I shall not try to say that twice—
“verbal memory and verbal processing speed … Dyslexia occurs across the range of intellectual abilities”.
There is a great deal more in that vein to be found in the document from Dyslexia Action. It is always there, and you will always have a different learning process, which means that every time you go into a new phase of your educational and training process you will always have the problem. The way in which it is dealt with will change over time, as will the way in which you deal with it and your interactions with other people. That will change under the pressures on you, but it is always there. If we get teachers trained initially and then make sure that others throughout the system have the support and knowledge of what was happening, we will take a huge step forward. We must make sure that the interaction and the different learning process never become a barrier. We must allow people to explain it.
If someone has the condition explained to them, they start to be able to take the appropriate steps to mitigate the condition. If a teacher goes up to a child and says, “You’re not stupid, you’re dyslexic”, that teacher and all other teachers have an infinitely better chance of a positive relationship than they would if they did not identify the problem. You can then go and tell the parents. The dyslexia world is full of the recurring story of parents saying, “My child is dyslexic and I have discovered that I am”. How do people get through life? They will say, “I never take notes—I always ask someone to do it for me”—as a result of having never kept a pen on their person for more than about three seconds at a time. They are dependent on partners, and so on. Those are the success stories.
In our prison population, about 70% or 80% are reckoned to have problems with literacy. Every single assessment of the prison population that has looked at it has come up with the figure of about 50% being in the dyslexia spectrum. If you take on board the idea that if you cannot access education you cannot access training because you cannot go through the process with a technical ability to read and write—and thus you cannot get employment—you have a far greater likelihood of becoming an offender. Asperger’s, I am afraid, is also highly represented. Possibly not communicating as other people do might lead to conflict. It is a very complicated and worrying situation. If you do not get in there early and coherently, it will cause problems.
What do I want done? Sir Jim Rose presented, under the previous Government, a model for the better training of dyslexics within the teacher training programme. You have to make sure that that is used not only in the initial training but throughout the system. Throughout the process of training, it is equally appropriate. The noble Baroness, Lady Wilcox, might well be able to regale my noble friend on the Front Bench with the long series of meetings that we have had over apprenticeships. The previous Government decided that they would reassure employers about standards in training and said that everyone must pass an English key skills—now functional skills—test. When challenged on this, they said that they would make a change, but I think that it fell through the cracks in the changeover of Governments. All I know is that I have spent the better part of two years chasing around to get those people the same support and help to get an apprenticeship that you currently have to get a degree—or at least for there to be no greater barriers.
At the last meeting I had, it was agreed that assisted technology could probably be used to get through this test. Someone said, “Well, no one has complained about it—we haven’t had one letter or e-mail”. You get that degree of resistance further up. I have had meetings with the Department for Work and Pensions, usually under the last Government. There is nothing new here. They said, “Well, yes, we’ve got people with needs who are long-term unemployed. We should help them”. “How?” “Oh, it’s complicated—we’d have to get more training packages”. “Yes, please do”. The Department for Education is uniquely placed to set a precedent for good training and awareness. That department can drive this. If it cannot, it can at least build the engine and hope that someone else will put their foot on the accelerator.
We must do something here to address the problem. Some 10% of the population with dyslexia are underachieving in many cases, sometimes becoming a drag on our society. The figures for autism might be smaller, but the problem is as profound, man for man, if not more so. We have to try to address the problem, but we will not do so unless we get a greater degree of awareness throughout the system. We have to get agreement. Every time a dyslexic has to deal with a form, they are at a disadvantage. Every time you ask someone to fill in a process that has anything to do with reading and writing, a dyslexic is potentially disadvantaged. We have to make sure that at all these points there is someone there who understands and, when you say, “I am dyslexic”, will understand that slight adaptions should be made. Assistive voice to text and text to voice technology is very old beer now. I have been using it personally for over 12 years. It is now comparatively easy to use. We have a way forward. This is something that could be integrated into the classroom more easily. It need not be that big a problem—all you need is slightly different patterns of dealing with this.
I look forward to hearing from my noble friend when he replies that the Government are taking this on board and that his department is driving this through the whole machinery of government. If it does not do so and merely concentrates on the schools aspect, it will leave people with a wonderful set of skills for one part of their lives and leave them to fall off a cliff the next.
Baroness Browning
My Lords, I refer the House to the Register with my interest in autism charities. It is a great privilege to follow my noble friend who has brought the debate to the Floor of the House today. He is a passionate advocate, particularly for those with dyslexia, and also always speaks out for those with what he termed—I think quite rightly—the “hidden disabilities”. As he said, somebody can meet someone they do not know, talk to them, observe them and not think that there is a problem—particularly with dyslexics and those with autism, and those on the more able end of the autistic spectrum such as people with Asperger’s syndrome.
Although there is still so much more to do, we know that several things have been done that have improved matters for all these children. When I started out as an MP more than 20 years ago, I remember in my constituency casework meeting professionals both in education and in health—doctors and teachers—who denied that autism or dyslexia existed at all. There were parents in my constituency who were paying privately for their dyslexic children to have tuition on Saturday while their classroom teachers denied that such a condition existed.
It has been a real battle to get autism up the agenda. Of course, both Houses agreed in the previous Parliament to an Autism Act. I say to my noble friend that I am increasingly concerned at the number of government departments that seem to be oblivious to the fact that there is an Autism Act on the statute book. Yes, it does focus very much on health, social care and integration—but it particularly affects those in transition out of education through those very difficult years into adulthood. I urge my noble friend—as I have urged other colleagues in other government departments—to make sure that, when they are legislating and looking at codes of practice, they look at what the House has determined should be the future for people coming out of education who are on the autistic spectrum.
In the classroom there are so many things that relate both to dyslexia and to the more able children on the autistic spectrum. I was very interested to see the article, “Dyslexia Still Matters”, in Dyslexia Action, which sets out effective practice that would make a difference. There were four very simple points, any of which could apply to autism as well. The first referred to:
“A whole school ethos that respects individuals’ differences, maintains high expectations for all”.
We know that children who are different in any way very quickly become subject to playground bullying and name-calling. All too often in a classroom situation it will become apparent to other children that they are struggling with the work. This of course applies to both autism and dyslexia. I hope that we have gone past the stage where they are subject to name-calling by teachers. That sounds rather shocking but I can think of several examples where teachers told children that they were “thick”. These memories will have remained with them well into their adulthood. One can only speculate on the impact that this had on both their self-confidence and their ability and willingness to learn in later life.
Dyslexia Action also refers to:
“Knowledgeable and sensitive teachers who understand the processes of learning”.
I am a great advocate of integrated education for children with a whole range of disabilities but I draw a line where the school does not understand the condition well enough to take those practical steps—very often environmental ones—that will enable a child to learn. I emphasise “learn” because there are children who because of their nature sit passively at the back of the classroom and allow education to wash over them year after year. It is quite common, for example, that children with autism are very sensitive to light and noise—even to the noise of a lot of children talking in close proximity. They struggle to concentrate and hold on to thought processes and eventually give up.
What happens to those children? It is not rocket science. There have been enough studies into this for us to be able to deal with it. It should not be an ongoing problem. These children start to develop what we might describe as challenging behaviour in the classroom. The children—particularly the autistic ones—who start to chuck the chairs about are the ones who suddenly get the attention. The ones who sit quietly at the back and end their school days without the benefit of the proper education that their intelligence tells you that they were clearly capable of obtaining—they are the ones we are letting down. I come back to those who start throwing the furniture about. Challenging behaviour is difficult for any teacher in a classroom setting. We are all aware of the need for the teacher to think of the whole class and not just that one child who, on an ongoing basis, may be disrupting the education of the others.
I must say to my noble friend that I have concerns and have had them for a long time. Although the Government—and the previous Government—no longer believe that so many statements should be issued, one of the reasons for trying to obtain a statement for a difficult child in a classroom setting concerns the allocation of extra teaching hours for a teaching assistant. All too often that teaching assistant is not trained in the needs of that individual child—whether dyslexic, dyspraxic or autistic—but is used all too often to assist the teacher with the general management of the class as a whole. Therefore, the need for the individual child who has a statement of educational needs to really motor on with their education is something that, very often, is not addressed just by having a teaching assistant in the classroom, particularly in respect to autistic children.
Of course, autistic children are different. It is a danger to just lump them all together. Their needs will be different. They are individuals. Their teaching needs will be best addressed by an environment and a teaching process that recognise what those needs are—which needs to be put together after very careful assessment. If we are going down the route of not having as many statements—I am a great advocate of statements; I cannot think of how many constituents I have gone into battle for who wanted a statement or challenged one, and I feel that statementing helped a great many children—there is at least a need for all children, statemented or not, to come through education with their needs being assessed and recognised. That is important not just while they are in the classroom; it is equally important when they go through that transitional period of adolescence and into adulthood, when they may need to access training such as apprenticeships, further education or, in many cases, higher education, which a great many of these children are capable of obtaining if they have the right package of support.
I want to share something with my noble friend. I suspect that his colleague in another place, Sarah Teather, will already be aware of it because on 11 July she will address the All-Party Parliamentary Group for Autism. The group has put together recommendations that we believe should apply to all autistic children. This will read across to other children. The recommendations are that every school should have a lead teacher for autism, and that all children and young people with autism and special educational needs should have an action plan, whether or not they have a statement, so that as they move through the transition period a record of what their educational needs were in school can go with them. The thing about children and education is that how you communicate with them when they have a communication disorder will apply as much when they become adults as it did when they were in the classroom. We are now talking about skills and services for life because, as my noble friend said, they will have this condition throughout adulthood—it does not apply only to the classroom.
The all-party group also recommends that there should be meaningful support for all young people with autism and SEN up to 25 years of age, including those who are not in further education. Some of these children, including some of the brightest, take a few more years than other people, because of their needs, to get there. If you do not give them the opportunity, the cut-off points in terms of their age can be detrimental. We have had debates in this House about the need to consider the needs of children through to age 25, and I think that the Government have been receptive. I hope that my noble friend will accept this.
Of the adult community with autism, 60% rely on their families for financial support and 40% live with their parents. Many people who have adult children with autism and other types of lifelong disability would recognise immediately that parenting is for life—it is for as long as you can continue to support that child. There are, therefore, very elderly pensioners supporting pension-age children. That is not unusual. It is important that we address the fact that many of these adults are sitting at home without the training or opportunity to make the positive contribution that many of them would like to make. That does not mean that you can just fix them up with a job. I commend my noble friend Lord Freud, who is not here, for personally taking a great interest in seeking to raise the number of people with Asperger’s syndrome who get into work. He has set up a group that is liaising with employers to show them that such people, with the right package of support, can make a great contribution to their own independence in paid employment and to the economy of the country.
However, we should recognise that some issues regarding disabilities in training and employment in the workplace are more easily resolved than others. Some adaptations for disabilities, after management has been made aware and has put in practical adaptations, do not subsequently take up any management time. This is particularly the case with the Asperger’s group. They need ongoing support in the workplace—although not to do the job; they can do some high-level jobs—and someone who understands how they function. How the individual functions and what works for them is as important in the classroom as it is in the workplace. We should help them make that transition and give them as much support and education in the workplace as we provide in the classroom.
Lord Morris of Aberavon
My Lords, I sincerely congratulate the noble Lord on winning the ballot for this very important debate on the disabled. I want to widen the range of his examples, because there are others who are disabled in different ways and there are general lessons to be learnt from the problems arising from how we deal, or fail to deal, with one form of disability, which then reflects on somebody else. I note the remarks of the noble Baroness who has just sat down on the importance of parenting, which is a lifetime problem. That is significant, too, for the disability that I will deal with.
I take part in this debate without any expertise whatever, not even “a veneer of expertise”, as Mr Clegg has apparently said. I declare an interest as one of my grandchildren suffers from type 1 diabetes. It is a disability that is particularly acute for the young. I am happy to say that he is able to do most things except contact sports such as rugby, which is a pity. He sails, fences and skis, which pose no difficulty. I have been trying for some time to get separate figures for research into type 1 diabetes, as opposed to type 2, the latter of which affects, in the main, older people. Type 1 sufferers—the young in the main—are growing in number at an alarming rate. At last, I think I am making a breakthrough in the answers I am getting, which I appreciate. I believe I heard the Minister, some months ago, responding to a question on the issue of education for the disabled. He was both understanding and appreciative, and I said that if the opportunity arose I might say something in the future. I believe it is only in recent years that some of the difficulties of children with problems, sometimes underlying ones, are being understood better and allowances made for them.
When I was at school, and even while my children were small, the problems of a child with dyslexia were not properly taken account of. Today’s report from Dyslexia Action states:
“Knowledge, understanding and expertise is patchy and Dyslexia Action too often still hears accounts of parents struggling to have their concerns recognised and addressed at school”.
That was the tenor of some of the remarks. The report goes on to say:
“Difficulties in their children’s learning are not picked up early enough”.
I say no more.
I return to type 1 diabetes. I attended a meeting in the House only this week on the research that is taking place on type 1. However, I fear a real breakthrough on causes and treatment is yet to come. The causes are not properly understood and more research on such things as artificial pancreases is required. Despite all the care in the world, and even with the modern pumps that are worn by children, there is no assurance that the sugar/blood condition, if that is the correct term, is correct at all times. The problem can be particularly acute at night and I would not weary the House by reciting the number of telephone calls that sometimes have to be made at night to an absent parent, of the type the noble Baroness referred to, when the child is away on school activities.
As far as education is concerned, it boils down to this: there is no guarantee what condition the child with this problem will be in the next morning. It is an unremitting battle to take every step to avoid a hypoglycaemic event—the right blood-sugar level is crucial. If a child has had a difficult night, even if he avoids a hypo, I suspect he is not in as good a frame of mind as his counterparts to face difficult and testing exams. It is very bad luck indeed if he has had a hypo the night before or even an unacceptable blood-sugar level. Should one make allowances for this kind of disability or for any other disability?
In a different world, I read of questions being asked about some notable individuals who have distinguished themselves in Paralympics in the past and I read press reports as to whether they were really as disabled as it was thought at the time. As a criminal lawyer, who has had the privilege of examining and cross-examining medical experts over the years in a whole range of cases and conditions, I know that some judgments in these fields frequently have a degree of subjectivity. Hence, the inevitable difficulty of getting acceptable yardsticks on which to make allowances.
I do not wish to traverse subjects such as cot deaths but we will all have read about the cases, some of which I have been involved in, that involve a huge amount of controversy. Part of the difficulty of getting yardsticks is that the degree of subjectivity can be very high.
I fear that I have no real answer to the question of how best to deal educationally with a child who has been close to or, worse still, has developed a hypo the night before his exams. Perhaps the way forward—this point has general application—is for examiners to have some sort of guidelines concerning the need, to be accepted by preliminary identification. I have dealt with one disability but the same applies to the kinds of cases on which the noble Lord has concentrated.
The answer—these are only suggestions—may be to provide extra time in an exam for any child with a disability, or perhaps, appreciating the problems that might be entailed, some flexibility over the timing, perhaps postponing an examination for just a few hours. Such conditions would be helpful in ensuring recognition of the problems of any disabled child, whatever his disabilities. A temporary blip in a child’s condition should not be allowed to endanger a proper assessment of his talents or perhaps handicap him unnecessarily in his further educational prospects.
Baroness Walmsley
My Lords, I, too, congratulate my noble friend Lord Addington on securing this important debate.
When reading the briefing material that came to those of us who had our names down to speak in this debate, there was one particular statistic that jumped out at me. It was that, in a study carried out in 2003, 41% of a sample of 1,000 unemployed people were dyslexic. I do not know whether there has been an update, because that was almost 10 years ago, but it is a pretty damning figure. Therefore, if your Lordships do not mind, I am going to stretch the topic of this debate very slightly beyond education and training into the employment which we hope will result from them and which is an important component of a fulfilled life.
An example from the Dyslexia Foundation about an organisation called Training Plus Merseyside in my city of origin, Liverpool, was instructive. In 2004, it was told that 4% of its clients had a special educational need. It obviously had a hunch that this was a gross underestimate, so it did something about it. It did some staff training, invested in screening tools, paid for psychological assessment and used ICT interventions, and it found that the real figure was nearer to 30%. What that tells me is that, at least at that time, the number of people slipping through the diagnosis net at school was far too large and many of those were landing up as NEET—not in education, employment or training. Indeed, all young people with disabilities are two and a half times more likely to fall into the NEET category than their fully able peers. Of course, there is a large cost, both personal and economic, to this, so we need to get it right at the education stage before the situation becomes entrenched.
The Government understand the importance of early diagnosis and intervention and have announced professional assessments of children’s health and development at the ages of two and five, as well as the phonics check at year one in primary school. I hope one can assume that the two and five year-olds’ checks are done by multidisciplinary, experienced professionals, but the phonics test will be administered by ordinary classroom teachers. That is why it is so essential that all teachers, in their initial training, have a meaningful SEN unit, including information about how to recognise and source appropriate help for children who achieve low scores in the phonics test and who therefore may suffer from dyslexia at some level.
Of course, it is far more likely that the parents will have noticed a problem—particularly with that other hidden disability, ASD—long before the child goes to primary school. It is really sad that so many of them say that they struggle to access appropriate care in therapies. I met a parent recently who noticed something wrong when their child was two and sought medical advice when he was two and a half. The doctors would not intervene until he was three, by which time his fairly normal vocabulary for his age at two had all but disappeared.
For parents with a child with severe ASD, working with their child and supporting him through his therapy and exercises is a full-time job. It is an enormous commitment, often meaning that they have to give up their own career, with the resultant stress on the family budget. However, if the condition is caught early enough and appropriate interventions are provided, the results can allow that disabled young person to be quite functional and lead a pretty normal life. However, adjustments have to be made in the education and work place and the person supported to reach his full educational potential and then become a productive worker. Even NICE says that this is a cost-effective intervention.
In schools, if the condition is not detected, as Charlie Taylor, the Government's behaviour adviser told the education Select Committee this week, it can result in bad behaviour. The noble Baroness, Lady Browning, has given us some graphic examples of that. As he pointed out, this is not the child's fault and should not be treated as such. Sadly, many employers also do not understand the conditions that we are talking about today and make no allowances.
Another thing that struck me in the briefings was the statement from Ambitious about Autism that:
“At 16, young disabled people hold the same aspirations to stay in education and find fulfilling careers as their non disabled peers”.
Well, of course they do; but, sadly, only one child in four with autism continues their education beyond school due to lack of suitable courses and lack of support. However, many do persist and get university degrees. When you think of the struggle that they have had, it is tragic to learn that a quarter of graduates with autism are unemployed. That is much higher for their age group despite the fact that seven out of 10 employers who have autistic employees report a very positive experience and would recommend employing people with autism to other employers. It is a terrible waste of talent after such a struggle. It is no wonder that many of them succumb to mental health problems, welfare dependency, and so on. This must change.
The Government have introduced the Youth Contract to help unemployed young people to get into work, and I think we can safely assume that many of them will have dyslexia or autism, or may be somewhere on either of those spectrums. Can my noble friend the Minister tell me what special provision is being made within the Youth Contract for these young people? If it is not for them, who is it for? It is doubly important that these young people are catered for with appropriate courses and support into work, especially in the light of the impending duty to stay in education or training until the age of 17 and then 18.
I return to education and the much more common condition of dyslexia. The Government have made clear their deep commitment to improving literacy. They are also changing and improving initial teacher training and continuing professional development. These two things go together. In this country we work with teachers to improve their practice. We do not sack head teachers on national television, as Michelle Rhee, the director of education in Washington DC did. We have nothing to learn from a city that let its schools get into such a bad state, where half of 15 year-olds were illiterate and 1,000 teachers were considered incompetent. Things are different here.
Will my noble friend the Minister say whether all the future vehicles for initial teacher training—including the ones in the new training schools—will have a compulsory SEN component, including training in how to recognise dyslexia and how to access the right support? Can he also say what is being done about teaching assistants? Again, the noble Baroness, Lady Browning, mentioned their importance. They are now an indispensible component of the staff of modern schools—especially primary schools—so it is vital that they have opportunities to specialise in supporting teachers with children with disabilities or special needs in their classrooms—which, actually, is most of them—and that they have a clear career path if that is the way they want to go. Can the Minister say something about that?
It surprised me recently to discover that the Open University teaching courses, often used by teaching assistants to move on to be a full teacher, do not have the option to specialise in SEN. One has to do a general teaching degree first. This is a pity as many teaching assistants already have good experience with children with special needs and could do well on a specialist teaching course. If this is not correct, I hope someone will give me the information.
As we have heard, Dyslexia Action is calling for a national dyslexia and literacy strategy. You cannot have a literacy strategy without addressing dyslexia. As the noble Baroness, Lady Browning, has pointed out, there are four simple key elements: whole school ethos; knowledgeable teachers; creative adaptations to classroom practice so that all children can be included; and access to additional learning programmes and sufficient resources. This does not seem too much to ask and I hope the Minister can assure us that this will happen.
Lord Ramsbotham
My Lords, I, too, thank the noble Lord, Lord Addington, and congratulate him on obtaining this debate. Like other noble Lords, I admire the determination with which he has pursued these issues on many occasions in the House. I welcome the fact that we are debating this issue with the Minister because, from our exchanges both during education Bills and subsequently, I know what a keen interest he takes in these matters. Knowing that we are dealing with and talking to someone who has such an interest is encouraging for those of us who have concerns in this area.
I, too, have benefitted from the briefing that we have had for this debate, particularly from Dyslexia Action. However, I do not want to speak only about dyslexia because I find from the briefings that I get from organisations in all the various parts of the spectrum—ADHD, autism and so on—that they all have similar areas of concern. The best thing we can do is to bring all those groups and their concerns together and try to unite them in a common strategy. After all, the process is the same, as I shall discuss, and it is only individuals with particular problems who have to be treated differently within an overall strategy.
I declare an interest as chairman of the All-Party Group on Speech and Language Difficulties. Currently we are conducting an inquiry into the links between speech, language and communication needs and social disadvantage. I shall mention some of the emerging evidence that we are getting because it is relevant to this issue. In that connection, we have had two days of evidence this week, which I have found the most valuable and inspiring days I have spent in this House, listening to practitioners in the field.
As I have explained to the House, my motivation stems from an experience in a young offender establishment in Scotland when the governor said to me that if he had to get rid of all his staff, the last one out of the gate would be his speech and language therapist. When I asked why, he explained that the offenders could not communicate either with each other or with the staff, and until and unless they could, no one knew what to do with and for them.
I met the marvellous woman who was carrying out this work and asked her what she did. She said she had assessed them all and found hideous shortcomings, which she was able to do something about. I asked her who was the best person in England to do this work and she named a professor at Surrey University, who I asked to come with me into a young offender establishment, and she did. She assessed the boys there and found all kinds of things which were not being picked up in other assessments conducted in reading, writing and other skills.
These include substance-abuse-induced memory loss, hearing problems and sight problems. Most telling of all, however, 100% had the communication difficulties associated with 1% of the population. Clearly, there is a link in all this. I will not bore the House, but subsequent work in putting two speech and language therapists into young offender institutions for two years, academically evaluated, proved within a month that they were an absolutely essential part of the establishment.
Secondly, it identified very clearly that picking up these problems at the age of 15 was far, far too late. It has got to be done earlier. It is not just being able to engage with the people who were looking after them in the young offender establishment; they had missed out on being able to engage with teachers throughout the whole process of life until then. No doubt, that failure had a lot to do with the fact that they were in those establishments. A statement was made to me, which I have never forgotten, that the inability to communicate was the scourge of the 20th century, and it is certainly that of the 21st century. I couple that sentiment with two other statements that I have repeated on many occasions in this House. One was the marvellous remark of Winston Churchill’s in 1910 that,
“there is a treasure, if you can only find it, in the heart of every man”,
with the clear implication that it is your duty to find it. Secondly, it is my firm belief that the only raw material that every nation has in common is its people, and woe betide it if it does not do everything that it can to identify, nurture and develop the talents of all its people, because if it does not and it fails, it has only itself to blame.
Thinking that through, therefore, I am very concerned that people with hidden difficulties and disabilities which could be identified early must have them identified, so that the talents and the treasure can be nurtured and developed not just for their benefit, but for the benefit of the nation as a whole. In preparing for this debate, I looked at my shelves upstairs and I was staggered at the amount of information and the number of reports on the subject. For instance, we had the Bercow report of 2008; the Department for Children, Schools and Families’ better communication plan; the Field report on the foundation years; the Marmot review of health inequalities; the Allen report on early intervention; a joint consultation on the new approach to special educational needs from the Department for Education and Department of Health; the Department for Education’s statutory framework for the early years; the 2012 Green Paper and the pathfinders; and, only today, another document from Dyslexia Action, Dyslexia Still Matters. These reports, together with masses of papers from the Communications Commissioner, the Children’s Commissioner and many practitioners, all say the same thing: that if we are going to make progress, we must intervene early—and the earlier the better—to discover difficulties and disabilities and do something about them as soon as possible.
I turn to the evidence that we have been hearing. I was very pleased to hear from the Department of Health that four new service models are being produced jointly by that department and the Department for Education, together with royal colleges, health visitors, UNISON and others, with pathways for parents, children and practitioners. Two have already been introduced; one for pregnancy and the early weeks of life and one for pre- and early school from two to 10. Another two will be introduced for the nine to 19 year-olds. Furthermore, I am glad to see that there is one for the criminal justice system. There is clear evidence in this that the health and well-being boards which were formed in the recent Health and Social Care Bill have a very important part to play in this. Interestingly, however, a number of our witnesses have said how much they wish that the phrase “mental health” was eliminated from our vocabulary and “mental well-being” was used instead. It is a much more satisfactory term; “well-being’ is a “doing” word, and might make people understand the problem better.
I come to the practicalities. We heard from a health visitor and a speech and language therapist from Northern Ireland that compulsory assessments are being conducted on every child at the age of two, and that health visitors have been trained by speech and language therapists to understand the symptoms they are looking for. They are picking up difficulties as well as disabilities, which is enormously encouraging. Northern Ireland has an advantage in that health and social care work together, which is not the case all over the country. The witnesses highlighted how hugely important this is because otherwise you begin to get fragmentation, which is difficult to deal with.
We then heard what is being achieved in Stoke-on-Trent. It has adopted a motto to the effect that communication is everyone’s business and regards intervention as a multi-agency activity. Some 5,000 people have been trained to identify symptoms. They are not only teachers and parents, but policemen and voluntary sector workers. People are on the lookout for these things and the response is co-ordinated. Stoke has developed a staged pathway which I believe is a model that others could follow with advantage. Indeed, Staffordshire has been fortunate to have had for many years some visionary people working in this area, with research that goes back 10 years showing the benefit of taking this sort of work further.
We heard from representatives of children’s services and speech and language therapists in Walsall. They realised that children entering secondary school had also not had problems identified. They have been assessing people as they enter secondary school. They have been doing this as a pilot for three years and they have some interesting data. Moreover, some schools have found that they have to do these assessments not just when pupils arrive, but at various stages of their passage through the school. I hope that that is not something which will be dismissed. It was interesting to note that after our evidence session, the people from Stoke married up, if you like, with the people from Walsall because they clearly reckoned that they had something to learn; you have to carry on beyond the early years.
Carrying on is the lesson in some excellent work that has been devised by the English Speaking Board for enhancing employability. What is absolutely crucial is the word “transition”. Whatever we do with those who have hidden disabilities and difficulties, having found them, we have to concentrate on the transitions from stage to stage not only throughout their education but on leaving school and making the transition into the workplace, and then on through life.
Later in the year we shall issue a report about this. It will say, frankly, that we think this is an area that needs national oversight. We are concerned that local authorities will be responsible for certain parts of it, with the healthcare and teaching sectors responsible for others. Unless someone pulls all this together, people will continue to fall through the cracks.
The other message that comes through strongly in the report I saw today from Dyslexia Action is that the solutions lie in using existing knowledge and good practice because there is masses of it out there. Rather than reinvent the wheel, for heaven’s sake, let us exploit the valuable expertise and experience of the marvellous people who do this terrific work.
As the title of this debate suggests, it is essential that appropriate teaching and training are available and accessible to all people according to their ability and talent. The ethos of the English Speaking Board is that every person is an individual with unique capabilities and problems who must not be compared with another; rather, each must be judged on their own merits. I hope that the Minister will be able to assure the House that a national approach which makes certain that people are not allowed to slip through the net from the moment of an early assessment at two years of age is what the practice will be, and that what is done in Northern Ireland will become common practice throughout the whole of the United Kingdom.
Lord Touhig
My Lords, we are indeed indebted to the noble Lord, Lord Addington, for securing this debate and also for the very powerful advocacy that he displayed when he opened it this afternoon. Finding a job is difficult enough these days, especially if you are a young person. Consider how much harder it is if you are disabled. In particular, if you are a young person with learning and developmental disabilities, accessing the right support and opportunities to find a job is especially challenging. On top of this, you are part of a substantial cohort of young people with special educational needs and disabilities, all of whom are likely to be unemployed, too.
In 2009, the Department for Education showed that 30% of young people who had a statement of special educational needs when they were doing their GCSEs, and 22% of young people with a declared disability, were not in education, employment or training when they reached the age of 18. This compares with just 13% of their peers. The Department for Education’s National Pupil Database 2009-10 reveals that just 20% of children with special educational needs and statements achieved five A*-C grades—less than one-quarter of the rate for children without special educational needs.
One person in every 100 has autism. Consider the detrimental effect that this has on the employment prospects for adults with autism. Too many autistic children and their families are being let down by the special educational needs system and are struggling to access the support that they need. That is why I and a great many others welcome the Government’s decision to reform the system through the forthcoming children and families Bill.
The noble Baroness, Lady Browning, has been a great champion and we all admire the hard work she does on behalf of people with autism. She referred to the All-Party Group on Autism’s recent report, The Right Start: Reforming the System for Children with Autism, of which I have a copy. As a result of publishing the report, we will press the Government to ensure that the legislative opportunities down the tracks for change will benefit all children with special educational needs, especially and including those with autism.
Our report, which is based on a public survey and expert evidence from young people with autism, parents, teachers and professionals, leaves us believing that the Government’s forthcoming legislation is perhaps a once-in-a-generation opportunity to make some significant change and improvement. Briefly, I will draw the House’s attention to just five key points from the all-party group report. They cover training and best practice; specialist support at school; involvement of parents and young people; transition, or the extension of the SEN system up to 25; and accountability.
On training and best practice, 84% of respondents to our survey said that teachers were not given enough training to teach and support children with autism effectively, yet we know that training is essential to understanding this complex matter. It is therefore necessary that the Government continue to fund the development of successful training programmes. We also believe that where specialist knowledge exists it should be shared. Schools should be able to draw easily on the expertise of neighbouring schools.
As a subtext, and on a matter that I have referred to before in the House, over 70% of youngsters excluded from school in England have SEN. That statistic should alarm us all. The mother of an autistic child gave evidence to our All-Party Group and said,
“My son is very articulate and very bright, but he’s autistic. The headteacher just thought that he was a naughty boy, who needed some anger management, and he got excluded on a couple of occasions”.
In a major National Autistic Society survey, 17% of children with autism have been suspended from school at least once, and more than 4% have been excluded permanently from at least one school. More than that, 32% of parents surveyed were asked to collect their child at lunchtime or before the end of the school day for reasons other than that the child was ill, and some 19% of parents reported this happening on more than four occasions.
Unless this is officially recorded, these types of exclusions are illegal, and we need to get this message across. Experts who came to give evidence told us that almost every single case of exclusion from mainstream school could have been avoided had more staff been aware of the children’s needs, and had there been better planning at school level to support children with autism.
On specialist support at school, our report highlights the fact that children with autism can have a range of complex difficulties that often need specialist support—that is pretty obvious. Far too often, however, parents say that this expertise is simply not available. We certainly hope that the Government will ensure that all children with autism have access to the support that they need, including those without a statement, or an educational health and care plan. We certainly believe that every school should have a lead teacher for autism—a point made by the noble Baroness, Lady Browning.
Moving on to the matter of involvement of parents and young people, we discovered that less than half of parents of children with autism considered that they were truly involved in shaping the support that their children need and receive at school. Autism professionals we met agreed with this, and so did 30% of the teachers. Over 90% of parents said that they wanted to be more involved, and that they wanted schools and local authorities to work closely with them, sharing information and ensuring that a consistent approach is taken at home and at school.
The SEN system is to be extended to 25 year-olds, and they, too, must be involved in the decisions that affect their lives. As for transition, for too many families the struggle for services intensifies as young people reach adulthood, and as we were told in one evidence session, as statements of special educational need come to an end it often feels “like falling off a cliff”. The Government have decided, I believe rightly, to extend the SEN system to 25 year-olds, but they must ensure that many more young people with autism can access the support and opportunities they need to live independent adult lives, and that those who are able can enter apprenticeships and gain employment. Our inquiry was told by one parent:
“When my son leaves school he has no future. I suggested work experience placements for young people with autism. At the moment they have nothing”.
That is simply unacceptable.
In quoting the noble Lord, Lord Freud, again, I echo the words of the noble Baroness, Lady Browning, who has been a great supporter of and friend to those who work actively on behalf of people with autism. The noble Lord said that the Government want to increase the number of people with autism in work to 30%, doubling it from 15%. We all share that ambition and we back him to the hilt in that.
Finally I will touch on accountability. An important aspect of any reform must be greater accountability for parents. Too many parents who came to give evidence to us said that they had to fight constantly to gain access to the support that their children needed. That is why we need an effective complaints system encompassing all state-funded schools, and it must be a priority, in order to ensure that parents have confidence in that system. Like many others, I wait eagerly for the children and families Bill, hoping and praying that it will help to show us the way forward.
Lord Clement-Jones
My Lords, I join other noble Lords in congratulating my noble friend Lord Addington on initiating this debate. Like them, I commend him on his consistency and persistency on these topics over many years. I must first of all declare an interest as the honorary president of Ambitious about Autism, the national charity for children and young people with autism, and I also declare a family interest in dyspraxia.
We have made some progress on the education of children on the autistic spectrum over a period of years, both under the previous Government and under this. I pay tribute to the two current Ministers who have shown an interest in this subject: my honourable friend Sarah Teather and my noble friend Lord Hill, who is to reply today. I will use this important debate to highlight the situation faced by young people with autism at a slightly older age and to suggest some solutions that might improve their ability to access education, training and employment. In view of the superb contributions that have been made in the debate, I will inevitably echo quite a large part of what other noble Lords have said.
What stops young people with autism accessing education and training? Ambitious about Autism research shows that 51% of Britain’s schoolteachers have never received training to help them support children with autism. The noble Lord, Lord Touhig, referred to exclusion. Children with SEN are currently disproportionately likely to be excluded from school as a result of this lack of skills and understanding in their teachers. Responding to our research, 43% of parents reported that their child with autism had been formally excluded within the previous 12 months, and 55% of parents said that their child with autism had experienced an illegal exclusion of the type mentioned by the noble Lord in which parents are called in the middle of the school day and told to take their child home. Department for Education statistics show that 27% of children with SEN are excluded from school a year, which is eight times the rate of children who do not have SEN. Exclusions have an obviously damaging effect on pupils’ educational progress and attainment. They also put pressure on parents. Many parents have said that their child’s exclusion had a detrimental effect on their employment and therefore on their family finances.
Beyond the problems surrounding exclusion, the current lack of teacher training in autism means that young people with autism are often in a classroom without any teaching staff who understand their needs. Quality of teaching is very important in ensuring that pupils with autism are appropriately recognised and supported and go on to reach their potential. Just one in four young people with autism continues their education beyond school. This is in part due to a lack of suitable provision, which my noble friend Lady Walmsley mentioned, poor funding structures and a workforce that requires additional support and training to support learners with autism. However, we know that young people with autism want to access employment and training, and we also know that they need the right support in order to do so. While there is a dearth of education and training available, young people with autism have very limited options.
A host of reports from recent years provided evidence that the transition to adulthood for young people with autism and other disabilities is poor and that there is a serious lack of educational opportunities for this group. Ofsted states that,
“the real choice of education and training opportunities at 16 was limited for many young people with learning difficulties and/or disabilities. Inspectors found few courses available for young people with the lowest levels of attainment”.
What impact does this have? The social impact of unemployment for young people with autism is huge. Not continuing in education or training beyond school leads to a loss of potential for young people and society. Disabled young people are 2.5 times more likely not to be in education, employment or training than their non-disabled peers, which is a direct result of failure to access appropriate education or training. Many young people with autism have very limited choices when they finish school. Often their only options are to stay at home with their parents or go to a residential care home, often with people twice their age. Failure to provide opportunities for education and training that will lead to employment denies young people with autism the right to fulfil their potential and contribute to society.
In addition to social costs, failure to provide for young people with autism leads to higher long-term financial costs. The National Audit Office found that £1 million per person could be saved by supporting young people with learning difficulties to gain the skills to live more independently. It also found that supporting a disabled young person to access work reduces lifetime costs to the public purse by £170,000.
So what is the solution? First, we need training for all school staff in autism and an awareness of other special educational needs and disabilities. I accept what the noble Lord, Lord Ramsbotham, said about bringing all of this together. This could include compulsory SEN training and a core autism module in initial teacher training. It is important that it is not just teachers who are included but also teaching assistants and supervisory staff such as mealtime supervisors.
Secondly, a school admissions code that ensures schools and admissions authorities are obliged to place children with autism in suitable schools is essential. We must guarantee an excellent education for all children and young people with autism. It is essential that schools have fair exclusions policies that ensure exclusions do not occur as a result of an unmet special educational need.
Thirdly, we need to ensure that government initiatives such as the Youth Contract are accessible to young people with autism and other disabilities, as a number of noble Lords said. Can the Government explain how they will make the Youth Contract fully accessible to disabled young people? Can they confirm that Access to Work funds will be available for young disabled people doing internships and volunteering placements?
Raising the participation age to 18 is welcome, but it appears little thought has been given to what this might mean for young disabled people, many of whom are not in employment, education or training—not through choice but through a lack of suitable provision. The raising of the participation age will help young people only if it coincides with the development of more and better educational provision. Have the Government committed the extra funding that is needed to meet the additional needs of young disabled people who are currently not participating? How have they calculated the level of this need? The funding must take account of all additional needs, not just those of young people with statements of SEN.
As part of Finished at School, Ambitious about Autism made a number of recommendations to improve post-16 education for learners with autism. I welcome the fact that one of those recommendations—a legal right to educational support for young disabled people up to the age of 25—has been adopted by the Government. I hope that, accompanying this, there will be a funding system that will give young people and families more information, choice and support, a cross-government focus on outcomes and destinations for young disabled people and a further education workforce with the skills to support young people with autism to achieve their ambitions.
It is not, however, all about government action. Ambitious about Autism, my own organisation, has launched a new strategy to create more and better services beyond school age. As part of the strategy, the charity is developing and launching new services to enable young people with autism leaving school to continue to learn so that they can transition to living and working as part of their home community. Its aim is to establish a new community-based college that is a partnership between specialist and mainstream provision.
Lastly, I have a few points on education, training and employment for people with Asperger’s syndrome—high-functioning autism—as well as others on the autistic spectrum. As the National Autistic Society says, while there are similarities with autism, people with Asperger’s syndrome have fewer problems with speaking and are often of average or above-average intelligence. They do not usually have the accompanying learning disabilities associated with autism but they may have specific learning difficulties. These may include dyslexia and dyspraxia, or other conditions such as attention deficit hyperactivity disorder or epilepsy. With the right support and encouragement, people with Asperger’s syndrome can lead full and independent lives.
People with autism, including Asperger’s syndrome and high-functioning autism, often have much to offer employers. With the right support, they can contribute fully to the workplace. In a study carried out by Research Autism in 2008 for NAS Prospects (London) on the experiences of employing people with autism, seven in 10 employers questioned had had a positive experience of employing someone with autism and said they would recommend it to others.
The NAS has launched its Undiscovered Workforce campaign, which works at a national level with Ministers, employers and others, and at a local level with campaigners, MPs, local businesses, universities and individuals. I commend that campaign. I also very much welcome the particular interest shown by my noble friend Lord Freud in his capacity as Welfare Reform Minister—this was mentioned by the noble Baroness, Lady Browning—and the interest shown in employment issues by my honourable friend John Hayes, the Employment Minister in BIS. The NAS seeks to increase the availability of specialist employment support for those seeking work and those already in work to transform attitudes and increase opportunities for people across the autistic spectrum to fulfil their ambitions in the workplace.
Therefore, will the Government pull all these aspects together through their disability strategy, the Youth Contract and the forthcoming children and families Bill—which has also been mentioned in this debate—to make sure that young people with autism and others with special educational needs are appropriately supported to enter further education, higher education, training, apprenticeships and employment? I look forward to hearing what the Minister has to say.
Lord Storey
My Lords, I, too, thank my noble friend Lord Addington not just for securing this debate but for his passion in making sure at every opportunity that these matters are at the forefront of our consideration. I am sure that his determination will succeed.
I declare an interest as a practising head teacher. I was very mindful of what my noble friend Lady Browning said about young people being labelled in the past. Because of their learning difficulties, they were often regarded by their peers, and sometimes by their professional teachers, as “thick”. From my first teaching job, I remember a teacher who was very keen on literacy and would test every child on their reading age every month. She had a chart on the classroom door with the names of all the children—there were 40 of them then—and their monthly reading age. Because some of the children had learning difficulties—sometimes specific learning difficulties, sometimes global learning difficulties and sometimes dyslexia, although we did not know that at the time—their reading age never moved. Therefore, the teacher would say, in an almost patronising way, “Poor little Michael”, or, “Poor little Dominic”, or whatever their name was. That was not the fault of the teacher but it created huge problems. These were not just learning problems; as was rightly said, it often led to bullying.
This did not just happen in schools. When I was doing my education degree, I vividly remember a very highly regarded lecturer in education almost dismissing dyslexia, saying, “There’s no such thing. It’s just made up. They don’t have dyslexia in China, do they?”. That was often the view at the time. Thank goodness we have moved on.
We then moved on to a period in which we began to understand dyslexia and other learning difficulties but did not know what to do about them. Resources were very limited. It would often be a parent who came into the school and said, “I think my child is dyslexic”. The teacher would say, “Oh yes?”, and would eventually get around to thinking about what might be done about it, but the resources were not there. We have come light years in what we are now able to do. Both the previous Government and this Government have taken enormous steps regarding special educational needs and are to be congratulated on what they have done. That is not to say that there are no further things that we should do.
I give one example of the progress that we have made, which touches my heart. A very close friend of mine has a daughter who has mild cerebral palsy. Although she required a bit of pushing from her parents—she was in the independent sector—she has been supported all the way through her education. She is now at Leeds University, which has been fantastic in supporting her. She obviously has a scribe whenever she is doing exams and so on. When she could not get the work in on time, they said, “Come on, we’ll help you and make sure that’s right”. She repeated one year. This year, she will get her degree and the following year she will do a two-year masters degree. That is something of which, as a nation, we can be duly proud.
The only reason I got involved in this debate is my own personal experience. The previous Government rightly used the phrase, “every child matters”. If we are going to make sure that every child matters, that has to be in everything. I look at my own school and at what we now do. First, we have an ethos that recognises particular special needs issues. On dyslexia, we have a qualified SpLD teacher who is, thanks to government funding, undergoing her masters. She is qualified to diagnose specific learning difficulties. The staff are also trained to identify characteristics of learning difficulties. They then use a checklist and go to the head of special educational needs. If that resource did not exist in schools, we would have to try and buy in a specialist teacher, or we would have to go and get the school psychologist, which would often mean a waiting list of six to 12 months. Having the resource in the school itself, having the staff qualified and trained, makes a huge difference.
What happens when a child is identified as dyslexic? Obviously, we involve the parents. We put together strategies in the classroom. We look at intervention strategies. We look at one-to-one teaching. We look at a multi-sensory programme of teaching. Most of us learn in an auditory or visual way. If a young person is dyslexic, we need to do lots of oral work and what we call “over-learning”—learning strategies to cope.
What do we need to do as a country? Again, I agree with my noble friend Lord Addington and other noble Lords have made the same point. We need to ensure that the training is there. In each school, there ought to be somebody who is fully qualified. That needs to be a crucial, integral part of our initial teacher-training course.
A lot of colleagues will have had information from Dyslexia Action, and the Dyslexia Foundation from my home town. The work that they have done to case study and highlight has been tremendous.
I am grateful to the Minister for always being prepared to listen and give information. I think that he is probably fed up of my Questions, but I have asked him a number of them on dyslexia. They not only show that we understand what needs to be done, but they indentify next steps. The money that has been made available by the Government is to be commended. However, looking at the uptake of funding and the number of people who have taken training places, region by region—I will not embarrass various regions—there are huge regional variations and that gives me cause for concern.
In a recent Question I asked whether the Government would consider asking teaching training providers how many compulsory courses there were and how many optional courses there were. Sadly, we do not hold that information centrally. We need to hold that information. We need to know how many teacher training establishments make this provision, so that we can plug the gaps. We need to get that information.
I agree with my noble friend Lord Clement-Jones that we have made huge progress. I am heartened at what we have heard but I am absolutely sure that progress will continue to be made. With the noble Lord, Lord Hill, a Minister who listens and I am sure is prepared to act and, in the other place, a Minister, Sarah Teather, who believes strongly in special educational needs and early intervention, I am hugely optimistic.
Baroness Jones of Whitchurch
My Lords, I thank the noble Lord, Lord Addington, for initiating this debate today. He has an impressive track record of campaigning on these issues and both he and a number of noble Lords have given some very well informed and passionate contributions this afternoon. I really appreciated the opportunity to listen and learn. I would also like to place on record my thanks to all the people—both the individuals and the organisations—who wrote to us with some very constructive solutions for the way forward, but also with some harrowing accounts of some of the problems we face with these issues.
I begin by reiterating the point acknowledged by my noble friend Lord Morris, the noble Lord, Lord Ramsbotham, and others in the debate, that while dyslexia and autism represent a proportion of the problem, there is a bigger challenge of hidden disabilities. For example, to give some other statistics, more than 3 million people have asthma in the UK, one in 200 people had epilepsy and one in four people will experience mental health problems—or should I say mental well-being problems—with an increasing number of young people in this category. Overall, it is estimated that around 70% of people with a disability in this country have a hidden disability. As the noble Lord, Lord Ramsbotham, rightly suggested, there is much to commend a united strategy to tackle these issues although there are individual elements to each of the disability issues, as we know and as we have rehearsed this afternoon.
The truth is that we have improved our medical skills in diagnosis and treatment, but these have not been matched by the ongoing learning and support guarantees necessary to enable young people to lead enriched lives and fulfil their potential or—as the noble Lord, Lord Ramsbotham, put it—to enable us to find the treasure within them. Despite the progress resulting from the Equality Act, we are still confronting levels of both overt and covert prejudice, institutionally and socially. These are lifelong challenges with very different solutions needed at every stage.
As we have heard, for young people with hidden disabilities in particular, even once a diagnosis has been made there is a subsequent fear of being adversely judged and labelled, or alternatively being disbelieved. At the same time, young people do not want to draw attention to their disability and appear to be different, either because they are embarrassed or, as we have heard this afternoon, because they fear bullying in a school or social environment. As a result they do not always access the funding and resources to which they are entitled.
While the original SEN programme played an important part in moving disability and special needs towards centre stage in the design and provision of local authority, school and personalised support—I thank the noble Lords who paid tribute to the previous Government’s efforts in this regard—it had undoubtedly become too bureaucratic and formulaic in its execution. There were too many agencies involved, no incentives for joined-up services and a degree of piecemeal funding.
Therefore, we welcome many of the aspirations in the Government’s special educational needs Green Paper and their response to the consultation. We support the concept of a single, simpler birth-to-age-25 assessment process and care plan with the right to a personalised budget for parents and young people to buy in support services. Parents tell us that these proposals match their aspirations for their children’s ongoing care. We welcome the requirement for earlier testing and intervention—another point made by noble Lords this afternoon.
We welcome the emphasis on providing an education that will help young people with disabilities into meaningful employment. But given the complexities of the new arrangements, and the need for parents to be reassured that there will be an improvement in the support given to their children, we would caution against rushing into legislation before the outcome of the 20 pilots, which are currently experimenting with the new proposals, have been properly evaluated.
The Minister will know that the interim report on the pathfinder pilots published this week is already flagging up some worrying concerns. For example, it is proving difficult to get agencies to work effectively together; assessments are being duplicated, not streamlined, as was the original intention; and the higher costs are judged not to be sustainable. More importantly, there are increasing criticisms that, contrary to their stated and well received objectives, the pathfinders are failing to involve young people themselves in the shaping of the new services. I raised this matter in Questions earlier in the week, and I once again urge the Minister to confirm that the full conclusions of the pathfinders will be evaluated before the Children and Families Bill is published. I would be grateful for his comments on this.
We would also expect the Government to set out clearly how the funding for these new, improved services will be guaranteed at a time when specialist posts are being lost due to deep cuts to council budgets and to health and welfare budgets. Could the Minister explain how the transition from separate budget heads in education, health and social care to an integrated, personalised provision will work in practice? Will they be expected at a local level to transfer funds into a separate pot, and it will it be ring-fenced?
As the Green Paper acknowledges, and a number of noble Lords around the Chamber this afternoon have said, education and training are central to addressing the needs of young people with hidden disabilities. As has been mentioned, it starts with initial teacher training courses and the need for compulsory modules on identifying, understanding and providing for children across the full spectrum of disabilities. It needs to be supplemented by specialist teachers trained in supporting young people in the classroom. It also requires sufficient teaching assistants, properly funded and trained to support the individual learning needs of specific children in the classroom. Those points were echoed by the noble Baronesses, Lady Browning and Lady Walmsley.
It also requires top-class careers provision in schools, which can give disabled young people specific advice about further and higher education courses and the employment options available to them. The Minister knows our continued concern about the quality of advice being provided by the new schools-based careers service, and we have a specific worry that children with specialist support needs will not get individual face-to-face advice to aim their skills at achievable ambitions. Perhaps the Minister could comment on this. Surely it should be a fundamental right of all children throughout the education system to have the same rights. Can the Minister clarify the legal position with regard to SEN children having access to academy places, and their rights once admitted? Would he agree to review the legislation if it is found to discriminate against statemented or SEN children?
While no one would pretend that the provision in schools is perfect, the message from many disability groups and individuals is that it is the transition from school to higher or further education and ultimately into meaningful employment that remains the biggest challenge. Parents who have seen their child have good support at school can be shocked when they view the adult options available when their child reaches the age of 16 or 18, with specialist adult facilities dominated by much older attendees, often with complex needs, or when they are faced with an FE syllabus that does not provide courses on a full-time basis, leaving parents struggling to provide home care at other times of the week when courses are not being provided. This is why FE colleges need to be centrally involved in pathfinders and why it is essential that they have a statutory duty to be involved in the transition planning for individual young people at a very early stage in their education so that appropriate provision can be laid on in the FE colleges to meet their needs sufficiently in advance.
Finally, as several noble Lords have highlighted, the real challenge highlighted in this debate is about those with hidden disabilities finding and keeping meaningful work. As the noble Baroness, Lady Walmsley, and the noble Lord, Lord Touhig, identified, the statistics are, quite frankly, depressing. Disabled people are twice as likely to live in poverty as non-disabled people. Some 22% of young people with a disability were not in any form of education, employment or training when they reached the age of 18—twice the level of their peers. The Labour Force Survey showed that, in 2011, 41 per cent of men and 43 per cent of women designated longer-term disabled were also unemployed. The result, as we have heard, is too many young, capable people trapped at home with increasingly elderly parents.
The Sayce report for the Department for Work and Pensions identified a number of solutions with which we concur, particularly the personalised approach and the expansion of the Access to Work scheme, which they describe as the Government’s best kept secret. This helped 37,000 disabled people into work in 2009-10. However, it needs to be better funded and more focused on helping those with hidden disabilities into work. The Government also need to focus on those with mental disabilities rather than seeing their role as just providing practical adaptations and support. Much greater emphasis should be placed on helping people access mainstream apprenticeships rather than separate, short-term internships, as seems to be the trend at the moment.
These are challenging issues—particularly challenging against a backdrop of central and local government cuts and welfare reform—that might face any Government. This Government have set out ambitious solutions for helping those with disabilities access quality education and jobs. However, with reducing budgets, the practical implementation may well elude them, leaving parents and young people frustrated and disappointed. In this context, I look forward to hearing what the Minister has to say in response to this debate to reassure us.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, I would congratulate my noble friend Lord Addington but I think he has had enough praise already this afternoon. He spoke, as I knew he would, with a great deal of knowledge. We all know the passion that he brings to the subject. I was grateful to him for doing so, and to my noble friends Lady Browning and Lord Clement-Jones, and the noble Lord, Lord Touhig, who spoke with equal authority about autism. The noble and learned Lord, Lord Morris of Aberavon, brought up the subject of diabetes, which I thought broadened the debate in an interesting way. The noble Lord, Lord Ramsbotham, spoke about speech and language difficulties, which is another manifestation of some of these issues that we are seeking to find solutions to.
As well as being a good debate, it is a timely one because, as noble Lords have said, the Government are introducing their children and families Bill, which in a way, I hope, sets the framework for much of what we have discussed this afternoon and how we hope to be able to improve things in future, because that Bill seeks to put into legislation a new framework for the education and training of disabled children, young people and those with special educational needs. The whole purpose of that new approach is to seek to promote better and earlier identification of children’s needs—one of the recurring themes this afternoon—and a better transition from school to further education, higher education, adulthood and the world of work, which I think is one of the other recurring themes of this afternoon.
To my noble friend Lord Addington, who was keen that I should muffle some bells, I think was his phrase, I would say—I am sure he knows this—that the purpose of these reforms is not reclassification or trying to knock people off lists but about trying to bring together what has been too disparate a range of provisions into a simpler and more coherent whole.
Perhaps I may set out our overall policy direction, bring your Lordships up to date with the latest position in some key areas, and then try to respond to the main points put to me. We have heard a number of facts this afternoon. It is the case that there are some 220,000 children with statements of special educational needs. Last year, there were more than 165,000 young people aged between 16 and 18 with a self-declared learning difficulty or disability studying in mainstream further education colleges. We know that these children are less likely to achieve well at school and are four times less likely to participate in higher education. At 16 or 17, young people with learning difficulties and/or disabilities are almost twice as likely as their peers not to be in education, employment or training. Those figures and others that we have heard this afternoon powerfully underline the case for reform.
As we have been reminded, under the current system, needs are often picked up late, families too often have to battle to find out what support is available, teachers and lecturers feel hampered by bureaucracy and lack the skills and confidence to meet those needs; and young people over 16 with SEN have weaker entitlements to support in colleges than if they had stayed at school, and lack clear routes into independent living and work. I think there is broad agreement that the system needs to change and that the objectives of the Government’s reforms are the right ones. I welcome the support given by the noble Lord, Lord Touhig, and the noble Baroness, Lady Jones of Whitchurch, in that respect. I accept her point that there are practical issues that we will need to work through. However, the direction of travel has broad endorsement.
Put simply, our goal in these reforms is that from 2014 we will have a better integrated assessment process that is more streamlined and better involves children, young people and parents. There would be a single education, health and care plan for children and young people with statements or learning difficulty assessments for post-16 education in the current system. This would help to deal with the important point raised by my noble friend Lady Browning and others about the current cut-off at 16 and the problem that brings. The proposals will include an offer of a personal budget, for those who want it, to give families greater control over the services they use. The plans will give parents the right to express a preference for any state-funded school, including academies, or college. There will be a requirement that local authorities publish a local offer of services for disabled children and young people, and those with special educational needs. We will also introduce statutory protections comparable to those currently associated with a statement of SEN for 16 to 25 year-olds in further education, with access to routes of appeal.
In order to prepare the ground for the new system, as the noble Baroness, Lady Jones of Whitchurch, said, we have set up 20 pathfinders, covering 31 local authority areas and their health service partners. These pathfinders are testing out many of the proposals set out in the Green Paper, such as education, health and care plans and the local offer. I listened to the points made by the noble Baroness about some of the practical concerns, and I agree that my department will need to reflect on them and take them into account as the proposals are taken forward. We will publish an interim report later in the autumn, and we will work with a range of different services to take the lessons on board.
We are also keen to make progress with the Bill in order to get the new system in place. We plan to publish draft SEN clauses for the proposed children and families Bill in the first week of September. A period of consultation and pre-legislative scrutiny will follow before the Bill is introduced to Parliament in spring 2013. That will provide an opportunity to pick up on some of these practical issues. Subject to the approval of Parliament, we hope that the Bill will gain Royal Assent in spring 2014.
One of the recurring themes this afternoon has been the importance of early identification. Here we are taking action on a number of fronts. We are, for example, recruiting and training an additional 4,200 health visitors by 2015, and identifying whether a child is disabled or may have SEN is a core part of the training for those health visitors. When parents have concerns about their child’s development and learning, they will be offered additional support and, where appropriate, referred to another health professional such as a speech and language therapist or a paediatrician.
We are also working to bring together the early years progress check at age two in the new early years foundation stage with the healthy child programme health and development review at age two to two and a half. That picks up on a point made by my noble friend Lady Walmsley. Our long-term ambition is to develop one properly integrated health and early years review to support children’s development, drawing on the expertise and professionalism of both the early years and the health workforce.
We are working with the Department of Health to see how we can best achieve this. We have asked Jean Gross, the former communications champion for children and young people, to lead a group exploring ways of improving that information sharing, and are expecting findings from that in October this year. Our aim is that the new integrated track, bringing these two aspects together, will be introduced in 2015, when the additional health visitors to whom I have just referred have been recruited.
A number of noble Lords raised the issue of reading difficulties. My noble friend Lady Walmsley mentioned the phonic screening check, the first of which was carried out earlier this month. It will help to identify pupils who have not met the expected standard in phonic decoding, and schools will then be expected to provide appropriate support to help them make good progress and master these essential early reading skills. I think it was alluded to this afternoon that it was the Rose review that underlined the benefits of systematic synthetic phonics for teaching those with dyslexia.
There is also some evidence that schools are getting better at identifying children with autism. The department has been collecting data on the number of children with different types of SEN who either have statements or are on school action plus. The statistics show that, in 2004, 31,000 pupils were identified as having an autistic spectrum disorder. This had risen to 61,500 in 2011, which seems to suggest that there is a greater recognition of autism in the education system. However, there is still a need to recognise and diagnose autism earlier, and we certainly expect local areas to take account of guidelines that are available, such as the National Institute for Health and Clinical Excellence’s guidelines on the identification and diagnosis of autism.
I will say a few words about early language, an issue raised by the noble Lord, Lord Ramsbotham. In March, the Government announced an early language development programme to train practitioners to help children up to five years old, particularly those with SEN, by focusing on improving communication and language skills. The programme will help the most disadvantaged children with a special focus on the under-threes, who are at risk of language delay. The new early years foundation stage framework, which my honourable friend Sarah Teather has been working on and which is to be introduced in September this year, will also make a number of improvements. There will be a stronger emphasis on the three prime areas most essential for children’s healthy development: communication and language; physical development; and personal, social and emotional development. We have commissioned the Early Language Consortium to deliver a three-year early language training programme to train practitioners to identify language development problems and then work with children and families.
That takes me to the importance of teachers and training, which is one of the recurring issues. My noble friend Lord Storey spoke in a very practical way about some of the steps that a school takes in dealing with these issues, which I found helpful, as opposed to some of the more abstract ways in which the issue is explained to me in the department sometimes. We are taking action in a number of ways to improve teachers’ skills in identifying and addressing the special educational needs of children and young people. The new standards for qualified-teacher status include a specific focus on meeting the needs of children with special educational needs or those who are disabled, which was a question raised by my noble friend Lady Walmsley. We have launched a scholarship scheme for teachers to improve and extend their knowledge and expertise when working with disabled pupils and those with SEN, including their knowledge in specific impairments. That scheme has already awarded funding to around 400 teachers to undertake specialist postgraduate qualifications.
My noble friend Lady Browning and others also spoke about the importance of teaching assistants having the necessary skills, so we have launched a similar scholarship scheme for the most able support staff working with disabled pupils and those with SEN. That should enable support staff to gain degree-level qualifications to build their skills and expertise, including in specific issues such as dyslexia.
The Teaching Agency has developed advanced-level materials on autism, dyslexia, speech, language and communication difficulties, and behavioural, emotional and social difficulties. We have increased the number of special school placements available for initial teacher training to up to 900 in 2011-12. We have provided funding for up to 9,000 school SENCOs to complete the mandatory higher-level SENCO award, and we are also funding a further 1,000 SENCOs in 2012-13.
Reference was made to the role of the voluntary sector, and we are supporting that sector as well in helping teachers and schools. Through the voluntary and community sector grant programme we have funded the Dyslexia-SpLD Trust, providing £1.4 million over two years, to raise awareness and support parents. We also provided a grant to Dyslexia Action, with the RNIB, to make more than 650 core texts available in a digital format for dyslexic pupils.
In addition, we are funding the Autism Education Trust to develop national standards for those working with autistic children, as well as training at universal, enhanced and specialist levels, and delivering that to at least 5,000 staff across the country.
Perhaps I may say a few words about the Achievement for All programme, which coaches and supports schools in improving the attainment of their pupils with special educational needs. We know that schools using the programme saw children make greater progress in English and mathematics than other SEND children across the country. In a significant number of schools involved in the pilot, they even exceeded the progress of non-SEND children nationally. An independent evaluation carried out by the University of Manchester showed that pupil attendance was significantly improved, with an average increase in attendance of just over 10%. It also showed significant improvements in behaviour, including lower levels of bullying—one of the issues that we have talked about—stronger relationships between schools and parents, and a greater awareness of and focus on special educational needs. We are now spending £14 million to roll that programme out across the country so that more children can benefit. More than 900 schools have joined the programme since last September and the number is on course to be 1,500 by the end of this year.
We also talked about successful transition into adulthood—an issue referred toin particular by my noble friend Lord Clement-Jones. We are running a trial of supported internships in 15 further education colleges this autumn. We are providing funding over a couple of years to 25 colleges to test different models of post-16 work experience, and 13 of the colleges involved in the trial will be testing models for young people with learning difficulties.
We are consulting on a more flexible approach to study programmes for all 16 to 19 year-olds, which we think will lead to that whole age group getting more valuable skills and qualifications. We are also providing funding to encourage greater partnership working between clusters of independent specialist colleges, FE colleges and schools so that they work together to improve local provision for young people with learning difficulties and disabilities and share expertise and delivery arrangements. We are going to increase the number of clusters further this year.
Furthermore, the Learning and Skills Improvement Service and the National Institute of Adult Continuing Education have launched specialist qualifications for college teachers working with disabled young people. We think that that will improve the expertise in the FE workforce.
I am pleased to say that more young people with learning difficulties are completing apprenticeships. In 2010-11 more than 17,000 people with a learning difficulty or disability successfully completed an apprenticeship, and that figure has increased in each of the past five years. The number of apprentices declaring that they are dyslexic more than doubled between 2005 and 2010. My noble friend Lord Addington will not be surprised to hear that the success rates for apprentices with dyslexia are similar to those of their peers. Almost 70% of apprentices declaring dyslexia succeed at their apprenticeship compared with 75% of those who do not report a learning difficulty.
The Government will issue an action plan later this summer with a number of measures to increase the accessibility of apprenticeships for young people with learning difficulties and disabilities. That will be aimed at colleges and training providers. I know that my noble friend Lord Addington has been discussing that with colleagues of mine. He has offered to help, I think, with the production of that guidance. We are grateful for that offer and I am sure that will be extremely helpful.
The noble and learned Lord, Lord Morris of Aberavon, raised the question about exam adjustments. There is a system of exam adjustments in place; schools and colleges can put arrangements in place to provide things like extra time, supervised rest breaks or assisted technologies.
The Youth Contract, which was mentioned by my noble friend Lady Walmsley, should support more than 55,000 16 and 17 year-olds over the next three years. It will certainly benefit those with learning difficulties and disabilities because they are disproportionately represented in this group of young people who are not in education, employment or learning.
The noble Lord, Lord Touhig, raised the important point about accountability. The new exclusions process, to be introduced in September, will provide additional safeguards for pupils with SEN. In particular, there will need to be an SEN expert to provide advice to the independent review panel. On the point about exclusions raised by the noble Lord, Lord Touhig, and my noble friend Lord Clement-Jones, I agree that the statistics clearly show that the groups we are discussing are disproportionately affected by exclusions. The Government’s trials, based on an approach pioneered in Cambridgeshire to try to give schools a far greater incentive to tackle the problem at source rather than excluding pupils and leaving it to other people to sort out, are going forward. They had great results in Cambridgeshire. Trials are taking place now in 11 local authorities and 300 volunteer schools, and I hope that that will be part of the solution to tackling exclusion.
The issue of careers was raised by the noble Baroness, Lady Jones of Whitchurch; I know that that is a concern of hers. We have been clear in the guidance that, for the kinds of group that we have been discussing, those with learning difficulties and other disadvantaged groups the expectation is that schools and colleges should provide face-to-face guidance.
That has been a slight canter across the terrain, and I hope noble Lords will forgive me if I have not picked up on everything. If there are some specific points, I will follow them up. However, I hope that what I have said conveys the range of activity that is under way and the extent of the Government’s aspirations. As my noble friend Lord Storey and others reminded us, it is easy to forget sometimes just how far we have come. Many people have made that possible over a long period of time, and there is good work to build on.
The fundamental reforms to the system proposed by my honourable friend Sarah Teather is ambitious, but rightly so. I am glad that there is broad support across the House for those reforms, and I hope that they will provide the platform for the further exposition of some of these issues to which the noble Lord, Lord Touhig, referred. I hope also that noble Lords will accept that, in the important area of helping those with hidden disabilities, this Government have been making progress, and I hope that I have shown that we are certainly committed to making more.
Lord Addington
My Lords, in the few moments remaining to me in this debate, I would like to thank all those who have spoken. I could speak again at considerable length, but I do not think that would be wise. The only thing I would say is something that we used to hear from the previous Government when we were in opposition. They used to state, “We have done more”—I think it was in the field of disability—“than any other Government before us”. My response was, “Yes, you have, and so you damn well should have”. That is also true of this Government now, in this field. If we can leave it, having said that we have made things a little better than they were before, and hopefully a lot better, we will have succeeded. However, we are standing on the shoulders of what has gone before, much of which was good, despite the mistakes, and I hope that we can carry on in that vein. This discussion has demonstrated a degree of consensus that is actually very helpful.
Dementia
(11 years, 10 months ago)
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Lord Touhig
To ask Her Majesty’s Government what steps they are taking to provide support for people with dementia.
Lord Touhig
My Lords, a debate on dementia is long overdue. Indeed, the last time your Lordships’ House debated dementia was on 25 June 2009.
Today there are 800,000 people with dementia in Great Britain, and two-thirds of them are women. Currently only 43 per cent of people with dementia have a formal diagnosis, yet we all know that diagnosis is the key to accessing information, treatment and support services. There will be more than 1 million people with dementia by 2021 in this country. This year alone it will cost us £23 billion. Currently there are 600,000 family carers of people with dementia.
While significant resources are being spent on dementia, they are often being spent inefficiently and in ways that do not meet the needs or aspirations of the people with dementia and their families. Improving services for people with dementia could therefore boost outcomes and also prove cost effective for the taxpayer. Over a million people living with dementia in the United Kingdom by 2021 will present a major challenge as people with dementia are significant users of both health and social care services, and there remains an unacceptable variation across the country in the quality of services and support. Too often, people with dementia are unable to access the support they need and are frequently failed by the current system. Urgent reform of the social care system is needed, along with a real priority attached to dementia, if we are to improve lives.
As a former member of the Public Accounts Committee in the other place, I well remember the 2007 report by the National Audit Office which found that the health and social care response to dementia was inadequate and that spending on dementia, while significant, was poorly used. The Alzheimer’s Society 2009 report, Counting the Cost, showed that there was an unacceptable variation in the care of people with dementia in the hospital service. It found that people with dementia were staying in hospital on average a week longer than other people admitted for the same reason. A report for the Department of Health by Professor Banerjee in 2009 estimated that 180,000 people with dementia were being prescribed anti-psychotic drugs but that two-thirds of the prescriptions were inappropriate. Anti-psychotics rob people with dementia of their quality of life and lead to 1,800 deaths a year. In January 2010, the National Audit Office’s interim report on dementia found that progress on implementing the national dementia strategy in England had been patchy and had got off to a slow start. The Alzheimer’s Society’s 2011 report, Support. Stay. Save., found that half of people with dementia were not getting the support they need.
Last March, the Prime Minister’s challenge on dementia laid out further key commitments on research, healthcare and dementia-friendly communities. The Queen’s Speech in May outlined the Government’s plans to introduce a draft Care and Support Bill for England. We are told that the Bill will set out how the Government will modernise care and support law to ensure that local authorities fit their services around the needs, outcomes, experiences and aspirations of the people. We are told that it will build on a personal budget agenda, simplify the laws around social care and improve the way in which people get information about their due entitlements. Dementia plans and strategies are in place in Northern Ireland, Wales and Scotland, all of which emphasise the need to improve awareness, diagnosis and services.
While the vast majority of care for people with dementia is undertaken by family carers, people with dementia frequently use social care services. The current system does not work for the person receiving care, it does not work for the person providing the care and it certainly does not work for the taxpayer. The chronic underfunding of social care over many years has driven down quality, choice and accessibility. Over the past four years, the increased demand for social care has outstripped the increase in expenditure by 9 per cent, and the ability of people with dementia to live well is increasingly under strain. People with dementia are being unfairly penalised by the existence of what is called the dementia tax.
Individuals and families are spending tens of thousands of pounds to access the care they need, while care for people with other medical conditions, such as cancer, is free. The Alzheimer Society’s 2008 report, The Dementia Tax, found that people with dementia and their families are willing to make a contribution to the costs of their care. However, they need a fairer deal which protects them against very high costs and which also guarantees the quality of care. Where one lives determines the level of care received, as councils decide locally at what level to start providing support. Across the country, people cannot get essential care, while some in a neighbouring authority can. A patchwork of complex rules and assessments makes claiming what people are entitled to difficult and off-putting. The highest spending local authority, Tower Hamlets, spends five times more than Cornwall, the lowest spending authority.
People have a limited say over the care they receive. Choice and control is the experience of too few people. Out of two million older people in England with care-related needs, 800,000 receive no formal support at all. The lack of support early in the condition leads to a substantial pressure on long-term care and acute sectors. Some 10% of the respondents to the survey Support. Stay. Save. reported that the person with dementia was admitted earlier than expected into long-term care because of inadequate support in the community early on. A similar proportion reported that the person with dementia was admitted to hospital when it could have been avoided because there was lack of early support in the community. This is despite evidence that early intervention is both cost-effective and is what people with dementia and their carers want. The care paid for by local authorities is too often provided to people who have significant need when evidence shows that investing in care earlier would reduce demands on the National Health Service. The Alzheimer’s Society has been campaigning for many years for a change in the way we pay for care. The forthcoming social care and support White Paper is an historic opportunity to overhaul our care and support system.
What can we do to make a difference? The Dilnot commission proposed a fair system where no one would lose more than 30% of their assets. That would help. However, without additional government funding, England’s social care system will not be fixed. The recent Nuffield Trust report identified a number of funding options that could release funds to invest in the social care system. The Government must begin a public debate on where money for care could come from. Money intended for social care must be used for care, and not for filling in potholes. At present, each local authority decides which of the four levels of fair access to care services eligibility criteria they will fund: low, moderate, substantial or critical. It is profoundly unfair that two people living either side of a local authority boundary—they could be living either side of a road—could be entitled to significantly different levels of care. The Government must introduce a national eligibility strategy to improve consistency and fairness across the country. Progress has been made, but we have a long way to go.
Just over two years ago I took part in a march. It was a memorial march in memory of people with dementia who had died. I walked with a man whose wife had not spoken a word in 18 months. He was her carer; he sometimes had respite when his son could take over. His wife was doubly incontinent; they had no shower or toilet facilities on the ground floor. He told me that the only day he was confident that she was kept clean was the day that she went to a day centre, where they had showers, and so forth. He was battling hard in order to find funds to provide these basic facilities on the ground floor of his home. I came away full of despair after talking to that man. I am sure that noble Lords must have had similar encounters.
When we last considered this subject, in a debate introduced by the noble Baroness, Lady Murphy, in 2009, she told us that the average age of your Lordships was 68 and that one third of us will die with dementia. That brings it home that every one of us must know or will have an encounter with someone who has dementia. We really must do something about it. We have a duty to those in our society who are desperately locked away almost as prisoners of illnesses of the mind. It is down to those of us who can still articulate and make the case to ensure that the Government and we as a society do something to improve the quality of life for people with dementia.
Baroness Barker
My Lords, I thank the noble Lord, Lord Touhig, for enabling us to hold this debate and for his eloquent and moving introduction. I confess that I am a veteran of pretty much every one of our debates in this House over the past 10 years. We have had dementia strategies and dementia plans, and I congratulate the previous Government on their work on those important documents, which have moved us forward. Dementia is something that affected my family until last December, when my mum died having, in her words, “kind of lost the place a little bit”. That was her euphemistic way of talking about dementia. It is a subject that for the past 20 years I have followed with a great deal of interest because, as noble Lords know, I work with older people.
I want to sound a somewhat more hopeful note than did the noble Lord, Lord Touhig, and I do so because two or three things have happened that give cause for optimism. Building on the work of people like the noble Baroness, Lady Greengross, and the all-party parliamentary group, as well as on important reports from Alzheimer’s bodies, the Prime Minister’s Challenge on Dementia and the updated dementia strategy are extremely good documents because they move us forward. Not only are they forward-looking, they are quite detailed. The strategy talks not just in broad terms about the need for more research and support, but it begins to draw down different areas in order to achieve a series of things which, over the next five years, will bring about real and actual change in both communities and the health service. They will be of benefit to people who have dementia and their carers.
The Prime Minister’s Challenge on Dementia is based on three things: raising awareness and understanding, early diagnosis and support, and enabling people to live well. There is a commitment to increase research funding to the unprecedented level of £66 million, some of which is to be spent in social care, which is extremely helpful. Some of the money will be spent on redesigning services in the health service, but some will also go to the Medical Research Council for further research into brain scanning. We are beginning to move away from broad strategies into more targeted and focused areas. I was pleased to see that resources are to be devoted to developing dementia-friendly communities. That is not jargon. People are starting to work towards a definition of what that is all about.
For more than 20 years I have followed the work of the Dementia Services Development Centre at Stirling University, both under its previous director and now under Professor June Andrews. It has contributed more than any other organisation to the understanding of dementia as an illness, to understanding the needs of carers, and to enabling academics and healthcare professionals to move forward. Recently, Professor Andrews gave a talk about design. She and her colleagues had been involved in a community pilot study in the Forth Valley. People from various disciplines worked for a year to see how, within their existing resources, they could manage things differently. I was pleased to see that not just the health service but organisations like the police, libraries, churches and the general public felt more confident in their ability to deal and interact with people who have dementia. We are getting close to the point where a diagnosis of dementia is not going to lead to older people and their carers automatically being cut off from the life they enjoyed previously and which, for many years to come, may still have some meaning for them.
Professor Andrews talked about the issue of design, and particularly design in people’s homes. I am very pleased that some of the people involved in the Prime Minister’s challenge are designers and private companies, looking at how they can respond in practical ways to the challenge of dementia. Professor Andrews also talked about the need to develop things like glass-fronted fridges so that people know that they have food. I look forward to the time when homes have glass-fronted freezers because I stopped counting the times that I had to throw away a freezer’s worth of food because my mum forgot about it and it went bad. Design, lighting and so on in people’s homes can make a tremendous difference to their ability to remember.
I want to focus on one particular area that has not been mentioned so far. Many older people with dementia also have other disabilities. If you are a carer supporting somebody and you try to find out about adaptations, they will be designed for a particular physical disability and not for someone who has a physical disability and also dementia. In this hopeful time, designers could look at the potential to design appliances for the home for people who have the multiple disabilities that most older people will develop.
One particular area we should focus on is telecommunications. It is great that there is enormous change going on in the world of telecommunications and that, for example, phones can now be used by people with hearing disabilities who could not use one before. Yet there is absolutely no point in having a phone that has wonderful functionality if you cannot learn to use it. Professor Andrews made an important point about the ability of people to design things in future that will have new functionality but will look like the objects that people with dementia remember—retro-designing things so that people can continue to use them.
I am also pleased that in the dementia challenge we are finally recognising that in future all health and social care professionals, whatever their discipline, will deal with people who have dementia. That will include dentists, pharmacists and others. We are now moving to a point where basic pre-qualification training for all health and social care professionals has to include dementia, whatever the area of specialism.
In the short time available, I will raise one more point. Last December, the Alzheimer’s Society produced a report, Short Changed, about the experiences of older people with dementia, and their carers, with banking and financial services. Older people with dementia are particularly vulnerable to financial abuse. We have known that for years. We knew it 15 years ago when the noble Baroness, Lady Greengross, set up Action on Elder Abuse. It is now more than five years since the passage of the Mental Capacity Act. At that time, the Office of Fair Trading and the British Bankers’ Association produced guidelines about tightening up procedures in relation to people who lack mental capacity, but we still have problems. Anybody who listens to “Money Box” will regularly hear reports of irresponsible lending to people with dementia.
I make one particular suggestion: will the Government, with the Office of Fair Trading and the British Bankers’ Association, now do some further work on banking services for people who lack capacity? Will that work draw a difference between people who have learning disabilities, people who have mental health problems which may be episodic and people who have dementia? All three have different issues but at the moment the banks treat them all the same. That is causing a problem, not least for carers of people who have dementia, who are worried and trying desperately to enable their relatives to keep control of their finances for as long as they can. They want a backstop for when the time comes when their loved ones can no longer manage.
Dementia is a terrible thing, and it is going to happen to more and more people as we live longer. It is going to become a part of life for more of us. I am not a Pollyanna, but having read the dementia strategy and the Prime Minister’s Challenge on Dementia, I think we now have reason to be much more hopeful than we have ever been that we will be able to see people living well with this terrible disease.
Lord Wills
My Lords, I, too, thank my noble friend Lord Touhig for securing this debate. My mother lived with dementia for many years and in the early stages suffered greatly from it. What she went through in the early 1990s was depressingly instructive about the state of dementia care at that time in the London suburb where she lived. My mother was diagnosed in 1993, but that diagnosis took place only after my sister and I ignored the advice of our mother’s GP, who said there was no point in a diagnosis as nothing could be done for our mother if her increasing memory loss and confusion turned out to be the result of dementia. When the diagnosis was confirmed and we asked the GP for help, the GP who had cared for my mother and looked after our family for 25 years, she said that she was very sorry but there was nothing that could be done medically and she could not help my mother any further.
No support was offered to us by the local NHS or the local authority. We were on our own while my mother was rapidly deteriorating, bewildered and panicked by what was happening to her. My sister and I, with six young children between us, could not care for her in our homes, so we looked for a care home for her, but we could not find anywhere that we felt would provide anything like a real home for her. So we searched for carers to look after her in her own home. We were untypically fortunate enough to be able to do that, and we went through one carer a week for six months, as we could find nobody able and willing to take on the complex task of caring for someone suffering from dementia. Finally, when we had really begun to despair, through some good luck, we found a caring woman who looked after my mother wonderfully for the last four years of her life and helped make those years, for the most part, happy and peaceful.
Finding a carer was not the end of the problems that we faced. As my mother’s general state of health declined, she spent more and more time in hospital, and at one point in 1997, she was having to be fed through a tube. The consultant then insisted that she no longer had any quality of life and that the tube should be removed and she should be allowed to die. My sister and I disagreed and the consultant then tried to bully us—and I use that verb advisedly—into following his advice, telling us that we were being selfish and that the bed was needed for a patient who would benefit from it more. The pressure he exerted on a daily basis was intense and caused us great anxiety and distress, but we still resisted and, in the end, we were able to find a hospital that took a different approach and we moved our mother there. Through its loving care, my mother recovered, the tube was removed without her dying as a result and she was eventually discharged and went home where she lived for a further nine months, mostly happy and peaceful.
I have told this personal story at some length because it illustrates the state of dementia care at that time in that outer London suburb and is typical of the experience of so many people, many of whom are unfortunately unable to care for their relatives in the way that we were able to care for our mother. It typifies the experience that so many people living with dementia and their carers went through at that time. There was no empathy with the patient, no support for relatives and carers and a pervasive inadequacy of care.
Twenty years ago, I assumed that was the way things were and had to be, but in 1997 I was elected as the MP for North Swindon and I found that in Swindon, thanks to the imaginative work of Dr Roger Bullock and his colleagues, dementia care was immeasurably better than that received by my mother. There was respect and dignity in the way care was delivered, there was an underpinning belief that those suffering from dementia could still enjoy a good quality of life, and there was dedication to providing therapies to that end, all of which had been notably absent from the care on offer to my mother.
I agree with the noble Baroness, Lady Barker, that over the past 10 years, the practice in Swindon has become more typical and the neglect and indifference experienced by my mother less so. There has been real progress and there is better understanding of the disease. The national dementia strategy launched by the previous Government in 2009 was a landmark, and I hope there are no members of the medical profession today who still believe that those suffering from dementia cannot enjoy a reasonable quality of life. I agree with the noble Baroness, Lady Barker, that the Prime Minister’s Challenge on Dementia, which was published three months ago, is most welcome. It sets out some of the progress that has been made and there is a commendable determination to go, as the Prime Minister puts it, further and faster. I am concerned, however, about the obstacles that remain in the way of such progress. It is depressing, for example, that the Alzheimer’s Society, which does such invaluable work in this area and for whose support I shall always be grateful, found in 2009 that there was an unacceptable variation in the care of people with dementia on hospital wards, as my noble friend Lord Touhig has just outlined. There are still no national eligibility criteria for access to care and there should be. As my noble friend has pointed out, the difference between the highest spending local authority at Tower Hamlets is five times that of the lowest spending one in Cornwall. This sort of variation is neither fair nor justifiable.
Moreover, as my noble friend Lord Touhig has said, the most pressing need is to sort out adequate funding for social care. As the population ages, the number of people suffering from dementia increases. There are 800,000 today and that is forecast to rise by 25 per cent in the next 10 years alone. There are at least 600,000 carers today and that number is almost certainly an underestimate. These figures are never accurate and they are almost certainly a significant underestimate. That number is bound to rise, too. Because they receive too little support, people with dementia are admitted earlier than they need to be into long-term care and into hospital when adequate support in the community might have rendered that unnecessary. This is a wasteful, inefficient and above all unfair system.
There is also the continuing refusal of the Government to extend the protections of the Human Rights Act to all those in care homes. It is perhaps those with dementia who are most in need of such protections and the application of those fundamental human rights principles of dignity and respect. We have debated this issue recently in your Lordships’ House and the Minister was adamant in his refusal even to contemplate the extension of such protections. I still hope he may think again, if not today, at some point in the not-too-distant future.
Finally, I want to address the issue of innovation, which is so important in all issues to do with health care but particularly so in this area of health and social care where our understanding of this disease is growing exponentially. We have to listen to and learn from the experience of those who are living with it and their carers. I pay tribute to the Department of Health because I think it is taking some worthwhile initiatives to foster such innovation, but significant problems remain. For innovation to flourish, two things are required: first, empowerment of the frontline; and, secondly, the ability to roll out best practice so that everywhere in the country can benefit from it.
Ten years ago I was so impressed by the quality of dementia care I found in Swindon that I wanted to help develop it into a model that could be replicated across the country quickly and easily. So in 2002 and 2003 I worked intensively with all the relevant local agencies, in the NHS and the local authority and with local carers, to develop new and better mechanisms. The innovative proposal that emerged from that process offered choices for different care packages to sufferers and carers. It offered integrated care and a unique role for the voluntary sector, all of which successive Governments and professional bodies and the All-Party Parliamentary Group on Dementia have said are important.
This proposal required no extra funding. That meant, however, that local managers would be required to be highly efficient in their management of resources and they were concerned that this new challenge might affect their ability to meet all the targets that the Department of Health then required them to meet. So they needed some assurance that, if they were to embark on this enterprising initiative, they would not be penalised by the Department of Health for missing any other targets as a result.
This was a difficult issue, especially as the then Government were so driven by targets. As this was an important initiative, however, formulated not by an MP but by outstanding frontline professionals and patients and carers, I would have expected at least a dialogue about it. I wrote several letters to two successive Health Secretaries and I never received even the courtesy of a substantive reply. It was not that the idea was rejected; Ministers refused even to discuss it. Even their Special Advisers saw no point in discussing it.
I should say that the noble Lord, Lord Adonis, an adornment to your Lordships’ House, then in the Prime Minister's Policy Unit, was enthusiastically supportive but sadly that counted for nothing in the face of an indifference from the Department of Health which stemmed, as far as I have been able to work out, from the fact that this idea did not originate in the Department of Health.
I understand that the Government’s reforms will relax the sort of control from the centre that stifled the Swindon initiative, but maximising the benefits of self-directed support of the sort that that initiative envisaged requires an adequate infrastructure of information and services to support patients and carers in their choices. Ministers say that they want personal budgets to be the norm by 2013. That could produce some of the same outcomes that the Swindon initiative envisaged and which research by the Mental Health Foundation has shown are valued by carers and users. However, these desirable outcomes can be secured only if there is adequate infrastructure in place.
At a time when so much control is being passed from the centre to local agencies, and local authority and NHS budgets are under such pressure, is the Minister confident that such infrastructure will be adequate everywhere across the country—not just in the places of excellence, such as Swindon, but everywhere? Can he be confident that there will not be the same unfair, uneven provision from area to area that has characterised dementia care in the past and about which my noble friend Lord Touhig spoke so eloquently? It is increasingly accepted that, nationally, dementia care has been unacceptably neglected for far too long and that, locally, provision has been far too uneven. I hope the Minister can demonstrate real commitment to going, in the Prime Minister’s words, “further and faster”, not simply by saying it—which I am sure he will, with his characteristic grace and eloquence—but by demonstrating that in future there will be the quality of care that all those with dementia and all those caring for them deserve, and that it will be available everywhere in the country.
Baroness Greengross
My Lords, I start with three lots of congratulations. First, I congratulate the noble Lord, Lord Touhig, on securing this debate, which is of the utmost importance, and on speaking so eloquently, as did the other noble Lords who have spoken. Secondly, I congratulate the previous Government on introducing the dementia strategy and on the research summit, which I was privileged to co-chair. At the summit, important plans were laid, which could lead to a lot of change. Thirdly, I congratulate the Prime Minister. I was in the hall when he spoke and heard his speech. I have never heard him speak as well as he did on the dementia challenge. He is obviously very committed to this, as am I—I am passionate about it—and it was wonderful to hear what he said.
What has changed is that we are having a debate on dementia when people are not afraid to mention it. It is, as the Prime Minister said, as things were with cancer a long time ago and later were with AIDS. We can now talk about dementia. People know that it is absolutely essential to get things going and changing with regard to dementia. We must implement the action. The Government are committed to what the previous Government were committed to. We have all-party agreement that this is of the utmost urgency. We must get this right now.
What we face is largely due to recent medical success. We are now able to control or get rid of many of the acute illnesses that used to take people away from us, particularly cancer, heart disease and so on. We have had wonderful success but must now face, in effect, an enormous crisis, which is mounting not just in this country but across the world. It is on a par with climate change and it is of the utmost urgency that we get this right. We have to get more money into research and care, we must have staff who can do the caring, and families must be helped with the caring that they need to do. There is an enormous amount that needs to be done. The fear of people in this country is now not nearly as much about cancer as it is about dementia. As the noble Lord said, one in three of us will die from it and the costs are immense. If we get things right, we can reduce those costs.
The all-party group has 70 Members from both Houses and the wonderful thing is that they come to the meetings. I chair three other all-party groups and am a member of others. People do not come—they are too busy doing other things—but the group on dementia is very well attended. We have had some marvellous results from the inquiries that we have carried out on some of the subjects mentioned by the noble Baroness, Lady Barker, such as early diagnosis, anti-psychotic drugs and staying too long in hospital if you have dementia. That last is totally inappropriate, both for the person with dementia who goes in with a broken arm or a fractured femur but also for all the other patients who cannot sleep, rest or get better. It is appalling. To be blunt, we know that 20% of our acute hospitals now need converting into primary-care-led hospitals where the sort of treatment from which people with dementia and others with chronic diseases could benefit is introduced. It is quite difficult to persuade Members of the other place that they will be re-elected if they join forces in changing the hospitals in their local constituencies. However, that is what needs to be done if we are to meet the need of the fast-growing numbers of people who suffer from one of the dementias.
We also know that early diagnosis is essential. As the noble Baroness, Lady Barker, said, there are things that can be done. There is some hope now. Early interventions into the neural networks can achieve change. It is not far off that we will actually be able to do something about dementia, not just helping people to live better but moving towards a cure. We must all get together to get the research under way and properly funded, globally as well as nationally, and all benefit from it. It is essential that early intervention in neural networks is pursued.
Much has been said about the need for better hospital care for people who do go into hospital, and about better care in the community, in which I have been very much involved, looking at the human rights of people who need care and support in their own home. I will not joint the debate with the Minister about where human rights are applied, but I will say that human rights are really important as a training tool, where you start with the person and look at respect, dignity, the right to have some social interaction with others and the right to family life. That means that you do not separate husband and wife if they go into a care home. The care worker has to spend more than 15 minutes with the patient, because you cannot clean them up, give them a meal, arrange their day, get things ready, look after them a litte and have a chat in 15 minutes. We have to change the rules and standards of care in people’s homes. If we look at those issues as an infringement of human rights, it helps us to train people to get it right. I do not blame the providers of care in people’s homes. Many of them are struggling to make ends meet, too. We need a better system of funding for that. We need local authorities to come together, as some are now doing, so that those people who have to do everything in 15 minutes and then travel without being compensated for the travel or time of travel will not have to do so. At least several boroughs or local authorities are getting together to minimise the risk of that happening. So things can be done which do not cost a great deal.
We have to get cost-effective care. We have to look at the standards of care and the training of staff. We also have to look at the status of staff. Care work, work with people in their own homes or care homes, is low status and very low paid. Why would they continue to do that? They are very committed or they would not have got into it in the first place. In fact, if you go and work on the Tesco cash till, you get shares in the company, you have mates to talk to, you have regular hours and, when you go home, you know that your work is finished. That does not happen if you are caring for people with dementia. It does not happen if you are caring for vulnerable people anywhere. This is why our staff leave and take up other jobs—they are under pressure. We really must get the care regime right.
Moreover, we must make sure that “integration” really means something, because if we do not join up our services and include housing and care, both health and social care—and we have an opportunity to do it—and if we do not get it right, we will be letting down some of the most vulnerable people in society. The role of health and well-being boards and the commissioning groups are critical to getting this right. We can, in fact, do it now. If we also look at annual budgets of local authorities and make sure they do not continue to be threatened with the loss of their central government grant, we can begin to get some preventive work introduced locally as well. It is a disgrace that we can only look after people when they are in a critical condition. If I were a director of adult social services, that is what I would do—we would all do it—and that does not help people to remain fit and well for as long as they possibly can.
We can and must do something about dementia. We have all-party agreement on the urgency of this, and on the need for change in our attitudes and in our services, and in the integration of care for those with a terminal disease, which does not get treated as a whole at the moment. If we do not get agreement and act now, we cannot call ourselves a reasonably compassionate society.
Baroness Pitkeathley
My Lords, I thank my noble friend Lord Touhig for securing this debate and for introducing it so passionately. In your Lordships’ House, we often talk about the ageing of society. People are living longer—a lot longer—and this is a subject for rejoicing and a tribute to developments in society and health provision. However, as we have heard, one of the other consequences of this development is undoubtedly the increase in dementia. We are all aware of the figures and I will not repeat them. Although there have been some welcome developments in recent years, not least as a result of the publication of the dementia strategy and, latterly, the Prime Minister’s commitment, there is still a very long way to go. Most people with dementia and their carers are not living well.
Although we have made progress, we still have a lack of awareness. Dementia is not something we really want to discuss, still less plan for within our families. I always remember when I was leading the carers’ movement that we managed to get a dementia storyline placed in one of the leading soap operas. However, it did not last long because the issue of incontinence might have had to be faced and the producers felt that the viewers did not want to know about having to wash soiled sheets.
There are also great difficulties in diagnosis. Let us not forget that up to 40% of acute hospital beds are occupied by dementia patients, but of that number as many as 80% have their condition diagnosed after they have been admitted. They are, therefore, being nursed and treated by non-specialised staff who may have little or no experience of the condition and of whom it is unfair to ask the skills and competences which such patients need.
It may be that GPs are reluctant to diagnose dementia because, as the noble Lord, Lord Wills, has reminded us, they believe there is no cure or because they do not want to depress either the patient or his or her relatives. However, without proper diagnosis, there is no hope at all of putting patients and their families in touch with the services they badly need. We should not forget either that the number of people with dementia that each individual GP sees during their career is relatively few and we should not expect them, therefore, to be an expert in diagnosis. What we can and should expect is that they are willing to make referrals to experts who can make a diagnosis. Talk to the family of any dementia sufferer and they will almost invariably tell you a long and distressing tale of how long and how much persistence it took to get a proper diagnosis.
The third thing is the lack of support. Dementia can be coped with but support services are vital and they are in short supply, and I am afraid they are getting shorter. Caring services are in crisis due to lack of funding. Talk to anyone engaged at the sharp end and the story is the same. Fewer and fewer older people, including those with dementia, qualify for local authority support, and many services provided by the community and voluntary sectors are disappearing. Those services especially under threat or gone already include those aimed at preventing those with low-level needs from reaching a crisis situation.
Let me tell your Lordships about Raymond, who is 85 and cares for his wife, Margaret. He says that Margaret,
“has been diagnosed with dementia. My caring changes from day to day and week to week. You are living on a knife edge—you don’t know what the next hour or day will bring … I have a nurse who comes to get”,
Margaret,
“up at 7.30 in the morning and then puts her to bed at 7.30 in the evening”,
but her visits are now only 15 minutes long—and Raymond has been told that they have to be cut down to nine minutes in the next year. Margaret,
“goes to a care home from 9.30 until 3 in the afternoon”,
every Wednesday,
“which is a great help. They have games and entertainment. I can get down to my jobs while”,
Margaret is away. It used to be Wednesday and Thursday, but it has been cut down to one day a week. He goes on to say:
“Caring is very tiring. I try to cope to the best of my ability but I find I can’t take it in my stride. Life is very stressful, especially the practical work. I prepare meals and do the housework … I pay someone to sit in with”,
Margaret, once a week,
“while I go out … I go to a carers’ meeting on a Friday. It’s like opening another door. I can get back to normal. The tension goes away and my head clears. We talk among ourselves and there is a pleasant atmosphere. We all have a tale to tell. I find out how other carers overcome their problems. It’s an escape valve. You are with your own kind—people who know what you are experiencing. Without the day centre and the carers’ group I couldn’t manage … I don’t know what I would do”.
Although Raymond is 85, he does not want to give up caring for his wife. However, unless he has what he calls his escape valve, what will happen to him? I have to tell your Lordships that the day centre provision is under threat and the carers’ group, which was set up by a local authority worker, is now run by carer volunteers.
The noble Lord, Lord Touhig, reminded us how important it is to support the families who provide the bulk of care for dementia sufferers. As I often remind your Lordships, they are saving the nation £119 billion a year, so it is in all our economic interests to keep them in a caring role. But it is also important for the future because we will need many more carers. If they are not also going to become a drain on our economy in their old age, we have to support them now and enable them to stay in paid work as long as they can. The recent report published for Carers Week, In Sickness and in Health, tells a very distressing story about the health of carers as a direct result of their caring responsibilities. No fewer than 87% of them said that caring had a negative impact on their mental health and 83% on their physical health.
Carers and the people they care for already pay for services. If they are not eligible for social services or their income is above a threshold, they have to pay, which can range from domestic assistants to care workers. Services can be arranged with the local authority or trust, and others through private companies. This is often the cause of financial distress for carers. With the introduction of personal independence payments and changes to employment and support allowance, this may lead to substantial numbers of people losing benefits, which may mean that the person being cared for can no longer purchase the service. That means that carers will have to find alternative ways in which to pay for a service by dipping into their savings, getting into debt or simply going without.
In the current economic climate, there are concerns that an already struggling system is going to be further hit. Cuts to services will only make matters worse. For some carers, the ultimate impact will be giving up caring themselves because their health has deteriorated so much that they can no longer do it. That comes at a significant cost, as the person they care for will need to be admitted to residential care. For others, they are storing up serious problems for their future. Who will be there to provide the care in their place, if carers can no longer carry on?
I have three questions for the Minister, who I know is very aware of carers’ problems. Indeed, I was most grateful to him for attending a carers event that I hosted last week and for taking time from his very busy schedule to speak to carers and hear their problems. I appreciate that and know that he has always been concerned about this issue. Let me put the three questions to him. When will the Government act on the issue of sustainable funding for social care? The reform of the law on care is very welcome and I understand that we will hear about that shortly in the White Paper but we have to address properly the funding issues. How can we ensure that there is ongoing support for carers, including giving them a break—the kind of break that Raymond has just once a week that enables him to keep going? We heard rumours at one point from one of the Ministers that the Government were planning to enable GPs to prescribe respite care for carers. Is there any truth in that? On the subject of general practitioners, how in the new structure of the NHS do the Government plan to monitor the performance of GPs with regard to carers, since they are so important for them as a first port of call?
Baroness Wheeler
My Lords, this has been a comprehensive and authoritative debate on one of the major health and care challenges facing us today: namely, how we provide treatment, care and support for people suffering from dementia and ensure that their families, carers and the staff in hospitals, care homes and those who come to the patient’s own home can help them have the best quality of life and care. As one would expect, many of the key concerns and questions on improving research, diagnosis, understanding, services and support have been ably put by noble Lords during the debate. I will not repeat those. I look forward to the Minister’s response.
Of course, I also pay tribute to my noble friend Lord Touhig for securing this debate and for his excellent opening speech, setting out the context, the stark facts, the progress and developments since the national dementia strategy was launched by the Labour Government in 2009, and the challenges that we still face. Most importantly, I appreciated his reference to carers of people with dementia because they are so important in the debate—whether they have 24-hour caring responsibility in their homes, are family members supporting a dementia sufferer or are supporting their loved ones in residential care.
My noble friend Lady Pitkeathley also spoke passionately about carers, as you would expect. Ensuring that the everyday experience of carers is heard in debates such as this is vitally important, and the House is better informed for it. As a trustee of our local carer support group in Elmbridge, Surrey, I know that about 70 per cent of carers we support locally are caring for somebody with dementia. The dementia ranges from people experiencing the early disturbing signs of the onset of dementia, who, with their families, are wondering what the future will hold and how they will be able to cope, through to those in the severe advance stages, still cared for at home or in residential care, either with respite or permanent care.
Speaking to just a small number of these carers, two things are particularly striking—apart from the love and dedication that it takes to cope and carry on. First, the carer never stops feeling responsible, even when the husband or relative has had to go into hospital or residential care. Secondly, it is striking how much better we need to become at understanding the range of care and support that is needed, and at providing flexible community personal support and day and residential care that treats people with dementia with dignity and helps them maintain their quality of life.
I will quote from one carer whose husband with dementia is in residential care because she could no longer cope with him at home. She said:
“I had him home this weekend, which was nice but he was very distressed when I took him back this morning because he clearly didn’t want to be there. It makes me feel so guilty and sad, because when he is with me he is full of smiles and hugs, and I feel I am betraying him by taking him back. He has become unsettled generally because one of the residents in his wing has severe dementia and shouts and swears all day long. It is having a negative effect on my husband and the staff, but when I raise my concern with the home manager, he makes it clear that there is nothing he can do”.
Why this care manager feels unable to take action is a complex mix of failing to understand the spectrum of care that is needed and failing to respect the individual’s needs and the impact their behaviour has on other people with dementia, as well as on their carers and families. It is also often about poor assessment of the patient’s needs, lack of resources, inadequate training and the low pay of staff. As Carers UK has stressed, carers often report challenges in finding appropriate services with the necessary expertise to provide the right care, environment and support—a problem faced by my noble friend Lord Wills, as he explained.
This failure to find adequate care means that it will be more difficult for families to accept practical help or take a respite break, as they do not have confidence in the quality and appropriateness of the care. Also, as evidence to the Dignity in Care Commission set up by Age UK, the NHS Confederation and the Local Government Association has shown, poor or neglectful care, even for just a few days, can have a devastating effect. Locally, I was told of a care home that billed itself as having a “specialist” dementia ward. However, the reality of the care it provided—or did not provide in this case—meant that an elderly lady admitted for respite care to give her husband a break deteriorated so badly during her short stay that she was unable to return home because she could no longer get to the toilet on her own or feed herself. She is now in permanent residential care. The respite experience pushed the husband over the edge and he was no longer able to cope.
As I always stress, there is of course good-quality care and best practice in day care, assessment centres and residential homes across the country, and the huge challenge, as usual, is to raise standards in the homes where there is poor care to their level. I pay tribute to key improvement tools such as the Age UK’s initiative, My Home Life, which promotes quality in care homes for older people. It is an exemplar programme that helps staff to optimise the quality of care in their homes and has the active support of the Relatives and Residents Association and the national provider organisations representing care homes across the UK.
For dementia, the need for more research, early diagnosis and the importance of providing integrated health and social care for people to improve services are key elements, as noble Lords have stressed. The Alzheimer’s Society’s estimate is that two-thirds of people living with dementia live in their own homes, and a third live in care homes. The reality, however, as we on these Benches have repeatedly stressed, is that current inadequacies and failures of the system will not be addressed without tackling the crisis in the funding of social care. As all key stakeholders in the voluntary, public and independent provider sectors, as well as care professionals and service users, have stressed, a full package of reforms that address legal, current and long-term funding is needed.
How can local authorities that are currently having to cut £1 billion from social care budgets provide adequate or improved community care support, not just for people with dementia but for people with other lifelong conditions such as stroke damage or diabetes, and for their carers and families? I understand that new figures revealed by the Alzheimer’s Society and MHP Health Mandate also reveal an alarming 12% increase in the number of emergency hospital admissions for people with dementia since 2006. Is this not evidence that the community services that are needed to help people live at home are woefully inadequate to meet current or future demand?
I ask the Minister if he can update the House on when spring will finally arrive and the social care White Paper will be published. What will it cover? We know it will focus on the reform of social care law, which is very important, but does he not agree that making changes to the legal rights and entitlements of elderly and disabled people without dealing with the issue of how the services are to be funded now and in the future will only create more expectation and demand that cannot be met?
On the question of improving early diagnosis, can the Minister update the House on what progress has been made by local NHS organisations in developing plans to improve diagnostic rates, as set out in the Prime Minister’s dementia challenge? The challenge also made £54 million available through the dementia Commissioning for Quality and Innovation—CQUIN—programme to hospitals offering dementia risk assessments to all over-75s admitted to their care. Can the Minister update the House on how many hospitals have received payments under this scheme and how many hospitals have offered such risk assessments to all over-75s?
On the issue of keeping track of how the national dementia strategy is being implemented, I understand from the Mental Health Foundation that Andrew Lansley at last year’s Dementia Action Alliance event promised that there would be an annual report on progress. This would be a really important lever to help drive through improvements. Can the Minister advise us on when the first annual report will be published?
Finally, as regards the White Paper, can I press the Minister, when he updates us, to advise us on whether it will set out a clear timetable for addressing the recommendations of the Dilnot report, as well as a full government commitment to the cross-party talks on this, and to standing by the Prime Minister’s pledge to deal with social care funding in this Parliament? As he knows, the Minister has promised the House that the Government will not shy away from tackling this issue. I have pressed him on this matter on a number of occasions, and I must say that his responses have become increasingly expansive as we have gone on.
On 11 June, he assured me that the Government are,
“absolutely committed to introducing legislation at the earliest opportunity in this Parliament to establish a sustainable legal framework for adult social care”.—[Official Report, 11/6/12; col. 1137-8.]
That much we of course knew by then but, on 18 June, the Minister assured me that the Government’s,
“aim has been and remains to legislate in this Parliament to create a fairer, more just and better funding system for social care”.—[Official Report, 18/6/12; col. 1542.]
So today I am hoping that he will be able to go the extra mile and commit the Government to producing a timetable in the very near future for consultation on the Dilnot recommendations, and for implementation of long-term funding proposals in this Parliament.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I begin by congratulating the noble Lord, Lord Touhig, on securing this debate and thank him for his compelling speech. As all noble Lords have emphasised, dementia is one of the most important health and social care issues that we face as a society. The statistics are staggering. The 670,000 people with dementia in England will double over the next 30 years, and the current £19 billion cost will inevitably spiral.
Dementia affects not only health and social care but all of society, and the speeches today have brought that dimension graphically to life. We need to be better prepared. Dementia is a priority for this Government, and we are working to ensure that it becomes a priority for every part of our society—communities, banks, supermarkets and transport. All need to become dementia-aware and dementia-friendly. That is why, on 26 March, the Prime Minister set out the Government’s challenge on dementia, to go further and faster in implementing the national dementia strategy in three key areas: driving improvements in health and care, creating dementia-friendly communities and improving research into dementia.
I was grateful to my noble friend Lady Barker for what she said about the challenge. We do mean business in this important area. Nationally, three champion groups are driving delivery. The first meetings of the three groups have already taken place and work is well under way to make progress on the challenge. The champion groups will report their progress in September 2012 and again in March 2013.
People with dementia, their families and carers have told us what is important to them and what will help them to live well with dementia. They want to receive an early diagnosis and timely, good-quality information that will help them to make informed choices about their care. I listened with dismay to the story the noble Lord, Lord Wills, told us about his own mother in that context. They want the treatment and support they receive to be the best for their dementia and their life, regardless of whether they are cared for at home, in hospital or in a care home. They want the care they receive at the end of their life to be compassionate and appropriate and to support their exercise of choice.
Early identification of those who care for people with dementia is crucial so that they can be directed to the information, advice and support that will help them in their caring role. The NHS operating framework requires the NHS to work more closely than ever before with local carers’ organisations and councils to agree plans, pool their resources and make sure that carers get the support and breaks they deserve.
However, there are other reasons why change is so important. The challenging economic context, as noble Lords have emphasised, makes it even more important for new and more efficient models of service delivery. That is why we have launched an innovation challenge prize of £1 million for NHS organisations to develop ideas for transforming dementia care. Through the dementia care and support compact, the social care sector is committing to leading initiatives to improve the quality of care for people with dementia. That includes work to ensure that people with dementia are clear about what they have a right to expect of care services.
The noble Lord, Lord Wills, asked about the funding for all this. The Government have already made increased funding available to the NHS and many of the aims of the challenge should deliver savings. For example, the CQUIN goal of improving the recognition of dementia in hospital should lead to people with dementia spending less time in hospital, and ensuring that people with dementia are diagnosed early should stop them going into crisis. The Prime Minister’s challenge is about the NHS and social care making better use of the resources already available to them.
The noble Lord, Lord Touhig, asked about the eligibility criteria for care. The imminent White Paper on care and support—I stress that it is imminent—will set out our plans to transform the care and support system for everyone, including people with dementia. The noble Baronesses, Lady Pitkeathley and Lady Wheeler, asked me for further and better particulars on our plans for publishing the White Paper and indeed for reforming the funding of social care. The care and support White Paper and the progress report on funding reform for social care will be published simultaneously and, I hope, very shortly. I believe that I can go no further than I did the other day in responding to the noble Baroness, Lady Wheeler, but I can reaffirm the Government’s intention to legislate on both funding reform and the reform of the law on social care as early as possible in this Parliament. Clearly, following the publication of the White Paper and the draft Bill that will go with it, we will wish to hear from all sides of the House and indeed from all sectors of the community about the direction of travel and the detail of our ideas.
The noble Baroness, Lady Pitkeathley, asked about the role of GPs. As part of the Prime Minister’s challenge, we are actively working with the royal colleges to identify how best to improve early diagnosis through awareness, education and training at GP level. Early and accurate diagnosis is, as the noble Baroness and others emphasised, very important in ensuring that people with dementia can access the support and information that everyone needs when they receive the dismaying news of this dreadful condition.
My noble friend Lady Barker spoke about adaptations for those with multiple disabilities. I agree with what she said. It is important that designers think about people with dementia when designing products for older people. The department provided funding to the Design Council to run a project to encourage design for people with dementia. There were 185 entries, which shows that designers take this seriously and that the design community is very definitely rising to the challenge.
The noble Lord, Lord Wills, spoke about the Swindon project and innovation. I can tell him that we very much want to see good, innovative practice spread out across the NHS and social care. That is why we have launched the innovation challenge prize for dementia, to which I referred. We are very much looking at innovation as part of the implementation of the Prime Minister’s challenge. Incidentally, the dementia challenge is to achieve a dramatic reduction in the proportion of people who have undiagnosed dementia, with evidence of a step-change in the diagnosis rate and a strong service response. The challenges in this and other areas will be open for a minimum of three years, which should encourage health communities and organisations to confirm their intention to apply for a prize.
The noble Lord, Lord Wills, also referred to human rights. We very much welcomed the publication of the report of the EHRC inquiry into human rights in home care for older people. The report found evidence of mixed practice. While we should be positive about those who deliver good-quality care services—and there are many—there is no excuse for bad practice. We believe that the report performed a valuable service by shining a light on the care and support provided in that most private of spaces—people’s own homes. We cannot tolerate poor quality in any of our care services. I completely agreed with what the noble Baroness, Lady Greengross, said about training. Care and support that respects human rights must be the foundation on which we build to make a reality of our vision of better health and well-being and better care for all. We will continue to work with the EHRC, the Care Quality Commission, local authorities and care providers to ensure that poor practice is rooted out.
The noble Baroness referred, quite rightly, to workforce issues and training. We know that two-thirds of people in care homes have dementia, so it is vital that the workforce is trained in dementia care. Indeed, 10 leading care home and home care providers have already signed the dementia care and support compact to which I referred, and we aim to have 50 organisations signed up by September this year. The compact sets out the organisation’s commitment to deliver high-quality, relationship-based care and support for people with dementia. I think that that statement of intent gets the process off to the right start.
The noble Baroness, Lady Pitkeathley, rightly reminded us of the vital contribution that carers make to society, a theme taken up, very perceptively, if I may say so, by the noble Baroness, Lady Wheeler. The Government have taken strong action to support carers. We set out our priorities in Recognised, Valued and Supported: Next Steps for the Carers Strategy, published in November 2010, and we are providing additional funding of £400 million to the NHS between 2011 and 2015 for carers’ breaks. As we set out in Innovation Health and Wealth, published last December, from April 2013 access to all CQUIN rewards will be dependent on commissioning support for carers in line with NICE and SCIE guidelines.
Furthermore, the 2012-13 NHS operating framework requires the NHS to work more closely than ever before with local carers’ organisations and councils to agree plans, pool their resources and make sure that carers get the support and break that they deserve. I very much hope and believe that that will have a positive effect on the thousands of carers of people with dementia in England.
Although dementia can be a crushing condition, we must not lose sight of the fact that people do live well with it. We need a profound shift in culture and behaviour if we are to reduce the stigma of dementia. All too often dementia is ignored, and the work of carers and other professionals goes unrecognised. Business and civic organisations are part of the solution. They can help to create dementia-friendly communities where people with dementia and their carers can remain and do the things that we all take for granted, such as travelling around and shopping. As so often, my noble friend Lady Barker was completely right in what she said on this theme. We need to create communities in which people are not ashamed of or embarrassed by dementia.
As we have a few minutes in hand, with the leave of the House I will continue a little longer. We need to create communities that show a high level of public awareness and understanding about dementia, communities where people with dementia and their carers are encouraged to seek help and where people know enough about dementia to be able to help someone with the condition. By 2015, there will be at least 20 places recognised as working towards being a dementia-friendly community. Places and organisations that meet the criteria being developed as part of the Prime Minister’s challenge will be awarded dementia-friendly status. I can say to my noble friend Lady Barker that, as part of the dementia-friendly communities strand of the challenge, we are working with banks to ensure that they and their staff understand the needs of people with dementia and that staff are dementia-aware.
The noble Baroness, Lady Greengross, mentioned an important part of the Prime Minister’s challenge, dementia research, spanning basic research through to living well with dementia and increasing capacity and capability across the entire research system. It commits the National Institute for Health Research, the Medical Research Council and the Economic and Social Research Council to increasing funding for research into dementia from £26.6 million in 2009-10 to an estimated £66.3 million in 2014-15.
Over the next three years, the NIHR will support the four new NIHR biomedical research units for dementia, projects resulting from the recent NIHR-themed call for research on dementia, and additional work depending on the volume of high-quality applications received. In addition to the increase in funding for dementia, the MRC will spend over £3 million to support the UK brain banks network. This connects all the UK brain banks for the benefit of donors, researchers and future patients. This money includes £500,000 a year to improve the process for donating brain tissue by meeting the costs of collection through the NHS. The ESRC is making £5 million of additional funding available to fund research into the prevention of dementia and interventions to maximise the quality of life for people with the condition.
There is much that the Government are doing and much more yet to be done. To address the challenges of dementia, we need a response not only from the NHS but from society as a whole.
Lord Wills
My Lords, as there is a little time—this is not my intervention—I want to place on record how enormously heartening I found the Minister’s response to the debate. I feel inspired by much of what he said and I want to put on record my thanks to him for his response.
My question is this: are there any milestones in place to measure progress in meeting the Prime Minister’s challenge and, if so, what are they?
Earl Howe
My Lords, if the noble Lord will allow me, I shall write to him on that. The answer, broadly, is yes, we want to see progress made by certain steps of time. However, time does not permit me to spell that out now.
There are already significant signs of progress up and down the country. The Prime Minister’s challenge is about mobilising not only the NHS and local authorities but all the resources that our communities have to offer. A great deal of good work is already going on and is beginning to lead to a steady increase in diagnosis rates, which is promising. The result of that will, of course, be that many more people will get the treatment and care that they need and that their loved ones deserve. Long may this continue.