House of Commons
Prayers
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Oral Answers to Questions
Mr William Bain (Glasgow North East) (Lab)
1. What steps he is taking to increase protection for consumers in the energy market.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
As the independent regulator of the gas and electricity markets, Ofgem’s primary duty is to protect consumers, and it has consulted on proposals to improve consumer protection and competition in its retail market review. The Government have consulted on new powers for Ofgem to compel energy companies to provide redress to consumers who have lost out because of a regulatory breach.
Mr Bain
According to the Government’s own figures, fuel poverty in England is set to rise by 400,000 this year. In Scotland, more than one in four people are in fuel poverty, in Wales the figure is one in three and in Northern Ireland it is nearly one in two, yet 5 million customers are still being overcharged by the big six energy companies. When will the Government take the strong action that is needed with those companies to ensure that over-75s are always put on the cheapest tariffs—a change that would help 6,299 people in my constituency and 4 million pensioners across the country?
Mr Davey
The Government have consulted on how we can change the measure of fuel poverty so that it is more exact and so that we can ensure that we tackle the worst fuel poverty. The previous Government could not even measure fuel poverty properly. As regards ensuring that the big companies give a fairer deal, Ofgem’s retail market review is considering everything from standards of contact to improving billing and tariff simplification. Those and other measures will help people.
Mr John Baron (Basildon and Billericay) (Con)
The Government have accepted the billing stakeholder group’s recommendation that information should be put on all energy bills, by this Christmas, detailing how much a customer could save if they were on that company’s cheapest standard direct debit tariff. Understandably, Ofgem cannot confirm whether it will implement that, so what will the Government do to raise the matter with the Prime Minister and the big six in any forthcoming deliberations?
Mr Davey
First, I thank the hon. Gentleman for all his work on this important issue. He has made a valuable contribution. We are raising the matter, because we take it very seriously. Ensuring that consumers have the right information so that they can switch to cheaper tariffs is very important.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
It is not just households that need better protection in the energy market. Small businesses are also consumers under pressure from soaring bills. In the debate on the Queen’s Speech on 16 May, my right hon. Friend the Member for Don Valley (Caroline Flint) asked the Secretary of State to end unfair roll-over contracts, stop small businesses being subject to six years of back-billing and ensure that energy companies act responsibly towards small firms that have fallen into difficulty. On that occasion, he was not able to give an answer. Now that he has had a chance to reflect on those issues, will he give an answer and indicate whether the Government are serious about Britain’s small businesses having support in the energy market if they are to help us to get out of recession?
Robert Halfon (Harlow) (Con)
Sixty-five Members of Parliament of all parties have signed a Back-Bench motion calling for an Office of Fair Trading inquiry into the uncompetitive role of oil companies in keeping prices high at the pump. Will my right hon. Friend put pressure on the OFT to carry out that inquiry?
Mr Davey
My hon. Friend will know that my right hon. Friend the Secretary of State for Transport and I have been looking into that issue, but as a former competition Minister in the Department for Business, Innovation and Skills I am clear that independent competition authorities are critical to effective competition policy. I would not want to be seen to be putting undue political pressure on a valuable independent institution.
Mrs Mary Glindon (North Tyneside) (Lab)
2. What assessment he has made of the potential effects on consumers of proposed changes to the Consumer Credit Act 1974 regarding early repayments and the green deal.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The hon. Lady raises an important issue and we have taken a lot of care over it. Any green deal provider will be able to charge additional penalties only if it is genuinely able to prove that it will suffer a loss as a result of a consumer’s decision to repay early. In addition, all consumers will have the ability to challenge any additional penalties, with recourse to the Financial Ombudsman Service where necessary.
Mrs Glindon
Given that the Department’s own impact assessment predicts interest rates as high as 9.5% under the green deal, does the Minister think the added possibility of a hefty penalty for early repayment will help to present a compelling case to families hoping to bring their energy bills down?
Gregory Barker
I understand the hon. Lady’s worries, which are why we have considered the matter so carefully, but there is a balance to be struck. If there are not penalties for those who repay early, the rest of the market will bear the additional risk and lack of profit, pushing up the cost of green deal plans for everybody else. I hope the interest rates will be significantly lower than she said, but we think we have got the right balance between consumer protection and a dynamic market.
Dr Phillip Lee (Bracknell) (Con)
3. What estimate he has made of likely capital costs for new electricity generating capacity under (a) contracts for difference and (b) a premium feed-in tariff.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The impact assessment published alongside the electricity market reform White Paper provides details of the capital costs of different approaches. The analysis shows that the cost of capital is lower under the contract for difference than under the premium feed-in tariff. The same low-carbon generation mix would cost £2.5 billion less to build under our chosen approach.
Charles Hendry
I assure my hon. Friend that we are always looking for measures that will simplify the structures, although I would draw attention to comments from EDF, a key investor, which says:
“The Contracts for Difference…which sits at the centre of the Bill, will be key to delivering investment that represents value for money, and protects consumers. It is a simple, transparent and proven instrument.”
Dr Alan Whitehead (Southampton, Test) (Lab)
Does the Minister accept that the contracts for difference impact study was undertaken when the idea was that the state would be the counterparty to the CFD? Now that is no longer the case, will he provide a new impact assessment that compares the relative costs and advantages of CFDs and premium FITs before the proposal is finalised in the energy Bill?
Charles Hendry
I am grateful to the hon. Gentleman for the work that he and his fellow members of the Select Committee on Energy and Climate Change have done on the proposal and on alternative counterparty models. The Government have made one approach clear in the draft Bill, but we have also made it clear that a single counterparty model could work separately. If we propose different models, we will publish a separate impact assessment.
Andrew George (St Ives) (LD)
4. When he plans to announce the outcome of the renewables obligation banding review.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I plan to announce the outcome of the renewables obligation banding review very shortly.
Andrew George
To secure essential jobs and investment, the industry needs certainty, clarity and rational decisions based on evidence and not on emotion. That is especially true of wave energy in my constituency. Will the Secretary of State reassure the House that decisions will be clearly evidence-based?
Mr Davey
I pay tribute to my hon. Friend for his work on promoting renewable energy in his constituency and his county of Cornwall, particularly in respect of marine energy. I can reassure him that the Government will make decisions based on the evidence. We will crunch through the more than 4,000 responses we have had—an awful lot of evidence, including some substantial new evidence—and our decisions will reflect the evidence.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the Secretary of State share my concern about the mooted 25% cut to onshore wind support? Does he agree that it would disastrous for wind? Does he also agree that the recent announcement of a £1 billion loan from the Department for Business, Innovation and Skills to Petrobas for deep-sea drilling in the south Atlantic completely undermines any progress on renewable energy?
Mr Davey
I congratulate the hon. Lady on asking three questions, but I will not anticipate the announcement that we will make shortly. We support onshore wind—we believe it is a cost-competitive renewable technology, and it has an important place in decarbonisation and in a secure energy supply.
Chris Heaton-Harris (Daventry) (Con)
As my right hon. Friend will know, if onshore wind is cost-competitive, it will not need support. If, as he has said in previous answers to me, of our 13GW target, 5GW have been built, 6GW are through the planning gate and 8GW are in planning in the summer of 2012, the level of subsidy is surely way too high.
Mr Davey
I have to disappoint my hon. Friend. The fact that we are supporting the industry is one reason why investment has come forward in large numbers. The 6GW that have been consented and the 6.5GW in the planning system would not necessarily go ahead if there were dramatic cuts in subsidies.
Caroline Flint (Don Valley) (Lab)
In the year in which the solar industry was undermined, there are fears that the Government are turning their fire on the cheapest form of clean energy—onshore wind power—by proposing a cut of 25%. In the words of one industry expert, that would “kill dead” new wind developments. Perhaps some Government Members would like that. The Secretary of State has briefed the press that he does not support such a cut—neither do the Opposition—so why does he not stand up to his Conservative colleagues who want to kill off the British wind industry?
Mr Davey
I have to disappoint the right hon. Lady, because my Conservative colleagues and I are working very closely on this matter. Both Government parties support decarbonisation and understand the critical role that renewables can play, whereas under Labour renewable investment did not occur and we had one of the worst records in Europe. She will have to be patient, but we will make the announcement, and it will be a very good announcement.
Caroline Flint
The mixed messages coming from Government Members have blighted policy in this area. Investors, who want to bring new jobs and industries to this country, are crying out for certainty and confidence, but I am afraid the Secretary of State just does not get that. The message from the Government seems to be that Britain is closed for green business, which is why Vestas has scrapped its plans for a factory in Kent and Siemens is warning that its plans for a new factory and port complex could be put at risk too. Before any more firms axe jobs in Britain, will he tell us today, before the House rises, that the Government will scrap the 25% cut and get behind British low-carbon jobs once and for all?
Mr Davey
Once again, the facts do not support the right hon. Lady’s case. There has been a large increase in investment in renewables in the past year, which has created more than 20,000 jobs, and confidence in the sector is actually extremely high. When we make our announcement, I believe we will see billions of pounds of investment coming forward.
Peter Aldous (Waveney) (Con)
5. What estimate he has made of the level of investment in generating capacity (a) under the existing renewables obligation and (b) in the future.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The renewables obligation has succeeded in providing support worth about £2 billion a year to renewable electricity in the UK. Industry announcements over the last financial year amounted to renewables investments totalling £6.9 billion, which potentially will support more than 20,800 jobs. We plan to publish details of the additional investment arising from the RO banding review shortly.
Peter Aldous
To maximise investment in the offshore renewables sector, it is important to provide investors with certainty on electricity market reform as soon as is possible. Will the Secretary of State confirm that progressing the draft energy Bill will be given the highest priority when the House returns and that he will take all other steps necessary to provide this certainty?
Mr Davey
My hon. Friend is absolutely right, and has been a champion of the offshore wind industry. I congratulate him on that. The draft energy Bill has been widely welcomed by many people in the offshore wind industry because they see that it contains the instruments needed. We are pressing ahead with the timetable in the White Paper that we published last July. I am grateful to the Energy and Climate Change Committee for how it has gone about is rapid pre-legislative scrutiny. We will look carefully at its report, and we hope to publish the full Bill in the autumn.
Mr David Hanson (Delyn) (Lab)
Will the Minister welcome the creation of more than 100 jobs at Mostyn docks in my constituency, based on the development at Gwynt y Môr offshore wind farm off the north Wales coast, which was supported by the previous Labour Government? Will he recognise that wind farms and wind generation are not just about cheap electricity but about economic development? Will he therefore heed what my right hon. Friend the Member for Don Valley (Caroline Flint) said about supporting the wind industry both onshore and offshore?
Mr Davey
I agree with the right hon. Gentleman. It is very good news that jobs are being created. The story of onshore, offshore, the renewables industry and our energy policies generally is to bring forward new investment and jobs. We are proud of that, and will continue with that support.
Kelvin Hopkins (Luton North) (Lab)
6. What steps he is taking to help households improve their energy efficiency.
Heidi Alexander (Lewisham East) (Lab)
7. What steps he is taking to help households improve their energy efficiency.
Lilian Greenwood (Nottingham South) (Lab)
13. What steps he is taking to help households improve their energy efficiency.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Our flagship energy efficiency measure is the green deal, which is supported by the £1.3 billion per annum energy company obligation. We are making very good progress towards its introduction, which starts this autumn, and we expect roll-out to grow strongly in 2013 and beyond, bringing new entrants, greater competition, consumer choice and innovation to this growing market.
Kelvin Hopkins
A crash programme to insulate every home in Britain would save millions of people money on their fuel bills and keep them warm in the winter. It would also be billions of pounds cheaper than investing in nuclear power. Will the Government undertake a rigorous cost-benefit study of these alternatives?
Gregory Barker
The hon. Gentleman is absolutely right. Energy efficiency is a no-brainer. That is why we have given unprecedented importance and attention to it and for the first time have created within the Department an office of energy efficiency deployment. The green deal will involve a far greater range of interventions in people’s homes, unlike previous programmes, which were very limited, so I think the green deal will achieve the aims he seeks.
Heidi Alexander
May I bring to the Minister’s attention the excellent work done by Lewisham council in its insulation partnership, which has seen almost 3,000 homes receive cavity wall and loft insulation in the last six months? Given the difficulties that the Government have experienced in getting the energy companies to meet their household energy efficiency obligations, does he agree that local authorities have a vital role to play in ensuring that as many people as possible can benefit from lower fuel bills?
Gregory Barker
Absolutely. The hon. Lady makes a sound point, and that is exactly why I shall shortly be issuing new guidance to local authorities, under the Home Energy Conservation Act 1995, making it clear that I expect every single local authority to draw up a strategy to roll out the green deal to all parts of their areas. Local authorities and communities are key to the success of the green deal.
Lilian Greenwood
In the last five years of the Labour Government, 2,456 people in my constituency got help through Warm Front to make their homes more energy efficient and to cut their energy bills. Can the Minister explain why just 80 people in Nottingham South were helped last year?
Gregory Barker
I cannot give the hon. Lady a breakdown of that, but I can tell her—[Interruption.] I will happily write with more detail about Nottingham South, but I can say that we helped a large number of people through Warm Front last year. However, we need to do much more than we could possibly achieve under the relatively limited Warm Front programme, which experienced so many troubles when the Labour party was in government. The green deal is going to be transformational and offer not just the very poor but everyone the opportunity to retrofit their homes.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
We have been telling the Minister for months that, to be a success, the green deal must be a good deal. According to calculations confirmed by a spokesman in his Department, if we take the Government’s intended rate of interest—7.5%, which is lower than the highest rate under the impact assessment—a household taking out a green deal of £10,000 would have to pay back around £22,000 over a 25-year period, which is more than double the cost of paying for the measures up front. Does the Minister think that represents a good deal?
Gregory Barker
I do not think there is any division between the hon. Lady and myself in wanting a good deal. We can certainly agree on that, and that is why we have put so much time and effort into this transformational plan. However, the obsession with interest rates alone, to the exclusion of everything else, does not serve her well. I think that the Labour party is actually announcing that it would subsidise interest. That will cost consumers billions and force up everybody’s energy bills. Why do the Opposition not just come clean, say that they are going to subsidise interest and put everybody’s bills up, rather than doing what we are doing, which is coming forward with a progressive market solution?
Luciana Berger
I thank the Minister for that response, but he need refer only to the contributions I made in debates on secondary legislation to know that there are many things in the green deal that we are concerned about, beyond the interest rate. With interest rates so high, there is a great risk that the public will not be interested in the green deal. We know from polling conducted by the Great British Refurb campaign that anything over 6% means that 90% of the British people will just not be interested. Indeed, the Department estimates that the number of homes being insulated next year will fall dramatically. Given that the green deal is meant to launch in October, why is the Minister not doing something about this now, to ensure that consumers really will get a good deal?
Gregory Barker
We are absolutely committed to giving consumers a good deal, which involves a high range of competition, new entrants and more choice. This is not some Stalinist five-year plan; this is a brand new market. It is perfectly valid to suggest that there should be subsidised interest rates, but let us hear how the Labour party is going to pay for that and how much Labour is going to put on consumer bills. We have a proposal for targeted support from the green investment bank, but the hon. Lady’s blanket approach, which does not understand economics, would be very costly for everybody and force up bills for families.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
8. What comparison he has made of the potential capital cost of meeting the Government’s 2020 renewable target using wind power backed up by open-cycle gas plants and meeting the same level of electricity demand using combined-cycle gas plants.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The capital costs of gas plant are slightly lower than those of onshore wind, although the operating costs are much higher and more unpredictable. An electricity supply reliant on gas would therefore be cheaper to build at present, but it would not offer the security of supply that the country needs. A responsible energy policy requires a diverse energy mix, combining gas, renewables, nuclear and fossil fuels with carbon capture.
Mr Lilley
I am grateful to my hon. Friend for his answer. Can I take it from the fact that he does not give specific figures that he agrees with the figures in the report by Professor Gordon Hughes, the professor of energy economics at Edinburgh university, “Why Is Wind Power So Expensive?”? The cost of providing a given amount of power by wind plus open-cycle gas turbines is greater than the cost of using efficient combined-cycle gas turbines by a factor of 10. Is that really something that the consumer can afford, if it saves only £500 million a year in operating costs?
Charles Hendry
I do not agree with Professor Hughes, and neither does the Committee on Climate Change or the Centre for Energy Policy and Technology at Imperial college. One of the main differences is the assessment of how much wind might be necessary, and we believe that the professor has overestimated that by a third, which automatically reduces the cost by £30 billion. Furthermore, he has not looked at the range of alternative back-up provisions, including interconnectors, or at the likely price of gas in the future.
Nic Dakin (Scunthorpe) (Lab)
What steps are the Government taking to ensure that capital investment in wind monopiles will result in manufacturing taking place in the UK using UK steel, so that UK energy bill payers and UK taxpayers can fund UK jobs?
Charles Hendry
The hon. Gentleman raises a critical point. We have secured agreement with the offshore wind industry that it will work to ensure that 50% of the supply chain involves UK companies, compared with perhaps 10% in the early projects. We want this to be a real industrial policy that brings help to constituencies, such as his, that have a great industrial heritage. We want this to be a joined-up policy.
Damian Hinds (East Hampshire) (Con)
9. What steps he is taking to ensure that small and medium-sized enterprises can participate in the green deal.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Small and medium-sized enterprises are key to the successful delivery of the green deal. To give them the help that they need to get started, we have given them special financial help to get the training that they need, and waived SME installer and assessor registration fees for the first two years of the green deal. We have also begun a series of regional green deal road shows aimed at explaining to SMEs exactly how they can access the market, and I am pleased to tell the House that they are proving highly popular.
Damian Hinds
Large installer companies will partner large financing companies to offer a seamless product to households. How will my hon. Friend promote white-labelled financing products so that small businesses in my constituency can do the same?
Gregory Barker
My hon. Friend is absolutely right to suggest that a lot of SMEs want to be green deal providers and offer that service in their own right to consumers, and it is vital that they should be able to do so. I am pleased to say that a number of commercial offers are now coming forward to create exactly that white-label proposition, and the Department is doing everything it can to facilitate that. We are also looking at other ways in which we can give confidence to the SME sector.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Given the current financial situation, SMEs are often reluctant to take on additional loan finance even if they are offered it. Would the Minister therefore accept that it is particularly important that the support for SMEs under the green deal should have a large element of either grant or long-term financial support, rather than deals that are attractive only in the short term?
Gregory Barker
The hon. Gentleman is right to say that we must have an easy-to-access offer for SMEs. The good news is that that can take a number of different shapes and forms, depending on an SME’s needs and on the offer that they want to provide for their customers. It is early days yet, but some interesting models are being put forward, and we are keen to support anything that helps to increase SME take-up.
Graeme Morrice (Livingston) (Lab)
10. What assessment he has made of the potential effects of the provisions of the draft Energy Bill on the competitiveness of the energy market.
Huw Irranca-Davies (Ogmore) (Lab)
20. What assessment he has made of the potential effects of the provisions of the draft Energy Bill on the competitiveness of the energy market.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The draft Energy Bill focuses on encouraging greater investment and competition in the energy market as we make the transition to a low carbon future. The provisions in the Bill are about removing barriers to entry and allowing all forms of low carbon generation to come forward and compete on a level playing field. In addition to the provisions in the draft Bill, Ofgem has consulted on liquidity proposals and the Government have issued a call for evidence regarding the availability of long-term contracts for independent generators.
Graeme Morrice
I thank the Minister for his answer. A report by the Institute for Public Policy Research, a respected think-tank, shows that if the energy market was more competitive, efficiency savings alone would knock £70 a year off the average energy bill. So why will the Government not get behind Labour’s plan to break up the dominance of the big six by requiring them to sell power into a pool? That would allow new businesses to enter the market, increase competition and drive down energy bills for families and businesses.
Mr Davey
Because Labour’s plan would not work. The critical factor for independent generators—the new competitors in the current and future markets—is liquidity in the futures market, not in the day-ahead market. Liquidity in the day-ahead market has increased significantly, and the pool proposal that the right hon. Member for Don Valley (Caroline Flint) has made would be about the day-ahead market. So we have already sorted that problem, and Ofgem is focusing on managing auctions for the futures markets, which is where the competition issue is.
Huw Irranca-Davies
Yet the Secretary of State knows that the whole sector of independent generators is sceptical about whether the necessary radical reforms are enshrined within the energy market reform as currently proposed. Does he think he will need to go further to have a more fundamental shake-up of the electricity market so that his vision of a genuinely competitive market for the interests of business and individual consumers will actually happen?
Mr Davey
The draft energy Bill is a fundamental shake-up of the electricity market, and it is widely recognised as such. That is why it has created such heated and interested debate. I have to say that I do not recognise the views the hon. Gentleman ascribes to independent generators. I have met groups of independent generators, and they welcome much of the Bill. They argued—and we listened—that more work needs to be done to ensure that finance is available, so we recently published a call for evidence to see whether we can make sure that the power purchase agreement market is as healthy as possible. That is another critical way in which we are trying to help competition.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
11. What steps he is taking to encourage biomass-based generation in appropriate and sustainable locations.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Alongside our bio-energy strategy, we have introduced the renewable heat incentive and are currently reviewing support levels for biomass electricity. We are introducing sustainability controls into financial incentives. We have reformed the planning system in England to promote sustainable development and to encourage local authorities to plan for renewables development in the right places.
Mr Sheerman
But does the Minister agree that there is enormous potential for biomass in this country, particularly because it is capable of being produced at the right size, volume and quantity in a location—and there is less resistance to that sort of biomass? The real problem comes when the biomass raw material is imported from South America and Africa and not grown in our own country.
Charles Hendry
The hon. Gentleman is absolutely right to highlight the benefits of biomass. In our estimate, in the areas of heat and electricity, biomass could account for 40% of the renewable energy that we need to achieve by 2020. We have to strike the right balance, as there are other uses for wood fuel in this country: it can be used in furniture and in panelling, which are important industries for this country. We believe it right to look at imported fuels as well, as long as they are sustainably produced.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Drax power station takes fast-growing crops, grown especially in Thirsk, Malton and Filey, and provides a great source of income to farmers in very difficult times. Will the Government and the Minister do all they can to promote biomass in preference to wind farms as a renewable and sustainable source of energy?
Charles Hendry
We do not have to be either/or; we need a balanced energy portfolio. I think biomass offers a very significant immediate carbon gain when we move from coal-fired generation to biomass generation. Some exciting developments are happening in that sector, but having wind in the right locations is an important part of the mix, too.
Julian Smith (Skipton and Ripon) (Con)
12. What recent discussions he has had on the subsidy received by wind farm operators.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Throughout the renewables obligation banding review and the comprehensive review of feed-in tariffs, I have had discussions with many stakeholders and with my officials and ministerial colleagues on subsidies for wind farm generators.
Julian Smith
The Coates family near Skipton were recently offered a bribe of £275,000 to put one wind turbine on their farm. They also received late-night bullying calls from the company, ConEnergieKontor. This behaviour is happening right across North Yorkshire. Does the Minister agree that the only way to fix it is drastically to cut the subsidy paid to these companies?
Mr Davey
I do not agree with my hon. Friend’s last point, but I would say that any bullying tactics by developers are completely unacceptable, and I join him in condemning them. The wind industry generally is committed to a good standard of community consultation and to providing community benefit. If my hon. Friend would like to send me the details of what he raised with me, I will take them up with RenewableUK. I do not believe such practices are widespread or that they are a consequence of renewable subsidies, but they are unacceptable.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
14. What assessment he has made of the report by the Royal Society and Royal Academy of Engineering on shale gas extraction in the UK.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
In response to calls for an independent and rigorous examination of the evidence on fracking, there could be no more authoritative or independent sources of advice than the UK’s science and engineering academies. Their report is therefore particularly welcome, and we will study it carefully in considering the future of fracking for shale gas in the UK. Its main message is that shale gas fracking could be allowed within strict environmental and safety constraints.
Dame Joan Ruddock
As the Minister will know, the report says that some issues merit further consideration, including climate risks. For the avoidance of doubt, will he carry out a comprehensive assessment of the emissions arising from the extraction of shale gas, and indeed its subsequent use?
Charles Hendry
The right hon. Lady brings tremendous expertise to this debate. We have already commissioned independent advice on some of the fracking issues, which is being subjected to wider analysis and peer review. One of the most thorough assessments has been requested by Sir John Beddington, the Government’s chief scientist. We will look at all the evidence. We believe that the technology has a potential that must be explored, but that will be done only with the most careful analysis of all the environmental and safety considerations.
John Pugh (Southport) (LD)
When can we look forward to the commercial production of shale gas in this country?
Charles Hendry
I think that it will be a while before we see commercial production. The situation here is very different from that in the United States, where, for example, landowners own the mineral rights beneath their homes. That is not the case in this country, so there is not the same economic driver. We are seeing some exciting assessments of the potential, but it will be some time before we see specific licences for development.
Caroline Nokes (Romsey and Southampton North) (Con)
15. What assessment he has made of the effect on security of supply of the Government’s renewable energy policy.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Department carries out a range of analyses to assess future security of supply. That includes the impact of all technologies, including renewable energy. Our most recent analysis was published in December 2011, and reinforces our commitment to a balanced energy mix to help to deliver security of supply. Ofgem will provide an assessment of future security of supply by 1 September, in line with its obligations under the Energy Act 2011.
Caroline Nokes
Gas continues to play an essential role as both a transition and a destination fuel for a low-carbon economy. What measures is the Minister considering to ensure that we have a secure and affordable gas supply to underpin electricity generation and support our energy-intensive manufacturing sector?
Charles Hendry
As my hon. Friend may know, we are putting together a gas generation strategy. We will look at the long-term role for gas, including the role that it can play in combination with other technologies. Other work is being done in relation to the implications for security of supply. We shall need to address wider issues as we move towards becoming a net importer of gas, but we are in no doubt whatsoever about the contribution that it can make.
Damian Collins (Folkestone and Hythe) (Con)
16. What progress his Department has made on negotiations to build a new generation of nuclear power stations.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Department of Energy and Climate Change regularly meets industry and other parties that are interested in the development of new nuclear power stations in the United Kingdom to discuss progress and the UK policy context. We are working with developers to address all relevant issues, so that they will be in a position to take final investment decisions as early as possible.
Damian Collins
Is the Minister prepared to maintain an open mind about the suitability of sites such as Dungeness in my constituency for new nuclear build, particularly if new evidence suggests that some of the initial concerns about the sites that have been raised by Natural England could be overcome?
Charles Hendry
Let me reassure my hon. Friend that we will always keep an open mind in regard to new evidence. The problem with the Dungeness site was that development there was not compatible with the EC habitats directive. The Government’s major infrastructure environment unit is continuing to investigate, and if there is additional evidence, I shall be pleased to meet my hon. Friend at any time to discuss it.
Mr Dennis Skinner (Bolsover) (Lab)
If the Minister is happy to meet the nuclear generation people, will he also take an interest in coal? We have 100 years’ worth of coal beneath our feet, and it is high time the Government paid some attention to the industry. Not many pits are left, and some of those are in jeopardy. It is high time the Minister met those people, together with the National Union of Mineworkers.
Mr Speaker
I assume that the hon. Gentleman is suggesting that as an alternative to new generation.
Charles Hendry
I had never seen the hon. Gentleman as an advocate of alternative energy policies.
I had a meeting yesterday with the head of the National Union of Mineworkers and the head of the National Association of Colliery Overmen, Deputies and Shotfirers, but if the hon. Gentleman feels that it is time for another meeting, I will of course consider that.
Neil Carmichael (Stroud) (Con)
17. What assessment he has made of the likely implications for his Department’s energy policy on the green investment bank.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The UK green investment bank policy is one of a number of policies that together will support the Government’s green and growth objectives. The bank, funded with £3 billion over the three years to 2015, will tackle gaps in the financing of green infrastructure projects. It will operate to a “double bottom line” of both achieving green impact and making positive financial returns. The initial priority sectors for the bank are offshore wind, waste and recycling, energy from waste, non-domestic energy efficiency, and support for the green deal.
Neil Carmichael
Does the Secretary of State agree that the green investment bank is emblematic of the Government’s determination to promote economic growth, and does he recognise the importance of ensuring that small and medium-sized enterprises are part of that story?
Mr Davey
My hon. Friend is absolutely right: our energy infrastructure and climate change policies are very much part of our growth strategy, and are bringing forward serious investment. He is also right that SMEs play a critical role in this regard, particularly in respect of innovation and the supply chain that is developing in many of the new and existing markets that we are developing.
Joan Walley (Stoke-on-Trent North) (Lab)
How is the Secretary of State following up representations from ceramics companies in Stoke-on-Trent, who are intensive users of energy and who have an agenda for innovation and investment, and who very much want to have the support of the green investment bank for the work they do?
Mr Davey
As the hon. Lady will know, a Department for Business, Innovation and Skills and Department of Energy and Climate Change consultation that has now closed looked at policies to help such energy-intensive industries. My right hon. Friend the Business Secretary will introduce some of the proposals, and we hope they will cover a range of industries.
Graham Stringer (Blackley and Broughton) (Lab)
18. What steps he plans to take to reduce the cost of energy bills for consumers.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
My Department is taking a number of steps to help consumers with energy bills. Programmes such as the carbon emissions reduction target, Warm Front, the green deal and the energy company obligation are helping to make more homes energy-efficient. The warm home discount provides direct help—worth £1.1 billion until 2015—to cut bills for 2 million low-income and vulnerable households. The voluntary agreement announced by the Deputy Prime Minister means suppliers will ensure that all consumers have good information on their supplier’s best tariff.
Graham Stringer
Those measures are trivial compared with the amount of subsidy going into wind farms, which has the effect of making rich landowners filthy rich, and by 2020 will put £1,000 per head on consumers’ energy bills. When is the Secretary of State going to change those policies so the consumer benefits, rather than rich landowners?
Mr Davey
I am afraid that the hon. Gentleman has got his facts wrong. The support for renewable energy costs 6p a day per household, and in this financial year the warm home discount will result in 1 million of the poorest pensioners getting a discount of £130—so I have to say the hon. Gentleman is wrong.
Mr Mark Spencer (Sherwood) (Con)
19. How many solar panels were installed in the most recent month for which figures are available.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
About 13,800 solar PV installations, with a total capacity of 58.5 MW, were confirmed on to the feed-in tariff scheme’s central register in May 2012. I am pleased to report that that is more than double the number of installations—with more than triple the capacity—that were confirmed in the same month last year. Preliminary figures indicate even stronger growth this month.
Mr Spencer
Clearly, this is a very popular technology. Given that—and the discussion that has just taken place in the Chamber—might it be time to consider switching subsidy from wind farms to solar panels?
Gregory Barker
My hon. Friend is right: it is a very popular technology, and as our reformed FIT scheme is now driving down the costs and helping to promote competition, it is also scalable to a very large scale. Solar will be included properly for the first time in our renewables road map that we will publish later in the year. Solar will have a meaningful part to play in the energy future of Great Britain.
Laura Sandys (South Thanet) (Con)
What assessment he has made of the likely level of future global oil and gas prices.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
DECC publishes low, central and high projections for long-term trends in world oil and gas prices. In 2011 prices, our central scenario is for oil to rise to $130 per barrel by 2030 and for gas to rise to a high of over 80p per therm in the middle of this decade, before falling back to settle at about 70p per therm.
Laura Sandys
Does the Minister see a time coming when we can decouple fossil fuel prices from low-carbon production prices?
Charles Hendry
We are already seeing some decoupling. We have seen a decoupling of the oil price from the gas price. We are expecting to see that gas will be an important source of generation in its own right, but that it will also have a very important future in providing back-up to renewable generation, which will inevitably be intermittent in most areas.
Mr Speaker
We are ahead of time today, and we will move on now to topical questions.
David Morris (Morecambe and Lunesdale) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Since my Department’s last Question Time we have published a draft Energy Bill for pre-legislative scrutiny, set out the next steps for the green deal, publishing the detailed plans and secondary legislation, and we have helped to broker an EU energy-efficiency directive. There is also decarbonising power generation, a new market for energy-efficiency and European leadership on international climate change—it is an ambitious agenda.
David Morris
I thank my right hon. Friend for that comprehensive answer. However, may I ask him what steps his Department is taking to ensure that Horizon Nuclear Power switches from its current owner, E.ON, to a new one with the minimum of disruption to nuclear build in Britain?
Mr Davey
My hon. Friend will know that, ultimately, this is a commercial decision for the owners of Horizon Nuclear Power—RWE and E.ON—but we have been working with them to facilitate investors coming forward to talk to them. We are very optimistic that we will see the Horizon project sold to another consortium and that new nuclear build will continue.
Caroline Flint (Don Valley) (Lab)
Since this Government came to power, we have seen: the chaotic mismanagement of cuts to solar power; delays to the green deal; delays to the borrowing powers of the green investment bank; cuts to the Warm Front scheme, with far fewer people getting a chance to avail themselves of that support, as my hon. Friends have said; and an Energy Bill that was laughed out of the room by the Select Committee. We have also heard in questions today that the assessments for that Bill are going to have to be further revised. This week, we also learned that the Department has underspent its budget by nearly £400 million. Nobody is against the efficient management of office budgets, but this is a ministerial team who fudge decisions, make the wrong choices, cannot keep to timetables and are incapable of managing the budget. Is this not another example of the omnishambles that is spreading through this Government like a virus?
Mr Davey
She says £400 million, but I am afraid that she needs to look at the facts, because the real figure for underspend is £266 million. That is still a large underspend, but I have to tell her that £177 million of that comes from higher energy trading income from the Nuclear Decommissioning Authority’s programme. So better performance by one of our non-departmental bodies is producing more money for the Treasury—I would have thought that she welcomed that.
Amber Rudd (Hastings and Rye) (Con)
T2. The residents of Hastings and Rye are looking forward to cheaper energy bills following the implementation of the green deal. What plans does the Minister have to make sure that residents of social housing also get the benefit of that? May I also invite him, as Minister and constituency neighbour, to come to Rye to share that information with AmicusHorizon?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I congratulate my hon. Friend, who has taken a very close interest in this issue of how we are going to help the poorest people in our society access the green deal and to improve the housing stock for everyone. I can assure her that we are working very closely with both the Local Government Association, the National Housing Federation, and with individual local authorities and community groups. I would also be delighted to come across the border and have a round table meeting to see how we can drive forward the agenda in Hastings and Rye.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
T3. Ministers will be aware that the Welsh landfall for an optimal Severn tidal barrage will be in my constituency. Given the need for a major increase in renewable energy and the potential for creating nearly 40,000 jobs, will Ministers provide us with some clarity on what the Government will do to promote this project?
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I am sure that the right hon. Gentleman is aware that a year or so ago we published a report, which had been commissioned by the previous Government, to look at the barrage proposals and the lagoon proposals. It showed that the largest of those would cost £30 billion-odd, and we believe that in the current climate that is unaffordable. We know that work is being done on looking at other ways of bringing finance into that. We have said that we will keep an open mind on the proposal, but it needs to be done at a cheaper cost to consumers.
Sarah Newton (Truro and Falmouth) (Con)
The Department has been a really good friend to the emerging deep geothermal energy industry in this country, through regional growth funding and direct support. Can the Government make that last commitment to give the industry the five renewables obligation certificates it needs as part of the review, which would enable the first commercial deep geothermal power station to be opened in my constituency?
Charles Hendry
My hon. Friend will not have to wait very long before we provide the final decisions on the renewables obligation banding review. She might also be interested to learn that I recently went to Iceland to sign a memorandum of understanding with the Icelandic Government about how we can share some of their knowledge as the world’s leading economy in geothermal power and heat, and see how that can be brought to bear to assist developments such as those in her constituency.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
T4. Since this rather miserable Government came to power, pensioners in my constituency have seen their energy bills rise by £200. If the Government insisted that the big energy companies put those pensioners aged over 75 on the cheapest possible tariff, 5,500 pensioners in my constituency would see their bills drop by £200. Is it not time that the Government stood up for senior citizens rather than the big energy companies?
Mr Davey
I have good news to cheer up the hon. Gentleman. Under the warm home discount, 1 million of the poorest pensioners will get £130 off their bills in this financial year. Under the voluntary agreement negotiated by my Department and announced by the Deputy Prime Minister in April, the big six will ensure that customers who are getting the warm home discount are informed that they can move to the cheapest tariff, if they are not already on it, which will augment the benefit from the discount.
Mr Speaker
Order. May I remind the House that topical questions are supposed to be significantly shorter, and the same goes for the replies? We will then be able to get more colleagues in.
David Mowat (Warrington South) (Con)
Over the past few months, there has been a significant increase in the level of electricity imports, mostly cheap nuclear from France, through the interconnector. Indeed, over the past 24 hours we have imported more electricity by a factor of two than we have produced from offshore and onshore wind. That is a big policy failure and is costing us thousands of jobs. How can we address it?
Charles Hendry
I disagree with my hon. Friend, as the interconnector is an essential part of our energy security. We have seen a new interconnector introduced to Holland and a new connection is coming through to Ireland. We are exploring other aspects of the matter, too. We think that it is a fundamental part of energy security and delivering low-carbon electricity at the cheapest cost to consumers.
Graeme Morrice (Livingston) (Lab)
T5. What steps is the Secretary of State taking to ensure that energy bill standing charges do not unfairly hit the fuel poor and other low-income consumers, especially pensioners?
Mr Davey
The hon. Gentleman will know that Ofgem is undertaking a retail market review that is considering standing charges. We expect its deliberations to be published in the autumn. Given that it is an independent regulator, I am sure that the hon. Gentleman will agree that I should not pre-judge its conclusions.
Tessa Munt (Wells) (LD)
Investing in a balanced mix of low-carbon energy projects has huge job creation potential. The CBI’s analysis has shown that the green economy currently supports 940,000 jobs, two thirds of which are outside London and the south-east. Does the Minister agree that that reveals how the green economy can support a balanced nationwide economic recovery?
Mr Davey
I strongly agree with my hon. Friend and pay tribute to the work she does in her constituency to promote energy efficiency and renewables. She mentions the CBI report and it is clear that the CBI’s director-general, John Cridland, is very supportive of the Energy Bill and our attempts to increase investment in energy infrastructure, which he sees as a key part of this Government’s growth policy.
Lilian Greenwood (Nottingham South) (Lab)
T6. Under Nottingham’s decent homes programme, more than 15,000 tonnes of carbon will be saved each year. Nottingham City Homes, the local arm’s length management organisation, can use decent homes funding to lever in additional benefits from the green deal’s energy company obligation, but that funding remains indicative for 2013 to 2015. What discussions has the Secretary of State had with the Department for Communities and Local Government on decent homes funding and will he join me in praising the environmental benefits achieved by Nottingham’s “Secure Warm Modern” programme?
Gregory Barker
I would go further and praise Nottingham for a whole range of things that it is doing. It has a very progressive agenda and I look forward to visiting Nottingham in the near future to engage on how we can drive that agenda forward. I cannot comment in detail on something that is the responsibility of DCLG—the decent homes programme—but I can say that we are keen for the green deal programme to leverage in all sorts of additional finance where possible. It is about not just energy efficiency but the wider sustainable regeneration of areas such as Nottingham.
Chris Heaton-Harris (Daventry) (Con)
The Department’s own figures suggest that, in 2009, 50,000 people were put into fuel poverty because of the wind element of renewable energy. Will the Secretary of State give up-to-date figures on that?
Mr Davey
I saw the press reports that made that allegation and I am afraid that I do not agree with them at all. The press article was trying to suggest that particular amounts of money that come from consumer bills to support the renewables industry was the top bit that would push people into fuel poverty. It was a very poor analysis and we completely reject it.
Graham Stringer (Blackley and Broughton) (Lab)
T7. The Minister failed to answer the question earlier about when shale gas would come on line, yet this source of energy would create real jobs and partially decarbonise the energy industry as well as lowering fuel bills. Why does he not get a move on?
Charles Hendry
This is not a matter purely for the Government. Companies here are exploring for shale gas and seeking to identify how much of the resource there may be. They will then need to apply for a licence, get permission from the Health and Safety Executive and get approval from the Environment Agency. A range of different bodies, in addition to local planning permission, are a vital part of the process. It may well have a role to play, but it has to be done with the strictest environmental and safety protections.
Damian Hinds (East Hampshire) (Con)
Does my hon. Friend agree that the continued growth of UK solar vindicates the approach of this Government, who keep returns attractive and make the money go further, in stark contrast to the limited ambitions and dodgy maths of a previous Secretary of State, now Leader of the Labour party?
Gregory Barker
Absolutely. We will see far, far more deployment now in the rest of the Parliament than we would have done if we had carried on with Labour’s very expensive, unfit for purpose, form of subsidy. Moreover, there is other exciting news. I am delighted that Sharp, the leading European manufacturer of solar, has announced that subsequent to the reforms, it will move its European manufacturing base from Germany to the UK—a real vindication of our reforms.
Derek Twigg (Halton) (Lab)
The Heath business and technical park in Runcorn in my constituency is one of the most important employment sites in the north-west, but the decision by SP Manweb plc to apply for a wayleave to retain electric lines on the site is putting at risk a multi-million pound investment in jobs and houses, which has been made worse by the fact that the Department will not be able to make a decision on this until well into next year. Will the Secretary of State intervene quickly to ensure that the investment does take place and is not put at more risk?
Charles Hendry
I am interested to hear the hon. Gentleman’s comments. I am not aware that he has written to me on the subject. If he has done so, I will be very keen to talk to him to see if there are things that we can do to speed up the process, because I understand the impact that it could have on employment in his constituency.
Neil Carmichael (Stroud) (Con)
Does the Minister welcome the news that nearly a third of the 900,000 new jobs have come into the green economy, which is obviously underlined by the excellent news that Sharp is moving to this country from Germany?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
There is real concern, especially among small innovative companies, that the Department’s smart meter programme, which should help reduce energy bills, is behind schedule, disorganised, has no technical standards to help small companies take part and is unco-ordinated with either the smart grid programme or spectrum release. Will the Minister provide some reassurances?
Charles Hendry
Let me provide the hon. Lady with reassurances. We have sped up the programme that we inherited and brought it forward by 12 months, we have been going forward in a very collaborative approach with industry to get its buy-in to all the key decisions, and we have submitted the technical specification for European Commission approval, which is happening in two stages, with one going through now and the second shortly. We see this as a very important aspect of energy efficiency and putting consumers in power, and also for real business opportunities for large and small companies alike.
Andrew George (St Ives) (LD)
Energy bills are still impenetrable to many households. What progress are the Government making to ensure that energy companies improve the transparency and clarity of their domestic bills?
Mr Davey
As we said earlier, work is under way on this. Ofgem, through its retail market review, is looking at tariff simplification, which is important. As my hon. Friend will know, since becoming Secretary of State, I have been pushing the idea of collective switching and collective purchasing, and simpler bills will be a big facilitator for that.
Jessica Morden (Newport East) (Lab)
Like my hon. Friend the Member for Scunthorpe (Nic Dakin), I have concerns about what the Government are doing to maximise the use of UK steel in the low carbon economy and all the opportunities that that brings. I understand that the Minister’s answer was encouraging, but does he appreciate that we must get this right now, because the deteriorating market for steel is impacting on workers in my constituency today?
Charles Hendry
Let me reassure the hon. Lady that that is absolutely at the heart of what we are doing. We are determined that there will be a major industrial gain for this country from building the new low-carbon facilities, as well as some of the older type of facilities. We have strategies for the oil and gas sector, the nuclear sector and the renewable sector. Throughout this area we want to see real industrial gain, often bringing new employment to areas that have been hard hit for a very long time.
Peter Aldous (Waveney) (Con)
Following on from the CBI’s report, the New Anglia local enterprise partnership has just published its manifesto for promoting green growth over the next three years. Will the Secretary of State and his colleagues across Government work with the LEP to discuss how its manifesto can best be implemented?
Mr Davey
We are keen to hear from any LEP across the country. I know that my right hon. Friend the Secretary of State for Business, Innovation and Skills and his ministerial team work closely with LEPs. Across Government we want to support their work in promoting the green economy.
Dr Alan Whitehead (Southampton, Test) (Lab)
Has the Minister spoken with the developers of large-scale wind farms who have difficulties because their development periods straddle the end of the renewables obligation and the start of—if they come to pass—contracts for difference? Does he consider that the end of the RO, if that is necessary, should be in 2020, rather than 2017, in order to accommodate those problems?
Charles Hendry
We are not persuaded by that argument. We think that there needs to be a clear switchover date and are giving a long lead-in time, to 2017, so that there is certainty. Alongside that, we are giving people the choice of whether they go with the existing renewables obligation mechanism or move to the new contract for difference mechanism so that they have the best opportunity to decide what works for them in the longer term.
Olympics (Security)
(12 years, 5 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Keith Vaz (Leicester East) (Lab)
(Urgent Question): To ask the Home Secretary if she will make a statement on the Olympics security situation.
The Secretary of State for the Home Department (Mrs Theresa May)
The Government’s overriding priority is to use all resources necessary to deliver a safe and secure Olympic games. That is what the public and the House would expect. The security operation has been meticulously planned. It will be the largest and most complex security operation in this country since the second world war.
Police plans, and those of the security and intelligence agencies, are well advanced. The success of the policing operation around the nationwide Olympic torch relay gives confidence in the robustness of police planning. Contingency planning has always been central to our security work, should any changes be needed at this late stage. The games security picture can change rapidly, so we have deliberately built in flexibility to respond to any challenge.
As the Defence Secretary has already told the House, we had always intended to deploy 7,500 military personnel to support the venue security operation organised by the London Organising Committee of the Olympic Games and Paralympic Games. These military personnel have already started to deploy to venues to support the rolling search and lock-down process between now and the start of the Olympics. They are already working alongside the police, LOCOG, the commercial security provider, G4S, and accredited volunteer staff.
As the venue security exercise has got under way, concerns have arisen about G4S’s ability to deliver the required number of guards for all Olympics venues and within the time scales available. The Defence Secretary and I, along with other Ministers, have been constantly monitoring the situation and the security contracts over many months. In consultation with LOCOG and G4S, we have now agreed that it would be prudent to deploy additional military support to provide greater reassurance.
I have therefore requested additional MOD support, and the Defence Secretary has authorised the deployment of a further 3,500 military personnel. That will bring the total number of military personnel supporting the safety and security of the games in a variety of roles to 17,000, including the military personnel deployed on functions wider than venue security. The chiefs of staff support an increased deployment and have confirmed that the deployment will have no adverse impact on other operations. The Government have committed £553 million for venue security and remain confident that we will deliver within that budget.
Ministers across Government recognise the burden that this additional short-notice deployment will impose upon individual servicemen and women and their families, especially over the summer holiday season, so we will ensure that all those taking part receive their full leave entitlement, even if it has to be rescheduled, that no one is out of pocket due to cancelled personal arrangements and that all deployed personnel are appropriately supported.
We have agreed with LOCOG that 10,000 Olympic and Paralympic tickets will be donated to the armed services via Tickets for Troops. Access for 2,000 people to spectator areas in the Mall for the Olympic cycle road races and the Olympic marathon will also be made available, as will the right to buy 2,000 Olympic park tickets. In addition, I can tell the House that a total of 7,000 tickets have now been offered to the troops for the dress rehearsals of the opening and closing ceremonies, a significant increase to recognise their extra commitment.
I can confirm to the House that there remains no specific security threat to the games and the threat level remains unchanged, and let me reiterate that there is no question of Olympic security being compromised.
In this country, we have the finest military personnel in the world, and they stand ready to do their duty, whatever the nation may ask. Our troops are highly skilled and highly trained, and this task is the most important facing our nation today. I know that we can rely on our troops to help deliver a safe and secure Olympic games that London, the country and the whole world can enjoy.
Keith Vaz
I thank you, Mr Speaker, for granting this urgent question and the Home Secretary for coming to the House at such short notice. I endorse the Government’s decision to provide 3,500 additional troops.
The right hon. Lady will understand, 15 days from the start of what we all hope will still be the greatest Olympics that have ever been staged, our deep concern about reports that surfaced last Sunday, now confirmed by the Government, that there is a shortfall in the trained security officers provided by G4S.
On Monday in the House the Home Secretary said:
“We have been testing our plans thoroughly and are confident that our partners”—
“our partners”—
“will deliver a safe and secure games”.—[Official Report, 9 July 2012; Vol. 548, c. 9.]
I spoke this morning to the chief executive of LOCOG, who told me that the matter surfaced, that it crystallised a fortnight ago but there had been concerns for some time, and that the decision, as the Home Secretary says, was made by all parties concerned.
Can the Home Secretary confirm the exact date that Ministers found out about the security shortfall, and the action that she took? When was the decision made to ask the Secretary of State for Defence for these additional troops, and when did he agree to provide them? What processes were in place to monitor the situation over the period—indeed, the lifetime—of the G4S contract?
I am very pleased with what the Home Secretary has said about the taxpayer not being inconvenienced by the situation, but will any troops have come from abroad and, therefore, be entitled to leave now because they are exhausted? It is a question not just of their being out of pocket.
Can the Home Secretary confirm that G4S will suffer penalties as a result of this fiasco? As she knows, G4S is already the supplier of hundreds of millions of pounds worth of Government contracts, from prisons to the immigration service. Will she now look at those contracts and ensure that there is a pause before any more are awarded?
Can the Home Secretary confirm that the Prime Minister had to cancel his appearance before the Olympic security committee this week, but that it will be rearranged? I attempted to contact the chairman of G4S this morning. Apparently he is in an emergency meeting with the MOD, the Home Office and other officials. I hope it is not another crisis meeting, with another set of changes.
G4S has let the country down, and we have literally had to send in the troops. Can the Home Secretary assure the House that she is now satisfied that all the changes she has announced today will mean that what we hope will be the greatest games ever staged will be done securely, for the safety of visitors and the British people?
Mrs May
I thank the right hon. Gentleman for his support for the Government’s decision. It is absolutely right that, at this stage, when what may be a gap has opened up, we act quickly to ensure that any gap will be filled.
The right hon. Gentleman asks about my remarks in the House on Monday, and about when the gap in the numbers from G4S was crystallised. We were receiving reassurances from G4S until very recently, and the absolute gap in numbers was crystallised finally only yesterday.
Because we have been monitoring the situation, we had had discussions with the MOD about whether troops would be available for the contingency, should the circumstances have arisen in which that was necessary, and that is why yesterday we were able to take that decision, having prudently had those discussions and made those contingency arrangements.
As I said in my response to this urgent question, we have been monitoring: monitoring has been taking place throughout the contract process; and we have obviously been testing and challenging the assurances that we have been receiving from G4S.
It is the case that some troops who are now within that 3,500 number will be from abroad, and some will have returned from recent operations.
The right hon. Gentleman asked about penalties for G4S. LOCOG signed the contract with G4S, and I understand that there are penalties within that contract. It will be for LOCOG to deal with that matter with G4S. He said that the Prime Minister had been forced to cancel the Olympic security board meeting this week, but the Prime Minister was not forced to do that.
What is absolutely essential is that when the Government identified that a need was there, we acted to ensure that we covered that requirement so that we can ensure that we have the venue security and general security for the games that we all want.
Mr James Clappison (Hertsmere) (Con)
I welcome the decisive action that my right hon. Friend has taken in safeguarding security for the Olympics. I particularly welcome what she said about the armed forces; the country would appreciate it if the powers that be were as generous as possible to members of the armed forces and their families in respect of receiving tickets and hospitality for the Olympic games.
On the further, separate point about G4S that the right hon. Member for Leicester East (Keith Vaz) has just chosen to make, is it not the case that G4S received large-scale contracts from the Government and was considered fit to receive such contracts before May 2010, for example?
Mrs May
My hon. Friend is absolutely right on that point. On his earlier point about generosity to the armed forces, I should say that the Secretary of State for Defence has taken that very seriously. He has been ensuring that we will be generous to those who are taking on the responsibility. As I outlined in my remarks, a number of arrangements are being made to cover that, particularly if members of the armed forces have personal arrangements, to make sure that they are not out of pocket and that they will get the leave to which they are entitled.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Everyone wants us to have a safe and successful Olympics, and we support the Home Secretary’s decision to bring in extra military support in the circumstances. We also recognise that, given the scale of the Olympic challenge, no one can guarantee that everything will go smoothly.
However, I have to say to the Home Secretary that this really looks like another huge Home Office shambles. On Monday, she was asked specifically about recruitment at G4S. She said:
“The Home Office has put in place a number of assurance processes to ensure that we have effective and robust scrutiny of venue security planning. We have been testing our plans thoroughly and are confident that our partners will deliver a safe and secure games”—[Official Report, 9 July 2012; Vol. 548, c. 9.]
She was so confident that two days later she called in the troops. What does it say about the Home Secretary’s assurance process that it took until two weeks before the games to realise that 3,500 military additional personnel would be needed? G4S is not just a few volunteers short—we are talking about 3,500 people from a contract to provide 10,000 staff and 6,000 volunteers. That is a breach of contract of about 25%. Why did it take until lock-down to realise what was going on?
The Minister responsible for security, the hon. Member for Old Bexley and Sidcup (James Brokenshire), told the “Today” programme this morning:
“We’ve obviously been monitoring the progress and been challenging them, asking the questions, really going down, kicking the tyres and doing all those sorts of things.”
Well, it was not very effective—was it?—if, with just 15 days to go, we could be in this situation. Can the Home Secretary tell us again what will happen to the G4S contract? Has she even asked those questions to make sure that the security budget is not affected and that the taxpayer does not end up out of pocket?
Of course we pay tribute to our military, who I am sure will do an excellent job, but what does it say about the Home Office that there are still two-hour queues at Heathrow, that borders staff sacked last year are being re-recruited, that the borders force is becoming a borders farce, and that the dynamic duo of the security Minister and the Minister for Immigration were tripping up this morning in the “Today” programme studios to defend themselves on different aspects of Home Office incompetence?
Everyone is working really hard to make the games a success and show the world the best of British. The Home Office is making that harder, not easier. I say to the Home Secretary: please get the security and border problems sorted out and stop letting everybody else down.
Mrs May
I think that I can deal swiftly with the right hon. Lady’s response. First, I thank her for her support for the decision. Secondly, I should say that it is not a shambles when the Government take the action necessary to ensure that we are providing the venue security. Troops have always been part of the provision of venue security and we are taking the action that ensures that we have the confidence that the numbers will be there. She should have listened to the answer I gave to the right hon. Member for Leicester East (Keith Vaz) about the timetable in relation to the G4S contract. It is a LOCOG contract, and it is for LOCOG to exercise the penalties within it.
As for the right hon. Lady’s reference to my hon. Friends the security Minister and the Minister for Immigration, I am sure that if neither of them had been speaking publicly about these issues today she would have complained about that as well. I am slightly sorry that she has not taken the approach of her noble Friend, Lord West, who has said, “I’m not trying to indulge in a blame game regarding Governments.” It is a pity that she could not, like him, be a bit more statesmanlike.
Mr Don Foster (Bath) (LD)
Safety and security is of paramount importance, and we should welcome the willingness of our armed forces to take on these additional responsibilities. Will the Home Secretary assure us that the additional troops will be provided with the necessary training, particularly for specialist tasks such as scanning? If G4S can bring additional people in, may we have an assurance that troop numbers will be reduced over time?
Mrs May
I thank my right hon. Friend for those questions. Yes, I can absolutely give the assurance that the training will be provided. We will of course want to ensure that at all times we have the correct number and the correct mix of people available to undertake venue security duties. I assure him that the troops will be used for tasks for which they have been fully trained.
Mr Jack Straw (Blackburn) (Lab)
Will the Home Secretary be more precise about the numbers? We know that 3,500 additional troops are being brought in. What was the total number of trained staff for whom G4S was contracted, and what is the shortfall in numbers?
Mrs May
The overall number that we were looking for was 23,700, which includes 7,500 troops. The right hon. Gentleman can do the maths for himself in terms of the total numbers and make-up of staff, who include volunteers, students, and the G4S staff themselves. G4S undertook the training of all those elements. G4S has said that it is not able to provide the balance of 16,000 to 17,000 guards, and therefore we have taken the step of bringing in the 3,500 military personnel. That is absolutely what one would expect a Government to do in these circumstances, and if he were in government, he would be doing exactly the same thing.
Nicholas Soames (Mid Sussex) (Con)
May I congratulate the Home Secretary on the prompt way in which she has dealt with this difficulty? Will she confirm that members of the Territorial Army based around London would be extremely serviceable on this occasion and would, I am sure, be very pleased to be called up to help in these matters? Will she assure us that all the security and immigration matters at Heathrow have been attended to, so that there is the ability to get people swiftly through and it will be a flawless operation?
Mrs May
I thank my right hon. Friend for his very appropriate reference to the reserves, who are indeed being used. We welcome the work done by people who willingly give up their time to the Territorial Army, and they will be part of the troop deployment that will be taking place for the security of the Olympics. On Sunday, the contingency arrangements for the Olympics period will kick in at Heathrow, with the extra numbers of staff over and above any who have already gone in, and there will be a policy of ensuring that all desks are manned at peak times. That will deal with the issue he raised.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I share the view that has been expressed about the military. In February 2003, when there was a very serious security threat to Heathrow, we discovered that the deployment and demeanour of the military was crucial in avoiding turning security into a feeling of insecurity. Given the deployment of missiles on residential property and the numbers of military now being deployed, will the Home Secretary talk to LOCOG to ensure that we do not have a repeat of a situation where visitors to this country feel genuinely worried?
Mrs May
I think that the opposite is the case. Obviously, we want people who are coming to the Olympics to feel that they are coming to an event that is about sport and not to think that the prime issue that they are facing is security. All the evidence so far is that the troops who are already at Olympic venues are welcomed, that their demeanour is entirely appropriate, and that they provide a degree of reassurance that is welcome to the public.
Jane Ellison (Battersea) (Con)
The Chair of the Home Affairs Committee has rightly asked an important question this morning and I am grateful for the Home Secretary’s reassurances. Does she share my feeling that the sour attitude and political point scoring from the Labour Front Bench will not be forgotten by Londoners if it continues?
Mrs May
My hon. Friend, as a London Member of Parliament, has made her point very appropriately and very well. I say to the Opposition that what Londoners and people across the country want is for us all to be behind the Olympics and to do what we need to do to ensure that it is a great event for the United Kingdom.
Mr David Winnick (Walsall North) (Lab)
Despite all the excuses that are being made, does the Home Secretary recognise that people will see what The Daily Telegraph has written about a security farce as perfectly justified? What is so difficult to understand is that, with all the time that has been available to prepare for the Olympics, we now have this near-crisis with just 15 days to go. Why should the country be let down by the Home Secretary and by the failure to plan properly? Why should Britain become an international embarrassment as a result of her incompetence?
Mrs May
The aspect of the hon. Gentleman’s question that most strikes me is the fact that he reads The Daily Telegraph. The Home Office has ensured that contingency arrangements are in place throughout this period. We have monitored the progress and looked for reassurances from LOCOG, whose contract it is with G4S, and from G4S. As I said in answer to the Chairman of the Home Affairs Committee, the gap in numbers that has been identified, which requires us to employ these 3,500 troops on venue security, crystallised only yesterday.
Penny Mordaunt (Portsmouth North) (Con)
I draw the attention of the House to my interest as a member of the Royal Navy Reserve. This situation shows how reliant we are on our armed forces. We must never take them for granted. I welcome the Home Secretary’s announcements about compensation and access to events, which I think will be very much appreciated. Will she reassure the House that there will be enough time and budget to ensure that, whether they are regulars or reservists, people are properly trained?
Mrs May
Yes, I can give my hon. Friend that assurance. She is right that we would not want to put our military personnel into these circumstances without their having been trained, because they are not usually required to undertake some of these duties. The training will be there.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
It is clearly in the Home Secretary’s job description to look unruffled when faced with a shambles, and she is getting plenty of practice. Very simply, if the operation was planned as meticulously and monitored as carefully as she claims, how did it go so badly wrong?
Mrs May
As I have said, and as the right hon. Gentleman has repeated, we have been monitoring this situation, but, of course, it is only at this point, when the scheduling of staff for the Olympic games comes through fully, that these sorts of issues start to arise. It is perfectly reasonable for the Government to have been talking to G4S and LOCOG throughout this period, which we have been doing. We have ensured that contingency arrangements are in place in case there are any difficulties. When we were advised yesterday that the guarantee was not there of the numbers that we needed, we did what was absolutely right and appropriate: we said that we needed to put extra contingency arrangements in place and we did so.
John Glen (Salisbury) (Con)
It seems that the Government have received verbal assurances from G4S, but not verifiable recruitment plans and progress reports. What wider lessons does this episode give the Government on how to handle such situations in future?
Mrs May
We have obviously had discussions with LOCOG and G4S about their plans for the numbers that they were bringing on board at any particular point in time. It has become clear to G4S that it cannot guarantee the numbers that it had previously given us reassurances about. It is in those circumstances that we have made the contingency arrangements.
Kate Hoey (Vauxhall) (Lab)
I welcome the use of extra servicemen and women at our Olympics. The three Olympic games that I have attended have had many representatives of the armed forces, who do a brilliant job. Perhaps they should have been involved from the beginning and the money that has gone to this security force could have gone to them to start with. Can we please remember that this is a sporting event? I worry that we are going so over the top on the security aspect that people have forgotten that this is about countries competing in sporting endeavours in a friendly way.
Mrs May
The hon. Lady makes an extremely valid point. This is a sporting event. We want people to come to London 2012 and enjoy it as a sporting event. We want them to feel safe and secure while they are doing that. That is why it is appropriate for us to ensure that the venue security arrangements are right. She referred to the military being engaged in other Olympic games. The military in the UK provides security at other sporting events, such as Wimbledon, so it is not unusual. What is different is the scale of this event and, therefore, the scale of the venue security that has to be provided.
Nick de Bois (Enfield North) (Con)
I commend the Home Secretary for her swift action. I can imagine the furore on the Opposition Benches had she not taken such action. On the penalty clauses between LOCOG and G4S, in my experience of business, such clauses are easily wriggled out of. I urge her to press LOCOG to publish the details of any successful rebate that it gets as a result of these apparent errors.
Mrs May
My hon. Friend is right that in previous examples, penalty clauses have not operated as well as they should have done. This is a matter for LOCOG to deal with, along with G4S. Everybody accepts that there are penalty clauses in the contract. That is obviously being looked at carefully. I will ensure that LOCOG is aware of his suggestion.
Margaret Hodge (Barking) (Lab)
I join others in congratulating the armed services on identifying personnel so swiftly and thank the 3,000 volunteers who will provide venue security. The Public Accounts Committee has looked at the issue of venue security a number of times. Does the Home Secretary accept that her Department and LOCOG did not identify early enough the numbers that would be sufficient? The contract with G4S was increased from £282 million at the time of the spending review to £553 million a few months later in December 2011. That suggests insufficient planning. Her officials, together with LOCOG officials, gave assurances to my Committee that they would recruit sufficient numbers perfectly adequately. Why did her officials give those assurances when it has now become so chaotic?
Mrs May
On the right hon. Lady’s second point, the assurances were given on the basis of the discussions that were taking place with the contracted providers. At that stage, the contracted providers were clear that they were going to be able to provide the numbers that they were contracted to provide. As I have explained, the gap that has opened up finally crystallised only yesterday when the request came through and we accepted that there was a need to undertake further contingency arrangements.
On the right hon. Lady’s first question, it was never the case that it would be possible, two or three years out, to identify absolutely every requirement of venue security. It was possible to identify the full requirements for venue security only at the point when all the venues had been determined by LOCOG, the appropriate level of security at the venues had been determined and the programme of events had been scheduled. It was at that point that the numbers necessary for security were finally determined.
Sir Bob Russell (Colchester) (LD)
I pay tribute to all members of Her Majesty’s armed forces who will provide security at the Olympic games, particularly those from the Colchester garrison. Is it not fortunate that we still have an Army large enough to deploy these numbers? I put it to the Home Secretary in respect of G4S that no public contracts funded by UK taxpayers should go to a company that is aiding and abetting the state of Israel with illegal activities in the west bank.
Mrs May
I will not go down the route that the hon. Gentleman is trying to tempt me down on a matter that is more appropriate to my right hon. Friend the Secretary of State for Defence. However, I would say that G4S is one of the largest security providers in the world, so it was natural to look to exactly such a company for venue security.
John McDonnell (Hayes and Harlington) (Lab)
Security begins at Heathrow. For months, the Public and Commercial Services Union, which represents border control staff, has been warning the Government that there are too few staff. BAA wrote to the Government saying that the queues were caused by too few staff, and the former head of border control has said that the temporary staff who have been brought in are totally inadequately trained to meet security needs. I am worried not just about the embarrassment caused to this country by passengers who are coming for the Olympics spending more time in the queues than watching the Olympics, but about the security of the staff working at Heathrow, many of them my constituents. Does the Home Secretary not understand that her statement will be seen as utterly complacent about what is really needed at Heathrow airport?
Mrs May
I welcome the hon. Gentleman’s support for the Government’s approach to border security. When we identified that security checks had been relaxed and put to one side on many occasions between 2007 and 2011, we decided that as the job of the border forces is about border security, we would tighten up that security.
Mr Philip Hollobone (Kettering) (Con)
In failing to honour its contract, G4S has clearly let the whole country down. As a result of the Home Secretary’s swift and correct decision today, Britain will have more troops dedicated to venue security than deployed to Afghanistan. It is not enough to rely on penalty clauses in LOCOG’s contract with G4S. My constituents would want the Home Secretary and the Government to say that G4S should have no more Government contracts whatever until it pays every last penny of the additional costs of the extra 3,500 troops.
Mrs May
My hon. Friend refers to the number of troops working on venue security, but of course the overall number of troops that I cited includes those who will be involved in specialist support and other operations as well.
A number of right hon. and hon. Members have made comments about G4S and its contract, but it is still contracted to LOCOG as a partner to produce a significant number of personnel for venue security. We want to work with it, and we want LOCOG to work with it, to ensure that it can deliver the number to which it has now committed.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
The whole House accepts the Home Secretary’s assurances about the great role that the armed services will play in the Olympics. Does she recognise, however, that the real casualties are the thousands of people who were looking for employment and volunteering opportunities as part of the legacy of the games? This morning, the airwaves were full of them complaining and expressing their frustration. Does she recognise that frustration, and can she say anything to them today?
Mrs May
We continue to support the work that G4S is doing to bring in the number of people that it has now said it will be able to supply. At the point when G4S and LOCOG identified that, in their estimation, there would be a gap in the number of people such as the hon. Gentleman mentioned coming forward to work in security jobs at the various Olympic venues, it was absolutely right that the Government said that we would not just risk what might happen. We decided that we would ensure venue security, and that is exactly what we have done.
Dr Andrew Murrison (South West Wiltshire) (Con)
Once again, our regular and reserve forces are about to prove that they are indeed the nation’s flexible friend, but they must not be taken for granted, and it is good to hear that the Home Secretary is not doing that. There will be big cash and opportunity costs for the Ministry of Defence budget as a result of all this. What structures exist to ensure that any clawback from G4S is hypothecated to the MOD?
Mrs May
I assure my hon. Friend that discussions are taking place among Departments about the funding. The funding will not reside with the MOD. The matter of penalties is one between LOCOG and G4S, but the Government will discuss it with them. As he rightly says, if the required numbers have not been delivered, the financial penalty proceeds should revert to the Government to make extra money available.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I share the concerns of my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) about the number of people, including in my constituency, who would have loved to have had one of the 12,000 jobs that are now going not to security staff but to the armed forces.
The Home Secretary has been in her post for two years and two months. In that time she has had three security Ministers, and Olympic security needs have more than doubled. The Home Office knew that there was a problem in May 2010. When did she know there was a problem, and why did not she or one of her three security Ministers ask LOCOG more detailed questions about its poor forward planning?
Mr David Hanson (Delyn) (Lab)
Pauline Neville-Jones, Angela Browning and the hon. Member for Old Bexley and Sidcup (James Brokenshire).
Mrs May
No, Baroness Neville-Jones was the first security Minister, and my hon. Friend is the second. Perhaps the shadow Home Office team could pay a little more attention to what happens with Ministers—I know that there are more of them shadowing us than there are Ministers.
The Home Office and others examined the contract and worked with LOCOG and G4S throughout the period in question to ensure that the arrangements they had in place were correct. Only yesterday did it become clear that G4S felt it was not able to provide the full number of personnel that it was contracted to provide. I hope the hon. Member for Hackney South and Shoreditch (Meg Hillier) will agree that, in those circumstances, it was entirely right for the Government to act.
Mr David Nuttall (Bury North) (Con)
As it is now more than seven years since the UK won the right to host the Olympic games, does my right hon. Friend not agree that the fact that we are having to bring in the Army with the opening ceremony just 15 days away must mean that someone in either LOCOG or G4S is utterly incompetent?
Mrs May
As I have explained in answer to a number of questions, plans have been put forward and changed over those years, and contingency arrangements were put in place. It was entirely right and proper for the Government to act in this appropriate and contingent manner when it became clear that the security provider contracted to LOCOG could not reassure us that it could provide the full number of personnel.
Mr Pat McFadden (Wolverhampton South East) (Lab)
What will the Home Secretary do about terror suspect CF, who is reported to have visited the Olympic site five times and is believed by the court to have undergone terrorist training in Somalia? Does she accept that CF’s ability to be in London at all is a direct result of her legislation removing the power to relocate such suspects away from London or other parts of the country? That legislation is complacent, wrong-headed and dangerous. Will she revisit the issue on the basis that it is not the terror laws that threaten liberty but the intent of those who would seek to kill and maim innocent people?
Mrs May
It is certainly the case that the threat to the UK is the intent of those who wish to kill or maim fellow citizens. I answered a question on this matter in Home Office questions on Monday, and it is not possible for me to go into considerable detail of a case that is before the courts. However, the right hon. Gentleman is incorrect in some of the facts that he has stated. The situation is that the police identified CF travelling through the Olympic park area, and the arrangements that we have put in place enabled that identification to take place. That is different from what he said.
Mr Speaker
Order. I hope the House will take note of what the Home Secretary has said. That was a perfectly proper question and answer, but if the specific case is sub judice, which I believe to be so, we should not seek to press the Home Secretary on the details of it.
Mark Pawsey (Rugby) (Con)
Will the Home Secretary remind us when the contract with G4S was entered into? Under its terms, will the company cover the cost of the welcome commitment to ensure that none of the additional armed forces involved in the Olympics will be in any way out of pocket?
Mrs May
The contract was entered into by LOCOG in December 2010. As has been indicated, the Ministry of Defence is making arrangements for troops. Payments will be made so that no troops are out of pocket as a result of this requirement on them, and arrangements will be made to ensure they can have the leave to which they are entitled. The Government will speak to LOCOG about the penalties available in the G4S contract. The contract is between LOCOG and G4S, but I can assure my hon. Friend that we intend to ensure we do not pay sums of money that we should not pay when penalties can be used to claw the money back.
Mr John Spellar (Warley) (Lab)
Have delays in Criminal Records Bureau checks, particularly by the Metropolitan police, partly caused the problem? Either officials and Ministers have been lied to by G4S, or they have not been on top of the job. Which is it?
Mrs May
I can confirm to the right hon. Gentleman that, as far as I am aware, the numbers were not affected by the accreditation system process for checks on individuals. There are various parts to the accreditation system. There is also a role for LOCOG in working with G4S in inputting information into the system and in ensuring that cards are available for those who are accredited.
Mr Speaker
Order. This is an extremely important matter in which there is a lot of interest. I would like to accommodate that interest among colleagues, but we have an important statement from the Foreign Secretary, business questions and other business to follow, and therefore I must appeal for short questions and short answers.
Mrs Helen Grant (Maidstone and The Weald) (Con)
Does the Secretary of State agree that our fantastic forces’ stepping in at short notice to assist with security shows how vital they are?
Mrs May
I absolutely agree with my hon. Friend. Our troops do a fantastic job for us in so many ways. Their ability to step in at this stage to undertake this work and to provide reassurance to everybody coming to the games is yet another example of what a great military we have.
Simon Danczuk (Rochdale) (Lab)
G4S gets millions of pounds from the taxpayer to deliver the Work programme to reduce the unemployment created by the Government. At the same time, it gets millions of pounds to recruit security guards for the Olympics. Why could G4S not marry up those two initiatives?
Robert Halfon (Harlow) (Con)
Will my right hon. Friend review the use of private companies at all for state events such as the Olympics?
Mrs May
Given the numbers necessary for venue security for the Olympics, it was entirely right of LOCOG to look at working with a private sector contractor as large as G4S, as I have said. It was entirely appropriate for LOCOG to do that. Frankly, it would not be right to say that we should not use private sector contractors for venue security—they are used in a number of such events very effectively. I remind my hon. Friend that G4S will provide venue security personnel for the Olympic games.
Kevin Brennan (Cardiff West) (Lab)
The Home Secretary will know that hundreds of thousands of people will attend Olympic events in Cardiff. My office received a number of calls this morning from constituents who did the course and got the necessary accreditation, but who will not have a job owing to the use of the Army. One constituent passed the course, but G4S has not yet sent the certificate of accreditation. The right hon. Lady said, quite rightly, that she will help the armed forces with extra tickets, so how about compensation for those people who wanted a job and went through the course and who are now denied the opportunity of a job in the Olympics?
Mrs May
The hon. Gentleman makes an assumption that he cannot make. Some of those who went through accreditation will be used by G4S, which will still provide a significant number of venue security personnel for the games. Security personnel will be drawn from those whom G4S has trained and who have been accredited.
Bob Blackman (Harrow East) (Con)
I welcome my right hon. Friend’s swift and decisive action and thank the Government for delivering the games on time and within budget. Will she confirm that there will be no extra requirements on the Metropolitan police? If there are such requirements, will there be similar gestures in the form of tickets for relatives of police whose leave is cancelled?
The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
Thanks to the Culture Secretary.
Mrs May
I was about to come on to that. My hon. Friend the Member for Harrow East (Bob Blackman) makes the point that all the Olympic venues are being delivered on time and within budget. I pay tribute to the work done by my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport and my hon. Friend the Minister for Sport and the Olympics, which built on work done by the previous Government—Labour was in government when the bid was won, and they did a lot of Olympics planning work. We should accept that both parties take responsibility for the Olympics and hope that everybody will enjoy a fantastic games.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
When I first raised this issue with the Home Secretary on Monday, she refused to confirm the size of the shortfall, or indeed whether G4S had a shortfall in its security training. Will she say specifically what the size of the shortfall in G4S security trained staff is, 15 days before the Olympics start?
Mrs May
G4S has been training a significant number of staff—over and above the numbers it intended to provide. We do not know whether it can guarantee or reassure us that all those staff will be available for the Olympic games. It was on that basis that we decided to make contingency arrangements. In relation to the hon. Gentleman’s question on Monday, I refer him to the answer I have given on a number of occasions, but which I first gave to the right hon. Member for Leicester East (Keith Vaz), who asked this urgent question: the fact that there was a gap of this size and that this contingency was required crystallised, and the request was made, yesterday.
Sarah Newton (Truro and Falmouth) (Con)
I had the privilege of sailing along the Thames on HMS Ocean when she took up her position to provide security for events at venues all over London. Does my right hon. Friend share my belief that the presence of the Navy in London will be reassuring to all Londoners and volunteers, who are coming from Cornwall and all over the UK to help to make this the best ever Olympics?
Mrs May
My hon. Friend is right to remind us that, although we tend to use the term “troops”, the security contribution is being made by our armed forces as a whole. My right hon. Friend the Defence Secretary has laid a written ministerial statement today that refers not only to HMS Ocean and other Royal Navy assets, but to the important role that the Royal Air Force will play in ensuring our security.
Rushanara Ali (Bethnal Green and Bow) (Lab)
As an Olympic host borough, my constituency is not hosting any events, but it is host to the surface-to-air missiles on residential blocks. There are already concerns about the heavy military presence. Will the Secretary of State give an assurance that proper safeguards will be in place? Will the military work closely with the community to provide sensitive security, so that people feel they will not be targeted? It is welcome that the military is stepping in to address this failure, but sensitive and appropriate treatment is needed.
Mrs May
I can reassure the hon. Lady. She will know that the Ministry of Defence and the military have made every effort to work with local residents, local residents’ groups and local authorities in the areas where the ground-based air defence will be situated. That will ensure that that layer of security for the Olympic games can be delivered safely and appropriately, and in conjunction with local residents.
David Morris (Morecambe and Lunesdale) (Con)
I congratulate my right hon. Friend on her swift and decisive action in dealing with this matter. Will she confirm that the G4S contract is with LOCOG and not the Home Office, and that the previous Government procured that mixed arrangement?
Mrs May
The contract is indeed between LOCOG and G4S and not between the Home Office and G4S. It is therefore LOCOG’s responsibility to deal with the contract and to ensure that it contains the right penalties and so forth. As I have said, discussion took place for some time, but LOCOG finally signed the contract in December 2010. It had obviously discussed the mix with potential providers for some time prior to that.
Heidi Alexander (Lewisham East) (Lab)
Some of my constituents in Blackheath will have to live with Rapier missiles located metres from their home during the Olympics. Does the Home Secretary recognise that this latest fiasco with G4S undermines pubic confidence in the planning and preparation for the Olympics, and what assurances can she give me that the same lax approach has not been taken to other security arrangements?
Mrs May
This is not a lax approach; it is about the Government ensuring that we have the right approach to security and that we step in when the necessity arises. I hope that the hon. Lady will reflect carefully on the words she used today, however, because I can assure her that in providing this and other layers of security, particularly the Rapier missiles, the military are certainly not lax in their approach. They deal with these matters appropriately and are working with local residents, who can have every confidence in our armed forces.
Harriett Baldwin (West Worcestershire) (Con)
G4S has had years to prepare for this event and has been paid millions of pounds, and according to the International Labour Organisation, 230,000 young people in this country are seeking part-time work to go with their studies, so the timing should have been perfect. What does the Home Secretary think has gone wrong with the labour market and G4S that it has been so completely incompetent at finding people to do these jobs?
Mrs May
G4S will still be providing a significant number of venue security personnel drawn from a variety of sources to provide security at the Olympic games. We will continue to work with the company. Obviously it recently identified problems with providing the complete number of personnel it was contracted to provide, but we will continue to work with it because it will still play a significant role in the security of the Olympic games.
Alison Seabeck (Plymouth, Moor View) (Lab)
We have heard across the House concerns about pressures on border security and wider airport security, so will the Home Secretary say what discussions she has had with the Ministry of Defence? Has she had confirmation from the MOD that it can provide any additional troops that might be required for a contingency plan to her existing contingency plan, and will any of those troops be coming from units abolished last week?
Mrs May
I can assure the hon. Lady that we have had significant discussions with the MOD about the contingency arrangements, but, as I said in my initial answer, the number of troops includes those on specialist operations as well as those providing venue security. A number of contingency arrangements remain in the plans, however, because we obviously recognise the need to continue to plan for other circumstances. That is why we will have been talking to the MOD. I can assure her that contingency arrangements remain.
Dan Rogerson (North Cornwall) (LD)
A retired police officer from my constituency travelled to Cardiff in early April to be interviewed and offered a job by G4S. As of last week, he was still contacting it to find out whether he had a job. Will the Home Secretary advise police authorities and, in due course, police and crime commissioners to steer clear of this shower and stick with their own support staff and police officers?
Mrs May
Police forces up and down the country have been working with private sector contractors for a number of years now. For example, when I visited Maidenhead custody suite, Reliance was working alongside the police officers and others. Indeed, it was the previous Labour Government who enabled forces to bring in private sector contractors to undertake detention and escort duties, which had previously been done only by police officers.
Kerry McCarthy (Bristol East) (Lab)
Given that the Home Secretary has been caught out by her complacency towards this contract, has she given her personal attention to concerns raised with her by the noble Lord Prescott, among others, about the fire marshals contract that LOCOG has awarded to Close Protection UK? Does she think that company fit and proper to run those services, and does she have confidence in its ability to do so?
Mr Peter Bone (Wellingborough) (Con)
I am sure that the whole House will thank the right hon. Member for Leicester East (Keith Vaz) for bringing such an important urgent question before us, and the Home Secretary for answering personally and not pushing it off to a junior Minister. Will she say whether what has been announced is the maximum number of troops being deployed? Would she hesitate to increase the number, if security was at risk?
Mrs May
As I said in answer to a question from the hon. Member for Plymouth, Moor View (Alison Seabeck), we are clear that we still have some contingency in place, so were there any security considerations, we could draw on that as well. We have ensured, and will continue to ensure, that further contingency arrangements are in place.
Balance of Competences
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
With permission, Mr Speaker, I will make a statement on the review of the balance of competences of the EU as it affects the United Kingdom.
Membership of the EU is in the UK’s national interests. The Government are committed to playing a leading role in the EU and protecting the UK’s national democracy, but the EU needs to reform to meet the challenges of competitiveness, a stable eurozone and greater democratic legitimacy. The crisis in the eurozone will almost certainly mean great changes for the European Union over the course of this decade. We understand the case for eurozone countries to take steps towards closer fiscal and economic integration as a logical consequence of monetary union. Given the UK’s place outside the euro, it is right that we have said we will not be part of that closer integration. We support the existence already of multiple forms of EU membership. This flexibility is in the interest of both the EU and UK. The EU is not and should not become a matter of everything or nothing.
As the European Union continues to develop, however, we need to be absolutely clear when it is most appropriate to take decisions at the national or local level—closer to the people affected—and in other cases when it is best to take action at the EU or global level. It would be rash to predict with certainty how the eurozone crisis will end, what solutions will be agreed upon and found to be workable and sustainable, and what choices other countries will make. Until we have a better idea of the answer to those questions, we will not know the decisions that all EU countries will be facing.
The crisis in the eurozone has intensified the debate in every country on the future of Europe, and there is no exception to that here. Equally, it is essential for the long-term success of any institution that its members are vigilant in reforming it so that it remains modern, effective, efficient and legitimate. The EU is no exception to that, either, but our national debate and the broader European debate must be thorough and informed.
Today, I have published a Command Paper that sets out in detail how we will deliver our undertaking in the coalition programme for government to
“examine the balance of the EU’s existing competences”.
The review will be an audit of what the EU does and how it affects us in the United Kingdom. It will look at where competence lies, how the EU’s competences, whether exclusive, shared or supporting, are used and what that means for our national interest. These are issues that affect all EU member states and could have a bearing on the future shape of the EU as a whole.
The review will be a valuable exercise for deepening understanding in Britain of the nature of our relationship with the European Union and how it has evolved over time, and will provide a constructive and serious British contribution to the public debate across Europe about how the EU can be reformed, modernised and improved. The review will be taken forward in a comprehensive and analytical way, jointly co-ordinated by the Foreign and Commonwealth Office and the Cabinet Office, and the Minister for Europe and I will answer to Parliament for it.
Government Departments will undertake the review for the areas of EU competence for which they are responsible. For example, the Department for Environment, Food and Rural Affairs will be responsible for conducting the review on the EU’s competence on fisheries, and will be jointly responsible with the Department of Energy and Climate Change for the EU’s competence on the environment. The review will be an outward-facing exercise, both domestically and internationally, and Departments will be tasked with consulting and inviting evidence from everyone with a knowledge of and interest in the exercise of the EU’s competences, including not only Committees of Parliament and the devolved Administrations but businesses, civil society, other interested parties and individuals with expertise in and experience of each area.
We will be as interested to hear from car manufacturers about EU product standards as from non-governmental organisations about environmental policies or security experts about combating organised crime. We will also invite our European and G20 partners, as well as the EU institutions and other international bodies, to contribute evidence if they wish. The review should be seen as a necessary and positive part of reforming Europe. Unless there is a good reason to the contrary, we expect to make all evidence submitted publicly available.
To do justice to the complexity of the issues and the interests at stake, it will be important to allow enough time for this process to cover the necessary ground. Departments will begin substantive consultation this autumn, and reports informed by evidence received on individual areas of competence will be published as the review progresses. The review will conclude in 2014.
The end result will be the most thorough and detailed analysis possible of what the exercise of the EU’s powers does and what it means for the United Kingdom. The review will present the evidence and analysis, and of course it will be for political parties to decide on their own policy recommendations. Such a comprehensive piece of work has never been undertaken before, but it is long overdue. It will ensure that our national debate is grounded in knowledge of the facts and it will be a valuable aid for policy makers in the future. Of course, this country is not alone in giving thought to the future evolution of the EU. Work is also being undertaken by, for example, my colleague the German Foreign Minister, Guido Westerwelle, and a number of my EU colleagues on the future of Europe. Our exercise will inform that wider debate.
With the European Union Act 2011, this coalition Government have already made an historic change to how we handle EU matters in this country, with new powers for Parliament and a referendum lock, so that no future treaty change that transfers powers from the UK to the EU can happen without the express consent of the British people. The work that I am announcing today will help to inform decisions on Britain’s future path in Europe. It is not a consultation about disengaging or withdrawing from the EU. The coalition Government’s policy on Europe has not changed. We remain committed to our membership of the EU and to a strong and stable Europe. [Interruption.] I am smiling: I am amused by one of my hon. Friends behind me. I also believe that the EU’s future lies in continued variable geometry, in different layers of integration. Britain will choose not to take part in some layers, such as Schengen or the euro, but will continue to play a leading part in completing the single market, championing free trade and enlargement, as well as in foreign policy and new areas, such as the unitary patent, which benefits British business.
It is my view, as it is the Prime Minister’s, that in future we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest in free trade, open markets and co-operation. That should involve less cost, less bureaucracy and less meddling in the issues that belong to nation states. This analytical exercise will help to inform political parties and the British public, as they consider how the United Kingdom’s democracy, prosperity and security are best advanced in Europe—and in the world at large —and what kind of Europe it should become.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
I thank the Foreign Secretary for his remarks today and for advance sight of the statement.
The Opposition have no objection to a proper, thorough and factual analysis of what the EU does and how it affects us in the United Kingdom, and we welcome the involvement of a wide range of external stakeholders in the exercise announced today. We are also clear, however, that we support a future for Britain within the EU. To cut ourselves off from a market of 500 million customers would imply not just that we had lost faith in Europe, but that we had lost faith in the ability of British companies to out-compete their European rivals. In an era of billion-person countries and trillion-pound economies, we need to find ways to amplify Britain’s voice on the world stage. Where we have shared goals—from climate change negotiations to tackling cross-border crime and human trafficking—working together in Europe makes global agreements more likely.
However, committed as we are to a future within Europe, we also recognise the need for reform of Europe. The Foreign Secretary made only passing reference today to the eurozone crisis, which is still afflicting Europe, so in many ways this was a curiously contextless and rather ahistorical statement, the announcement of which, I fear, owed more to enduring political problems than to immediate policy challenges. Let us remember that President Van Rompuy stated at the European Council just a couple of weeks ago that his plan was to
“submit to the December 2012 European Council detailed proposals for a stage-based process towards a genuine Economic and Monetary Union”.
Given that that timetable is much shorter than the one the Foreign Secretary has set out today for full publication of the internal Government audit, will he confirm that the work initiated today will not be completed and so will not inform the Government’s negotiating position in the critical weeks and months ahead? Given the broad terms of the Foreign Secretary’s statement, will he take the opportunity of his reply to set out more clearly to the House what the Government’s specific negotiating objectives are in the crucial six months ahead?
Every Member of the House knows that it has not exactly been a great week for coalition unity. That is perhaps reflected in the strength of support from the Liberal Democrats Benches for the Foreign Secretary’s statement today—
Mr Alexander
I am glad to say that what is missing in quantity is indeed made up for by quality on the Liberal Democrat Benches. There are still some true and honourable Liberal Democrats, I am glad to acknowledge.
The statement we have just heard from the Foreign Secretary will do little to create a greater sense of consensus between the coalition parties, I fear—indeed, the project is not even under way yet and already cracks are emerging. The Foreign Secretary’s Liberal Democrat colleagues, including the Deputy Prime Minister’s advisers, have reportedly been claiming that the audit is a small, low-key affair and largely a technical exercise. The Foreign Secretary today makes grand claims about the scale and scope of the project, but the hon. Member for Cheltenham (Martin Horwood), co-chair of the Liberal Democrat parliamentary committee on international affairs, has already said:
“The call for a long list of demands for unilateral repatriation and carve-outs is neither achievable nor desirable.”
Indeed, the Deputy Prime Minister is reported in the newspapers to have already warned that the review must not simply provide a turbulent backdrop to what is already a tense relationship between Britain and its EU partners. Given that the Deputy Prime Minister knows a thing or two about tense relationships, what assurances can the Foreign Secretary give his colleague today that that scenario will not come to pass?
The timing of today’s announcement seems to have more to do with managing the fallout from the recent weekend of referendum shambles than with promoting Britain’s national interest, because the splits on Europe are not just between the coalition partners, but within the Conservative party. The timing seems to reflect growing rumblings from those on the Conservative Benches, many of whom will see today’s announcement as merely another step on the ramp towards an inevitable EU referendum. [Hon. Members: “Hear, hear.”] Right on cue, and from the Conservative Front Bench. Let me therefore take this opportunity to ask the Foreign Secretary an important question that the Prime Minister failed to answer when he returned from last month’s EU summit. If the Conservative party were to propose a referendum premised on a package of powers being repatriated—a list that would probably be drawn from the audit announced today—but the Foreign Secretary was unable to secure such an outcome in his negotiations with members of the EU, would he contemplate advocating withdrawal in a subsequent referendum? I invite him to desist from warning about defeatism and simply to answer the question.
In conclusion, the Prime Minister himself said recently that it is vital for our country
“that we get our relationship with Europe right.”
Much that determines that relationship could well be decided before the Government’s review is completed. The truth is that Britain urgently needs an effective Europe strategy, and an audit, although worth while, is not a substitute for a strategy.
Mr Hague
Stripping away one or two of the remarks about political parties, I think that amounted to a welcome for the announcement, as the right hon. Gentleman said that he had “no objection”. That is as near as we get to enthusiasm from Opposition Front Benchers on this subject, so I am grateful to him for what counts as a very strong welcome and I look forward to the Labour party submitting its evidence to the review in due course.
Given that the right hon. Gentleman got into party political matters, let me say that it is a pity that Labour never conducted such a review. It might have helped the Labour Government when they were handing over so many competences without understanding what they were doing, without subjecting them to proper scrutiny in this House and without having a referendum. We remember—[Interruption.] Opposition Members are talking about particular treaties, but it was in the Nice treaty that Labour gave up the veto, which ended up with our being implicated in eurozone bail-outs under qualified majority voting—something from which this Government have now extracted the United Kingdom. The Opposition will therefore benefit enormously—and could have benefited in the past—from this kind of analysis, and I am glad that they have no objection today to its being undertaken.
The right hon. Gentleman asked about our priorities in the coming months. They are, of course, to protect the integrity of the single market. There is much talk about banking union, for instance, although different countries and different commentators mean different things by the term. We will protect the integrity of the single market, but above all our priority is to support measures that will really bring growth to the EU. They include removing barriers to business and pursuing free trade agreements with countries such as Canada and Singapore. Much of that agenda was endorsed at the June European Council.
The right hon. Gentleman went on to ask other questions about the future, and to suggest that the timetables were somehow amiss, but he himself said in an article in The Guardian on 1 July that
“there are also those within the Labour party who have speculated about the possibility of a referendum… We should not decide now because the pressing priority…is…securing Britain’s interests and protecting the single market”.
That is exactly what I have been saying. He went on:
“And we cannot sensibly decide now because none of us can fully predict where Europe will be in a few months, never mind a few years.”
So he does not want to answer the questions that he has just been putting to me about the longer-term future. What we do know is that, whatever happens, we will be in a better position if we have undertaken this work. It should have been undertaken before. It will inform our negotiations, improve our discussions with our partners and allow the public to be engaged in the process. Perhaps it will also lead to Governments undertaking more successful negotiations than the one that he will remember from his time as Minister for Europe, when he gave away £7 billion of our rebate. There is much to learn if we are to avoid negotiations that are so memorably, comprehensively and disastrously unsuccessful as those.
Mr William Cash (Stone) (Con)
Naturally, we all welcome this initiative. Does my right hon. Friend agree, however, that it is not only about specific powers but about democratic power as a whole, and that that raises the question of the sovereignty of Parliament, and of the wording of the European Communities Act 1972 and its impact on the daily lives of the people of this country? Does he also agree that it is essential to incorporate all those questions in the review, as well as on the necessity of holding a referendum as soon as one can possibly take place?
Mr Hague
It will be a wide-ranging review and I am expecting a substantial contribution to it from my hon. Friend, given his knowledge of and long-standing opinions on so many aspects of EU competences. We are not restricting what people can submit in their evidence or what subjects can be addressed. The review will involve the majority of Government Departments, and, of course, all the analysis of the competences taken together will prompt major questions about how democracy works and about the appropriate levels at which decisions should be made. It is not a review about a referendum. We passed legislation last year that deals with the circumstances in which referendums will be held, and it is for each political party to explain the circumstances in which they would hold a referendum. My right hon. Friend the Prime Minister and I have recently discussed that matter, as my hon. Friend knows.
Mr Denis MacShane (Rotherham) (Lab)
I welcome the Foreign Secretary’s statement, but does he agree with this time line? In July 2009, he leads the Conservative party out of the family of centre right parties in Europe. In July 2012, the Prime Minister announces that he envisages a referendum, and the Foreign Secretary announces today that every green-ink EU obsessive may write to him with their ideas on what needs to be done—I hope that the Foreign Office has a big enough warehouse for all the mail. Does he agree that we will have a referendum in July 2015 or 2016, and that he will arrive at his long wished for moment, when Britain separates itself from the rest of Europe?
Mr Hague
When a letter in green ink arrives from an obsessive, I shall check to see whether it has come from Rotherham. I suspect that there is a fair chance that it will have done. The time line that I remember is not far off the right hon. Gentleman’s period as Minister for Europe. In 2004, the Labour Government promised a referendum on the European constitution. In 2005, they failed to hold it. In 2007, they signed the Lisbon treaty, which was very similar to that constitution, without holding a referendum. In 2008, they passed many competences away from this country without understanding what the consequences would be. Now, in 2012, we are ensuring that there will be a proper understanding of the issues. That process will no doubt be informative for the right hon. Gentleman as well.
Mr Kennedy
Together at last.
This has been a memorable parliamentary week, and the Foreign Secretary is topping it off with a moment of history. He has made a statement on matters European that can, at one and the same time, be welcomed by the most arch-Eurosceptic as well as by those of us who are quite relaxed about being described as European federalists. I congratulate him on the squaring of that circle, and I wish him well in his endeavours.
Is it significant that the word “repatriation” did not appear in the right hon. Gentleman’s statement today? Will he confirm that this calm, methodical, thorough review is going to be wisely led by civil servants and that it will not lead to policy prescriptions, which will be left to the wilder elements of individual political parties?
On behalf of all of us who argue for a more decentralised, transparent and democratic European future, I want to say with an element of affection and nostalgia that, today, my mind goes back to the general election in which he led his party and I led mine. He led his on a Save the Pound campaign. [Hon. Members: “We were right!”] He might have been right, but he resigned as leader the day after the general election. None the less, I knew then that, one day, he would come good on Europe. Today is that day, and it would be churlish of me to deny him his moment in the Mediterranean sun.
Mr Hague
I am grateful to the right hon. Gentleman for some parts of his question. I well remember that general election, in which, I have to say, I got a lot more votes than he did—but not so many that I did not want to resign the following day. I am grateful for his endorsement of the statement, following the ringing endorsement—“no objection”—from the Opposition. We now have the enthusiastic support even of the Euro-federalist members of the Liberal Democrats. This exercise will therefore begin with strong cross-party support.
I cannot confirm that the review will be led by civil servants, because it is the job of Ministers to lead in Government, but there will of course be many assiduous officials engaged in the process and answering to Ministers, through whom the Government are accountable to Parliament. I can confirm that it will be an analytical exercise. I would not join the right hon. Gentleman in describing those in political parties who will draw policy conclusions from it as the “wilder elements”, as those parties are an important part of the functioning of our democracy. I am sure that the exercise will inform the functioning of our democracy, for which the right hon. Gentleman is a great enthusiast.
Stewart Hosie (Dundee East) (SNP)
The Joint Ministerial Committee’s memorandum of understanding on EU policy states:
“Ministers and officials of the devolved administrations should be fully involved in discussions within the UK Government about the formulation of the UK’s policy position on all issues which touch on matters which fall within the responsibility of the devolved administrations.”
I want to ask the Foreign Secretary two questions. First, was there any discussion at all with the devolved Administrations on the formulation of this review policy? Secondly, does he really think it adequate that Cardiff, Belfast and Edinburgh should be invited to submit evidence to the review? Does that meet the terms of the MOU, which states that the devolved Administrations should be “fully involved” in discussions on policies in which we have competence? He mentioned agriculture, fisheries and the environment: many of those matters are devolved.
Mr Hague
They will of course be involved in determining policy. I stress again that this is a review to establish a proper understanding of the use of EU competences and the balance of those competences with the powers of the United Kingdom. It will then be a matter for the political parties or the devolved Administrations to draw their policy conclusions from it. They will be involved in the way that has been set out in the memorandum. The commitment to undertake this exercise is in the coalition agreement; it is part of what the coalition Government said they would do at the beginning. That agreement is not qualified by, and cannot be diluted by, consultations with the devolved Administrations; we are empowered to do this as a coalition. Of course the devolved Administrations will be involved in determining policy, and I look forward to the representations that they make as part of the review.
Richard Ottaway (Croydon South) (Con)
As the Foreign Secretary rightly says, Europe is changing, perhaps faster than we realise. Our relationship with Europe will change. In debating that, we must be well informed; there is no substitute in politics for being well briefed. Once the information has been analysed, however, what will be the process of drawing it together to reach a conclusion?
Mr Hague
As I explained in my statement, the results of this analysis will be published as we go along. There will be many opportunities for individual Departments to do that; then, during 2014, that work will be drawn together. It is then for us all—for Parliament as a whole, for the Government or for political parties—to draw their policy conclusions and base them on that. That process is up to Parliament, up to the Government at the time and up to political parties.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
It is important to be fully briefed, but there is plenty of expertise in government and elsewhere. Surely, this audit could be completed by the end of this year, not the end of 2014. That is why many of us are very sceptical about the motivation behind the Government’s timetable. At a time when so many crises face Europe and the world, is it not important to work out what our strategy should be on so many of those important issues, rather than simply having this interminable discussion motivated by political purposes?
Mr Hague
It is no good for the Opposition, who never proposed and have never undertaken such a review, now to say that it must all be done in the next few weeks, particularly when they had 13 years in government during which they could have undertaken any such exercise. When this is completed, it will of course be available for political parties to draw on in the next general election campaign and develop in whatever direction—including for the Labour party, if it manages to decide by then what policy it is going to pursue. This will not prevent us in any way from doing the work that we are doing now to protect our national interest. As I mentioned earlier, the Government have already been able to extract the United Kingdom from liability for eurozone bail-outs. We are already working hard, in consultation with the devolved Administrations, on the common fisheries policy and in trying to ensure that the exercise of competence under that policy is used much more at the national or regional level, since the common fisheries policy has been one of the most catastrophic and disastrous of the common policies of the European Union. We are already doing that work in any case; this review comes on top of that work and does not in any way conflict with it.
Mr John Baron (Basildon and Billericay) (Con)
I wish the Foreign Secretary well in trying to repatriate powers from the EU, but can he explain why he is so unwilling to commit to a referendum on our membership of the EU in the next Parliament, given that this would give us time to have an informed debate, allow the eurozone crisis to play out and fundamentally address the lack of public trust when people hear politicians making promises about matters European?
Mr Hague
Again, I am grateful to my hon. Friend for wishing me well on the exercise. This is not about a referendum; questions about a referendum are separate. I believe, however, that for any future public debates or a referendum of any kind about the European Union, this exercise will prove immensely useful—for the public, for Parliament and for all involved in the debate. As I say, my hon. Friend’s question is separate from what I have set out in the statement. My own view is that it is necessary to see how Europe develops, what happens during the eurozone crisis, what structure of Europe we are dealing with and what can be achieved to improve this country’s relationship with Europe before we decide on any such referendum.
Kevin Brennan (Cardiff West) (Lab)
Despite our political differences, I have been friends with the Foreign Secretary for over 30 years. In that time, I cannot remember him being a Euro-enthusiast—despite his support for Maastricht. He did say in 1999:
“The British people believe that Britain’s place lies firmly within the European Union”.
Is that still his view?
Mr Hague
I was about to call the hon. Gentleman my hon. Friend because we have known each other so long. Indeed, in our days in the Oxford Union, I do not recall him being much of a Euro-enthusiast either. We used to make common cause against the Liberal Democrats, but I am skating over that for obvious reasons today. I do not know whether the hon. Gentleman was in his place at the beginning of my statement, but I did say right at the outset, “Membership of the EU is in the UK’s national interests.” I therefore think that he will find perfect consistency between that and what I said in 1999.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate my right hon. Friend on embarking on this review. May I query use of the term “competence”, which has a particular legal meaning in European law, particularly regarding fisheries competence, which is now enshrined in the Lisbon treaty? Does he not share my enthusiasm for the direction in which reform of the CFP is heading—to all intents and purposes, to devolve power and decision making back to member states?
Mr Hague
I do very much, as I mentioned a few moments ago. The envisaged changes to the common fisheries policy do not amount, of course, to a change in competence—the competence remains with the European Union—but if all goes well, the member states will be accorded much more say in how the measures adopted by the EU are implemented. That, I think, will be immensely beneficial to fisheries policies. That illustrates how the use of competence can be changed. We could, of course, debate whether the competence of the EU in certain areas should exist at all, as well as how it should be exercised. I do not think that we have any problem in using that term, and what is happening in the fisheries policy provides a good example of what can be achieved.
Wayne David (Caerphilly) (Lab)
May I press the Foreign Secretary a little on the curious timing of this exercise? To many of us, 2014 sounds suspiciously close to the next general election. Is this not all about preparation for the Tory party manifesto for that election?
Mr Hague
The hon. Gentleman is welcome to use this for the Labour party manifesto, and it might make it a much better informed manifesto than previous ones. I do not see any downside to that. This is a democratic country in which election campaigns are meant to be properly and fully informed. There is no disadvantage to the nation in that happening. Moreover, I intend this to be, and it will be, the most comprehensive exercise ever undertaken in this or any country about the competences of the European Union; it is important that it is fully and comprehensively undertaken. As I have said, it is odd that Opposition Members, who never thought of the exercise, never proposed it and were never in favour of it until today, now want it done at greater speed.
Mr James Clappison (Hertsmere) (Con)
As someone present at the launch of the Save the Pound campaign on a wet Tuesday lunchtime at St Albans market—with sizeable public support, as it was market day—I welcome my right hon. Friend’s statement. Does he agree that it should be perfectly possible, alongside this review, to take account of the public’s views and the public demand for a referendum on this subject? The public can see that the power of the European Union is growing day by day, in the exercise of its powers under its existing competences, and that our national democracy and our national sovereignty are being eroded day by day.
Mr Hague
Certainly, public disillusionment with the European Union is the greatest that it has ever been. We should be clear about that. I remember my hon. Friend being there on the day we launched the campaign to save the pound; let us be thankful that it was successful. We had precious little help from the other side at that time. [Interruption.] I seem to remember that a certain Prime Minister—the one before the last one—was very keen on joining the euro, so it was important to put him off, which we helped to do. A referendum, however, is a separate question from this exercise. I am not saying that this review is the only thing that will happen in our policy on the European Union. Much else will be happening over the coming months. My attitude towards a referendum is as I expressed it earlier. Discussion about it and the debate within all the political parties about what should be proposed for the future will carry on at the same time as this review.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I welcome my right hon. Friend’s statement, but will he reflect on the fact that some years ago President Giscard d’Estaing himself—a wise European—said that the United Kingdom would need to negotiate for itself a special status in the European Union? I commend my right hon. Friend’s recognition of public opinion, but at least two thirds of public opinion favours a looser trade and co-operation relationship with the EU, rather than this disastrous process of integration. Will he shout from the rooftops that only a Conservative Government will deliver the renegotiation that British people want?
Mr Hague
Like my hon. Friend, I remember the statements of President Giscard d’Estaing. I am sure that my hon. Friend will make extensive contributions to the review, and I look forward to them. Although I shall of course be shouting from the rooftops about what a Conservative Government will do, I shall not be doing so from the Dispatch Box now, given that I represent a coalition Government as Foreign Secretary. However, I look forward to doing the shouting at the appropriate time.
Mr Edward Leigh (Gainsborough) (Con)
In view of the absurd statement this week by Mr Barroso that if we left the EU we would be reduced to the status of a Norway or a Switzerland, perhaps there should be a review of his competence. Incidentally, Norway and Switzerland have the second and fourth highest GDP per capita in the world. Life outside the EU can go on if countries enjoy full trading relations.
Mr Hague
I will not stray as widely from the statement as my hon. Friend has asked me to, but I urge him to submit his thoughts to the review. The review can give rise to policy conclusions, and he has given a strong hint of the conclusions that he might draw from it. I look forward to discussing that further in the future.
Nicholas Soames (Mid Sussex) (Con)
I warmly welcome the Foreign Secretary’s statement about what will be a very important piece of work, especially since, as we all know, Europe will have to change dramatically following this dreadful eurozone crisis. Does he agree that the debate that follows will need to be conducted in a calm and rational way, given that, as he has said, Britain’s interests lie in full and wholehearted membership of the European Union?
Mr Hague
It is important for the debate about Europe to be well informed. Many Members on both sides of the House will cite instances in which European directives or EU competences are used in a way that is unnecessarily meddling or interfering at local or national level, but it is equally important to understand the importance of the single market to the economy of the United Kingdom. I hope that the review will draw out those issues and establish a huge amount of common ground, even among people whose opinions about the European Union differ, so that the debate can then focus on the genuine differences.
Chris Heaton-Harris (Daventry) (Con)
At last! I congratulate the Foreign Secretary on the statement and the Command Paper. By the end of this audit, we shall know exactly how the EU has bound its tentacles throughout Government. We shall also know the cost of our membership, and, through the work of the Fresh Start project—that is just a little advertisement—we shall know that we have options for change. Does the Foreign Secretary agree that all this will provide the British public with the information that they require to make a judgment on what any new relationship, post-eurozone crisis, should look like?
Mr Hague
I hope that the review will indeed provide that information. Not everyone will think that the right conclusion has been drawn, but it will make the biggest single contribution to the provision of information on which we can base policies in the future. I welcome the work that has already been done by, for instance, the Fresh Start group, of which my hon. Friend is a leading member, because that is exactly the kind of active, positive and constructive thinking about Europe that we need to see and that should feed into the review.
Elizabeth Truss (South West Norfolk) (Con)
I congratulate the Foreign Secretary on the review. Can he confirm that it will examine the costs of EU regulation, not just in its own context but by comparison with the costs of regulation around the world? It worries me that the UK currently ranks 83rd in the World Economic Forum’s regulation league table.
Mr Hague
Of course the review will be able to examine that issue, and my hon. Friend, among others, will be able to make representations about it. Part of the argument about how competence is exercised, and about the level of government at which it should be exercised, relates to the costs that are involved, and it will therefore be wholly legitimate to consider such questions.
Mr Philip Hollobone (Kettering) (Con)
I welcome the review, but may I express my regret that it does not go far enough? My right hon. Friend is right about so many things, and indeed I was with him until the second sentence of his statement—[Laughter]—in which he said, “Membership of the EU is in the UK’s national interests.” I do not agree with that, and nor do an increasing number of my constituents. Rather than asking what is the balance of the relationship between Britain and our EU partners, should not the review ask whether the United Kingdom is better off in or better off out of the whole thing?
Mr Hague
I appreciate the fact that my hon. Friend was with me until the second sentence of my statement. However, given that in the first sentence I merely said that I was going to make a statement, I will not take that as a ringing endorsement.
Of course my hon. Friend has a strong view, which is different from mine, about membership of the European Union. However, I think that he will concede that reviews of this kind, which spell out in detail how competence is exercised and, in many instances, what the costs are, and which set out properly the facts of how it is exercised in a single market, in directives and in many other contexts, can at least ensure that any debates about that issue, now and in future, are better informed and take place on the basis of a common understanding of the facts that would otherwise be lacking.
George Eustice (Camborne and Redruth) (Con)
I welcome my right hon. Friend’s announcement as a crucial first step towards Britain’s inevitable renegotiation of its membership of the EU. Does he expect the review also to examine the jurisdiction of the European Court of Justice and, in particular, its tendency to widen the scope of certain directives beyond the extent that national Governments originally envisaged?
Mr Hague
Yes, it is part of the history of EU competence that it has sometimes been extended, not by treaties and not by the decisions of nation states, but by rulings of the European Court of Justice, or by an expansive interpretation of the treaties by the European Commission. As we go through each of the issues, the way in which competences have developed in the past will be a legitimate factor in the assessment of how competence should be exercised in the future.
David Rutley (Macclesfield) (Con)
Like many of my hon. Friends, I warmly welcome the statement. I am keen to see a fundamental realignment of the UK’s relationship with Europe. Does my right hon. Friend agree that the prospect of a more multi-tier Europe should hold no fears for us, and, in that spirit, can he confirm that the UK will not be part of an EU banking union?
Mr Hague
We will not be part of an EU banking union. There are, of course, supervisory arrangements in respect of which we have common arrangements with the rest of the European Union, but the United Kingdom will certainly not become part of a full-scale banking union, participating in the provision of mutualised deposit guarantees. I hope that that, too, is common ground across British politics.
As for my hon. Friend’s question about a multi-tier Europe, I believe that the European Union, however it develops, will have to become more flexible. The unitary patent is an example of that, as is, in a different way, the fisheries policy as it develops. As the EU enlarges, as we hope it will, it is inevitable that it will become more flexible, and essential for it to do so.
Mr Peter Bone (Wellingborough) (Con)
I have no objection to the statement, but the Foreign Secretary is being a little coy. Is it not possible that the Conservative party will go into the next election promising a renegotiation and then a referendum, which will lead to a 100-seat Conservative majority followed by the renegotiation and then the referendum, in which the people will be able to choose whether to accept the renegotiation or pull out of the EU?
Mr Hague
I am glad my hon. Friend has no objection—which is quite rare when it comes to statements, so I also appreciate that endorsement. He is asking about a party issue, whereas I am speaking as the Foreign Secretary of the coalition Government today. I am sure we will profit in our party meetings from discussing the issues that he raises.
Robert Halfon (Harlow) (Con)
I welcome the statement, but will the audit include a cost-benefit analysis of our relationship with the EU, and will the Foreign Secretary make my constituents of Harlow incredibly happy by saying that it will look at immigration and that we will get back immigration as our area of competence, not the EU’s?
Mr Hague
The review will, inevitably, look at costs in most of the areas that I have described, but that is a different exercise from trying to arrive at a single figure for cost and benefit. There are many aspects of our relationship with the EU to which it is difficult to attach a financial benefit or cost. In the work that I do in respect of a common policy towards sanctions on Iran or Syria, for example, it is beneficial to the UK that we act with our partners, but it is hard to attribute a financial benefit to that. So I do not think one can arrive at a single number, which my hon. Friend may be looking for, but it is, of course, possible within this analysis across many different policy areas to look at costs and benefits, and it is absolutely possible in the work the Home Office will do to look at migration responsibilities and issues, and I know that my right hon. Friend the Home Secretary is very keen to do so.
Margot James (Stourbridge) (Con)
I very much welcome the positioning of this review as an outward-facing exercise. My right hon. Friend states that the relationship between the EU and the member state is a subject of intense debate in many member states, so will he take every opportunity to bring like-minded member states with us in our bid to recast the balance of power, so that the competitiveness of Europe as a whole improves in relation to the growth markets in the world?
Mr Hague
We are, of course, already engaged in trying to persuade like-minded member states that we must do the essential things in respect of permitting growth to take place in the European economy. That includes doing everything we can to limit the further application of the working time directive, and it means that directives currently being debated—the pregnant workers directive and the posted workers directive—that are further unnecessary burdens on businesses must be resisted. So we are already engaged in that work, quite separately from this review and analysis.
James Morris (Halesowen and Rowley Regis) (Con)
I welcome the statement. Does the Foreign Secretary agree that, as we are pursuing a radical policy of localism in Britain, decentralising power to local government and local communities, that spirit of localism should also inform our thinking about our future relationship with the EU?
Mr Hague
Yes, I very much agree. I have mentioned the common fisheries policy and the decades-overdue changes that are now at least being contemplated, and that would lead to more local, regional or national decision-making. It is certainly my view that we need to go in that direction in more policy areas.
Sajid Javid (Bromsgrove) (Con)
The vast majority of my constituents rightly believe that we have given away too many powers to the EU, and they will never forgive the previous Government for signing us up to the European constitution without the promised referendum. I welcome the statement, but will my right hon. Friend confirm that the review will be very open and transparent and, importantly, that all evidence submitted will be made available to the public?
Mr Hague
I agree: it is my view as well that too many powers have been given to the EU. That has certainly happened—and it has happened notably in the past few years under the Lisbon treaty. I therefore think that my hon. Friend’s constituents are right about that. I can confirm that, unless there is some powerful—and at this stage, very unexpected—reason to the contrary, the evidence given will be publicly available.
Dr Andrew Murrison (South West Wiltshire) (Con)
I welcome the statement—and, with due deference to my hon. Friend the Member for Kettering (Mr Hollobone), may I say that I actually rather liked all of it? I am pleased that the Foreign Secretary mentioned Guido Westerwelle, who, somewhat famously, said at the February 2010 Munich security conference that it was his aspiration to move towards a European army with full parliamentary control. Will my right hon. Friend confirm that this review will look at the European security and defence policy and the so-called EU defence identity?
Mr Hague
Yes, the review will, and I shall welcome my hon. Friend’s contribution to the review—as I welcome his endorsement of this statement. My friend and colleague Guido Westerwelle and I have quite different views on such issues. He has talked about a European army. I do not believe that can ever be contemplated, and I will maintain quite a strong difference of view with some of my colleagues about that.
Mark Reckless (Rochester and Strood) (Con)
The latest opinion poll recorded that 48% of people wanted to leave the EU and that only 31% wanted to stay in. The Foreign Secretary is in the minority therefore, but would it not be more sensible for him to take that view at the conclusion of his audit, rather than prejudging it before it starts?
Mr Hague
As I have said, hon. Members and political parties will be able to draw their policy conclusions from this review, and they will also, no doubt, take into account events that happen in the meantime. I am stating the policy of the coalition Government and pointing out that that has not changed, but in doing so, I do not prejudge the opinion that anybody could come to at the conclusion of this review.
Mr David Nuttall (Bury North) (Con)
Following on from the last question, if the findings of this review demonstrate that our membership of the EU is damaging the prosperity of UK citizens, does my right hon. Friend not agree that the right and logical thing to do will be to give the British people the option to leave the EU by holding a referendum?
Mr Hague
Again, my hon. Friend is, in line with his consistently held views, trying to take me on to a different and further debate. What I am setting out today is a process that will inform the wider debate. It might inform it in different directions, but it will help to ensure that the debate takes place on the basis of established facts, and I am sure that that will be beneficial for all.
Bob Blackman (Harrow East) (Con)
One of the many mistakes made by the last Labour Government was the blatant failure to control immigration from new entrant states to the EU. Will my right hon. Friend confirm that the effect of immigration from new entrant states and UK immigration controls will be part of this review, as will the benefits and disbenefits of the policy pursued by the last Labour Government?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Last, but certainly not least, I call Chris Pincher.
Christopher Pincher (Tamworth) (Con)
Thank you, Mr Deputy Speaker; I know my place.
I congratulate my right hon. Friend on this initiative, but does he agree that when the results of the audit are known, thanks to the supine posture struck by previous Governments, the British people will be shocked at the extent to which the EU involves itself unnecessarily in our affairs?
Mr Hague
Well, they might be shocked in some areas. I am trying not to prejudge the review, but I cannot exclude the possibility that they will be shocked by some of its findings. I am delighted that there has been such a warm welcome for the review from those who expect to be shocked, those who want to be shocked and those Opposition Members who never seem to have been shocked by the extent of the powers that they handed away.
Business of the House
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Sir George Young)
With permission, I should like to make a statement about the business for next week, which will be as follows:
Monday 16 July—Opposition day (4th allotted day). There will be a debate on health, followed by a debate on adult social care. These debates will arise on Opposition motions.
Tuesday 17 July—Debate on a motion relating to the Prime Minister’s adviser on Ministers’ interests, followed by a motion on the summer recess Adjournment, the format of which has been specified by the Backbench Business Committee. The subjects for these debates were nominated by the Backbench Business Committee.
The business for the week commencing 3 September will include:
Monday 3 September—Second Reading of the European Union (Approval of Treaty Amendment Decision) Bill [Lords].
Tuesday 4 September—Second Reading of the Small Charitable Donations Bill, followed by a motion to approve a money resolution on the Prisons (Interference with Wireless Telegraphy) Bill.
Wednesday 5 September—Opposition day (5th allotted day). There will be a debate on an Opposition motion, the subject of which is to be announced.
Thursday 6 September—Debate on a motion relating to immigration, followed by debate on a motion relating to community hospitals. The subjects for these debates were nominated by the Backbench Business Committee.
Friday 7 September—Private Members’ Bills.
I should also like to inform the House that the business for Westminster Hall for 6 September will be:
Thursday 6 September—A debate on the UK’s energy supply, followed by a debate on building regulations applying to electrical and gas installation and repairs in dwellings.
As these are the last business questions before the summer recess, may I, as usual, thank the staff of the House for all their hard work, Mr Deputy Speaker? I hope that they have a good and well-deserved break before we return in September. I am sure that the whole House will also want to join me in wishing all participants in this summer’s Olympic and Paralympic games the best of luck, especially Team GB.
Ms Angela Eagle (Wallasey) (Lab)
I thank the Leader of the House for his statement. May I echo his thanks to all the staff of the House for the way they have supported us this Session? May I also say to him that, following his written ministerial statement on the experiment with public reading stages, the Opposition will certainly be looking forward to the pilot?
As these are the last business questions before the Olympics, may I take this opportunity, as the Leader of the House has just done, to wish Team GB all the best? The whole country is behind them. However, given today’s urgent question on security, the problems with the M4 flyover and the continuing issues at Heathrow, could he assure us that the Government are confident that these troubles will be overcome before the opening ceremony?
The Government’s handling of the House of Lords Reform Bill has descended into farce. On Tuesday, the Prime Minister lost control of his party and the Government abandoned the programme motion. Despite an explicit promise to me on Tuesday, the Leader of the House has failed to make a further announcement about how the Government intend to proceed. I hope that he will do so in his reply to me.
In his usual helpful way, the Liberal Democrat peer Lord Oakeshott said on Wednesday that the Prime Minister must
“not cringe to the Tory dinosaurs now they have tasted blood.”
Last night at the 1922 committee the Prime Minister apparently gave a hint about how he wishes to proceed when, after hugging his beleaguered Chief Whip—we all agree with that and can add our sympathy to him—he said:
“We are not going to negotiate with Labour, they are the enemy and they can’t be trusted—we are going to negotiate with the Liberal Democrats”.
By all accounts, the Prime Minister’s unique perspective on the trustworthiness of Liberal Democrats did not go down terribly well in that room. It was then pointed out to him by a much more experienced member of the Conservative parliamentary party that:
“Labour is not the enemy; they are Her Majesty’s Opposition”.
May I gently suggest to the Leader of the House that, as the PM clearly does not have the votes on his own side to deliver House of Lords reform, we should proceed on the basis of genuine cross-party discussion and agreement?
At business questions last week, I asked the Leader of the House about Conservative and Liberal Democrat Ministers splitting Government time to enable them to differentiate themselves from one another. In reply, he said that, when it came to the House of Lords Reform Bill, there would be a
“seamless approach to the legislation from those who are opening and closing the debates”.—[Official Report, 5 July 2012; Vol. 547, c. 1071.]
It did not quite work out that way, did it? I see that the Government announced at the end of last month that they were launching a £14 million fund to help people through the process of divorce. It gives people who are splitting up advice on how to divorce amicably and avoid arguments. Could the Leader of the House say whether the Prime Minister and his deputy were the first in line to receive the advice?
Yesterday, the Deputy Prime Minister sent an e-mail to his dwindling band of party activists, and I have managed to obtain a copy. In it, he says of Tuesday’s Lords vote:
“This is a huge triumph for our party”.
I wonder what on earth a disaster would look like in the eyes of the Deputy Prime Minister.
Last night’s suggestion that replacing the remaining hereditary peers with directly elected Members is a substantive reform is absurd. We have been debating whether there should be a 100% elected or an 80% elected second Chamber; electing just 10% would not be a democratic reform. A 10% elected second Chamber would not be a compromise; it would be the Liberal Democrats running up the white flag.
What a shambles this has been: the Prime Minister has lost control of his party; the Liberal Democrats are in revolt; and Government Whips have taken to ordering rebel Tory Back Benchers off the premises. And it is not just Government Whips who have been bullying their own Back Benchers. We have got used to the Prime Minister losing his rag at the Dispatch Box, but on Tuesday night, in one of his Flashman moments, he had an angry altercation with one of his leading Back-Bench rebels. Would the Leader of the House make a suggestion to the Prime Minister: “Just calm down”?
Sir George Young
On the first question, we are determined that the Olympics will be a great success and that the issues that the hon. Lady referred to will be resolved in good time.
The hon. Lady conveniently glossed over the rebellion among the Labour Members, 26 of whom defied their Whip, so it is clear that the Conservative party is not the only party that has differences on this issue. In my business statement, I announced the business for the first week back, which did not include further progress on the Bill, but on the substantive issue that she raised, it was clear from the vote on Second Reading that a huge majority of the House want to get on with it, with majorities within each of the three major parties voting for reform. She said that we could trust the Labour party, but I have to say that the Labour party was willing the end but not willing the means. Saying before the programme motion was even tabled that Labour Members would vote against it shows a lack of commitment to getting the Bill on to the statute book.
It was equally clear on Tuesday that there was no consensus on the timetable for the Bill, which is why we did not make progress with the programme motion. What we want to do—I say this in response to what the hon. Lady has just said—is to reflect and to allow time for meaningful discussion, including with the Opposition and with other hon. Members, to build a consensus on the best way forward. As I said on Tuesday, we do intend to table a timetable motion for the Bill in the autumn, but, as the House would expect, we want those discussions to take place first before I can give the House any further information.
As for marital relations, I think that relationships within the coalition are much better than relationships within the previous Labour Government. I get on much better with my deputy than the previous Prime Minister got on with Tony Blair. I just say to the hon. Lady, in conclusion, that two parties are working together to put right the mess left behind by the Labour party, which still refused to admit that it got anything wrong.
Bob Blackman (Harrow East) (Con)
Under the coalition Government, 10,000 more people suffering from cancer have received treatment as a result of the cancer drugs fund that we introduced. That would not have been possible had we followed the Labour party’s proposals to cut the national health service. May we have a debate on the benefits that the coalition Government have brought to the health service and the further improvements we can bring to cancer research?
Sir George Young
I am glad to say to my hon. Friend that we can have a debate on the health service, because we will have one on Monday. The subject was chosen by the Opposition and that debate will give all my hon. Friends the opportunity to explain the extra resources we have made available to the NHS, resources that it would have been denied by Opposition Members, including the cancer drugs fund to which my hon. Friend just referred.
Jonathan Ashworth (Leicester South) (Lab)
May I return to a theme that was raised extensively during last week’s business questions, which is the review of children’s heart services? The Leader of the House will recall that Members on both sides of the House raised that important issue with him. The decision to end services at Leicester’s Glenfield hospital has been shattering news for families and patients in Glenfield. Already 28,000 people have signed a petition and 250 are signing it by the hour, but unfortunately time has not been found for a specific debate on the future of children’s heart services. I concede that there is an Opposition day debate on health, but given the cross-party support I am not sure whether that is the appropriate moment to discuss this. Will the Leader of the House find time for such a debate or impress on a Health Minister the importance of coming to the House to make a statement on the future of children’s heart services before the summer recess?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I stress that a lot of Members are trying to catch my eye and we are already quite late into the day. I want to get everybody in, so if we can have short questions that will be very helpful and I am sure that we will get speedy answers. This is the last chance that Members will have to ask questions of the Leader of the House before the recess so I want to get everybody in.
Sir George Young
After the passionate representations made at business questions last Thursday, I raised the matter immediately with my right hon. and hon. Friends at the Department of Health. There are Health questions on Tuesday and I am glad to say that the Backbench Business Committee has found time specifically for debate on children’s heart surgery in Leeds and on children’s heart surgery in Leicester during the pre-recess Adjournment debate on Tuesday. There will also be opportunities to raise the issue during the Opposition day debate on Monday. I hope that between now and the time the House goes into recess there will be three opportunities for the hon. Gentleman and others who share his concern to raise the matter with my hon. Friends in the Department.
Mr David Nuttall (Bury North) (Con)
In view of the constitutional importance of the House of Lords Reform Bill, will the Leader of the House confirm that sufficient time will be provided in Committee of the whole House for every clause and every schedule to be debated?
Sir George Young
It is certainly our intention that there should be sufficient time to debate the House of Lords Reform Bill in Committee. Speaking from memory, I can tell my hon. Friend that 50 hours have already been devoted to the Bill by the Joint Committee. In addition to providing adequate time for consideration of the House of Lords Bill, it is also the Government’s intention to provide adequate time to debate the other Bills in the legislative programme.
Wayne David (Caerphilly) (Lab)
On the question of House of Lords reform, given that the Prime Minister has said that he does not trust the Opposition, how on earth can we have a constructive dialogue unless we recognise there must be mutual respect?
Sir George Young
I repeat what I said to the Opposition on Tuesday: we are very anxious to have a constructive dialogue with them about the programme motion, but despite repeated requests on the Floor of the House for them to tell us how many days they want in Committee, we did not get an answer. I repeat what I said to the hon. Gentleman when he intervened in my speech on Tuesday, which is that we are happy to enter into discussions with the Opposition, as I said a few moments ago, to find a way forward. As Leader of the House, I am conscious of the fact that a large majority in the House wants the Bill on the statute book and it is up to all those who want to see it there to work together to achieve that objective.
Dr Matthew Offord (Hendon) (Con)
The Government intend to introduce ambitious targets for the recycling of plastic packaging, which will impose financial obligations on UK manufacturers. However, local collection and sorting of plastic packaging is a long way off from being able to deliver those targets and there is little incentive for local councils to improve when they have weight-based recycling targets. May we have an urgent debate on how to establish a realistic road map for promoting recycling that takes account of the local reality and does not hold small and medium-sized enterprises financially responsible for delivering targets that are outside their control?
Sir George Young
My hon. Friend raises an issue that is of concern to many local authorities, including my own. I shall raise the matter with my relevant colleagues, who are presumably those at the Department of Energy and Climate Change and the Department for Communities and Local Government, to see whether we can find a way through and provide real incentives to recycle that do not impose unrealistic obligations on small and medium-sized enterprises.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Will the Leader of the House arrange for a statement to be made to sort out the mixed messages that are being sent by Ministers to Citizens Advice in Manchester? In June, the Under-Secretary of State for Justice, the hon. Member for Huntingdon (Mr Djanogly),wrote to me to confirm that he was terminating the contract for the community legal advice centres that Citizens Advice runs in the city of Manchester six months early, so the money will run out next March. At the same time, the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), who is the Minister for civil society, wrote to the same organisation to congratulate it in glowing terms for its achievements and saying specifically:
“We would like to see many more projects like yours”.
Will the Leader of the House get those two Ministers together to sort out the message and, more importantly, to sort out some additional resources to ensure that the services can continue?
Sir George Young
Of course I will respond to the challenge laid down by the right hon. Gentleman, contact the two Ministers to whom he has referred and get a consistent response, hopefully so that that good organisation can continue to provide advice to the citizens in his constituency. I will raise the matter with the Lord Chancellor and the Minister for civil society in the Cabinet Office.
David Tredinnick (Bosworth) (Con)
Will my right hon. Friend congratulate our right hon. Friend the Prime Minister on his efforts, including a change in the law, to clear the demonstrators out of Parliament square so that it is available for all the visitors during the Olympics? When does the Leader of the House expect the remaining demonstrators to leave?
Sir George Young
My hon. Friend was a keen supporter of the Police Reform and Social Responsibility Act 2011, which prohibits the erection of tents on Parliament square. As he knows, many were removed relatively recently. Operational decisions on making further progress to clear the square are a matter for the Metropolitan police and I shall draw my hon. Friend’s remarks to the attention of the police to see whether any further action is needed.
Valerie Vaz (Walsall South) (Lab)
In previous years, the children who attended the international physics Olympiad were given funding. Last year, they won three silver and two bronze medals. Despite my letters to the Department for Business, Innovation and Skills and the Department for Education, they have refused to restore funding. Will the Leader of the House look at how we can support our brilliant future physicists?
Sir George Young
I commend the achievements mentioned by the hon. Member for Walsall South (Valerie Vaz)—I stress the reference to Walsall, after last week—and will raise the issues she has raised with ministerial colleagues and will ask them to write to her.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
The Leader of the House will know how important local post offices are to many of our constituents around the country, especially in rural areas, and how welcome it is that the Government have made a commitment to having no post office closure programme. May we have an update from the Government on the new Post Office Local model, and particularly whether the Post Office is putting them into the right venues? The loss of services that come with the transition might not be appropriate in all cases.
Sir George Young
My hon. Friend is right that we have committed ourselves to no wholesale closures of post offices such as those that we saw in previous Parliaments. I will raise the issue with the Secretary of State for Business, Innovation and Skills, who will be at the Dispatch Box on the first Thursday after we come back. I will see whether I can get a response before then.
Mrs Madeleine Moon (Bridgend) (Lab)
On Tuesday, we had a statement from the Department for Work and Pensions about the proposed closure of Remploy factories. The Minister did not give a list of those factories that were facing definite closure and nine were under possible commercial bids. My Bridgend Remploy factory thought that it had made a successful bid and that it was one of those whose bid for their own future was going forward. It is now subject to a commercial factory bid and has no idea who the bid is from or what the future holds. May we have an accurate and fully detailed statement from the DWP about what is happening, and can each Member who has an appropriate factory be notified before we rise for the recess of what is happening in their area to the people who are directly employed in their Remploy factories?
Sir George Young
As the hon. Lady said, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), who has responsibility for disability, came to the House to make a statement on Tuesday and answered questions for a substantial time. I do not know whether the hon. Lady was able to get in on that exchange and ask that question, but I shall certainly raise the question of the future of the Remploy factory in Bridgend with my hon. Friend and will ask her to write to the hon. Lady so that we have some clarity on which avenue that factory is going down.
Mr David Ruffley (Bury St Edmunds) (Con)
The Leader of the House referred to the Government’s intention to table a time allocation motion on the House of Lords Reform Bill. Can he confirm that that will be tabled during the September sittings?
Sir George Young
The precise wording that I think I used on Tuesday was “in the autumn”. I have announced the business for the first week back. We are sitting for two and a half weeks in September, and I would very much hope that by the time we rise for the conference recess I will be able to give the House further information about our proposals for the Bill.
Ian Mearns (Gateshead) (Lab)
One of the particular pleasures that I have had since being elected in 2010 is to welcome parties of schoolchildren to this place from my constituency, and many hundreds of them have benefited from that. One unintended consequence of the decisions taken last night could well be that those opportunities are curtailed somewhat, particularly for parties having to travel many miles to get here. Will the Leader of the House use his best endeavours to try to maximise the opportunities for such school parties in future?
Sir George Young
This refers to a debate that took place yesterday when the Deputy Leader of the House mentioned that specific consequence. The House has made a clear decision when to sit on Tuesday, but we will look at the consequences for tours and see whether we can find some way through to make sure that those who want to visit the House are able to do so.
Jeremy Lefroy (Stafford) (Con)
The 2010 Browne report recommended that an efficient national scheme be set up through the student finance system to encourage past graduates to contribute to university endowment funds. May we have a debate on this subject and the progress on that?
Sir George Young
I cannot promise an early debate before the House rises, but my hon. Friend makes an important point. I can only suggest that when the House returns in September he applies for a debate in Westminster Hall, so that he can pursue this particular avenue and deal with it at greater length.
Mr John Denham (Southampton, Itchen) (Lab)
The right hon. Gentleman has been here even longer than I have, and I have been here long enough. Will he draw on his considerable experience of this House to confirm that where a clear majority of the House supports a Bill in principle, it is perfectly possible to make good and measured progress even if there is not a timetable resolution, simply by that majority closing a debate on a particular topic when it has had due attention and moving on to the next matter? Can we kill the myth that a timetable resolution is essential for progress on a Bill?
Sir George Young
That was not the conclusion drawn by the Labour Government, who introduced timetable motions on all the constitutional measures in the recent Parliament. There is a real risk if we go down the route suggested by the right hon. Gentleman—who I am sorry is standing down at the next election—of having protracted debates on individual subjects each of which needs to be guillotined. My own view is that it is much better if, in principle, one can seek agreement on an overall amount of time and then plan the debate for the Bill in conjunction with the time that is needed for all the other Bills. I am slightly reluctant to go down the route that the right hon. Gentleman has just invited me to go down.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I draw my right hon. Friend’s attention to the debate on Tuesday on the Prime Minister’s adviser on ministerial interests? The motion now has, or will by tomorrow morning, no fewer than 18 signatures from Chairs of Select Committees, and includes support from people such as the right hon. Member for Birkenhead (Mr Field) and our right hon. Friend the Member for Mid Sussex (Nicholas Soames). I have good indications and hope that Her Majesty’s Official Opposition are also sympathetic to the motion. Will the Government be seeking to block the motion and will the Leader of the House say which Minister will be leading for the Government?
Sir George Young
I am glad that we have found time to debate this important issue, which was displaced when we had the debate on the banking inquiry last Thursday. This was a step that the Opposition were not prepared to take in government, so I take their current support with just a pinch of salt. I cannot tell my hon. Friend who will be responding to the debate, and he will have to wait for the reply from a Minister to find out the Government’s reaction to the proposition that he has put before the House.
Kerry McCarthy (Bristol East) (Lab)
In the written ministerial statement today on wild animals in circuses, the Government talk as though they are proposing a ban, but it is clear that they are considering a licensing regime. That is not what the many, many Members who turned out for the debate a year ago were led to believe when the Government promised them a ban in an attempt to avoid an embarrassing defeat. May we have an urgent statement on it?
Sir George Young
My right hon. Friend the Minister of State, Department for Environment, Food and Rural Affairs has made it clear that we are proceeding with changes to the licensing system in the short term, but we are committed to legislating in the longer term. If the hon. Lady looks at the written ministerial statement, there is a clear reference to draft legislation.
Dr Julian Lewis (New Forest East) (Con)
The almost complete absence of Liberal Democrats from their Benches today suggests that most of them may already have abandoned the marital home, but despite that massive handicap, may we have a debate on a votable motion in Government time on the future of the nuclear deterrent? Members from both sides of the House would very much like an opportunity to express their views on such an important matter, because we have not had a chance to do so since 2007.
Sir George Young
I understand my hon. Friend’s interest. He will know that the Minister for the Armed Forces is undertaking a review, which I think was the subject of an exchange at recent Defence questions. A good opportunity to have a debate on that issue will be when that review is completed.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Leader of the House will know that many young people will be leaving schools, colleges and universities this summer, and many will be in danger of joining an already large number—almost 1 million—of unemployed young people. He knows that I have asked for greater attention, imagination and leadership on this issue for a long time. Has he considered the call that I have heard outside this place for the Duchess of Cambridge to have a particular role looking at and leading on the issue of young people who need our help this summer?
Sir George Young
I will certainly ensure that the Palace is aware of the hon. Gentleman’s suggestion. He will know that in the last quarter, youth unemployment was down by 29,000, and I hope very much that we can maintain that downward trend. He will also know that there are a range of initiatives on apprenticeships, the youth contract and the Work programme, which we hope will further reduce the rate of youth unemployment.
Mr Peter Bone (Wellingborough) (Con)
I know how much the Leader of the House hates programme motions because on constitutional matters when in opposition he always voted against them. May I make a suggestion that will be helpful to him, the Chief Whip and Parliament? The problem on Tuesday night was not caused by the programme motion; it was because there was not a business of the House committee. If there had been such a committee, with members who were not part of the Executive or the shadow Executive, it would have made time available. Surely in September we should bring in a business of the House committee, and that would solve all the right hon. Gentleman’s problems on programme motions.
Sir George Young
I am not sure that my hon. Friend has got that one absolutely right. The Wright Committee recommendations make it absolutely clear that the Government have an entitlement to get their business through. My hon. Friend’s suggestion is that the Government’s business should be subjected to a regime that might put at risk the likelihood of the Government getting their Bills through. It was always envisaged that the House would set up a Backbench Business Committee, which we have done, but it was always recognised that the Government should be entitled to get their business through.
Clive Efford (Eltham) (Lab)
I will certainly be trying to speak in Monday’s health debate, but I am dismayed that the Leader of the House has not given any notice that the Secretary of State for Health intends to come to the House, because he has issued a written statement today about appointing an administrator for my local healthcare trust. He has met the Conservative Members of Bromley and one of the Conservative Members of Bexley who are affected by the decision all together, but he did not meet the Labour Member who covers a Bexley seat, nor the Labour Members in the borough of Greenwich. That is clear and blatant politicising of the decision. I hope that the Leader of the House will take that back and make it clear that not only is the House unhappy with the Health Secretary’s behaviour, but that it is not appropriate for him to avoid coming to that Dispatch Box having put out blatant misinformation from his Department about the performance of that trust.
Sir George Young
The Secretary of State has put the House in the picture by making a written ministerial statement, which is a perfectly appropriate means of communicating Government initiatives. There is a health debate on Monday, where the hon. Gentleman may be able to raise this. I think the issue of meeting Members of Parliament was raised at Prime Minister’s questions yesterday, and I will do as my right hon. Friend the Prime Minister said and make further inquiries to see whether meetings can now take place that have not taken place so far.
Mark Pawsey (Rugby) (Con)
I shall be travelling to Rwanda this weekend to join Project Umubano, the Conservative party’s social action project. May we have a debate on how such projects are an excellent way for volunteers to appreciate international development issues?
Sir George Young
I welcome my hon. Friend’s initiative and know that he has been to Rwanda before. As we speak, my right hon. Friend the Secretary of State for International Development is on his way there, and I commend the work being done by those volunteers who are helping to transfer skills in medicine, law, business and a range of other areas. There was an opportunity to develop this yesterday at International Development questions. My hon. Friend will know that we are sticking to our promise on aid because it is the right thing to do and because it helps our own security and prosperity.
John Healey (Wentworth and Dearne) (Lab)
In his big red file, does the Leader of the House have a copy of every one of the 28 written ministerial statements tabled today, including the one confirming that the Government are cutting funding for further education courses for older students, which will mean that those over 24 will have to pay up to £4,000 a year at a time when they are worried about jobs, debt and how to pay the bills? It has been tabled, with the regulations, just three days before the summer recess, preventing this House from properly challenging this big change. Will he make time for a debate on the change in this Chamber?
Sir George Young
There is an Opposition day on Monday, when the Opposition could have chosen this subject for debate. I have looked through the written ministerial statements. I saw one from the same Minister, the Minister for Further Education, Skills and Lifelong Learning, about extending loans to students aged over 24, which I hope the right hon. Gentleman will welcome.
Mr Ben Bradshaw (Exeter) (Lab)
May we have a statement from the Health Secretary on regional pay, given the decision by 20 NHS trusts in the south-west to walk away from the national pay agreement, “Agenda for Change”, which thousands of NHS staff in Exeter and the wider south-west feel will lead to a further erosion of their pay and conditions, not least because the Liberal Democrats have been boasting recently that they blocked Conservative plans for regional pay?
Sir George Young
There is a health debate on Monday, when the right hon. Gentleman will be able to raise the matter.
Brandon Lewis (Great Yarmouth) (Con)
This morning I attended the Federation of Wholesale Distributors conference and had the chance to be reminded how important the industry is in supplying millions of people across the country through the retail network. Like retail, it is primarily made up of small and medium-sized enterprises, the very businesses that the Government are focused on for delivering job growth and economic growth and that have provided the half a million extra jobs we have seen since the coalition came to power. Will the Leader of the House find time for a debate in the autumn, in Government time, on the work the Government are doing to encourage SMEs and secure further job growth?
Sir George Young
I will spend the summer recess looking forward to that debate, when we can explain what we have done: cutting corporation tax, ensuring access to finance, scrapping regulations, setting up 24 new enterprise zones and a range of other measures to promote employment and growth in my hon. Friend’s constituency and elsewhere.
Robert Halfon (Harlow) (Con)
May we have an urgent debate on the anti-Christian behaviour and bias of the Charity Commission? A constituent has contacted me because the commission has revoked the charitable status of a trust that is part of the Brethren Christian Church, which does a lot of good work for charity. This is an extremely important test case because it has widespread implications for all Christian charitable trusts. Does the Leader of the House not agree that Christian groups that are serving the community have the right to charitable status and should not be subject to politically correct bias?
Sir George Young
I am sure that the Charity Commission is not anti-Christian. I do not think that the organisation to which my hon. Friend refers has ever been registered as a charity, so it is not quite true to say that that status has been revoked. The application has been turned down because it was not clear whether there was enough social engagement with the community to meet the public interest criteria. As I understand it, that decision has now gone to appeal at the first tier, which I think is probably the right way to resolve it.
Mr David Hanson (Delyn) (Lab)
Dairy farmers in my constituency were so concerned about the current and future potential cuts to the price of milk before 1 August that they travelled the 220 miles to London yesterday, with many hundreds of others, to complain about the potential loss of £50,000 from their incomes. I know that the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), is having meetings this week about the consultation on contracts, but can the Leader of the House indicate whether we will have a written or oral statement on the matter before the House rises and, if not, what mechanism is in place to ensure feedback to those farmers before the price cut deadline of 1 August?
Sir George Young
There will be a debate specifically on the dairy industry in the pre-recess Adjournment debate on Tuesday, which I hope will be an opportunity to bring the House up to date. I know that many hon. Members met their dairy farmers yesterday to listen to their concerns. The right hon. Gentleman will know that the Department for Environment, Food and Rural Affairs has made available £5 million to help certain farmers and that we are doing all we can to promote a voluntary agreement that will provide greater transparency and improve contractual arrangements between purchasers and dairy farmers.
Martin Vickers (Cleethorpes) (Con)
The Office of the Rail Regulator is currently carrying out a review of access charges for freight traffic moving on to the network, which are potentially very damaging for businesses that transport heavy bulk loads in and out of Immingham port in my constituency. Will the Leader of the House arrange for a statement on the matter from the Secretary of State for Transport?
Sir George Young
I will certainly draw my right hon. Friend’s attention to the concern my hon. Friend has just expressed. It is very important that we develop the railway network in such a way that it is possible to move freight from road to rail and that the interests of freight operators are not ignored when we look at track access charges.
Karl Turner (Kingston upon Hull East) (Lab)
Bullying in the workplace is apparently on the increase. On Tuesday night I witnessed a very red-faced and angry Prime Minister sticking his fingers in the face of the hon. Member for Hereford and South Herefordshire (Jesse Norman), who, reportedly, was then removed and marched off the estate by the Prime Minister’s henchmen. May we please have an urgent debate on bullying in this place and the Prime Minister’s anger management issues?
Sir George Young
I honestly think that there are better business questions that can be put to the Leader of the House than recycled gossip and tittle-tattle.
James Morris (Halesowen and Rowley Regis) (Con)
Jaguar Land Rover has recently announced that it intends to create 4,500 new jobs over the next five years and is investing £500 million in a new engine plant in the Black Country enterprise zone. May we have a debate on the success of that enterprise zone in supporting a successful automotive industry in the west midlands?
Sir George Young
My hon. Friend reinforces a request for a debate made a few moments ago, which I would very much welcome, although I cannot promise one before we rise for the recess. We need to give business in the UK all possible support, removing regulatory barriers to growth and promoting the excellent record of the motor industry—we are now a net exporter of cars, rather than a net importer. It is absolutely crucial that we stick to our fiscal consolidation targets, which have provided the right framework for this success.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Although this morning’s written ministerial statement on aviation strategy from the Department for Transport is welcome, the House was expecting a second written statement and a consultation on capacity in the south-east and the status of a hub airport. That absence is regarded by business organisations and the TUC as harming British competitiveness and the British economy. Can we expect to have the statement in September, or will it be delayed a third time? We are two years into the coalition but still have not had a strategy.
Sir George Young
The hon. Gentleman will have seen the written ministerial statement on aviation policy, which makes it clear that we intend to publish a call for evidence on maintaining our international connectivity in the medium and longer term. We remain committed to adopting the final aviation policy framework by next spring, so there will be the second phase to which he refers in due course.
Mr Philip Hollobone (Kettering) (Con)
Has the Leader of the House noticed that Members from Britain’s supposedly third major political party, with a few honourable exceptions, appear week after week to be absent from this Chamber on Thursdays? Is it official Government policy to give the Liberal Democrats a disproportionate leave of absence, or could the national interest, which the rest of us discuss, perhaps be made more interesting and important to attract greater attendance from the junior coalition partner?
Sir George Young
I am not sure that that is a useful subject for a future debate, but, if my hon. Friend looks at the record in the Division Lobbies, he will see that our coalition partners have been present—on some occasions in even greater proportions than some members of my own great party.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
On Tuesday, a piece appeared in The Guardian about the difficulty that my disabled constituent Ray Bellisario has had accessing buses in his permissible wheelchair, often when going to and from hospital. Despite repeated letters on the issue to the disabilities Minister, Maria Miller, over the past 18 months, he had received no reply. Miraculously, however, a letter appeared in The Guardian from Maria Miller—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We should not use personal names. If we refer to a “Minister”, that will be fine.
Seema Malhotra
Thank you, Mr Deputy Speaker.
Miraculously, however, a letter appeared today from the Minister for disabled people, suggesting concern at Mr Bellisario’s plight. A citizen in a wheelchair should not have to take or to threaten legal action to get a response. May we have an urgent debate about the needs of people with disabilities when accessing public services, including transport, and the Government’s effectiveness in addressing those issues.
Sir George Young
I am grateful to the hon. Lady and have seen that article in The Guardian. As she says, my hon. Friend the Minister for disabilities takes the issue seriously and is intervening. It is important that those in wheelchairs have access to public transport, and I will ask my hon. Friend to write to the hon. Lady.
Mr Edward Leigh (Gainsborough) (Con)
May I join my hon. Friend the Member for Harlow (Robert Halfon) in pressing the Leader of the House on the appalling decision by the charity commissioners to revoke charitable status from the churches called Gospel halls of the Plymouth Brethren on the ground that they do not admit non-members to their holy communion, although they do admit non-members to all services, bible readings and all the rest? These people are a small and completely harmless Christian community. For almost 200 years we have proclaimed in this Chamber the right to religious freedom. This is a vital and important issue, and we should proclaim it.
Sir George Young
Further to the original question posed by my hon. Friend the Member for Harlow (Robert Halfon), I must say that it has been decided not to enter one of the Brethren halls on the register of charities because the legal basis for the registration of that organisation as a charity is not clear, and the question, as I said a moment ago, was whether the trust met the public benefit requirement, given the limited social engagement of the followers of the Brethren in the wider community. That decision has been challenged by way of an appeal to the first tier tribunal, and that is probably the right way to let it proceed.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Since the Rio+20 conference, the Environmental Audit Committee has been trying to get the Deputy Prime Minister to appear before it to report on the summit, at which he led the UK delegation. He has not yet found time to do so, but, given that his responsibilities for legislation might be a little lighter in the immediate future, will the Leader of the House ask the Deputy Prime Minister to ensure that he appears before the Committee to report on the conference and on how the UK takes forward the issues raised at it?
Sir George Young
As I have been reminded, the Deputy Prime Minister made a statement to the House and is regularly accountable to the House at the Dispatch Box. It has been a convention, among all Governments, that they decide which Minister to put before a particular Select Committee. There have always been attempts to get Treasury Ministers to appear before individual Committees, but Governments of all persuasions have resisted that and put up the appropriate Secretary of State.
Chris Evans (Islwyn) (Lab/Co-op)
As a Co-operative Member, it has come to my attention that funding for fan-owned rugby league clubs appears to be under threat. Will the Leader of the House please contact the Department for Culture, Media and Sport with a view to releasing a statement after the recess in order to alleviate those concerns?
Sir George Young
I will raise the hon. Gentleman’s concern with my right hon. Friend the Secretary of State for Culture, Media and Sport and ask him to write to the hon. Gentleman, rather than wait until we return after the recess.
Kevin Brennan (Cardiff West) (Lab)
May I wish the Leader of the House a pleasant summer recess and ask that, when we return, we have a debate about privatisation? Recent events have convinced me that, sometimes, private concerns can do a more effective job than Government concerns, not least because more Conservative Back Benchers voted against the House of Lords Reform Bill’s Second Reading on Tuesday than voted in favour. May we have a debate about privatising the Government Whips Office—in the interests of public efficiency?
Sir George Young
I think the Government Whips Office is already privatised: it is run by people who have a commitment to enterprise, individuality, private sector growth and the rest. Rather than looking just at Back Benchers, it would be fairer if the hon. Gentleman looked at the votes of the Conservative party as a whole, where he would see that a majority voted for the Bill’s Second Reading.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
A caravan holiday park business, Tingdene, has continuously, deliberately and in a bullying fashion targeted Hazelgrove caravan owners association in my constituency, because the association has stood up for caravan owners’ consumer rights. May we therefore have a debate to discuss broadening the proposed new residential park home legislation to include holiday caravan parks?
Sir George Young
I think I am right in saying that one of the successful bidders in the ballot for private Members’ Bills made park homes their chosen subject. I very much hope that that Bill makes progress, because we all have constituents who have difficulties with some owners of park home sites, and I very much hope also that if the Bill is not currently configured in a way that meets the needs of the hon. Gentleman, there will be a sensible discussion as it proceeds through the House, and that any necessary amendments might be made.
Nic Dakin (Scunthorpe) (Lab)
The Office of Rail Regulation’s proposal to introduce a specific tax on the movement of coal and iron ore was referred to by the hon. Member for Cleethorpes (Martin Vickers). Will the Leader of the House arrange for the Secretary of State for Transport to make a statement on the measure’s likely impact, if it goes ahead, on the UK economy and on UK energy prices?
Sir George Young
I repeat what I said a few moments ago, and as a former Secretary of State for Transport I am very keen that, wherever possible, we move freight from road to rail. I would be very concerned if unnecessary barriers were put in the way of that transfer. I will raise the matter with my right hon. Friend the Secretary of State for Transport and ask that any letter she sends to my hon. Friend the Member for Cleethorpes (Martin Vickers) be sent to the hon. Gentleman as well.
Point of Order
Robert Halfon (Harlow) (Con)
On a point of order, Mr Deputy Speaker. May I clarify for my right hon. Friend the Leader of the House my question during business questions? The organisation that I spoke about, the trust that owned the hall, did have charitable status, which the Charity Commission revoked on the ground that the organisation had no public benefit and, therefore, no right to be classed as a charity. I urge my right hon. Friend to look again at the issue. I am happy to write to him with the details, because I do think that it is an unfair case of bias against that organisation.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We cannot carry on the debate, but I am sure that Government Front Benchers have heard that point, and that correspondence can be sent accordingly.
Court of Justice of the European Union
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Europe (Mr David Lidington)
I beg to move,
That this House takes note of the draft Regulation 2011/0901A(COD) of the European Parliament and of the Council (amending the Protocol on the Statute of the Court of Justice of the European Union and Annex 1 thereto) and draft Regulation 2011/0902(COD) (relating to temporary Judges of the European Union Civil Service Tribunal) and, in accordance with section 10 of the European Union Act 2011, approves Her Majesty’s Government’s intention to support the adoption of draft Regulations 2011/0901A(COD) and 2011/0902(COD) of the European Parliament and of the Council.
The debate covers two draft regulations that reform the Court of Justice of the European Union with the aim of improving its efficiency. The European Scrutiny Committee has described the two regulations as
“a modest but useful package of reforms”,
and the Government endorse that verdict.
This is also the first time that the House has had the opportunity to debate such draft regulations under the new provisions of section 10(1)(d) and 10(1)(e) of the European Union Act 2011. Section 10 covers a small number of articles in the European Union treaties, and its provisions require each House of Parliament to approve a motion on the draft measure concerned before the Government are able, on behalf of the United Kingdom, to vote in support of the measure in Brussels.
As hon. Members on both sides will know, the role of the European Court of Justice is to ensure that European Union law is observed. It is a key role, and it is only right and proper that Parliament should oversee the Government’s approach to any reforms to that important European institution.
Mr William Cash (Stone) (Con)
Does my right hon. Friend agree that implicit in what he says is the rule of European Union law, but is he also aware that the European Scrutiny Committee, in its report on the recent fiscal compact, made it clear that it did not regard European Union law as having been fulfilled, and that the Government themselves still retain their own position of reserving their views on the legality of the compact? What are the Government doing about that?
Mr Lidington
I know, not least from my own 90-minute evidence session in front of my hon. Friend’s Committee, how strongly he and other members of the Committee feel about that subject. However, it would be moving beyond the terms of this afternoon’s debate if I responded in detail about the Government’s approach to fiscal union and their decision to reserve their position on the use of the institutions for the implementation of the fiscal compact. Ministers have corresponded about that with the Committee and I am sure that there will be other opportunities for us to go into that matter.
Mr James Clappison (Hertsmere) (Con)
Does that not go to the root of the matter? We are told that the regulation is justified by the growth in the work load of the European Court of Justice. Assuming that there has been no change in the litigiousness of members of the European Union, and taking into account EU expansion as well, should we not be given pause for thought that it is the increasing jurisdiction of the ECJ over member countries that lies behind the issue? It is highly material that we should look at the prospective growth of that jurisdiction through the expansion to which my hon. Friend the Member for Stone (Mr Cash) referred.
Mr Lidington
It is true that every time the competence of the European institutions is enlarged through treaty amendments, the potential case load of the European Court of Justice is also enlarged. However, as I shall come to demonstrate, the reason for these particular reforms is largely to do with an increase in the case load as a result of litigation by private parties, particularly on single market matters. The case load that the reforms are intended to address certainly does not arise out of the negotiation of the fiscal compact by 25 member states last year.
Mr Lidington
I will give way to my hon. Friend, and then I shall make progress.
Mr Nuttall
My right hon. Friend makes a good point in saying that the ECJ’s increasing work load is often owing to disputes between private organisations. In the past, those disputes would often have been resolved here in London, as a result of contracts providing for the determination to be under English law. Therefore is not the work of European judges replacing the work of British judges?
Mr Lidington
Under successive Governments, the United Kingdom has supported the principle that we should be part of a single European market with a set of common regulations and legal provisions, because Conservative and Labour Governments alike, and now the coalition Government, have taken the view, backed by British industry for the overwhelming part, that that is to the economic advantage of British businesses—both manufacturers and service providers—the United Kingdom economy and the prosperity of our people.
Let us look at the justification for the package of measures before us. The House of Lords European Union Committee set out in its report of March 2011 how the work load of the Court had increased substantially in recent years. Between 2007 and 2011, new cases at the European Court of Justice increased by 18%. In paragraph 44 of its report, the Committee noted that
“We believe that the expansion of the CJ’s jurisdiction into the Area of Freedom, Security and Justice introduced by the Lisbon Treaty, coupled with the increase of EU membership to 27 States, will have an impact on the CJ’s ability to manage its workload. We predict another crisis of workload soon.”
What has also happened is that the number of cases going to the ECJ on appeal has increased significantly in recent years. For example, in 2008 just seven cases relating to competition law went on appeal to the ECJ; in 2011, the total had risen to 52 such cases. Given the Court’s key role as the arbiter of the single market and the advantage that the United Kingdom’s business community derives from the single market, dealing with the problem of delays and the overload of the Court is in the United Kingdom’s national interest.
Mr Lidington
I will give way once more and then I will move on to the details of the reforms.
Mr Clappison
My right hon. Friend has been generous in giving way. He made the same point—that the Court was of benefit to British businesses because of the enforcement of the single market—in the memorandum supplied to the European Scrutiny Committee. However, in my researches I have not been able to find any such case involving a British company, although there may be such cases.
Will my right hon. Friend write to me giving chapter and verse of cases involving British companies that have involved the European Court of Justice and the single market? There is the suspicion that the European Court of Justice, as with many other things to do with the European Union, is using the single market as a justification for its intrusion into decision making in areas that have nothing to do with the single market.
Mr Lidington
I will happily write to my hon. Friend, but I point out to him that just because a case does not involve a British company as one of the parties does not mean that the case is insignificant to British business interests. There might well be a case involving parties from other member states the outcome of which made a considerable difference to the opportunities available to United Kingdom companies.
Roger Williams (Brecon and Radnorshire) (LD)
The Minister is making a powerful case that the interests of UK business are best served when we have an efficient and properly resourced system of law. There is also the fact that many of the judgments have been delayed, which is to the great detriment of British interests as far as business is concerned.
Mr Lidington
We can debate, as my hon. Friend the Member for Hertsmere (Mr Clappison) does so robustly, whether the European Court of Justice should enjoy such widespread jurisdiction. However, what we are talking about is how we should address the problems in the system as it currently exists under treaty—the backlogs and delays, both at first instance and appeal. A system of courts in which justice is denied simply because the system is unable to cope with its work load is not in anybody’s interests.
Jacob Rees-Mogg (North East Somerset) (Con)
Will the Minister give way on that very point?
Mr Lidington
Of course I will give way to my hon. Friend, although I will be anxious to make progress thereafter.
Jacob Rees-Mogg
My right hon. Friend is exceptionally generous, as usual. However, I am not entirely sure that his last point is right. It could be in people’s interests for the Court to be bunged up. If one takes the view that the European Court of Justice is increasingly extending its powers into areas where it ought not interfere, anything that stops it doing that is all to the good.
Mr Lidington
A court of law and legal system should serve the interests of parties to that legal system. I go back to the old English adage that justice delayed is justice denied; my hon. Friend will be familiar with that and no doubt champion it as a matter of principle. I would argue that that principle should apply on a European level as well as on a United Kingdom or English level.
The reforms that we are discussing involve, first, the creation of a vice-president to assist the president of the Court in their role of managing litigation and overseeing the business of the Court. The vice-president will be appointed from among existing judges; an additional judge will not be required.
Secondly, there is to be an increase in the number of judges sitting in the Grand Chamber of the European Court of Justice, which generally handles the most sensitive cases. That is to allow broader participation by ECJ judges in general in Grand Chamber cases. It should increase the wider expertise of the Court and ensure greater consistency in how cases are handled. Thirdly, the reforms propose a reduction in the number of presidents of five-judge chambers who have to sit in the Grand Chamber at the same time. That will allow the chamber presidents more time to administer their separate chambers, each of which handles a substantial case load that should, as a consequence of this reform, be enabled to progress more quickly.
The reforms also include the power to appoint up to three temporary judges to the civil service tribunal, which is the employment tribunal for European Union officials. The problem with the tribunal at the moment is that it has only seven judges, which means that if even one judge is absent for a lengthy period, perhaps because of illness, cases can be delayed. Appointing temporary judges will prevent those delays from occurring. The temporary judges will be appointed from a panel of former judges of the European Court and will be paid only for the days that they actually work; they will not be on a long-term retainer or salary.
Finally, there is a key reform to the lower court, the General Court, which has a substantial backlog of cases. As is proposed for the ECJ—the upper tier—a vice-president will be created for the General Court, again from among the existing judges, to assist the president in managing litigation.
The Government have been active in negotiating the details of these reforms, and I am glad to say that because of our efforts two potential reforms about which we had concerns that we explained to the European Scrutiny Committee have now been removed. One of those was the proposal to remove the 10-day so-called period of grace granted to litigants to submit pleadings to the ECJ over and above the standard deadline period. We and other member states argued that removing the period of grace would harm our ability to submit pleadings and damage our national interest. We have protected the period of grace and ensured that not only the Government but, importantly, British businesses that may be party to ECJ cases have the maximum possible time to submit pleadings to the Court.
The other potential reform was the addition of 12 judges at the General Court. The Council has concluded that that reform requires further consideration and should be reserved for a later date. The rationale for the proposal was, again, the substantial backlog of cases—currently more than 1,300—at the General Court. It was also, in our view, very important that the reform was got right. We wanted to ensure that the arrangements for appointing any new judges are fit for purpose and that any increase in the number of judges should be consistent with the requirement for minimal spending in the current economic climate. We argued that any increase in the number of judges should go hand in hand with a programme of efficiency savings in the ECJ’s budget. The removal of the reform from the package at this stage is in line with our interests, but we may return to it at a future date.
Roger Williams
Was there a suggestion that specialist chambers be set up to deal with particular issues? Has the case for that not yet been made?
Mr Lidington
The idea of specialist chambers is indeed another proposal that came up in the course of negotiations.
All member states have now accepted that there will need to be further consideration of what could be done further to improve the efficiency of the Court in the longer term. A new group has been set up among officials representing the 27 member states to discuss and recommend potential reforms and, in particular, to address the backlog at the General Court. The group’s remit will include an examination of the potential increase in the number of judges and the way in which such judges might be appointed. I can assure Members that the Government will be an active participant in the group, and we shall argue that any reforms should be based soundly on concrete evidence. We will also finalise our policy on the appointment of any additional judges in the context of the broader discussion about the search for efficiency and reduced spending in the ECJ and in European Union institutions as a whole. It goes without saying that the Government will ensure that the House and, in particular, the Chairman and members of the European Scrutiny Committee, are kept briefed on developments.
At present, the reforms on the table are modest, but they support the Government’s objectives of trying to increase the efficiency of the European Court of Justice and pave the way for more significant reforms to the General Court at a later stage. On that basis, I commend the motion to the House.
Emma Reynolds (Wolverhampton North East) (Lab)
I welcome the opportunity to discuss the revised rules of procedure for the European Court of Justice. The Minister said that the Government are happy with what he calls a modest package of reforms that should improve the functionality of the Court without incurring any significant costs. We are pretty much in agreement with his analysis of the revised rules of procedure. We hope that the changes will make the ECJ’s procedure more efficient, and we appreciate that the Court itself was keen for the reforms to be agreed before the partial renewal of judges in October.
As the Minister outlined, there has been an increase in the Court’s work load, so the reforms are necessary. In its report, the European Scrutiny Committee noted the increased work load and said that it is due to the development of European Union law in new areas and the increase in the number of member states. As the Minister said, in the past year the number of new cases referred to the ECJ from national courts has increased, as has the number of commercial disputes, tax disputes and intellectual property cases. We are concerned that the backlog of cases is gradually continuing to grow.
It is clear that an enlarged Court requires more streamlined rules. We therefore welcome some of the changes proposed, in particular the removal of the requirement to read the report of the judge-rapporteur at the hearing, and the modifications of the composition of the Grand Chamber to ensure greater consistency. We also welcome the proposal to allow a member state bringing proceedings against another member state to use its own language, rather than that of the defending state. It is, however, questionable whether the reforms go far enough. It is to be hoped that procedural reforms will eliminate some of the delays, but structural reforms might be necessary.
In his letter to the Chair of the European Scrutiny Committee, the Minister says that a friends of the presidency group will be established to examine wider potential reforms to the Court, including the proposal to increase the number of judges. I listened attentively to the right hon. Gentleman, but I am not clear about the Government’s position on the proposal to increase the number of judges in the General Court, and I would welcome clarification of that when he winds up. The proposal was controversial and was dropped by the Danish presidency in order to expedite the reforms we are discussing today.
The motion refers to the appointment of temporary judges to the EU civil service tribunal. Seven judges serve on that tribunal, which adjudicates disputes between the European Union and its civil servants. The proposal is that temporary judges be appointed in the event that one of the judges must take an extended leave of absence. That administrative change to cover absence seems sensible.
The Opposition agree with the Minister that the rule changes are modest and welcome. We hope that they will streamline the decision making of the ECJ, as we want no further increase in the backlog of cases. The Court is the arbiter between member states and is key to the effective functioning of the single market, so we also agree with the Government that improving the functionality of the Court will be good for British business operating in the EU. Hopefully, it will prevent delays in the enforcement of single market legislation.
Both the European Court of Justice and the General Court have proven effective in enforcing competition rules and in ruling against protectionism. It is vital that they continue to do so do so in future. It is important to British business, consumers and workers that both Courts perform their duties as efficiently and cost-effectively as possible. That is why we support the motion.
Mr William Cash (Stone) (Con)
The report of the European Scrutiny Committee has been referred to by the Minister.
I will start by setting out the importance of the proposed reforms and putting them in context. As a practitioner of law over an extended period, I know that the volume of law has been increasing exponentially, particularly since we became a member of the European Union—or the European Community as it was then—in 1972. I do not think that anybody can put an accurate figure on the number of pages or statutes that have been effected in this House under section 2 of the European Communities Act 1972; suffice it to say that it is monumental.
The European Court of Justice is being reformed because of its vast work load. That is the problem. We discussed the extension of EU competences a little earlier with the Foreign Secretary. Those competences impact on the daily lives of people not only in the United Kingdom, but across the European Union, and the excessive legislation strangles small and medium-sized businesses. That is all part and parcel of a much deeper problem than the surface question whether the Court needs a few more judges. The Court may need more judges, but that is because of the increase in its work load.
I will refer very briefly, Mr Deputy Speaker, to the ancient history of codification. No less a person than Justinian had to decide whether the state could cope with the vast increase in law that had taken place. Eventually, he decided to reduce the volume of law from a monumental 3 million lines of legislation to 150,000 lines. His example demonstrates that it can be done.
The problem is work load and the volume of law. It is perfectly clear from the various papers that have been supplied to us that the length of proceedings, which now averages 17 months, also presents serious problems. The Max Planck Institute for Comparative and International Private Law, based in Hamburg, has stated that the European Courts are under pressure because of their work load and that the greatest problem facing EU judges is the dramatic rise in the number of cases. The number of preliminary ruling cases increased from one in 1961 to 385 in 2010; and the number of cases at all three EU Courts had risen to 1,406 by 2010. Mr Rösler, who conducted the study, stated:
“That’s the highest level in the history of the EU Court of Justice.”
He went on to say that
“the EU Court of Justice has the biggest workload of any international court”.
The more law there is, the greater the work load. Mr Rösler believes that the EU’s geographical expansion is just one reason why EU judges face an excessive work load.
There is also the question whether we are having reform or a facelift. Mr Rösler states that reform is the only way out of the predicament, and his call is backed by the EU judges. In a very unusual public statement, the president of the Court, Vassilios Skouris, highlighted the Court’s excessive work load. He called for 12 new judges to be appointed to the European General Court. That has become a matter of dispute, as the Minister said. The question is what is being done. Mr Rösler mentioned the effect of having 12 more judges—I understand that that has stalled because the actual number has not yet been decided—saying:
“The expansion of the Court is urgently needed, but does not resolve the multi-faceted issues.”
In a statement I think some Members may regard as highly controversial, Mr Rösler says that a system of judicial federalism needs to be developed between member states and the European Courts. That is the direction in which all this is going. Above all, he says, the aim should be structural reform that establishes a new European judicial architecture. He says that would require the Court of Justice to specialise in relevant areas.
Mr Rösler goes even further, saying that the EU judiciary must open itself up to its citizens so that they can call upon the Court of Justice directly. It has already been accepted that the Court’s work load is absolutely enormous and arises from the vast increase in the amount of legislation affecting the daily lives of all the people in the EU, including people in the UK. Now, distinguished professors and others who are highly influential are suggesting that the whole process should be opened up to individual litigants. The idea is simply extraordinary.
Mr Rösler regards new, codified European legislation on conflict of laws and procedural law, which he says will significantly facilitate the enforcement of law before foreign courts and the EU Court of Justice, as a worthwhile long-term objective. There is almost no limit to the ambitions of those engaged in European jurisprudence. The problem is that the more law there is, the greater the distraction from the real problems facing Europe as a whole, which I do not need to go into today because they are well understood by the House.
We ought also to think about how to streamline the Court’s procedures and maximise its productivity through strategic changes to its personnel. That goes to the heart of the impact of European law. The European Court of Justice lies at the heart of part of the problem that the Foreign Secretary addressed in his statement earlier, and it ought to be put on his agenda.
The background to the debate is also influenced by the qualifications of the individual members of the Court. The Court is manned by people who, I have no doubt, could be regarded as generally proficient in law, as they are professors and celebrated advocates; the problem is that the members are not drawn from judges alone. That needs to be seriously considered. In the UK, it is unimaginable that members of a senior court at such a level would not be drawn from the senior judiciary. That in itself may be one reason why the European Court’s work load has increased so greatly in recent years.
The Court of Justice is currently composed of 27 judges and eight advocates-general, who are appointed by common accord of the member states after consultation with a panel that is responsible for giving an opinion on prospective candidates’ suitability to perform the duties involved. I personally believe that the system needs to be tightened up, so that only those with judicial experience are members of the court, rather than it being merely a question of their suitability.
I would be grateful if the Minister addressed the fact that the great majority of evidence received as the measure was being conceived recommended an increase in the number of judges of the General Court as the best solution to the work load problems. Why did that aspect of the negotiations stall, and what is the Government’s policy on increasing the capacity of the General Court?
I say that without reference to my other remarks, because the increase in the work load is the consequence of the vast increase in the functions and competences that have streamed like a tsunami to the European Union. I opposed the Lisbon treaty in opposition. I proposed amendment after amendment, greatly supported by the current Foreign Secretary, and opposed every provision in the treaty, but the House ended up implementing it because it accepted that ratification had taken place. I did not agree with that, and despite the fact that we were given a cast-iron guarantee of a referendum, we did not have one.
I have some questions for the Minister. What is the expected cost of the amendments to the statute and the appointment of temporary judges to the civil service tribunal, and does he regard that as good value for money? How much will it cost to establish the office of the vice-president of the Court of Justice, and how will the office benefit a litigant? How much will it cost to establish the office of the vice-president of the General Court, which was previously known as the Court of First Instance, and how will that benefit a litigant? How will altering the composition of the Grand Chamber benefit a litigant? Do any of the reforms introduced by the amendments save money? If so, how much?
Some influential voices, such as former Advocate-General Jacobs, who will be well known to those who take an interest in these matters, and current Advocate-General Sharpston—both UK appointees—believe there is little scope for reducing the time taken to litigate cases before the Court of Justice through further procedural reform. The Minister might well ask himself why and consider it carefully. The reasons, it is said, include the Court’s translation obligations, the reliance on written procedure and the privileged status of member states to intervene. Does the Minister regard the views of former UK Advocate-General Jacobs and current Advocate-General Sharpston as correct?
I accept the apology the Minister makes in his letter to me of 11 July, which hon. Members have in front of them. There was uncertainty about what was contained in the provisions. I am grateful that he has made it clear that, on taking legal advice, the matter had to be rectified. The letter states that the
“appointment of temporary judges to the Civil Service Tribunal…at the CJEU also fell within Section 10 of the Act”.
The Government believe that the reform will be beneficial, as the Minister has said, and the European Scrutiny Committee takes the view, given the general comments I have made, that this is a modest but useful package of reforms. Well, it is a modest but useful package of reforms which takes account of the overarching volume of legislation that has generated the work load. Some hon. Members desire not merely to repatriate powers, but to reduce the volume of legislation as Justinian was able to do. That was at the end of the Roman empire—the fall, not just the decline. In that context, it might be observed that the last act of the Romans before the Visigoths and the others moved in on Rome was to try desperately to reduce the volume of legislation. Such action is now well overdue.
In our conclusions, having thanked the Minister for inviting us to comment, we express our regret at the lack of time given to us to do so. Indeed, our report was only published today, so for practical purposes we have all been put under a great deal of time constraint. Having said that, the real question seems to be: by how much can we reduce the amount of law that is leading to the excessive work load and to more judges, which in turn means increased costs? What practical impact will this have on litigants? I trust that he will not encourage the idea of personal litigation of the type recommended by the gentleman I quoted earlier. I ask the right hon. Gentleman to answer some of those questions as best he can, difficult though that might be.
Jacob Rees-Mogg
I begin by thanking the Minister, because it is down to his initiative that we can have this debate under the European Union Act 2011, which was a major improvement in our procedures to enable anything altering the structures of the Court to come before Parliament and to be the subject of a proper debate and motion. That is all to the good and increases the power of the House in relationship to the EU.
It is worth reminding ourselves that the European Court of Justice is not a proper, honest, decent court, like our courts are. I remind the House that these are the judges who ruled to their own benefit against that legal maxim that a judge should never be a judge in this own cause. They ruled to increase their own pay, and we should always remember what an improper and rotten court it is. We are dealing here with a small package of measures that will make it a more efficient, if no less improper, court by enabling it to attend to some of its business faster.
There is a wonderful paragraph from the helpful Library document. It is a quote from the Max Planck Institute, which my hon. Friend the Member for Stone (Mr Cash) cited, about what the European Court is up to:
“Whether it is buying a car, going on holiday or taking out an instalment loan, few aspects of our everyday lives are conceivable today without reference to European Union law. Countless directives and regulations, which set out the rights of consumers and entrepreneurs, apply not only in international legal undertakings, but also in domestic legal transactions. Which party has the law on its side is increasingly dependent on the European Court of Justice in Luxembourg, which ensures the implementation of European law within the EU.”
That is a rotten state of affairs.
There were great debates in the 18th century in this House on the motion:
“That the power of the Crown has increased, is increasing, and ought to be diminished.”
In every debate on the EU, we should remind ourselves that the power of the EU has increased, is increasing, and ought to be diminished. That is why I challenged my right hon. Friend the Minister for Europe over whether it was a good thing to make the European Court more efficient. In response, he challenged me with a proposition that I would normally accept, because he quoted an ancient British maxim—one probably invented in Somerset, where all good things come from—and it is true that justice delayed is justice denied. But the key word is “justice”, and the European Court of Justice might have that word in its title, but it is not its essence. Its essence is as a political entity. It is seeking to increase the power of a federal European state and turn the EU into a functioning country. That is why the House should be cautious about doing anything that makes it more powerful, because it is fundamentally hostile to us.
Kelvin Hopkins (Luton North) (Lab)
I have much sympathy with the latter part of the hon. Gentleman’s speech in particular. Would it not be a good idea to test the water somewhat by seeking to repatriate some powers—some power, even—to Britain, to see what the reaction of the European Union would be? There is much talk of repatriation, but let us take back just one simple power: I would start with the common fisheries policy, as he might know.
Jacob Rees-Mogg
I am extremely grateful to the hon. Gentleman, who is so wise in these matters. We ought to be looking at the inefficiencies in the European Court of Justice and saying, “Could these matters be decided in our own courts?” Is there a way in which, instead of saying, “Give them more power; give them more money; and give them more judges,” we can say, “Let these laws be determined in our country.”?
It is interesting, as my hon. Friend the Member for Stone said, that one of the reasons for the increase in the European Court of Justice’s work load is that our courts are sending it judgments for preliminary approval and guidance on what European law says. Would it not be better to repatriate that? Indeed, when we are in the process of negotiating on the European Court and how to make it more efficient, this is surely the opportunity to do so.
Mr Cash
On the preliminary reference procedure, Mr Rösler says:
“The judges in Luxembourg constitute a supranational court beyond national jurisdiction, dealing with an incredibly diverse range of issues that no national judge is faced with”.
He goes on to say that
“in contrast to national judges, the EU judges are not specialized in specific fields.”
Is it any surprise that they make such a mess of things?
Jacob Rees-Mogg
It is a rather terrifying thought that we have a court that its own friends say does not have judges with the expertise to rule on issues, but that instead of saying, “Well, let’s decide it in our own courts, where we have judges of proper expertise and standing,” we should be just appointing more second-rate judges to Europe, to get them to sort it out. That cannot possibly be the right approach to take.
We in the United Kingdom have a very high view of judges. We have been fortunate in this nation to have judges who have been rigorous figures of the law. They have not been political participants. However, the European Court is not of that category or standing. It is part of the operation of the European Union; and, along with the Commission and the European Parliament, it is in a constant battle and struggle to take powers from the nation states. Anything that we do to reform the European Court should mean bringing powers back to our own courts, where they will be judged on their merits and not on a scheme to push forward the programme of ever-closer union.
It is worth remembering, if anyone questions whether that is true, what happened in the United States in the 19th century, when the Supreme Court was avowedly federal in its approach and the 10th amendment was increasingly ignored to empower the central authorities. The European Court of Justice is doing exactly the same thing. Therefore, I go back to the intervention that I made on the Minister: the more the system is gummed up, the better. The fewer opportunities there will be to interfere in the nation state, the more opportunity we will have to repatriate powers to our own systems and our own judges. Therefore, although the matter before us is minor and essentially trivial, let it go through, but let us watch like hawks any further changes that the European Court may seek to make, to ensure that this drift of power to the continent ceases.
Mr Lidington
I thank the hon. Member for Wolverhampton North East (Emma Reynolds) and my hon. Friends the Members for Stone (Mr Cash) and for North East Somerset (Jacob Rees-Mogg) for their contributions. Let me seek to respond briefly to the various points and questions that have been raised. I will try to divide my response into four parts.
Let me deal first with costs, which my hon. Friend the Member for Stone spoke of. The measures in the two draft regulations will be accommodated within the European Court of Justice’s existing budget. The additional costs will be no more than de minimis. As I said earlier, the two vice-presidents will be existing judges; no additional individuals will be appointed to those posts. The extra judges who will be available to provide sickness cover in the civil service tribunal will be paid only for the days when they are required to be on duty and sitting.
My next point relates to powers. It is obviously tempting to go beyond the terms of the motion and the draft regulations and have a more general debate about the powers of the European Court of Justice. My hon. Friends the Members for Stone and for North East Somerset spoke with passion about their concerns over the way in which the powers of the ECJ and the scope of the Court’s jurisdiction had been enlarged over recent decades. The trouble is that such a debate would take us on to broader questions about the development of the European Union that do not fall within the scope of the motion.
I suggest to my hon. Friend the Member for North East Somerset that there are certain remedies that he might propose. For example, other hon. Friends advocate changes to the treaties of the European Union, and such changes could seek to impose the kind of constraints that he has in mind. I do not mind saying clearly that, as far as I am concerned, we would all benefit, nationally and in every part of the European Union, from less legislation. We would benefit if there were no culture in institutions, either national or European, to seek a remedy for any ill or injustice through additional laws and regulations, rather than seeking an effective non-legislative remedy.
I say to my hon. Friend that it would not be right to question the quality of the individuals who serve in the European Court of Justice. As he will know, the treaty and the rules of appointment require that they should be men or women who have served, or who are capable of serving, in senior judicial roles in their member states. Certainly, the men or women who might be nominated as the United Kingdom’s judges at the European Court of Justice are required to have achieved a very high reputation indeed in the judicial and legal professions in this country even to be considered, let alone nominated. Whether we agree or disagree—as individuals or as Governments—with particular judgments of the ECJ, the judges are people of high professional standing.
Jacob Rees-Mogg
I would question the judges’ probity on one thing in particular: their ruling that their own pay should be increased, which was fundamentally improper.
Mr Lidington
My hon. Friend has made his point clearly for the record.
My hon. Friend the Member for Stone asked about the risk of further efforts to enhance the powers and the jurisdiction of the European Court of Justice. He referred in particular to the possibility of the introduction of a right to petition the Court and take cases there. I can assure him that, notwithstanding what learned professors might say, no such proposal is on the table at the moment. No such proposal forms part of the regulations before us. The subject has not crossed my desk and it is not a matter of live discussion among Governments at present.
My hon. Friend also asked about the timing of the debate and expressed concern at what he believed to be an absence of time for the European Scrutiny Committee to consider this matter. I would challenge him on that. Looking back at the record, I see that we provided explanatory memorandums to that Committee at various times during the course of the negotiations: first, on 28 April 2011, then on 24 June 2011, 30 September 2011 and 20 April this year. I wrote to him last week to advise him of the latest developments and to request that the Committee clear these measures from scrutiny.
As for the most recent developments, we are working against the decision by the Cypriot presidency to table these measures for discussion and decision at a Council meeting in the very near future. My concern in writing to my hon. Friend as I did was to ensure that his Committee was aware of the need for urgency if the Committee and Parliament were to have the opportunity to express their views and, in the case of Parliament, to take a decision about the UK’s approach to these regulations ahead of that Council meeting.
The final point on which I was questioned—
Mr Cash
My hon. Friend should not show his impatience; that is not a wise thing to show to the Chairman of the European Scrutiny Committee. I think that his demeanour should be a little more relaxed.
Let me say simply that I have put a number of questions to the Minister and I can see that he is not going to answer them, so I should be grateful if he wrote to me when he has had a chance to look at the transcript of the debate. As it happens—I do not say this with any stricture—he was talking to the Whip on duty when I asked him the questions that had been formulated carefully by our advisers. I should be grateful if he replied to me in writing, as he is clearly not going to respond at the moment.
Mr Lidington
I can assure my hon. Friend that, when it comes to dealing with him, my patience is infinite. I will certainly check the record and I will write to him if there are any points on which we have not given him an adequate answer. I ask him to look at what I have said about the nugatory costs of the measures, because questions on that matter formed a considerable part of the series of questions that he put to me during his speech.
The hon. Member for Wolverhampton North East asked about the Government’s attitude towards the proposal to appoint additional judges to the General Court. My answer is that we do not rule this out. We can see why this is being advocated as a means of reducing the significant backlog of cases at the General Court, but before we agree to an increase in the number of judges, with the additional costs that that would undoubtedly entail, we certainly want to be absolutely clear that every possible efficiency measure had been taken to reduce the General Court’s spending and to improve its productivity. We view this question—and the possible costs arising out of an increased number of judges—as one that needs to be addressed in the broader framework of the financial pressures on the EU and its member states and in the context of the negotiations over annual EU budgets and the multi-annual financial framework.
Another point in reply to the hon. Lady is that, in addition to our concern about costs, we would want to be satisfied with the judges concerned if additional judges were indeed appointed. The United Kingdom—England and Wales in particular, where a common law system applies—will be concerned as a country to make sure that judges with a knowledge of common law systems are properly represented when cases are considered by the European Court of Justice.
I have tried to respond to the points raised in the debate, and I hope that the House will now agree to the motion.
Question put and agreed to.
Resolved,
That this House takes note of the draft Regulation 2011/0901A(COD) of the European Parliament and of the Council (amending the Protocol on the Statute of the Court of Justice of the European Union and Annex 1 thereto) and draft Regulation 2011/0902(COD) (relating to temporary Judges of the European Union Civil Service Tribunal) and, in accordance with section 10 of the European Union Act 2011, approves Her Majesty’s Government’s intention to support the adoption of draft Regulations 2011/0901A(COD) and 2011/0902(COD) of the European Parliament and of the Council.
Draft European Union Budget
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:32 - The House divided: - Ayes: 141 / Noes: 234 - Question accordingly negatived.
The Financial Secretary to the Treasury (Mr Mark Hoban)
I beg to move,
That this House takes note of an unnumbered Explanatory Memorandum dated 5 June 2012 from HM Treasury on the Statement of Estimates of the Commission for 2013 (Preparation of the 2013 Draft Budget); recalls the agreement at the October 2010 European Council and the Prime Minister’s letter of 18 December 2010 to European Commission President Manuel Barroso, which both note that it is essential that the European Union budget and the forthcoming Multi-Annual Financial Framework reflect the consolidation efforts of Member States to bring deficit and debt onto a more sustainable path; notes that this is a time of ongoing economic fragility in Europe, with countries across Europe taking difficult decisions to reduce public spending; agrees that the Commission’s proposed 6.8 per cent increase in European Union spending in 2013 is unacceptable; agrees that the Commission’s proposal for a larger European Union budget is not the way to fix Europe’s problems, and that large savings are feasible without compromising economic growth; notes that the proposed increase would impose unaffordable costs on taxpayers in the UK and other Member States; notes that UK contributions to the European Union budget have also risen in recent years due to the 2005 decision to give away parts of the UK rebate; and so supports the Government in seeking significant savings to the Commission’s proposals across all budget headings and in its strenuous efforts to limit the size of the 2013 European Union budget.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I must inform the House that Mr Speaker has selected the amendment in the name of the hon. Member for Nottingham East (Chris Leslie).
Mr Hoban
I am pleased to have this opportunity to discuss the 2013 EU budget.
As Members will know, the economic climate in the EU has changed dramatically in recent years, and the situation remains fragile. The uncertainty in the euro area is the biggest challenge facing the EU economy, and there is a risk that it will affect growth and jobs in Britain. That is why we have pressed the euro area to address both the immediate challenges and the long-term systemic issues that it faces. In the midst of one of the biggest debt crises to hit Europe, this Government and Governments across the EU have made difficult decisions in order to consolidate their public finances and implement structural reforms.
The EU budget, funded by EU taxpayers, cannot be immune from the changes that are sweeping across Europe. An ever-increasing EU budget is not the way in which to fix Europe’s problems, and it is time for the EU to live within its means. That requires a strict reprioritisation and the targeting of areas that support growth and reduce the waste and inefficiency that has become characteristic of EU spending.
John Healey (Wentworth and Dearne) (Lab)
The Financial Secretary mentioned supporting growth. As he will know, as part of the preparation for the EU’s next budget period there are proposals for “transition regions” status, which could benefit at least 11 regions in this country. We in south Yorkshire are aware of the benefits that it could bring by supporting local jobs, businesses and growth. Are the Government in favour of the concept of transition regions?
Mr Hoban
I am surprised that the right hon. Gentleman has raised that point, given that the amendment tabled by a member of his own Front Bench calls for a more restrained budget and given that one of the consequences of a cut in the budget would be a further constraint on spending. Our main priority is to deliver a freeze in the multi-annual financial framework, and we need to establish which measures in the budget are consistent with that. However, we do need to focus on jobs and growth, and the biggest challenges in that regard are often presented by the newer accession states when the gap between their economies and those of countries such as the UK, France and Germany is at its widest. We need to focus on spending in the areas where there is the greatest potential for those countries to yield real fruits in terms of economic growth and jobs.
John Healey
I am not entirely sure whether that was a yes, a no, a maybe, or an “I don’t like to say.” The Financial Secretary will know that the qualification for transition regions status is a GDP that is between 75% and 90% of the EU average. Some parts of our country require that extra help; they need more balanced growth, and support for jobs and businesses. Does the Financial Secretary support the concept—I am not asking about the quantum—of transition regions in the next EU budget period?
Mr Hoban
The negotiations on regional funding are a matter for my colleagues in the Department for Business, Innovation and Skills, and I am sure that they will respond to the points that the right hon. Gentleman has made. Our overarching priority is to ensure that our spending in the EU gives us value for money, and the overall settlement for the next seven years and the multi-annual financial framework must reflect that. He may wish to participate in the debate on the preparations for the framework which will take place in European Standing Committee B when the House returns in September. That is one of the many opportunities for debate provided by my hon. Friend the Member for Stone (Mr Cash) in his role as Chairman of the European Scrutiny Committee.
Chris Heaton-Harris
According to a paper produced recently by the Fresh Start group, of which I am co-chairman, if we repatriated structural funds among countries whose GDP is more than 90% of the EU average, we would be able to spend £4 billion more—money that would come directly from the Government—on growth in the United Kingdom without having to go through the middleman of the European Union.
Mr Hoban
My hon. Friend makes a powerful point. We need to view expenditure issues in the context of the impact of our contribution and how it is linked with the rebate, but I do not want this to turn into a debate entirely about structural funds. There will be many other opportunities to discuss those.
Mr Hoban
Let me make some more progress. My hon. Friend described the EU as a middleman. I suspect that the right hon. Gentleman is asking me to be a middleman between him and my hon. Friend, so I shall press on.
As Members know, the size of the annual budget is guided by the multi-annual financial framework, which is equivalent to a seven-year spending review. This was agreed by the previous Government in 2005, and set a rising trajectory for EU spending to 2013. Under the ceilings negotiated by the previous Government, the 2013 EU budget may increase by 14% in payments compared with the 2012 budget. That has encouraged the Commission to seek even more EU spending. In the current economic climate, the framework negotiated by the previous Government is out of date. We have been seeking to put right the mistakes made in the past by making every effort to rein in EU spending in recent years.
This year, however, the European Commission has again shown that it is hopelessly out of touch with the mood of Europe’s taxpayers. On 25 April, it proposed the largest recent increase in the EU budget: a 6.8% increase in 2013, taking total spending to €137.92 billion. It claims that the increase will support growth and jobs while also allowing the Commission to catch up on payments on programmes announced in previous years. We are acutely aware of the risk a budget increase of this scale poses to the UK’s contribution. At a time when we are tightening our belts in the UK, an increase in the order of 6.8% would cost the UK, taking into account the rebate, roughly €1 billion more than this year. Of course, this is not helped by the previous Government’s abatement giveaway in 2005, a decision that is costing today’s taxpayers an extra £10 billion over this Parliament. The amendment seeks to airbrush that from the record.
Graham Stringer (Blackley and Broughton) (Lab)
I agree that a 6.8% increase is unacceptable given the current economic situation, but why are the Government settling for a flat budget, when local government in this country is suffering cuts of 30%? Why is Europe getting a better deal than Manchester or Plymouth?
Mr Hoban
That is an important point, and I shall address it shortly.
Our response to the Commission’s inflation-busting proposal has been robust. At a time when Governments across Europe are making difficult decisions on public spending, a 6.8% increase in EU spending in 2013 is completely unacceptable. First, the economic circumstances have changed dramatically, and the Commission cannot ignore the facts. By 2014, the level of public debt across the 27 member states will be over 50% more than it was back in 2007, two years after the last seven-year budget was agreed. Secondly, a larger EU budget will not solve the eurozone crisis. A smaller, leaner and better-targeted budget is the best way to drive growth across the EU.
We have identified many areas of EU spending that are ripe for reform. It is time to cut the quangos, EU staff pay and programmes that offer low added value or are poorly implemented. For example, the Commission set itself the target of reducing its headcount by 1% this year. Although 286 posts have been cut—equivalent to a 0.7% reduction—that has been offset by the creation of 280 posts for Croatia’s accession. There has been no attempt to redeploy staff to meet the needs of Croatia’s accession. As ever, the Commission’s knee-jerk reaction is simply to increase the number of people employed in the EU. As a consequence, this year the Commission has cut just six posts. We estimate that if it had cut the headcount by 1%, it could have saved €45 million.
The total salary bill for the EU institutions’ staff in 2011 was over €3.5 billion, more than 2.8% of the Commission’s budget proposal for the year, and more than double the amount spent on freedom, security, justice and citizenship. Staff at EU institutions, who may have lived in Brussels for more than 30 years, continue to be paid an extra 16% “expat allowance” on top of an already generous salary, and a teacher at the European school is paid twice the average UK teacher pay.
Mr William Cash (Stone) (Con)
My hon. Friend is making a powerful case and I take it seriously. I do not in any way suggest cynically that the Government are merely trying and not succeeding, but when I see the words
“seeking significant savings…across all budget headings and in…strenuous efforts to limit the size”,
I feel that there is another answer. In the light of his powerful argument, which has not yet even finished, there is a strong case for our saying that we insist, rather than merely seek, and for saying, “We will not pay any more. We will refuse to do so if you are not prepared to do something about it.” This really is getting out of control, as is the work load of law that we discussed in the previous debate.
Mr Hoban
I will come on to deal with the process of negotiation that we are going through, but my hon. Friend will, of course, be aware that the EU budget is determined by qualified majority voting, whereas the framework is determined by unanimity. As he said, he has practised law for some time, so I am sure that he would not be encouraging us to break the law—
Mr Cash
I am grateful to my hon. Friend for walking straight into that one. He knows the formula that I have adopted in the past, notwithstanding the European Communities Act 1972. I have put it to the Prime Minister, and the European Scrutiny Committee report endorsed it as a potential weapon. I simply say to my hon. Friend that there comes a point when we simply have to draw a line and we may have to override European law. The EU breached the law with the stability and growth pact and the fiscal compact. I think it is about time we started showing a bit more mettle.
Mr Hoban
I have to say that I always thought it was appropriate to obey the law, even in circumstances where we would perhaps rather not do so. We need to take our obligations seriously, but that does not in any way weaken our resolve to get the best possible deal for British taxpayers.
Jacob Rees-Mogg (North East Somerset) (Con)
I am sure that the Minister has as much backbone as Margaret Thatcher had. She went along to European Councils and said, “Give us back our money.” I think that is the line he should take.
Mr Hoban
Indeed, I think that the achievement of the rebate at Fontainebleau was a signal achievement of her time in office, but of course that was done in the context of a multi-annual financial framework debate, and we are going through that process at the moment with our European partners. We have made it clear that the rebate is one of our red lines, and we will continue to stick to that, in the same way that we have been very clear about our outright opposition to the financial transaction tax. We will show backbone in these debates, but let us identify those opportunities where our power and leverage is at its highest, to maximise the price that we want in return.
Chris Leslie (Nottingham East) (Lab/Co-op)
While the Minister is in such a fine and confident mood, can he give a commitment that the UK Government will settle for nothing less than a real-terms reduction in the budget for the multi-annual financial framework—that spending review seven-year period?
Mr Hoban
I have to say that talk is very cheap on the Opposition Benches, as the amendment demonstrates. They may talk things up, but what was the previous Government’s record? It was to give away our rebate in the hope of some vague common agricultural policy reform. So let the negotiations continue and we will come to the House when they are concluded; we have been very clear about what we are seeking to achieve.
Mr Hoban
The hon. Gentleman may say “Ah”, but the reality is that when his party was in office it gave away the rebate and allowed a spending increase that permitted the EU budget to rise by another 11% this year. I do not think the Labour party’s record in government is anything that the Opposition should be proud of or crowing about.
Mr David Nuttall (Bury North) (Con)
Perhaps I can help the Minister. In 2010, I asked about the cost to the UK taxpayer of the reduction in rebate negotiated by the previous Government and was told that the full cost, now that the rebate is fully phased in, is £2 billion a year. Will he confirm that?
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
As the Minister will be aware, I am no great defender of the previous Government’s position on these matters. However, simply pointing to the previous Government’s position is not answering the question. Will this Government make it clear that they will not agree to an increase in the money going to the EU? Yes or no?
Mr Hoban
We are going through the process and we have been very clear about our red lines for own resources and the rebate. We have tried to reach a common position with our allies on the size of the budget and of the multi-annual financial framework. We have been very clear that, at a time when member states across the EU are being asked to curb their spending, the EU should play its role in doing that, too. That is what we are seeking to do, not just in the budget but in the financial framework. Just as we have delivered spending restraint at home, we are urging the case for delivering spending restraint in the EU. We have argued forcefully that we need to tackle the chronic over-budgeting and strictly prioritise EU spending. We need significant cuts in the Commission’s spending and I think that they are possible without impeding efforts to boost growth.
Kelvin Hopkins (Luton North) (Lab)
I, like many Members, have criticised the decision in 2005 to give away part of our rebate in return for a non-existent reform of the CAP. The Government make much of that, but as I have said more recently, if they really are concerned, why not say to the European Union that we want the £2 billion a year back? We might not be able to recoup all the money that has been lost already, but at least let us get the rebate back to where it should have been had that 2005 agreement not occurred.
Mr Hoban
The hon. Gentleman makes a proposal. We are in the early stages of the discussion on the next multi-annual financial framework. Clearly, maintaining our rebate is a key priority in that debate and we will continue to work to protect the rebate, using our veto if necessary.
There are things that we can do to support growth without massive increases in spending. We can deepen the single market, sign free trade agreements with third countries and reduce regulatory burdens. The Commission claims that bills must be paid, but its proposals simply create new bills for future generations to pay by announcing new programmes this year. It cannot complain on the one hand about needing more money to pay bills due this year when it is also making fresh promises that will have to be paid for in future years. We expect the Commission to look for savings in programmes that either are not under way or represent poor value for money, rather than simply asking member states and their taxpayers to pay more.
It is time that Brussels woke up to the economic reality that member states face and started helping us to tackle our debts at home. Following the Commission’s proposal in April, we have been working with other member states to drive down the Council’s opening position on the EU budget but, as Members will be aware and as I mentioned in response to the intervention from my hon. Friend the Member for Stone (Mr Cash), the Council’s position on the annual budget negotiation is agreed by QMV, not unanimity. Following lengthy negotiations, the position in Council limits growth in spending to 2.79% on 2012 levels. We voted against that in Council because it is simply too high, but we must recognise that it is an unhappy compromise. A higher increase would have been blocked by net contributors such as ourselves and a lower increase would have been blocked by net recipients. Each, in different circumstances, have a qualified majority.
The outcome reached in Council cuts €5.2 billion off the Commission’s proposals and saves the UK taxpayer about £500 million. It is larger than the spending cut that saved us €3.6 billion last year and is €11.3 billion lower than the ceiling of EU spending agreed by the last Labour Government, saving the UK around £1.1 billion. Within the overall budget we have slashed the Commission’s proposed increase for the CAP by €490 million.
The debate on the budget will continue. We now have a period when we have to discuss the budget with the Council and Parliament and when we will come under pressure from both the Commission and Parliament to increase spending and move away from the 2.79% increase agreed in Council. That is why we have worked with France, Germany, the Netherlands, Sweden, Austria, Finland and Denmark, not only outlining our disappointment with the 2.79%, but making it clear in a statement made at a meeting earlier this week that further increases to EU spending should not be agreed later this year. That sends a clear signal to the Commission and the Parliament that they should not expect the Council to compromise in budget discussions later this year, and it is a reminder that we will continue to take a tough line on the multi-annual financial framework and on any spending increases proposed for the 2012 budget.
It takes a bit of barefaced cheek for the hon. Member for Nottingham East (Chris Leslie) to table an amendment that deletes reference to the fact that Labour gave away our rebate in 2005. It is an attempt to hide Labour’s record in office. It gave away that rebate in return for a review of CAP that did not take place, at a cost, as I said earlier, of £10 billion to British taxpayers. It would have been better if the hon. Gentleman had recognised the serious mistake that had been made by Tony Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in giving away our money.
In his amendment the hon. Gentleman talks about trying to make friends and secure allies, but he was the campaign manager for the right hon. Gentleman—something that is not often quoted in the right hon. Gentleman’s biographies—who attempted not to go to ECOFIN to build alliances with other Finance Ministers to help to get a satisfactory outcome for our budget rebate; the man who did not even turn up for the public signing of the Lisbon treaty, and who wanted to do it in the dark, which shows an inability to create alliances. We will take no lessons from the Labour party on the need to create alliances with other member states. As we have clearly demonstrated with the agreement that we have reached on how the future negotiations on this year’s budget will proceed, we can and do build alliances and successfully impact the course of policy development in the European Union.
Kelvin Hopkins
I do not really agree with the amendment, because it seems to suggest that the Prime Minister is some sort of militant Eurosceptic, which is far from the truth. I would like him to take a stronger line.
Chris Heaton-Harris
My hon. Friend is being a bit soft on the Opposition, because their amendment is absolutely pathetic. It is like student politics, trying to re-write a bit of history and deny the past. It is quite pathetic, because they signed up to the rules by which this Government have to negotiate.
Mr Hoban
My hon. Friend is spot on. It is absurd to try to re-write history and deny that it is because of the actions taken by the previous Government that we have a real challenge in curbing EU spending. It is because they were soft in their negotiations on the rebate and on the level of EU spending across the financial framework that we are spending more than we ought to be spending. It is not just the £10 billion that we have lost as a consequence of the rebate. They negotiated a spending ceiling for this year that is £11 billion higher than the Commissions proposals, so we could face an even bigger bill as a consequence of the weakness of the previous Government. To try to use this amendment to airbrush history lets the Opposition down and shows how unfit they are for office.
Kelvin Hopkins
The hon. Member for Daventry (Chris Heaton-Harris) suggests that this is tit-for-tat student politics, but the Government constantly refer to the 2005 budget settlement—which I agree was wrong—and then propose to do nothing about it.
Mr Hoban
Unlike the Opposition, who were prepared to sacrifice our rebate for some sort of illusory review of spending, we stand firm. It is one of our red lines. In the same way, we stand firm on the financial transaction tax. That is why we vetoed it. We have cut €500 million off the CAP budget this year, which is much more concrete than some review that cost us £10 billion.
Mr Redwood
What would the member states that want a high budget say if the UK Government pointed out that public sector wages and benefits in Greece and Spain are having to be cut in cash terms because the EU will not cut its own budget? When there is so much waste and programmes that are not very important, one would think it was much easier and preferable to cut those.
Mr Hoban
My right hon. Friend needs to reflect on the fact that there are, crudely, two groups of member states: those that are net contributors to the EU budget, such as the UK, Germany, the Netherlands and France; and those that have no incentive to curb the size of the budget because they are net recipients. That is one of the reasons there was a tension in the Council debate on this year’s budget and, effectively, two blocking minorities: one if the budget settlement were too low and the other if it were too high. We are making the case across Europe that we need to curb spending and that the money is spent much better at home than through Brussels. We have a group of like-minded allies on that, although not all member states see it in the same way. I think that we need continually to send the message that there are better ways to boost growth in Europe than simply by spending more taxpayers’ money, whether it comes from Belgian, Greek or British taxpayers.
Mr Redwood
But they need to be educated, because in order to get money out we also have to put money in, so higher EU spending affects all member states adversely, not just those that make a net contribution.
Mr Hoban
In the dynamics of budget debates, the net recipients see that they have a net benefit from increased EU spending, rather than a net cost, which we have. That is one of the driving forces behind their negotiating position. We are taking the argument to them, engaging with them, explaining some of the problems with EU spending and trying to get the EU back on track. Let us wean people off the idea that simply spending more is the answer to our economic problems and find concrete ways in which Europe can contribute to growth without spending more of our taxpayers’ money.
The Government have taken a tough stand in negotiating this year’s budget and are working with like-minded member states to curb increases in EU spending. We are hampered by the fact that the rebate was given away by the previous Government, which cost the taxpayer dear, but we are trying to recover that money. I urge hon. Friends to vote against Labour’s amendment if it is put to a vote and to support our motion.
Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move amendment (a), at line 15, leave out from “States” to the end and add
“notes that the UK’s ability to negotiate a satisfactory European Union budget deal has been weakened by the Prime Minister’s failure to secure allies for a more prudent settlement in this qualified majority decision; and so calls on the Government to strengthen its stance so that the 2013 Budget and the forthcoming Multi-Annual Financial Framework are reduced in real terms.”
It is always interesting to follow the Financial Secretary to the Treasury. His motion, parts of which we agree with, states that the multi-annual financial framework—a rather clumsy phrase, but essentially a seven-year spending review for EU budgets from 2014 to 2020—needs to be on a sustainable path. Of course that is true. It is also absolutely true, as the motion states, that these are times of ongoing economic fragility in Europe. However, the motion does not mention the fact that, sadly, that is more the case in the UK under this Government.
The motion mentions difficult decisions having to be taken, but falls short when it comes to the actual matters at hand. The Minister spent almost half an hour trying to throw mud and allegations at the previous Government about what happened several years ago, but said hardly a word about what he was doing about the budget settlement for 2013 and even less about the big decision on the seven-year spending review period—a decision, incidentally, on which the Government have a veto. We are coming to that critical period of time when he and the Prime Minister in particular are potentially at their most influential, with leverage over what happens with that budget, but when we tried to get a simple answer from the Minister on whether he agreed that the 2013 budget and the multi-annual financial framework should be reduced in real terms, answer came there none. He said, “Well, we’ll try our best to do the right thing.” The motion states that the proposed 6.8% increase is “unacceptable”, but that is simply too weak. Not going for the 6.8% increase is a no-brainer. Where is the Government’s backbone?
The motion was tabled only yesterday, so it is no surprise that many hon. Members may not have seen that this crucial debate is taking place.
Chris Leslie
I am glad that the hon. Gentleman is, as ever, in his place.
If people realised how weak the Government were being in their negotiating stance, they would be totally appalled.
Jacob Rees-Mogg
The hon. Gentleman is very reasonable in all these matters and of course he wants answers from the Government, but in that spirit of frankness, does he personally regret the loss of £10 billion to the UK Government by giving away the rebate? I know he was not personally responsible for that.
Chris Leslie
The hon. Gentleman has to realise that the European Union was going through a totally different era of accession countries and enlargement. Now, we are in a post-financial crisis era, in which it is absolutely clear that, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, serious spending cuts are taking place in our domestic economy and budget. Many of our constituents want pro-job, pro-growth and pro-stimulus measures to be priorities here in the UK, and they feel aggrieved that some administrative budgets in the EU will continue to roll forward without the UK Government showing the restraint that they ought to show while they are at the height of their potential negotiating powers—hence the amendment that we have tabled.
Despite the Financial Secretary to the Treasury’s sudden animation when I asked him what exactly the Government are doing, the motion does not set out clearly the view, which ought to be and would be shared by all hon. Members, that the budget and the multi-annual financial framework should be reduced in real terms. It is a simple statement that would help the Government in their negotiations, and that is why the House should support the amendment.
Mr Nuttall
Some of us will oppose the amendment on the basis that it, too, does not go far enough, because it talks about reducing the budget merely in real terms. The question I therefore pose is: would the hon. Gentleman be satisfied if the budget increased in cash terms?
Chris Leslie
The hon. Gentleman was perfectly free to table his own amendment, and he pitches a perfectly respectable position. I thought that it was important to draw the Government into adopting a stronger stance, and a reduction in real terms is, at the very least, the place where we need to see the Government, but we could not get them even to that point. He has seen the motion; it falls short in so many ways.
Real-terms cuts are required now to the EU administrative budget, because in the UK we are in a double-dip recession, thanks in part to the Government’s failure on economic growth. The economy shrank in the last quarter of 2011 by 0.4%, and in the first quarter of this calendar year by 0.3%. Borrowing hit £18 billion in May, up £3 billion on the same month last year, and pressures on the UK’s finances are increasing: domestic tax revenues have fallen and income tax receipts are 7.3% down on the year to May. Today the Office for Budget Responsibility, in its fiscal sustainability report, cites projections suggesting that the public finances are likely to come under pressure in the longer term, and states:
“In the absence of offsetting tax increases or spending cuts this would widen budget deficits over time and eventually put public sector net debt on an unsustainable upward trajectory.”
There is much more evidence than ever before of the need for us to strengthen the Government’s negotiating stance. That is why it is just not good enough for the Government to say, “There’s not much we can do about it. It’s a qualified majority vote this year. We’re in a terribly difficult position,” and why in our amendment we have, sadly, had to point out that the Government have failed to win alliances for a tougher position on the budget. That is where we are today.
There was the phantom veto in December last year, when nothing was actually vetoed—everything went through with the agreement of the other EU countries, and the Prime Minister succeeded simply in alienating the UK’s negotiating position. Now, when we need to make strong arguments about reducing budgets, few are listening and open to ideas because of the stance taken by the Prime Minister in those negotiations.
Kate Hoey (Vauxhall) (Lab)
I want whoever is in power in this country to negotiate over our budget in a much tougher way. Does my hon. Friend agree that perhaps the only way for us to get the European Union to take us seriously is to say that we will not pay any more than what we think is a fair contribution and increase? Indeed, given all the waste, there should be not an increase, but a decrease.
Chris Leslie
That is why we need to change the approach of Ministers in negotiations. We have to come to a settlement. This year, we are on the cusp of Ministers having a veto power over the seven-year spending review period. This is the moment when we need them to be particularly firm.
Mr Davidson
Does my hon. Friend feel so strongly about making sure that the agreement we strike with Europe has the support of the people of Britain that he thinks the budget settlement should be the subject of a referendum? That would be an ideal way to determine the long-term budget—the people themselves voting in a referendum on whether they are prepared to accept it.
Chris Leslie
I see the tempting avenue down which my hon. Friend wants to go. I am not sure that it is necessarily good to budget by referendum. It would be simple for the Chancellor, the Prime Minister and the Minister to firm up their position and set out things much more clearly than they have in the motion. I urge hon. Members to look at the airy-fairy fudging language of the motion today—and going forwards, which the Minister does not like to talk about.
The Minister was right to draw on the Financial Times analysis, including in pointing out the reduction of just six administrative staff from the 41,000 EU posts. Some increases for pensions, for schooling allowances for EU officials and even for some of those extra accession activities in relation to Croatia, are still pencilled in by the Commission. I do not think that the administrative budget proposals on the table are justified. Instead, we should be reprioritising the resources paid to the EU budget so that they are sweated more effectively for a pro-growth, pro-jobs position—looking at energy markets, high-speed broadband and the infrastructure and structural fund changes that need to be made. I do not think that the Government have appreciated the strength of feeling on this matter.
Mr Cash
I am glad that the hon. Gentleman used the phrase “strength of feeling”. What is his strength of feeling about the fact that every justification for proposing an increase of 6.8%, in all the papers that I have read as Chair of the European Scrutiny Committee—everything in the European Parliament and the multi-annual financial framework discussions in which I took part a few months ago—is, “We need to do it because of the Lisbon treaty”? Will the hon. Gentleman, on behalf of the Opposition, now accept that the Lisbon treaty was a great mistake?
Chris Leslie
No. Some commitment appropriations are certainly being pencilled in—“We can’t undo the budget because of previous commitments”—but almost an equal number of appropriations are new programmes that the European Commission could vary and change. I am all for expenditure at European level and doing our part collectively to boost and stimulate economic growth, but there is not sufficient justification for some of the continued administrative back-office areas of expenditure that simply do not help at this time, especially when we have so many economic difficulties in the UK.
My question to the Minister is very simple: what exactly is the Government’s position? Are they in favour of a real-terms reduction in the budget or not? The Minister would not say. I urge his hon. Friends to try to pin down the Government on that, because we are at a crucial juncture. From reading the reports this week in The Guardian about a deal being done whereby we will not touch reform of the common agricultural policy, for example, I get the sense the Prime Minister likes an easy life with business as usual and wants to continue in that vein.
Kelvin Hopkins
I entirely agree that the Prime Minister wants an easy life as regards the CAP. On behalf of the European Scrutiny Committee, I recently attended a meeting in Brussels about CAP reform where I think I was the only voice calling for restraint; most of the others were calling for more spending on the CAP. What are we doing about it?
Chris Leslie
Although changes to that 40% chunk of the budget have been made, fundamental reforms must still be on the table. The Prime Minister should not wave the issue away so readily.
The Prime Minister and the Government must build some radical alliances, because the 2013 budget is decided by qualified majority voting. They must also strengthen their backbone on the seven-year spending review. This will be a key test for the Government. We know that they just want to look backwards, but it is important that the Minister takes some responsibility, because he is in the driving seat now. The Government must focus not only on the rebate but on ensuring that budgets are set at the right and prudent level. We believe that real-terms reductions can be achieved now and for the future, but the motion falls short of that. That is why we tabled our amendment, which I commend as the best way to strengthen the Government’s backbone.
Chris Heaton-Harris (Daventry) (Con)
This subject has been omnipresent throughout my political career. For 10 years, I served on the European Parliament’s Budgets Committee and Budgetary Control Committee.
Chris Heaton-Harris
Yes, indeed.
I am very keen that the Government get their principles in line and their priorities straight. I want to explain why the amendment tabled by the Opposition is complete rubbish and to give the Minister a feel for why many Conservative Members think that we need to be doing slightly more, in a slightly stronger way, to achieve the aims that I think we all agree on, given that the European budget is way too high.
This year is important in budgetary terms because 2013 is the last year of the current multi-annual financial framework. The work that is done now on the 2013 budget will hold firm for next multi-annual financial framework, within which the Commission is bidding for a lot more money. That is significant for the United Kingdom.
The Commission raises this money in a number of ways: direct payments from national Governments based on each country’s gross national income, a levy on each national Government that takes a slice of their VAT income, customs duties on various imports from outside the EU, and levies on sugar production. That accounts for about 99% of the budgeted income of the European Commission. To put that into scale, in 2010 the UK’s gross contribution to the EU budget was €14.66 billion and we received back €6.75 billion, equating to a net contribution of €7.91 billion.
Jacob Rees-Mogg
My hon. Friend mentioned the repatriation of funds to the UK. The net figure that he cites assumes that the European Union spends money in the UK in a way that we would like, but that is not a fair assumption.
Chris Heaton-Harris
That is a correct assumption. A number of those projects would not have been financed by this Government or by previous Governments, so the money is being diverted into different things. That is why the last Prime Minister, when he was Chancellor of the Exchequer, mooted the idea of repatriating those moneys.
Andrew Percy
I agree that the Labour amendment is total nonsense. Is it not true that a lot of money is being spent on infrastructure projects in parts of the European Union that are wealthier than the area that I represent, where a great deal of Government funding is being cut? That is completely unacceptable to my constituents.
Chris Heaton-Harris
I agree with my hon. Friend that it is a difficult ask for us to explain to our constituents why no money is forthcoming for reasonable projects in our areas, when we are giving money to richer areas across the European Union through the regional structural funds. That is an aberration that we should look at seriously.
We were the second largest net contributor to the European Union in 2010. Germany was ahead of us with €11.95 billion. Behind us were France with €6.48 billion and Italy with €5.84 billion. Obviously, Italy is not the richest country in the world at the moment, so it, too, is trying to do something about its net contribution. The largest net recipients in 2010 were Poland with €8.17 billion, Greece with €3.44 billion and Spain with €3.1 billion. So there are lots of fiscal transfers across the 27 member states.
Many other costs are hidden in the European Union budget.
Mr Nuttall
The figures that my hon. Friend quotes show that, in essence, we are transferring the entirety of our net contribution to Greece and Spain.
Chris Heaton-Harris
If it was done as a simple transaction, that would be the case.
The Commission’s budgetary expenditure is divided into five headings. “Sustainable Growth”, which mainly involves the EU structural funds, and “Preservation and Management of Natural Resources”, which relates to agriculture and the environment, are the biggest items and accounted for 87% of EU spending in 2012. “Citizenship, freedom, security and justice”, which relates to social policy, crime and policing, and “The EU as a global player”, which involves foreign policy issues, were the smaller items of the budget. The heading, “Administration”, relates to the finances of the staff of the European Commission and other institutional expenditure, such as that of the European Parliament, the Committee of the Regions, the Economic and Social Committee and various other EU agencies and quangos.
Kate Hoey
I hope that the hon. Gentleman’s attention has been drawn to the wonderful little DVD that has been sent to a number of Members by Marta Andreasen, who has done a terrific job of showing all the waste that has gone on and how massive amounts of taxpayers’ money are being wasted. If we stopped that waste, we would not have to increase the budget, but could cut it. Would he like to ensure that every Member of Parliament can see the DVD?
Chris Heaton-Harris
It is not often that I would commend anything to do with a politician from the UK Independence party. However, if we look at the front page of the Financial Times from 1 August 2002, we see sitting beside Marta Andreasen at the press conference one of the MEPs for the East Midlands, who is now the MP for Daventry. She was the first person to hold the role of chief accountant of the European Commission who had an accountancy qualification. I am very keen that her expertise is shared. I have seen the DVD and it is well worth looking at.
The Minister set out some obstacles to the reform of the budget, and they are great. When there are big vested interests, with big countries getting way more money out than they will ever put in, there is no chance of reducing the budget under qualified majority voting. As I have tried to explain, we are one of the biggest net contributors, and we will continue to be so way into the future. However, we will always be outvoted on budgetary matters under qualified majority voting, because more countries gain from our expenditure than pay themselves.
Blocs exist to protect certain things. There is the bloc of net gainers, but France, which is a net contributor, exists in another bloc to protect one of the big areas of spending: the common agricultural policy. It does not want any major changes to the CAP, because that is how it diminishes its net payments to the EU. With such vested interests built in, reform of the European budget is much easier said that done, as the Opposition prove in their amendment.
Another problem with the EU budget is that its own auditors do not sign it off. This is the 17th consecutive year in which the European Court of Auditors, having checked the legality of EU spending, has refused to give it what is called a positive statement of assurance. Essentially, it has refused to sign off the accounts. As the Financial Secretary said, we must consider that alongside the fact that the European Commission constantly asks for much more money to spend but then cannot spend it properly. Until recently, it was running up massive surpluses in its own accounts.
There are also aberrations that people do not like. The latest is that we are told that EU chiefs are splashing out on a new £350 million headquarters, at a time when everybody else is having to cut their budgets. That new headquarters, by the way, is in Luxembourg, where MEPs no longer go because they are based in Brussels and Strasbourg. There is obviously too much money in the system. The case for reform is therefore greater now than it has ever been.
Although the European Council will not formally adopt its position on the European Commission’s proposed EU budget for 2013 until 26 July, member states’ ambassadors to the EU reached a deal on it yesterday, as the Financial Secretary mentioned. The Commission has proposed an overall 6.8% increase in payment appropriations compared with 2012, which amounts to about £7.2 billion—a decent sum. As he said, the member states’ position agreed yesterday means a £2.9 billion increase in payments. That is an increase of 2.79%, which can be compared with the EU inflation rate of 1.9%.
The Financial Secretary and I know that the UK, the Netherlands and Sweden all oppose the deal and will vote against it at the Council on 26 July. However, if we are the only three states to do so, the budget will be adopted by a qualified majority of countries in the blocs that I outlined, which want to receive more than they put in. If the estimated UK gross contribution of 11.3% to the 2012 EU budget were replicated, under yesterday’s deal the UK would pay about £12.2 billion gross into the budget next year.
Essentially, we are just about to increase the EU budget, and our part of that increase is £330 million. That would pay a year’s basic salary to 18,500 Army privates, the average basic salary to 10,500 NHS-qualified nurses, or a year’s basic salary to 12,500 police constables.
Graham Stringer
The hon. Gentleman is providing some extraordinarily insightful and useful information about the absurdities of the EU. When the Financial Secretary was asked to be a bit tougher, he made great play of always having to obey the law. We are law makers, so of course we agree, but can the hon. Gentleman think of any organisation in the UK that would hand over £100, let alone £12 billion, to an organisation that cannot get its accounts audited?
Chris Heaton-Harris
No, I cannot. One point that I am trying to make is that, if we want to be stronger and to cause a bit of upset among our European partners, we could dig our heels in. The Government are doing what they can, while abiding by the letter and spirit of the law, but we could change the face of public services in the UK with just the increase in our contribution to next year’s budget. It is therefore perhaps worth digging our heels in that bit harder and threatening to do something that might be against the letter of the law. There would be a relatively large amount of public approval for such actions in respect of an organisation that has not had its accounts signed off for 17 years, as the hon. Gentleman says.
There would be more public approval for such actions if people knew what the money is spent on. I shall speak for just one more minute, because I know other hon. Members wish to speak, and outline a handful of things that the European budget goes on. Total EU spending in 2012 on quangos and agencies, which the Minister mentioned, was about €2.48 billion. Some agencies and quangos completely duplicate other bodies that serve the EU and member states, such as the Economic and Social Committee and the Committee of the Regions, which the European Commission is meant to consult but which no one has ever heard of, apart from those illustrious members of our communities that enjoy going on the monthly trips to serve on them. We could cut those and save €215 million straight away, but British Governments of either political complexion have never suggested it.
There are two human rights agencies. We could cut at least one of them, saving €15 million. Four agencies are involved in workplace and environment issues. We could cut a number of those and save €50 million. If we dig and delve deeply enough, we find that each EU Commission budget line funds all sorts of things that it probably should not. Hundreds if not thousands of non-governmental and other organisations get money from the EU budget. The have become slightly too close to the EU and should question whether that helps them to get their point across, even if it helps them in budgetary terms. Greenpeace is not one such organisation—it refuses to take any money from any governmental institution.
Mr Davidson
Is the hon. Gentleman aware of how the system operates? The EU gives money to organisations that it has established, so that they can lobby the EU to spend money on their aims.
Chris Heaton-Harris
To illustrate exactly that point, I shall quote the reasons Greenpeace gives for not taking money from governmental institutions:
“Greenpeace does not solicit or accept funding from governments, corporations or political parties. Greenpeace neither seeks nor accepts donations that could compromise its independence, aims, objectives or integrity… Greenpeace relies on the voluntary donations of individual supporters, and on grant support from foundations.”
I take EU lobbying by Greenpeace way more seriously, because it comes from the heart and not from an EU budget line.
My next example is the LIFE+ programme budget line, which funds, among other groups, Avalon, which co-ordinates activities and lobbies on behalf of sustainable rural development in central and eastern European regions; BirdLife Europe; CEE Bankwatch; Climate Action Network Europe; Coalition Clean Baltic; Danube Environmental Forum; EUCC Coastal and Marine Union; Eurogroup for Wildlife and Laboratory Animals; EUROPARC; the European Environmental Bureau; European Environmental Citizens Organisation for Standardisation; European Federation for Transport and Environment; European Landowners Association; European Water Association; Federation of Associations for Hunting and Conservation of the EU; FERN; Friends of the Earth Europe, which constantly lobbies hon. Members on all sorts of things; Health and Environment Alliance; International Federation of Organic Agriculture Movements EU group; International Friends of Nature; International Network for Sustainable Energy; Justice and Environment; and the Mediterranean Information Office for Environment, Culture and Sustainable Development. The list goes on. Just one budget line funds all those organisations.
Mr Cash
On a broader question, will my hon. Friend consider that if we were to consider a Swiss-style relationship with Europe and negotiate a proportionate drop in our net contributions, we could reduce the amount we pay to no more than £1.3 billion, saving nearly £7 billion? Does he find that an attractive idea?
Chris Heaton-Harris
Anything that saves UK taxpayers significant sums of money I deem worthy of further investigation.
There are lots of areas in which the Government, working with others on the Council and Members of the European Parliament, who have an opportunity to amend the budget, can do a lot more, but only if there is a tiny threat that we might not want to increase our contribution at all. We have the reason to do it—the accounts not being signed off—but I urge the Minister to consider the opportunities that present themselves in the coming years. I support the Government in trying to reduce our budgetary contribution. I know that it is unbelievably hard work—I have sat in on these trilogue meetings in Brussels—but it is worth the effort, because we could save the UK taxpayer billions of pounds.
Keith Vaz (Leicester East) (Lab)
I want to start with a small Euro whinge about the time available to discuss these important matters. When we discuss European affairs, it is important that we have more than one and a half hours. I have great respect for the Front-Bench spokesmen, but they took more than 45 minutes to put their cases, leaving very little time for those knowledgeable Back Benchers—I do not include myself; I would never want to praise myself—who want to make a contribution on these important matters.
It is a pleasure to follow the hon. Member for Daventry (Chris Heaton-Harris), who is obviously extremely knowledgeable about these issues, having sat on the budget committee of the European Parliament for many years before claiming asylum here in Westminster. I am sure that we should listen carefully to what he says about how the process operates. I would also be keen to see a copy of the DVD showing what goes on inside the EU that my hon. Friend the Member for Vauxhall (Kate Hoey) offered to Members. I have not received a copy—perhaps the UK Independence party MEP decided to send it only to some Members.
I want to say three quick things, because I know that other Members want to contribute. The first, concerning migration issues, is directly relevant to the EU home affairs agenda. I would like to know from the Minister, if not today then certainly in writing, what part of the budget will be ring-fenced to help countries such as Greece to deal with the serious migration problems at their borders. I see that the hon. Member for Rochester and Strood (Mark Reckless) is here. The Home Affairs Committee visited Fylakio, on the border of Greece and Turkey, where we saw the detention centres in which many of these refugees and asylum seekers live. The conditions were appalling, and we were told that more than 100,000 people crossed the border between Greece and Turkey every year.
Obviously we would like an improvement in the living conditions of those who arrive in Greece, but more than that we would like to prevent these illegal migrants from coming into Greece in the first place. As Members will know, the destination of choice for those 100,000 people who cross the border into the EU is not Greece. They are only kept in detention for six months, and they then travel to Athens and end up in northern and western Europe, particularly the United Kingdom and Scandinavian countries.
We know that Greece is having huge problems, but I would like an assurance that some of the money in the budget will be ring-fenced for issues of concern to this country. If we are to deal with illegal migration, it is much better to do so at the far borders of the EU, rather than allowing it to be a problem for us here, with all the issues and political controversies that it raises when we debate it. Is any of that budget to be ring-fenced?
Mark Reckless (Rochester and Strood) (Con)
I wonder whether the Chairman of the Select Committee on Home Affairs recalls that when we went to Greece we came across a young lady from Latin America who had almost accidentally got caught up in the Greek illegal immigration system. She was desperate to go back, but the EU funds could not be used for that purpose, however much we made the case to the European Commission representative there. In the end, we had to get assistance from the Norwegian Government, whose funds did not require domestic Greek matching funds. Should we therefore not also deal with that issue?
Mark Reckless
I must clarify the position: I believe it was my hon. Friend the Member for Hertsmere (Mr Clappison) for whom she made a beeline.
Keith Vaz
We did not give notice of that allegation, so we had better not pursue it. However, the hon. Gentleman is right: the issue he raises is another area that can be looked at as a possible means of dealing with this important subject.
The second issue—[Interruption.] My hon. Friend the Member for Glasgow South West (Mr Davidson) keeps reminding me that I said I would speak for three minutes, and my time is now almost up. Let me therefore ask the Minister to look at the cost of enlargement. I am a great supporter of enlargement. When I was Minister for Europe, my job was to go to the European Union, as Tony Blair told me to, and ensure that we became best friends with all the countries in eastern Europe that sought to come into the European Union, and that is what I sought to do. I am therefore very much in favour of enlargement, but I am a bit worried by some of the figures for the cost of it. Croatia has been promised €150 million, while Turkey, which is not even a member, has been given €3 billion. We all support Turkish membership, but I am worried about all the money that is going to candidate countries and the possibility that we do not know precisely what is happening to it.
Mr Hoban
The right hon. Gentleman makes an important point. Last week the Commission proposed a €10 billion increase in the financial framework to cover the cost of Croatia’s admission. However, it should find that money from the existing budget, rather than loading additional costs on to taxpayers across all 28 member states, as they will become.
Keith Vaz
I am pleased to hear that the Minister is seized of the issue, and presumably he resisted that attempt to increase the budget. However, we seem to be giving a lot of money to some of the other potential candidate countries—Iceland, Serbia and Montenegro, as well as Turkey, of course—without knowing precisely what the benchmarks are. We should therefore look at that issue in the budget.
My final point relates to the Europe 2020 strategy and the benchmarks set when it was created, starting with the Lisbon agenda, which was agreed in 2000. Are we sure that enough of that money is going on growth and jobs in the European Union? There are other issues that need to be dealt with, but ensuring more jobs and growth is the key to getting Europe out of its current mess.
Jacob Rees-Mogg (North East Somerset) (Con)
It is a great pleasure to follow the right hon. Member for Leicester East (Keith Vaz), although I note that we are all glad that he is Chairman of the Home Affairs Committee rather than the Select Committee on the Treasury, because 13 minus six is certainly not three. None the less, it was a great pleasure to listen to what he had to say.
I want first to deal with the hypocrisy of the European Union. It seems to me outrageous that the European Union is saying to the peripheral nations—the nations in trouble—that they must cut, be austere and have reduced budgets forced on them while it builds up its own empire and takes more money for itself, so that it can enjoy the fleshpots of Brussels while the people in Greece can hardly afford to eat. This is deeply shameful and another reason for being suspicious of the European Union and the way it operates.
On the other hand, I support the Government because they have been valiant, in extremely difficult circumstances, in trying to keep the budget under control. As my hon. Friend the Member for Daventry (Chris Heaton-Harris) pointed out, it is almost impossible to get a qualified majority to keep the budget down when so many people benefit from an increased budget. However, the Government have done incredibly well in getting allies and in working with other member states whose interests are aligned to ours to keep the increase down to just a little above inflation. Of course I would like to see more; I would like a cash decrease in the budget and a remarkably small EU budget in general, but, given the difficult circumstances that the Government face, they have done extraordinarily well.
The Government have a bigger challenge ahead of them, however, because this arrangement is just for 2013 and they will have to negotiate the multi-annual financial framework. They hold one crucial card in that respect, which is unanimity—the veto. I would be interested to hear from the Minister whether the starting point for the multi-annual financial framework will be the budget for 2013 as agreed or the limit for the 2013 budget as agreed under the last multi-annual financial framework, because I believe that there is a difference of €11 billion between the two. If we are starting from the much higher level, we might find ourselves being told that the reduction has been a great success when in fact there has been an overall increase. That technical point is important.
I also want to issue a warning to the Government, and here I am going to sound like a Treasury stooge—a position that I hope to achieve at some point—who supports the Treasury line on everything. I support it in this regard, however, because I believe in austerity, and in cutting public spending and getting it under control. I am very worried about the partial general approach that is being taken to the multi-annual financial framework. I am worried that other Ministries are agreeing to programmes that will require funding, and that they will subsequently present the Treasury with a fait accompli.
Jacob Rees-Mogg
I am reassured by that, but I note that some of the documents that we have seen in the European Scrutiny Committee make it seem as though it would be difficult to un-agree some of the things that have been agreed. I am reassured, however, that the Minister is going to watch the situation carefully.
I should like to finish by thanking the Opposition for their marvellous amendment. It has without doubt achieved one thing, which is to unify the Conservative party in ridiculing an amendment that could hardly be sillier, more foolish, more erroneous, more wrong-headed or more potty—I hope that that word counts as parliamentary. Let us look at it. It states that
“the UK’s ability to negotiate a satisfactory European Union budget deal has been weakened by the Prime Minister’s failure to secure allies”,
yet the Prime Minister has secured allies right, left and centre. He did it for this year’s budget, and he has done it again for next year’s. It was one of his great European negotiating triumphs over the mendicant nations that get more money out of the European Union than they pay into it.
The Opposition also have the brass neck to state in their amendment that they want a real-terms reduction in the multi-annual financial framework, and that the Government will not answer their questions. I asked the hon. Member for Nottingham East (Chris Leslie) a simple question about the £10 billion that we lost, whether he regretted it in any way. I phrased my question as gently as I could, acknowledging that he had not been in Parliament at the time—a sad loss to the nation—but did he answer me? Did he say that it had been a great humiliation and a great shame that the last socialist Government had lost £10 billion of hard-earned British taxpayers’ money? Not a bit of it. He wandered on, and he meandered around, but he said nothing helpful of that kind. He therefore unites the Tory party in chortling at the effrontery of the socialists in coming here, when they spent money as if it was going out of fashion, and expecting us to do a job that even Hercules would probably have found beyond him.
I urge the Government—I beseech them—to cut the spending of the European Union. I am with my hon. Friend the Member for Daventry in saying that we should say to the EU: “For those 17 years of not having your accounts written off, we are deducting £1.7 billion from our contribution.” That has a nice symmetry. Let the EU take us to the Court—the Court that, as we discovered earlier, is gummed up with cases—and let it see whether it could bring a case against us to show that the law was on its side. I doubt that it would be.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
It is noticeable that, so far as I am aware, not a single Member has risen to defend the European Commission’s case for an expansion of its budget. Not even my right hon. Friend the Member for Leicester East (Keith Vaz)—representing Leicester and Brussels East—who is just departing, dared to suggest that the budget should be increased. I note that not a single Liberal Democrat has bothered to turn up to defend the EU’s budget proposals either. When I indicated my intention to speak in this debate, the Whips Office very generously offered me the chance to have the day off, on three occasions, despite the three-line Whip. Nevertheless, I felt it appropriate to share my views with the House.
This is the one area where, in respect of the UK Budget, virtually everybody is agreed that substantial cuts can be made. At a time of austerity, it is clearly indefensible to spend copious amounts of money on the European budget in the way we do. If I remember correctly, the Minister mentioned European schools, so will he tell us how much money is spent per teacher and per pupil in European schools in comparison with schools in the UK, either for the individual nations or across the UK as a whole? That would enable people to see the disparity. Will the Minister provide for the information of Members an account of the salaries and other rewards, and the tax and other deductions, of the top 100 most highly paid people in the European Commission and of those of the top people employed by the British Government? I believe such a comparison would reveal the level of extravagance of the European Commission in supporting itself in the style to which it has become accustomed to be outrageous and indefensible.
The Minister did not mention to any great extent the case for making cuts in the common agricultural policy, which is the wildest example of a benefits system for the least deserving that I have ever come across in my life. We have attacked the poor by changing their benefits system, yet we are not prepared to take any steps to try to amend the benefits system that works for this country’s wealthiest landowners. The waste and extravagance of the EU fails to be audited successfully year after year—to the great complaint of the Public Accounts Committee on which I served for many years.
It seems obvious that the Minister and Conservative Members must have something in their notes, saying: “weak case; kick Opposition”. I accept that the Opposition’s case is weak. I did not support the budget changes when we gave away the rebate: we got virtually nothing for it; we got no change to the common agricultural policy, and those responsible for it did not even get the presidency of the European Union. In those circumstances, it was a patently disastrous deal, but simply reflecting on that is not sufficient. The Minister needs to be more explicit about how exactly he proposes to deal with the situation in which we are perpetually outvoted in qualified majority voting by those who receive money from those who pay. There is an in-built majority of recipients, so it is inevitable in those circumstances that we will always lose.
The question arises of what we do about the next overall budget for the longer period. I am not clear whether the Government are saying unequivocally that they intend to veto that budget if it is unsatisfactory. I am not clear how they will judge whether or not the proposed budget will count as unsatisfactory. An hon. Member asked earlier whether the Government would view a cash increase as acceptable in any terms. I would have thought that a cash freeze should be the very least that the Government would expect from the budget going forward. I would have hoped that we wanted to see, at the minimum, substantial cuts in a whole host of areas of the EU budget—and that otherwise we would reject it. If that brings about a confrontation with our European allies—those with whom we wish to work on many fronts—it might bring about the sort of issue on which we want a referendum.
I have not previously favoured an in/out referendum because I regard neither of those options as particularly attractive: a yes to stay in would be seen as a green light to ever-closer union, while a no to get out would be seen by isolationists as a green light to their position. I believe in co-operation with our European allies, but on different terms from those that we have at present. The Government have a responsibility to be fair to our European allies so that they do not feel that they have been ambushed by our producing—like a rabbit out of a hat—a whole set of red lines at the last minute. We should be spelling out now what it is that we are not prepared to accept in any drastic redrawing of the budget.
I hope, of course, that the budget cuts will be so drastic that my hon. Friends support them as well. It is noticeable that Opposition Members have been unanimous in criticising the European budget, and I think that if a vote were taken now among the Opposition Back Benchers who are currently present, the budget would be subjected to stringent cuts.
The Government must recognise that the country is far more Eurosceptic and suspicious of EU budget spending than the élites of Europe who are disproportionately spoken for in the House. It is true that the Liberal Democrats are not here, but they are not the only guilty parties. There are those who have become hypnotised by the lure of Brussels and the concept of flying back and forth throughout Europe. They have been sucked in by a very seductive embrace: the idea of becoming a European statesmen, and world statesmen, and so on and so forth. That leads people to forget what life is like at home, and the feelings and ambitions of ordinary people, let alone the price of milk.
I hope that the Financial Secretary will not only agree to provide the information for which I asked about schools and the salaries and taxation of the top 100, but spell out more clearly the rules that the Government intend to apply for the forthcoming budget period.
Mr William Cash (Stone) (Con)
The debate is extremely important, particularly in the light of what we heard from the Foreign Secretary this morning, because it is about our relationship with the European Union. As I said in my response to the Foreign Secretary’s statement, it is fundamental that we concentrate not merely on powers, but on democratic power. The debate is about sovereignty and tax and spend, it is about how much we should contribute, and—as I said to the hon. Member for Nottingham East (Chris Leslie)—it is about the increase in functions that has led to the increase in the budget. The hon. Gentleman knows that, and we know it. The fact is that the Lisbon treaty should never have been allowed to go through. The budget question is at the heart of this, and I say no, no, no.
Neil Parish (Tiverton and Honiton) (Con)
My hon. Friend is absolutely right. If we want to curb the powers of the European Union we should pay it far less money, which it should spend more efficiently, and, given that Europe is facing austerity, it is entirely wrong to ask for a 6% increase.
Mr Cash
It is indeed. In fact, the Commission is asking for 6.8%.
I agree with the Minister that the Government have fought hard, but they have not fought well enough. Although an amendment that I tabled last year proposing no increase was accepted by Members on both sides of the House, we ended up with a 2.5% increase. I think I am right about that, although the Minister appears to disagree. As for the year that we are discussing now, we need to ensure that, if necessary, we take firmer steps in the light of the changed relationship that has resulted from these times of austerity.
I think that we should say no and ensure that the amount in question is at worst a flat increase. Furthermore, I think that we should say no to the final results. QMV does not impress me: other member states have been breaking the law all over the place, particularly Germany and France over the stability and growth pact. The whole of the fiscal compact was unlawful. It is time that we took a firmer line. We are a major net contributor to the EU budget, of which, last year, 45% was spent on policies for sustainable growth, 41% on the preservation and management of natural resources, and the rest on, for instance, “the EU as a global player” and administration. We are the second largest net contributor after Germany. The current annual budgets under the multi-annual financial framework are going in the wrong direction. We should restrain all further expenditure to the EU. We must take action on the gross payments. The gross payments, less abatement, were £12.915 billion in 2010, up from £8 billion in 2005. There is an ever-growing increase in real terms. That is unacceptable in a time of austerity.
I shall conclude by referring to a point I have already made. We must change our relationship with the EU in the way anticipated by those of us who would make the most of what the Foreign Secretary said earlier today, and we must do so sooner rather than later, and certainly before 2014. If we were to adopt a Swiss-style relationship and negotiate a proportionate drop in our net contributions, we would be able to save at least £7 billion for the British taxpayer. That is the direction we should go in. It is time that we said no, not maybe.
Mr David Nuttall (Bury North) (Con)
As ever, it is a great honour to follow my hon. Friend the Member for Stone (Mr Cash).
The facts are simple. The net out-turn figures are £9.2 billion for 2010-11, £8.7 billion for 2011-12, £6.9 billion for 2012-13 and £8.3 billion for 2013-14. At a time when we are cutting our budgets here in the UK, the fact is that, whatever happens in the negotiations, those in Europe and Brussels want the European budgets to be increased. Meanwhile, my constituents are seeing their budgets being cut. This serves to highlight the fact that we would be better off out of the EU.
Question put, That the amendment be made.
EU Charter of Fundamental Human Rights
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Europe (Mr David Lidington)
I beg to move,
That this House takes note of European Union Documents No. 18635/11, relating to the Joint Communication to the European Parliament and the Council on Human rights and democracy at the heart of EU external action-towards a more effective approach, together with an unnumbered Explanatory Memorandum dated 7 June 2012, submitted by the Foreign and Commonwealth Office, relating to a draft Council Decision appointing the European Union Special Representative for Human Rights, and the EU Action Plan on Human Rights and Democracy, and No. 8905/12 and Addenda 1 and 2, a Commission Report to the European Parliament and the Council, the European Economic and Social Committee and the Committee of the Regions on the Application of the EU Charter of Fundamental Rights; notes the Commission document on the Progress on Equality Between Women and Men in 2011; endorses the Government’s intention to support the draft Decision on the EU Special Representative for Human Rights; and welcomes the Government’s work to provide for enhanced Member State oversight of the Special Representative’s activities in Articles 10 and 11 of the draft mandate.
The motion deals with a number of European Union documents. As the House will appreciate, the Foreign and Commonwealth Office is responsible for those documents dealing with the EU’s human rights strategy and the proposed appointment of a human rights special representative. The Ministry of Justice is responsible for other documents included in the bundle, and I acknowledge the presence of the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), in that connection.
Two years ago, almost to the day, the House debated the creation of the European External Action Service, an institution set up by the Lisbon treaty. The Government took the view that, whatever opinions the two parties in the coalition had about the creation of the EAS, now that it existed as the creation of the Lisbon treaty, we wanted the new institutional arrangement to complement our own strong commitment to an active British foreign policy and to use the EAS to help to deliver the diplomatic objectives of the United Kingdom. Our judgment is that the EU’s new human rights strategy is an example of how the EAS can be used to complement and amplify the UK’s own human rights policy.
This afternoon, I want to address some of the concerns expressed by the European Scrutiny Committee and others about the implications of the measures before us. I have singled out three matters in particular.
Oliver Heald (North East Hertfordshire) (Con)
My right hon. Friend is absolutely right to address the concerns of the Scrutiny Committee, but does he accept that there is some concern in the Council of Europe Parliamentary Assembly, particularly about how the two jurisdictions of the special representative and the human rights commissioner of the Council of Europe will overlap and interweave, whether this will be duplication or a takeover, and whether it all makes sense?
Mr Lidington
I completely understand my hon. Friend’s point. I said that I wanted to address the concerns expressed by the European Scrutiny Committee and others.
The three issues I have in mind are: first, the need to maintain the rights of member states to determine their foreign policies and to avoid any scope for competence creep towards the EU institutions; secondly, concerns about the balance of responsibilities between the EU institutions themselves and, in particular, the role of the European Parliament; and thirdly—this goes straight to my hon. Friend’s point—the relationship between the EU special representative on human rights and the work of the Council of Europe, particularly its human rights commissioner.
Let me deal first with the question of competence and the rights of member states to determine their foreign policy. Democratic freedoms, universal human rights and respect for the rule of law are at the heart of British diplomacy and policy. I believe that the new EU human rights strategy and in particular the EU special representative on human rights will help us to deliver our national foreign policy objectives better through the EU, by providing a strong and visible face for its external action on human rights.
The EU’s external human rights policy flows from the common defence and security policy, which will provide the operating framework for the special representative. Declaration 13, annexed to the treaties, provides confirmation that the CFSP does
“not affect the responsibilities of the Member States… for the formulation and conduct of their foreign policy”.
Therefore, the new human rights package will not affect our ability to formulate and conduct our own national foreign policy. Furthermore, decisions at European level on CFSP require unanimous approval by the Council, with agreement by every member state. No EU position on external human rights policy or any other aspect of common foreign and security policy can be agreed without the approval of the British Minister or other representative in the room, and of course the same right of veto applies to every other member state. There is no suggestion in these documents or elsewhere that there should be any change to those arrangements.
The Government’s view remains firmly that the EU must act only where it has the competence to do so under the European Union treaties. We will remain vigilant against any threat of competence creep through the actions of the External Action Service. It is essential that the EAS continues to complement and support, not replace, national diplomatic services. That is why, for example, we have been so resolute on the principle that the EAS should have no front-line role in consular services, which would go beyond the supporting role for member states provided for in the treaties.
So far the EAS has delivered best when it has worked closely with member states and capitalised on the resources of member states and EU institutions. I will quickly highlight what I think are a number of genuine achievements from the past year where the EAS has worked well and, in doing so, has helped to deliver important British foreign policy objectives. First, there was the review of the European neighbourhood policy, which has produced an ambitious framework for the EU’s approach to the emerging democracies of north Africa and the middle east. That is now starting to have a practical impact through structures such as the EU-Tunisia taskforce.
Secondly, the EAS and Baroness Ashton personally have worked closely with the E3 plus 3 to engage Iran over its nuclear programme, and the EU recently agreed to the most far-reaching sanctions ever imposed on any other country, working in that case closely and efficiently with the Governments of the individual member states. Thirdly, the sanctions already in place against the Syrian regime—16 rounds already agreed—are still under consideration and may be strengthened further.
The proposed EU special representative will allow us to deliver more such examples of successful EU external action. The role is granted in article 33 of the treaty on European Union, which provides:
“The Council may, on a proposal from the High Representative …appoint a special representative with a mandate in relation to particular policy issues.”
The way in which the mandate is implemented will be critical, and I am glad that the European Scrutiny Committee noted the United Kingdom’s successful efforts to secure an additional layer of member state oversight of the special representative’s activities, in order to guard against any unwelcome or unwarranted expansion of their responsibilities. Article 11 of the mandate provides that
“the EUSR shall work in coordination with the Member states.”
Article 10 requires that he or she
“shall also report to the competent Council working parties”,
and article 4 states that the Council’s
“Political and Security Committee shall maintain a privileged link with the EUSR”.
The last provision is common to all EUSR mandates. In practice, that “privileged link” means that the special representative will be able to communicate directly with the Council, bringing together the representatives of the 27 member states, rather than having to go through the High Representative or through other structures. The mandate also ensures that the Political and Security Committee will
“provide the EU special representative with strategic guidance and political direction.”
Given those safeguards, I am confident that the United Kingdom is well placed to play a leading part in giving that direction and guidance to the EUSR and in holding the special representative to account for his or her actions.
The appointment of a special representative will in no way affect the United Kingdom’s ability to speak, as now, on its own behalf in international organisations, including the Human Rights Council of the United Nations. As is the case now, the European Union may speak on our behalf only if there is a shared position to which the United Kingdom has signed up, and which requires unanimity. On the basis of those safeguards, I seek the House’s approval for the establishment of the role.
Jeremy Corbyn (Islington North) (Lab)
Having attended many meetings of the UN Human Rights Council, I was consistently disappointed when the member state representative said nothing and left it all to the EU representative. I am pleased that increasingly the UK representative speaks independently, particularly about the death penalty, but can the Minister assure the House that we will continue to have an independent voice at the UN Human Rights Council and will resort to the EU representative to speak on our behalf only in a case of absolute unanimity?
Mr Lidington
I can give the hon. Gentleman two assurances. We are members of the UN Human Rights Council in our own right. When there is no unanimously agreed common foreign and security policy position, the United Kingdom’s representative will speak on behalf of the United Kingdom Government’s position. When there is a unanimously agreed CFSP position, normally that will be represented by the European Union’s representative, but member states do speak—particularly if the occasion is sufficiently important—in support of the EU representative’s view, giving extra weight to the views expressed on behalf of all 27 members. It is best left to judge on a case-by-case basis exactly what tactic will be the most effective in delivering the outcome we want, but I take to heart the hon. Gentleman’s point about wanting to hear the vigorous expression of British policy objectives, whether on our own or in support of a unanimously agreed EU position.
Jacob Rees-Mogg (North East Somerset) (Con)
I am extremely grateful to my right hon. Friend for giving way in a second debate this afternoon.
If there is not a unanimously agreed position, can the EU representative speak at all, or do they have to remain silent?
Mr Lidington
If there is no unanimously agreed position, there is no locus for the EU representative to speak at all; they have a right to express a view only when there is an agreed European Union position. As hon. Members on both sides will probably recall, there have been occasions when, regrettably, European Union member states have split two or three different ways on a particular issue before the Human Rights Council.
Jacob Rees-Mogg
Does that apply to the noble Baroness Ashton as well? Can she speak on foreign policy matters only with the consent of the British Government?
Mr Lidington
Baroness Ashton is an office holder, in accordance with the treaties, as both vice-president of the Commission and High Representative of the European Union. She can speak out on foreign policy issues in that capacity; what she cannot legitimately do is express a view purporting to be the commonly agreed policy of the European Union, and therefore on behalf of all 27 member states, unless the decision to adopt a common position has been taken by those member states.
In practice, what happens is that a common foreign and security policy position is adopted. An incident may then occur—another outrage in Syria, for example. Nobody quarrels with the idea that Baroness Ashton would comment on that, just as my right hon. Friend the Foreign Secretary would; the test is whether the statements are in line with the foreign policy position that has been unanimously agreed. In my experience, Baroness Ashton has observed very well the requirements of the treaty and the importance of unanimity for a commonly agreed position.
Mr Edward Leigh (Gainsborough) (Con)
Is the Minister aware of the widespread concern among Members of the Parliamentary Assembly of the Council of Europe? We already have a perfectly good commissioner for human rights. Given that the Government’s rhetoric is all about avoiding competence creep by the EU and that we already have a perfectly good person doing a perfectly good job on behalf of nation states throughout Europe, we cannot understand why we are going along with the measure. The Minister has to reassure us further that in no way will it go against British national policy.
Mr Lidington
I have explained why the measure does not cut across British national policy, but I will come in greater detail to the relationship between the EU special representative and the Council of Europe.
I turn to the action plan. The European Scrutiny Committee noted that it is a comprehensive text and suggested that it constitutes a departure from the approach outlined in the previous joint communication. The High Representative has described human rights as
“a silver thread that runs through everything that we do in external relations.”
That is very much how the Government see human rights, too. In 2010, early in the Government’s life, my right hon. Friend the Foreign Secretary said that
“values are part of our national DNA and will be woven deeply into the decision-making processes of our foreign policy at every stage.”
The action plan is comprehensive, because integrating a human rights perspective across all areas of the EU’s external action is the best way to ensure that the European Union maximises its influence on these issues.
We did not just agree to the action plan on the nod. We conducted a line-by-line assessment of the items, and we are content that what is proposed is in line with our policy objectives and does not pose a risk of competence creep. In addition, the Council has formally agreed that the action plan will fully respect the existing division of competencies. Although it is a comprehensive document, it both builds on the original joint communication and has been examined closely by the Government on precisely the question of competence that concerns my hon. Friend.
Mr Lidington
I will give way, but I am very conscious that a lot of hon. Members wish to speak.
Mr Cash
It is also true that the Minister is at the Dispatch Box and has a responsibility to answer these questions. There are four pages under the headings of outcome, action, timing and responsibility. Is he seriously suggesting that in every single respect, given the general nature of all these things and the fact that the legal consequences will ultimately end up in some court or other, he is right in making such a general assertion?
Mr Lidington
Yes, of course the action plan is expressed in general terms, because the intention is that those general principles should be applied to the European Union’s human rights activity across the range of EU dossiers and areas of external policy action.
On the common foreign and security policy—CFSP—the freedom of the EU special representative or the High Representative to express a view and develop a policy on behalf of the EU collectively will depend on whether a CFSP position has been unanimously agreed for a particular country, region or crisis. The action plan describes in general terms how the EU and its High Representative and special representative should determine their priorities for action, but we cannot sit down in July 2012 and write down in detail which countries and crises will be involved and in what manner such work should be undertaken. Foreign Ministers in the Foreign Affairs Council and national representatives in the Political and Security Committee will consider these matters case by case.
The European Parliament saw a role for itself on the CFSP following the Lisbon treaty, and we were equally clear that the CFSP would remain intergovernmental. The High Representative has made a gesture to the Parliament in a non-binding declaration on political accountability, which says that she will seek the views—nothing more than that—of the European Parliament on CFSP matters. As one would expect, the European Parliament has taken a keen interest in the new human rights package. In accordance with article 36 of the treaty on the European Union, the mandate for the special representative provides that he or she
“may be involved in briefing the European Parliament.”
However, such briefings may take place only in a committee or sub-committee configuration and never in plenary debates, in which only the High Representative may participate. This reflects the arrangement, which we firmly support and uphold, that on issues pertaining to the CFSP the High Representative may be replaced in plenary only by a Minister of a member state.
I want to move on to the possible overlap with the Council of Europe, which concerns several Members. I start by acknowledging the important work that right hon. and hon. Members in all parts of the House play as Members of the Parliamentary Assembly of the Council of Europe. I recall the very pleasurable visits that I made to the Parliamentary Assembly during the United Kingdom’s six-month presidency of the Council of Europe. It is clearly important that there be effective, mutually trusting co-ordination between the Council of Europe, particularly its human rights commissioner, and the EU’s new special representative on human rights. That is reflected in the wording of the mandate, which I will describe shortly.
I note that the two roles have distinct responsibilities. The Council of Europe’s human rights commissioner is mandated to promote awareness of and respect for human rights within the member states of the Council of Europe. The EU special representative’s role is different; it is to promote human rights globally as part of the EU’s unanimously agreed CFSP. Both office holders will be involved in work on promoting respect for human rights in states of the Council of Europe that are not EU member states. To avoid any risk of unhelpful overlap and duplication, article 11(3) of the EUSR’s mandate expressly requires him or her to
“liaise and seek complementarity and synergies with other international and regional actors”.
To turn that jargon into English, it means that the special representative should maintain a regular dialogue with the commissioner to avoid duplication. The secretariat of the Council of Europe has expressed no concern to us about the creation of this role. Indeed, subject to proper co-ordination, it welcomes an increased focus on human rights within the EU’s external action.
During the UK’s presidency, I discussed with Secretary-General Jagland the relationship between the Council of Europe and the European Union. I was pleased to learn from him and other senior officials in the Council of Europe that, over the past year or so, there had been a distinct improvement in the quality of liaison and co-operation between the two organisations. There was a feeling, certainly among the secretariat, that there was no longer the pressure from the EU that there had been for its institutions to take over the work of the Council of Europe; rather, efforts were being made on both sides to agree the areas where each was likely to be the most effective actor.
Mr Christopher Chope (Christchurch) (Con)
That may be the view of officials at the Council of Europe, but it is certainly not the view of the members of the Parliamentary Assembly. In a debate at the last part-session, members from all political parties and from right across the 47 member states expressed grave concern about the duplication and the additional cost involved in this project. Why are we spending money on this project in an age of austerity?
Mr Lidington
The budget for the special representative and his or her office and team has to be found from within the existing budget of the External Action Service. It will therefore have to be found at the expense of other potential items of expenditure. I have no doubt that some people will argue that, given the creation of the role, a bigger budget is needed, as with any EU special representative role, but we do not accept that. We continually resist calls for increases in annual and multi-annual budgets and seek to bear down on the costs of, and to secure better value for money in, individual special representatives’ missions and common security and defence missions more generally. I do not want my hon. Friend to think that this will lead to a vast new bill.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
Some members of the Parliamentary Assembly of the Council of Europe have a different view from the hon. Member for Christchurch (Mr Chope). Some of us hope that the fundamental focus of the Council of Europe on human rights might reinfect the body politic of the European Union and add human rights to some of the agreed trade policies that have ignored human rights.
Oliver Heald
My concern is that the Council of Europe includes large and important countries such as Russia and Turkey. At the moment, those countries seem to be taking a constructive approach to the implementation of court judgments, criticisms and so on. There seems to be an improving picture. The Russians recently gave evidence to the committee on legal affairs and human rights about what they are doing. There is a great difference between being criticised and having a constructive approach within an organisation that one is part of and having another organisation that one is not part of shouting from the sidelines. Does my right hon. Friend understand that the 27 lecturing the others is not going to work and that we must avoid it?
Mr Lidington
If this is going to work to the benefit of the EU and its member states, it is important that it does not turn into the EU lecturing other countries, as my hon. Friend describes it. However, let us consider the situation in countries that are in the Council of Europe and not the EU. I repeat that a great deal is going on in EU relations with countries beyond Europe that are important but do not touch on the Council of Europe’s responsibilities.
For instance, let us take Ukraine. The problems of human rights there are quite properly being dealt with through Council of Europe mechanisms. In particular, individuals can take specific grievances about alleged abuses of human rights to the European Court of Human Rights and have them tested by judges. However, the European Union has important relationships with Ukraine in its own right. Ukraine is part of the EU’s eastern partnership and has been negotiating with the EU an association agreement and a deepened comprehensive free trade agreement, which include clauses on human rights and political reform.
The special representative for human rights can add value by giving extra coherence and force to aspects of specifically EU external policy that touch upon human rights matters. It is important that the two organisations respect each other’s important and complementary roles. I would be concerned if I thought that the EU had an appetite to take over what the Council of Europe was properly doing, but all I can say is that that is not what I am hearing from senior officials at the Council of Europe or from the High Representative and her senior team.
I turn briefly to the other documents in the bundle, although they are not the direct responsibility of the Foreign and Commonwealth Office. The first is the Commission’s 2011 report on the application of the European Union charter of fundamental rights. The European Scrutiny Committee questioned whether the annual report served as a tool effectively and systematically to monitor the implementation of the charter and how the effective implementation of the charter by member states would be measured in future.
It is important to note that the report is not an enforcement tool. It sets out a number of mechanisms that the EU institutions are developing to review EU legislation as it is drafted, to ensure that the rights and principles listed in the charter are respected. Although the charter is primarily directed at EU institutions and at member states only when they are implementing European law, the Government will consider any Commission proposal on how the actions of member states in that area might also be assessed.
The final text before us is the Commission’s report on progress on equality between women and men. This is the first time that the document has been included with the report on the application of the charter, and the Government consider that the two reports sit well together. The Government believe that the UK has a good story to tell on gender equality. Our priority is to support women in employment, whether through the provision of quality, affordable child care or by providing mentors for aspiring business women. The Commission’s report rightly reflects the fact that progress is being made but warns us against being at all complacent about gender equality.
In working with our EU partners on human rights issues, our objective throughout is to ensure that the EU institutions act to advance the prosperity, security and values of the UK by complementing and supplementing, not replacing, the work of the Foreign and Commonwealth Office and other arms of the UK Government. We consider that a new EU special representative for human rights will help us deliver our national diplomatic objectives through the EU by providing a strong, visible face for European external action on human rights. I therefore seek the House’s approval for the establishment of that role and commend the motion to the House.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before I call the shadow Minister, I advise the House that I will interrupt the debate at 6 pm to put the Question on the deferred Divisions motion, and then the debate will continue. I do not want to surprise anybody.
Emma Reynolds (Wolverhampton North East) (Lab)
I welcome this second opportunity to discuss a European motion, this time on the EU’s role in promoting human rights and democracy and the EU’s external policy. In the context of the Arab spring and with the ongoing crisis in Syria, those issues are highly relevant and the EU’s role is more important than ever.
Three subjects are central to the motion: the new EU human rights strategy; the corresponding action plan; and the appointment of an EU special representative on human rights. The Opposition agree with the Government that the EU should use its collective weight to maximise its influence in promoting human rights and democracy around the world, and that the EU’s new human rights strategy will serve as a multiplier of the UK’s voice. The size of the European economy and the fact that the EU is the world’s largest provider of development aid gives it significant influence and leverage in the promotion of human rights.
We also agree with Baroness Ashton that human rights must be the silver thread running through the EU’s external strategy. For the first time, one document summarises all aspects of EU human rights work. The strategy emphasises the universality of human rights and the importance of making them central to the EU’s external policies. It is vital that promoting and protecting human rights is not considered an add-on to the EU’s external policies, so we welcome the fact that they will be mainstreamed into all EU external policies.
We welcome the strategy’s commitment to include human rights considerations in trade, investment, technology, telecommunications, internet, energy, environment, corporate social responsibility and development policy. The mainstreaming of human rights is further strengthened by the commitment for the geographical working groups in the Council to have responsibility also to fulfil the action plan. The EU will increase its support for freedom of expression, association and assembly. That is important, because, as the strategy says,
“democracy cannot exist without these rights”.
We welcome the increased emphasis on supporting the fair and impartial administration of justice—another important way of promoting the independence of the judiciary. More generally, there is an encouraging emphasis in both the strategy and the action plan on the need for the EU to evaluate the impact of its human rights policies. The EU’s annual human rights report will now evaluate the EU’s progress in meeting its objective as well as the human rights record of third countries. That is welcome in terms of increasing both transparency and accountability. Another positive development is the commitment to develop indicators for human rights dialogues.
The action plan further acknowledges the division of competence between the EU and member states on human rights and recognises that the role of the EU is to complement the work done by member states. Finally, both the strategy and the action plan underline the importance of the EU working even more closely with civil society in its human rights work.
The role of the new EU special representative on human rights will enhance the EU’s effectiveness and visibility in protecting and promoting human rights—this special representative will be the first to have a thematic role. Whoever is appointed will have a broader remit and a more flexible mandate than the existing EU special representatives. We agree with the Government that the person chosen to be representative should have
“an established track record and international experience in human rights”
and that he or she
“should have an excellent ability to maintain diplomatic relations at a senior level”.
The motion refers to the charter of fundamental rights and the Commission’s 2011 report on the application of the charter. The report underlines that progress has been made in ensuring that all EU institutions, bodies and agencies comply with the charter. It also contains a number of observations and recommendations. It notes that positive steps have been taken on, for example, disability rights, child protection and preventing human trafficking.
On disability rights, the EU has joined the UN convention on the rights of persons with disabilities, which is a welcome development. On child protection, the EU has adopted an agenda on the rights of the child, which is a prelude to developing new rules on combating the sexual exploitation of children and child pornography.
The report details the EU directive on the prevention and combating of trafficking human beings and protecting its victims, which came into force in 2011. As the report recounts, the directive took a human rights and gender-specific approach and sought to achieve more effective prosecution of human traffickers by national authorities across borders. The Commission also appointed an EU anti-trafficking co-ordinator.
The report highlighted areas for improvement, namely on gender equality, and to this end the Council of Ministers adopted a European pact for gender equality calling for equal participation of women in decision making and repeating the importance of integrating a gender perspective into all policies, including in the external actions of the EU. Progress has certainly been made, but there remains much to do.
It is important to consider the role of human rights not only in the EU’s external policies but inside EU member states. In that context, I would like to ask the Minister about the situation in Hungary. Last year, the Commission used its legal powers to raise concerns with the Hungarian Government about media law, because the Commission had serious concerns that the law would severely restrict freedom of expression. Fortunately, the Hungarian Government were persuaded to agree to a raft of changes to ensure that those concerns were addressed.
Nevertheless, there remain ongoing concerns about the actions of the Hungarian Government, in particular over the introduction of the new fundamental law, which came into force at the start of the year and replaced the constitution that had transformed Hungary from communist dictatorship to liberal democracy.
Jeremy Corbyn
I appreciate what my hon. Friend says about the media laws in Hungary, but does she also share my concern about the disgraceful systematic treatment of the Roma in Hungary and the many cases reported at a very high level to human rights organisations? There is a case for the strongest possible statements to be made by both the EU and the Council of Europe.
Emma Reynolds
I agree with my hon. Friend that the protection of the human rights of the Roma community is incredibly important and that those rights are at risk in Hungary. Their human rights have been threatened in other member states, too—I will not mention a former President of the French Republic and some of the things he said about that community.
The fundamental law extends the Hungarian Government’s control over various bodies that should be independent, such as the central bank and the courts. In particular, there are concerns about the independence of the judiciary. We believe that an independent judiciary is a vital safeguard of human rights. The European Parliament and the Commission have raised concerns about democracy and the accountability of the Hungarian Government, and it is clear that human rights must be protected within the EU and its member states, if the EU is to have an authoritative voice on human rights in external countries. I would appreciate it, therefore, if the Minister could shed some light on these matters by answering the following questions: does he think that the situation in Hungary weakens the EU’s voice on democracy and human rights in third countries; and will he update the House on what discussions he and his colleagues, including the Foreign Secretary and the Prime Minister, have had with the Hungarian and other EU Governments about the new Hungarian fundamental law and its the implications for the human rights of the Hungarian people?
Mr Cash
Is the hon. Lady aware of the enormous majority that the President, Prime Minister and Government of Hungary have as a result of free and proper elections? Does she think it the right and duty of the EU or the Venice Commission to tell a member state how it should behave, when it has such a massive democratic mandate? This is a very serious question.
Emma Reynolds
I agree only that it is a very serious question. The EU must promote and protect human rights within its member states, regardless of the majority that a President or Government have received from the electorate. We should not tolerate the judiciary, the media or other such institutions being under the control of whatever Government in whatever member state. Labour Members are proud of our record on human rights while in government. We passed the Human Rights Act and prioritised the promotion of human rights in our external policies, particularly our development policy. Further back in history, the UK was one of the leading architects of the European convention on human rights. We remain proud that the UK is a signatory to that convention, and we are a full and active member of the Council of Europe.
Although we welcome the Government’s position on the documents before the House, it seems that the Government are not always entirely consistent in their commitment to human rights. The Minister has said positive things today, but his Conservative MEPs in Brussels say and vote entirely differently. Regrettably, they sit with a rag-bag of anti-Semites, holocaust deniers and homophobes.
Emma Reynolds
I do not think it is rubbish at all.
We need a Government who will consistently champion human rights in the UK, in Brussels and around the world. The new EU strategy, the action plan and the appointment of a special representative for human rights will hopefully make the EU’s promotion of human rights and democracy more effective. We therefore support the motion.
Mr Deputy Speaker (Mr Nigel Evans)
Order. A number of colleagues wish to participate, but I should remind the House that the debate is time limited, and we wish to leave some time for the Minister to respond.
Mr William Cash (Stone) (Con)
I have listened to the hon. Member for Wolverhampton North East (Emma Reynolds), and my concern about this whole debate is that it seems that, somehow or other, there is a universality about human rights, without reference to democracy in individual countries. The question I have to ask is: how do we define what a human right is?
It is not so simple. I believe in human rights; I believe in the manner in which we legislate. However, we are already having a massive debate in the House of Commons about the Human Rights Act 1998, and about the commission that has been set up as a result of the coalition agreement. There are also massive questions being raised about the manner in which our judiciary is interpreting human rights—in relation to extradition, deportation, Abu Qatada, and so on. I have even noticed some Opposition Members showing an increased interest in whether human rights can be regarded as entirely generic and universal, when it is actually up to individual member states and individual Parliaments, based on the votes cast in general elections, to decide whether a particular human right is or has been contravened.
Mr Cash
I will happily give way to the hon. Lady, because I am getting increasingly fed up with these people who continually assert, with their political correctness, that they know what a human right is. It is down to Parliament, based on what is decided by the voters in general elections, to determine those questions. It is a matter of law, not just some generic universality. I will be the first to fight for habeas corpus or trial by jury. What worries me is all these generic expressions—I will come to that in the middle of my speech—and this whole concept, which is promoting more and more generic human rights creep.
Jo Swinson
I sometimes wonder whether it is better not to encourage the hon. Gentleman, but I want to challenge him on universality, because I believe, as do many others, in the universality of human rights, as have been signed up to by our Government through the United Nations conventions. Does he really think that we in this country have no role in arguing and campaigning for changes abroad, and that if, for example, even a democratic country elsewhere in the world decided that it would persecute Christians—torturing them, and so on—just because of their beliefs, that should be of no concern to us whatever and that we should not try to change minds or persuade others to take action to change it?
Mr Cash
No, I do not. As a matter of fact, I have been very much personally involved in the Jubilee campaign, standing up for the rights of people in other countries who are being persecuted. Indeed, as the hon. Lady will know, I have also promoted the issue by forming the all-party group on water and sanitation in the third world. I stand absolutely 100% behind people’s rights in that regard. What worries me is when the whole thing is codified—as it is in the papers before us and the strategic plan—and interwoven with the universality matrix, and then buttressed by legal requirements. Therefore, when I hear the Minister saying, “Well, we will exercise the veto as and when it is appropriate”—if I can put it in generic terms—I simply do not believe that to be a realistic way of dealing with the issue.
This is another example of the European Union engaging in European creep on a monumental scale. I am not against the individual defence of people in relation to human rights questions, and there are many things that crop up in the European strategic framework and action plan that I would strongly support in an individual context. What worries me is the universality, not only because of the panoramic view that is taken of all these matters, but because of the panoramic way in which it will be applied in practice, headed by the European representative. This is essentially a practical question.
Dr Julian Lewis (New Forest East) (Con)
Is it my hon. Friend’s assertion that, while he has no objection to a democratic country expressing strong views about abuses of human rights in other countries, democracies or otherwise, his real objection is that the European Union is seeking to take on this role without constituting a democracy in its own right?
Mr Cash
That is exactly the point. This is almost a jurisprudential question. It is not about fancy philosophy; it is about how we make decisions relating to individual, practical instances. My hon. Friend is entirely right to make that point. It is difficult to imagine that we will be able to make a choice, once the machinery is moving forwards. I shall give the House an instance from among the wide range of activities in the many pages of the strategic framework and action plan that has been adopted by the EU Council. By engaging in this proposal, we are effectively endorsing European creep. I know that my right hon. Friend the Minister says that that will not happen, and that we will have the opportunity to exercise the veto, but I just do not see this as a practical way of working.
The Council has adopted the measure, and we have demanded this debate on the matter for very good reasons. We want to examine exactly what the measure contains. There simply is not enough time, in the one and a half hours allotted to us, to go through the incredibly complex questions that arise from the matter or to deal with the interaction of the decisions and the impact that they will have on human rights law in this country or in others.
I shall give the House a flavour of what I am talking about. Anyone listening to or reading the debate might like to look at the range of matters in the action plan. I mentioned that it is divided into outcomes, actions, timings and responsibilities. It is divided into seven chapters, and it sets out a variety of external policy activities. This has been agreed by all member states. Seven headings cover 36 policy areas and 97 potential actions, and that deals with the matter only in the generic sense. When we reduce this to individual cases, we are effectively saying that the EU will have a supervisory responsibility, subject only to the caveat that we will be able to exercise the veto, as my right hon. Friend the Minister said. I do not see that happening, however, once the machinery has been set up.
This is very much like the External Action Service. Indeed, it is very much like the EU itself. I said in 1992, or whenever it was—it seems a very long time ago now—that once the Maastricht treaty had gone through, once the European governmental system had been created with all the qualified majority voting that went with it, once we had created the mechanism and endowed it with resources, and once we had increased and implemented its legislative capacities and functions, we would have constructed an enormous creature that was incapable of being restrained. That is exactly what has happened, with disastrous consequences.
To come back to the main issue, let me provide a few examples. In the first place, the action plan refers to
“Human rights and democracy throughout EU policy”.
For those who are interested, this is taken from a Library note dated 9 July. It is also referred to in the papers before us and it has been looked at by the European Scrutiny Committee. The plan refers to the need to
“Incorporate human rights in all Impact Assessment”,
and to
“Insert human rights in Impact Assessment, as and when it is carried out for legislative and non-legislative proposals, implementing measures and trade agreements that have significant economic, social and environmental impacts, or define future policies.”
I would like to know what is not included in that, and what the opportunity would be for any restraint on the use of such provisions in the strategic plan.
The plan also refers to
“Genuine partnership with civil society”,
and that
“Heads of EU Delegations, Heads of Mission of EU Member States, heads of civilian missions and operation commanders shall work closely with human rights NGOs active in the countries of their posting.”
I would be the first to support NGOs in their individual activities, but this is a mandatory requirement, going beyond what I would describe as voluntary activity. Then there is the need to
“Present EU performance in meeting the objectives of its human rights strategy in the annual report on human rights and democracy in the world.”
I would be on the side of all those campaigners when it comes to individual human rights matters. I see in his place the hon. Member for Islington North (Jeremy Corbyn), who knows that I campaigned with him on issues relating to the Chagos islanders. Going further back, I was also involved with the issue of aboriginal rights in Canada. I could provide a whole list to show that I have been as much at the forefront as anyone else when it comes to campaigning against abuses of human rights. Where I differ, and why I object to these arrangements, is in respect of this overarching determination to get away from specific campaigns into this idea of universality, whereby I think we miss the wood for the trees.
Jeremy Corbyn
I acknowledge the hon. Gentleman’s genuine support for human rights issues in many parts of the world and the fact that he campaigns on them. Does he agree with me, however, that the issue of the Chagos islanders is now before the European Court of Human Rights and that it will take a decision? Both the hon. Gentleman and I want it to go in the same direction. Is this not one possible way of bringing about justice for the people who were treated so abominably in 1982?
Mr Cash
I would rather have the hon. Gentleman leading the campaign for the Chagos islanders than the EU representative who is being appointed under these documents. It is the individual commitment that counts. If I may say so, it is rather like John Bright, who campaigned for people’s rights throughout the world—in our colonies and our empire—in the 19th century. It is the individual passion and determination to stand up for people that I look towards. That is what Wilberforce was all about. I doubt whether William Wilberforce would have been deeply impressed by the manner in which this is being done. I really have to ask that question, because in my judgment, it is not desirable to end up creating this universal approach.
The second chapter is
“Promoting the universality of human rights”.
With the outcome of “universal adherence”, it specifies the action:
“Intensify the promotion of ratification and effective implementation of key international human rights treaties, including regional human rights instruments”—
and so it goes on and on, page after page, and I am reading from a tightly compressed printed version. In an intervention, I think I mentioned four pages, but there are seven pages of this. All I need to say is this: is this really the right way to go? Baroness Ashton and the entire External Action Service are, I believe, simply another manifestation of the problem. On the very day we have been told that we are to examine all the workings of the European Union in relation to the United Kingdom —all its competences—the central question is being lost, and a globalising, universal approach is being taken to something that will have to form part of the review announced by the Foreign Secretary.
On the very day we have advocated an analysis of the manner in which the European Union functions, we seem to be effectively endorsing a strategy that goes in exactly the opposite direction to the views of all those Members who support not only the review, but the repatriation of powers and the resolution of the human rights questions that are so bedevilling the relationship between Parliament and the judiciary and the whole question of extradition, the whole question of immigration policy, and the whole question of the application of law in this country on matters pertaining to human rights.
I view this development with grave concern. I do not refer to its individual application to individual cases; I refer to the attempt, through what I consider to be European federalisation or European creep, to convey the concept of a European Union that is acting on behalf of all of us. If a country such as Hungary has made a decision in its own Parliament, I think that that should be respected. Through their electors, through general elections and the democratic will of their own people, individual nation states, or member states, should be allowed to decide these matters, rather than having their decisions overridden by universality of the kind that these documents represent.
Jeremy Corbyn (Islington North) (Lab)
I will be brief, so that the remaining Members who wish to speak can do so before the debate has to end.
I support the motion, but I acknowledge what has been said by the hon. Member for Stone (Mr Cash). Human rights changes are achieved because people are prepared, very bravely, to stand up for them. We should spare a thought for the role played by human rights defenders throughout the world who often put themselves at huge risk to speak up for other people. Many of them are assassinated or murdered as a result, and they are the ones whom we do not hear about.
Anything we can do to improve the general atmosphere and narrative of human rights is very important. We should not be over-sensitive when we are criticised by people outside this country, for we are not perfect when it comes to human rights. We make many mistakes. For instance, we imprison far too many young people, and I think that our treatment of asylum seekers is highly questionable. We impoverish many people who are legitimately seeking the right of asylum here.
I spent many years campaigning for the rights of the Birmingham Six and the Guildford Four, who were wrongly accused of bombings and murder in this country and were eventually released. I was very pleased by the open declarations of support that were made by many people around the world, including in Australia and the United States of America. I did not see that reaction as an interference in the political system or rights in this country; I saw it as a legitimate and helpful element of political debate.
What I find slightly odd is that we should end up confusing support for human rights with treaty obligations. Every time any country signs a treaty and ratifies it through its own system, it gives up some of its sovereignty. That is what a treaty is about: it gives a country international obligations. When we sign a document such as the universal declaration of human rights, the European convention on human rights or any other convention and incorporate it into UK law, of course that changes things, and of course it limits what we can do in our national law. I think that is fair enough; we should enter into agreements with an open mind, and if we do not agree with certain aspects of them, we should try to change them later. Although I support the Government motion, only a week ago we were debating with great intensity in this House the alleged interference in British law of the operation of article 8 of the European convention on human rights, and the right to family life in the context of the new immigration rules introduced on Monday, which are limited and damaged in that respect. We must be more consistent in such matters, therefore.
Earlier, I intervened on my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) about the situation in Hungary. I hope that all the member states of both the Council of Europe and the EU will be prepared to stand up and say something about the loss of rights of free expression that is going on and the abominable treatment of the Roma people in Hungary—the systematic discrimination and the brutality against them. During a visit to Brussels, I met a MEP from Hungary who shared my views on that. The people in Hungary who are trying to stand up for the rights of minorities in that country need open declarations of support. They need to know that others are watching what is going on, and that we support them in their efforts.
I would like the Minister to say whether the EU human rights strategy will include generic human rights that are not necessarily specific to any one country. I am thinking about migrant peoples, migrant workers and itinerant asylum seekers across Europe. We are facing a human rights crisis in many parts of the world. Hundreds, if not thousands, of people are dying trying to flee to a place of political, military or economic safety: those who die trying to cross from the west African coast to the Canary islands; those who try to cross the Mediterranean to Greece, Spain, Sicily or elsewhere; and those who die in transit. Many of these people will have paid a great deal of very hard-earned money in order to try to get to a place of economic security, yet they die in the process or are subsequently grossly exploited by industrialists, farmers and others all across Europe. Throughout Europe, there is an entire underclass of people who are leading a twilight existence. That is an abuse of their human rights.
Sadly, there is a growing narrative of far-right racist parties across Europe that are prepared to attack these people at every turn, and we need to say that these people deserve, and should get, protection from national and international laws. Worldwide, there are even more such people, such as the poor people who recently died trying to get from Indonesia to Australia. They are the ones we have heard about; there are many others whom we do not hear about at all. I would like to know, therefore, whether there will be a systematic approach to such human rights issues.
Turning to the abuse of human rights in Russia, the decisions on two cases that were before the European Court of Human Rights were announced yesterday. One was that there had been brutal treatment of an individual, which was a welcome decision. The other decision, however, was more than slightly surprising, as it found that it was within Russia’s national competence to suppress demonstrations in the run-up to the recent elections. Without having had the benefit of reading the entire judgment, I have to say I find that more than a little surprising. I would have thought that we, and the European Court of Human Rights, would respect the right to demonstrate peacefully in any circumstances, and that we would agree that to curtail that right is clearly an infringement.
Turkey has had the presidency of the Council of Europe and is bound by the European convention on human rights and decisions of the European Court. There are still significant problems, however. Political parties have to achieve a threshold of 10% of the national vote to be represented in the Turkish Parliament, and there are serious concerns about the conduct of trials of Kurdish people in Diyarbakir and other places in the south-east of Turkey. Although I suppose pretty well everyone in this country supports the Turkish application to be a member of the EU, I hope that there will be some recognition of the fact that there are problems in the treatment of Kurdish people in Turkey.
The last point I wanted to make relates to the international operation, outside both European Union and Council of Europe states, of the proposed new system of an EU human rights representative. The EU has trade agreements with a large number of countries, all of which include a human rights clause. Many of us have raised many times the issue of the human rights clause in the EU trade agreement with Israel and the detention of Palestinian people, including Palestinian parliamentarians and Palestinian children, and a number of associated issues. Is raising such issues going to become the duty of the EU representative? Will the representative be prepared to do so, or will they be bound by a sense of unanimity—an issue raised by the hon. Member for Stone—in raising questions on the ground?
The same things apply to the EU trade arrangements with Morocco, which remains in occupation of the Western Sahara. The EU trade agreements with Morocco continue, but the fishery agreement has been suspended following an EU decision made, as I understand it, because the proceeds of fishing were not evenly spread, particularly among the people who ought to be able to live in the Western Sahara.
If we are to be effective, as the EU representatives sometimes can be, we should say so. I have visited Mexico on a number of occasions and was very impressed with the EU ambassadors working together—all 27 of them—and being prepared to put joint pressure on the Mexican Government to support the decisions of the inter-American human rights court. Such an approach is effective. The hon. Member for Fylde (Mark Menzies) and I were part of a delegation when those issues were raised, and we acknowledged that that was an effective representation that made a difference which encourages the Mexican political system to acknowledge that Mexico, too, has responsibilities to the inter-American human rights court.
I hope that the Minister will be able to assure me that the EU representative is prepared to be robust, particularly where EU trade interests are involved, given that it may sometimes be pointed out by the country concerned that trade relations with the EU are being damaged. We want to see people having the right to speak freely, to demonstrate freely, to organise themselves freely and to join trade unions freely. Just as much as we would want those things for ourselves, we would want them for other people around the world.
Having said that, we have to acknowledge the huge work done by voluntary sector organisations in this country—by Amnesty International, the Bar Human Rights Committee and so many others—in improving human rights around the world. In reality, what we legislate for has often come from the activities of very brave individuals and brave groups all around the world. What we are doing is acknowledging that in legislation by what we are trying to do today.
Mr Deputy Speaker (Mr Nigel Evans)
Order. With the proviso that I am going to interrupt proceedings at 6 pm, may I advise hon. Members to be conscious that if they want to give the Minister any time to wind up, they must take into account the fact that the Question must be put at 6.16 pm?
Jo Swinson (East Dunbartonshire) (LD)
I rise to support the motion and the documents before us. It is worth remembering the origins of the European Union and its predecessor organisations in the aftermath of world war two. The original body was set up not only to promote peace and security across western Europe, but as a result of the appalling human rights violations seen in that war, with the aim of ensuring that such things could never happen again. Obviously, it has not always been successful, but the over the decades it has been a strong guardian of human rights through its role in international negotiations and through the incentive—the carrot—offered of potential EU membership, which has encouraged many countries to make progress and take steps to improve their human rights records. Of course more can always be done, and it is right to recognise that there are problems within EU member states. Indeed, as the hon. Member for Islington North (Jeremy Corbyn) said, we in the UK should not be complacent but should maintain an ever-vigilant approach to improving human rights in this country, too.
Member states do a lot individually, but we can do even more with the strength of 27 nations acting together. That is why I support the historic opportunity to further the aims of UK foreign policy. The action plan and the creation of the special representative have already been approved by 26 member states and I urge the House to support the motion today, so that we can also do that.
Jo Swinson
I very much welcome the strength of the language in the strategic framework, particularly the emphasis on the centrality and universality of human rights in EU foreign policy. Like the hon. Member for Wolverhampton North East (Emma Reynolds), I think that the mainstreaming of this question across different policy areas is important, as it means that human rights are not dealt with in some sort of isolated box. The ability of the EU to take an active position—the special representative will certainly help in that regard—is incredibly important, particularly in the context of recent events during the Arab spring and in many countries around the world that still have grave human rights problems. The action plan is comprehensive and I will touch on a few specific areas.
Section 11, on trade, is helpful on the question of mainstreaming and includes in its list of actions one, (f), which states that we must:
“Work towards ensuring that solid human rights criteria are included in an international arms trade treaty.”
I know that the hon. Member for Bristol East (Kerry McCarthy) and my hon. Friend the Member for Cheltenham (Martin Horwood) were at the negotiations that are ongoing in New York. Indeed, I think we are soon to have an Adjournment debate on the topic—unfortunately, I am unable to stay, as I need to catch a train to get back to Scotland this evening. It would be helpful for the House to hear how those negotiations are progressing in the context of the human rights criteria that we so much want to be a strength of that treaty.
I also welcome sections 13 and 18 of the action plan on entrenching human rights in counter-terrorism activities and providing effective support to human rights defenders, which was an issue raised by the hon. Member for Islington North. In 2010, along with the noble Lord Judd, I visited Chechnya to see the human rights situation there. We were both struck, as the report we produced made very clear, by what we experienced and witnessed. We spoke to people who were victims of human rights abuses and heard about disappearances, assassinations, murders and violence where there was no proper judicial process—cases would be opened and not followed through, so people would not be brought to justice and the security forces would perpetrate the abuses. It was clear that that worsened the security situation and in some ways created a breeding ground for the terrorism that the security forces were trying to repress. Human rights defenders play an important role in bringing abuses to the attention of the wider community, and some of the points in the plan, particularly those on temporary havens for human rights defenders when they are under particular threat, are matters on which we could do more within the European Union.
I also warmly welcome section 16, which is about the death penalty and what is being done to work for its abolition in other countries. I particularly welcome the suggestion of targeted campaigns to try to get the retentionist countries to change their minds. Next year, we will have the world congress against the death penalty; it would be wonderful if some countries agreed at that point to abolish it. Can the Minister update us on any recent discussions? The Government always say that they raise the issue in discussions with other countries, and I am certain that that is true, but we also want to see action and some indication of whether progress is likely with some of our counterparts around the world.
On that point, I warmly welcome the recent decision that my right hon. Friend the Secretary of State for Business, Innovation and Skills has taken on export controls on the drug propofol, which can be used in executions in the United States. That comes on the back of a similar decision about sodium thiopental in 2010. If we are serious about opposing the death penalty, it is vital that we do not make it easy for other countries to implement it through our sales to them. Two years ago, the UK’s leadership ultimately led to a EU-wide ban, which shows how we are stronger working with all the states together.
I mentioned earlier in my intervention on the hon. Member for Stone (Mr Cash) the section on freedom of religious belief. We are lucky to enjoy a great degree of religious tolerance in our society. Given the tensions in South Sudan and Sudan, the persecution of Christians in Iraq, the Baha’i in Iran, the treatment of Sikhs in India, about which many of my constituents have expressed concern, and the host of other countries around the world where people do not have the freedom to hold the faith they choose and to worship in peace without fear of violence, that is a hugely important section in the plan.
I do not endorse the concerns that were raised about competence creep. The Minister has reassured us absolutely on that point. This is about enhancing UK influence, not reducing or constraining it. It is about 27 states agreeing on something and it therefore having the agreement of our Government and this place. An additional voice can only be a good thing. I warmly welcome the motion and the documents and I hope that the House will support them today.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
It is important to put on the record that I supported giving the Minister a waiver so that he could go to the Council and support this document, rather than having to break the scrutiny reserve if he had to do so. The reason was that we were going to have a debate anyway, and in the document there is much to support. I want people outside who listen to this debate and who do not spend all their time reading European documents to know exactly what we are supporting.
On 25 June 2012, EU Foreign Ministers adopted an ambitious EU strategic framework and action plan on human rights and democracy. It included an ambitious human rights package consisting of 36 policy areas, ranging from the fight against the death penalty, effective support for democracy, the eradication of torture and the promotion and protection of children’s rights. A division of that work into not fewer than 97 actions has been agreed, and I hope will come into effect, in full respect of national competences—a point made by the Minister. Indeed, only with a joint commitment between the EU and its member states can change be made on the ground.
The action plan sets out a wide variety of external policy activity agreed by all member states. The 97 potential actions have seven headings: human rights and democracy throughout EU policy; promoting the universality of human rights; pursuing coherent policy objectives; human rights in all EU external policies; implementing EU priorities on human rights; working with bilateral partners; and working with the multilateral institutions. The last one is very important because the non-governmental organisations now feel that they have been invited in to the discussions in a way that they have not felt the EU institutions have dealt with them in the past.
The appointment of a human rights representative or envoy will be the first ever thematic envoy. There are many at the moment in parts of the world, but not on a theme such as human rights, and that will be fundamentally important.
The document assigns responsibility for each proposed action to the European External Action Service, member states, the Commission or a combination of two or more of them. It is clear that there is a commitment to consolidate consultations with civil society, which is fundamental.
I think that when these measures are combined with the decision of the EU to sign up to the convention on human rights, there has to be a fundamental rethink of how the EU carries out its policies. The director of Amnesty International’s European institutions office, Nicolas Beger, who was today debating with me in another place on this issue, said:
“We never thought we would see such a positive move forward”.
He commended Cathy Ashton, who has done so much in a way that people did not believe possible. As Hollande said to Sarkozy, “The reason you lost is you underestimated me.” We underestimated Cathy Ashton’s ability to deliver.
We have to ask the EU to look again at its trade agreements. If they are in breach of human rights, which are fundamental to the Council of Europe, the EU has to consider why it did not take on human rights conditions in Colombia, Israel, Peru and Sri Lanka, and it must look again at conditions in Turkey. All of them contain breaches of human rights. If this is going to work, the action plan and the envoy must speak up for human rights defenders before they are thrown into jail or killed by repressive regimes, and we must make sure that we do not sign trade agreements that allow continued breaches of human rights. That is what I see in this policy, and I hope that, by supporting it, we will see forward movement that we have not seen from the EU for some time.
Mr Lidington
May I first thank all hon. Members who have contributed to the debate? I say to the hon. Member for Linlithgow and East Falkirk (Michael Connarty) that the action plan clearly sets out the fact that part of the special representative’s role will be to act as an advocate for human rights concerns with both the Council, representing the member states, and the EU institutions because, as he will know, the Commission in particular will have a leading role in trade negotiations, for example. The purpose of the framework, with the strategy, the action plan and the special representative, is to ensure that human rights concerns cannot be overlooked or dismissed in any area of the EU’s external activity.
The hon. Member for Wolverhampton North East (Emma Reynolds) asked about Hungary. Our general approach to the Hungarian legal changes has been to support the European Commission in its approach to the Hungarian Government. As she acknowledged, the Hungarian Government altered their proposed media law after conversations with the Commission, and the same was true of their proposed changes to the governance of the Hungarian central bank, which were later amended. I have had a number of conversations about these issues with my Hungarian opposite number over the past 18 months. I will write to the hon. Lady with a little more detail on the matters she raised.
The hon. Member for Islington North (Jeremy Corbyn) asked about the scope of the action plan and the special representative’s role. Article 20 of the action plan relates to gender-based violence, article 14 deals with action against human trafficking, and article 9 covers trade agreements, so these generic issues are within scope. The particular issue of migration that he talked about can be covered in the action plan’s reference to the EU’s development instruments. My one word of caution is that this particular set of documents comes within the framework of the common foreign and security policy, whereas some of the questions he asked are really about the treatment by EU member states of migrant and minority populations within their own borders, and that is outwith the scope of the special representative, whose responsibilities pertain to the EU’s external policy only. It is probably best if I do not talk about the Russian cases he mentioned, because I have not read the judgments or been able to take a considered view on them. His point about human rights defenders was well made. Again, standing up for human rights defenders is listed explicitly as one of the items in the action programme.
I will write to my hon. Friend the Member for East Dunbartonshire (Jo Swinson) on some of the detailed points she made, particularly those about the death penalty. As she said, the two issues that concern her—women’s rights and freedom of religion—form an important part of the action plan and will be within the scope of the special representative’s work. With regard to the arms trade treaty, the United Kingdom remains firmly of the view that we want an ATT that contains strong human rights and international humanitarian law provisions, and that is what British Ministers and officials will be pressing for in the forthcoming round of negotiations.
My hon. Friend the Member for Stone (Mr Cash) raised the serious question of how we get the balance right between an acceptance that people everywhere are entitled to respect, dignity and what we would term human rights and the right of electors in a democracy to express their will and have it carried into effect by those whom they choose to govern them. That takes us a long way beyond the scope of the motion before us, but they are very important and profound questions with which countries throughout the world are grappling, and we accept that in the national sphere there should be constraints, legislative or constitutional, on the untrammelled freedom of a majority to act, which may be temporary, when that action might unfairly or unreasonably damage the interests of minorities.
The debate to which my hon. Friend was contributing was about the extent to which that principle should be adopted internationally, too, and I would just say this with regard to the EU. The EU is not just an economic club; it has always been a club for democracies. Spain could not get in until it established democracy, and the EU accession process is the most important driver of democratic, political and rule of law reform in eastern and central Europe today. I ask that the House support the motion before us.
Question put and agreed to.
Resolved,
That this House takes note of European Union Documents No. 18635/11, relating to the Joint Communication to the European Parliament and the Council on Human rights and democracy at the heart of EU external action-towards a more effective approach, together with an unnumbered Explanatory Memorandum dated 7 June 2012, submitted by the Foreign and Commonwealth Office, relating to a draft Council Decision appointing the European Union Special Representative for Human Rights, and the EU Action Plan on Human Rights and Democracy, and No. 8905/12 and Addenda 1 and 2, a Commission Report to the European Parliament and the Council, the European Economic and Social Committee and the Committee of the Regions on the Application of the EU Charter of Fundamental Rights; notes the Commission document on the Progress on Equality Between Women and Men in 2011; endorses the Government’s intention to support the draft Decision on the EU Special Representative for Human Rights; and welcomes the Government’s work to provide for enhanced Member State oversight of the Special Representative’s activities in Articles 10 and 11 of the draft mandate.
Business Without Debate
Arms Trade Treaty
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Martin Caton (Gower) (Lab)
The final negotiations that can create a robust and effective conventional weapons arms trade treaty, built on humanitarian and human rights principles, are happening in New York most of this month, and they are potentially a major step forward in the protection of human life across our planet. The world must grasp this opportunity, because it is far from certain that another one will come along again in the foreseeable future.
In one sense, it is astonishing that we have reached this year and not adopted a worldwide agreement to regulate the global arms trade before. We have treaties that control trade in a whole variety of goods, such as in endangered species, ivory and rhino horn, dinosaur bones and bananas, but not in the global arms trade, and the absence of such a treaty has undoubtedly meant death and injury, often to some of the most vulnerable people throughout the world, on a truly alarming scale.
As the Control Arms Coalition points out in its briefing to parliamentarians on the treaty, every minute at least one person dies from armed violence; 85% of all killings documented by Amnesty involve guns; and two bullets are produced each year for every person on the planet.
The arms trade is global, so controlling it must take place on a worldwide basis. Many individual states have laws regulating the international transfer of arms, and some regions have agreements in place to do the same, but too often they are not legally binding, not properly enforced and not based on adequate criteria.
Of course, a considerable number of countries are not signed up to any sort of multilateral agreement and do not have well developed national laws in this area, so what regulation we do have, in the absence of an arms trade treaty, is patchy and inconsistent, so creating an environment that is all too easily exploited by unscrupulous arms traders. Consequently, weapons get into the wrong hands, where they are used mercilessly to facilitate serious human rights abuses, armed violence and conflict, destabilising regions and further impoverishing people and communities in the process.
It is estimated that armed violence costs Africa $19 billion every year—coincidentally and ironically, roughly the same amount that the continent receives in development aid. The dangers and the damage of an absence of adequate regulation on the international transfer of conventional weapons have been recognised for a long time, going back to 1995 when a group of Nobel peace prize laureates proposed globally binding rules on arms control.
The main message that I want to put over this evening is that, yes, we need an arms trade treaty and we need it now, but not just any agreement that bears the title will do. It must be something that will make a real, practical difference—a treaty that will save lives.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I congratulate my hon. Friend on securing this debate. Does he agree that, although an arms trade treaty needs widespread support to be effective, given that 150 of the UN’s 193 member states support a comprehensive and robust treaty, a strong treaty with a large number of signatories and the potential for more is better than a weak treaty with a few more signatories?
Martin Caton
I completely agree; my hon. Friend has made it unnecessary for me to give part of my speech, but I will mention an alternative option, if the worst comes to the worst, for trying to get something really valuable.
I am chair of the newly formed all-party group on weapons and protection of civilians. We have made it our first priority to work for an arms trade treaty that is robust and workable. We were persuaded to do so by the group of non-governmental organisations that make up the Control Arms Coalition—organisations that have been working for many years to try to achieve the objective of such a treaty.
What do we mean when we call for a robust and workable arms trade treaty? We can achieve it by bringing together countries’ existing obligations and commitments, and other widely accepted norms of state behaviour, under international law and applying them to the trade in conventional weapons.
In practice, that means establishing in international law a binding obligation to prevent transfers of weapons if the arms would pose a substantial risk of being used to commit or facilitate serious violations of international human rights law or international humanitarian law, or to undermine socio-economic development and poverty reduction goals. States should be required to conduct rigorous case-by-case assessments of all proposed imports, exports and international transfers of conventional arms to enable them to prevent those that breach the criteria of the treaty.
Nia Griffith (Llanelli) (Lab)
I congratulate my hon. Friend on securing this important debate. I know that he recognises the excellent work done by NGOs on this issue. Does he agree that any treaty needs to address the whole issue of resale? An awful lot of arms get transferred to countries that use them inappropriately.
Martin Caton
That is absolutely right. As I am sure that the Minister will report, there is a real danger in negotiations at present; some states are trying to reduce various things that should be covered. We want a comprehensive treaty.
The treaty needs to cover all types of conventional weaponry, munitions, armaments and related articles used for potential lethal force in military and law enforcement operations, as well as their parts and accessories, machines and the technologies and expertise for making, developing and maintaining them. It must have strong and effective implementation systems, including a public and transparent reporting mechanism, good monitoring, reporting and verification procedures, and provisions for settling disputes over suspected violations of the treaty. To achieve that, the treaty must also provide institutional support and periodic review for those states that do not have experience of enforcing a high standard of arms transfer control. That will require both resources and technical assistance.
The treaty must create an international framework of legal obligation, but it must be implemented nationally. Arms transfer decisions will still have to be decided by national Governments, but under the treaty they will be obliged to deny any transfer that breaches the arms trade treaty criteria.
When the all-party group decided to prioritise securing the treaty, we set ourselves the task of convincing the UK Government to fight for the sort of robust agreement at the UN that I have just described. We secured a meeting with the Minister, who is leading on the issue, and his diplomatic team, along with the NGOs that I have mentioned. We were very pleased to learn at that meeting that we did not have to convince the Minister or his team; it became apparent that their objectives for a strong, effective treaty mirrored ours pretty well. That has been further confirmed at a joint public meeting in Westminster, at which the Minister spoke, organised by our all-party group and the all-party United Nations group, chaired by Lord Hannay of Chiswick.
The Governments of some other nation states are, however, either opposed to such a comprehensive treaty or, at best, sceptical about it. The objections and reservations vary from state to state, so there is a real and challenging job to be done at the UN in the next couple of weeks if we are to secure our shared, progressive objectives. Given the nature and structure of treaty conferences, it is difficult during the process to get an accurate overview to help to assess the prospect of a successful outcome, but from the reports that I have received, the signs appear to have been positive and less positive so far.
The Control Arms NGOs are pressing for what they describe as a bullet-proof treaty, and they have presented a 600,000-signature petition to Ban Ki-moon. Parliamentarians for Global Action has delivered a petition signed by 2,053 Members of Parliament from 96 countries, including, of course, from this Parliament. However, a small minority of sceptical states have managed to get the NGOs excluded from a substantial part of the conference.
The UN Secretary-General, Ban Ki-moon, showed appropriate leadership in his opening statement to delegates when he said:
“You will need to agree on robust criteria that would help lessen the risk that transferred weapons are used to commit violations of international humanitarian law or human rights. You will also need to define the scope of the treaty to cover an extensive array of weapons and activities and that leaves no room for loopholes. Our common goal is clear: a robust and legally binding ATT that will have a real impact on the lives of those millions of people suffering from the consequences of armed conflict, repression and armed violence.”
Jeremy Corbyn (Islington North) (Lab)
I compliment my hon. Friend on his speech. I share his disappointment that the NGOs were removed from the discussions in New York, because that is completely contrary to the spirit of the UN. Does he agree that they will be needed in the monitoring of the treaty should it finally be achieved, as that is the only way in which we will ensure its success?
Martin Caton
I completely agree with my hon. Friend. The experience from recent treaties, some of them outwith the UN—for example, on landmines and cluster munitions—is not only that we have needed those in civil society to bring them about, but that we need them to watch what is going on afterwards.
Worryingly, the statement by Ban Ki-moon was followed by a discussion paper from the new chair of the conference that fell way short of what he had described. Its stated goals and objectives for the treaty fail to require respect for international human rights law or humanitarian law. Its proposed criteria for identifying circumstances in which a transfer of arms should be denied are over-complex, inconsistent and unworkable. It uses language that has no foundation in international law and would allow weapons transfers with a significant risk that the arms would be used to violate human rights or humanitarian law or to undermine sustainable development. Its scope is far too narrow and unclear, leaving out a range of lethal munitions, technologies and activities.
It appears that the negotiations have started very slowly, with some nations clearly attempting to block progress. In contrast, there have been strong calls for a robust treaty from a number of states, including Norway, Australia and the Caribbean community countries. The UK delegation has similarly called for
“a robust, effective and legally binding”
ATT. Every delegation in such negotiations will have its own red lines beyond which there can be no compromise because fundamental principles would be lost—the point made by my hon. Friend the Member for Islington North (Jeremy Corbyn). I will not ask the Minister to describe, in the middle of negotiations, what his red lines are, but I urge him and his delegation to redouble their efforts to secure the ATT that we in this House all want.
In particular, we need to make it clear that the treaty must require states to refuse transfers with a substantial risk that they will be used to commit or facilitate serious violations of international human rights law and humanitarian law, and there should be no agreement to so-called mitigation measures that would allow transfers even where those risks applied. Similarly, development must be a clear criterion against which to assess transfers.
I should like to ask the Minister some specific questions that I hope he will be able to answer. So far, the process seems to have been dominated by a small minority of countries intent on disrupting and delaying the negotiations. Have he and his team been able to make bilateral contacts to help to speed up progress, and if so, who has the UK identified to work with or influence? On criteria, the new chair’s paper seems to be heavily influenced by the US, with much weaker proposals than those in the previous chair’s draft treaty. How is the UK team going to secure the oft-repeated aim for robust criteria based on international human rights law and humanitarian law?
I congratulate the Minister on the UK’s intervention at the conference that referred to the positive role that the ATT can have in reducing armed violence and gender-based violence. That needs to be addressed in the criteria section. Is that one of the UK’s priorities in the negotiations? If so, what are he and his team doing to encourage other states to support its inclusion in the treaty?
Like my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), I appeal to the Minister not to settle for a weak treaty. It would be better to have a smaller number of signatories and a strong treaty. I am not suggesting that the Minister should be thinking about failure at this time. However, if the only treaty that we can get is a very weak one, we should not sign up to it, but should join with the progressive countries and get agreement at the General Assembly to a strong treaty. I hope that it does not come to that. I wish the Minister and his delegation every success in securing the robust and effective treaty that he wants and that this Parliament supports.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
I congratulate the hon. Member for Gower (Martin Caton) on securing this debate on the arms trade treaty. I thank him for his courtesy in letting me and my officials have a copy of his remarks, which will make it easier to respond directly to his questions.
As we can tell from this debate and as I know from my correspondence, this issue commands a great deal of cross-party interest and support. The hon. Gentleman, the other Members who are present and many others feel passionately about this issue and follow it closely. I returned recently from the treaty negotiations in New York, where I had the good fortune to meet the hon. Member for Bristol East (Kerry McCarthy), who is in her place tonight, and the hon. Member for Cheltenham (Martin Horwood). That emphasises the interest that colleagues have in seeing as much of the process as possible after waiting for so long.
The timing of this debate is opportune, coming as it does at the mid-point of the highly significant negotiations that began in New York last week. It offers an opportunity to take stock of the negotiations and to set out the Government’s priorities for and commitment to a robust and legally binding treaty. I briefed the all-party parliamentary groups on the United Nations, on landmines and unexploded weapons of conflict, and on weapons and protection of civilians at the end of April. I stressed that securing a positive outcome in July would not be easy, but that we would do everything within our power to secure a good result.
Nothing that has happened since I attended the opening day of the conference has led me to change my view. This remains an incredibly complex negotiation, made more difficult by a hard core of countries that would like to derail the negotiations, as the hon. Member for Gower said. I assure the House that the UK’s teams in London and New York—and our embassies and high commissions across the world, because sometimes the decision makers are not in New York, but in their home capitals—are working long and hard to ensure a successful result.
Jeremy Lefroy (Stafford) (Con)
I congratulate the hon. Member for Gower (Martin Caton) on securing this debate. Has the Minister spoken with his colleagues at the Department for International Development about how this trade affects the impact of UK development money, given the considerable amount of money that the UK taxpayer is spending in some of the worst affected regions of the world?
Alistair Burt
I assure my hon. Friend that I have spoken long and frequently with my colleagues at the Department for International Development, and in particular with my right hon. Friend the Minister of State, who will be going to the negotiations next week. It is clear that in a number of the countries that are most affected by the misery of an unregulated arms trade, we have deep concerns about all sorts of other issues. My hon. Friend is right to draw attention to the importance of that element of the negotiations and to the need for joint working. He and the House can be assured that there is exceptional joint working across the Government on this issue.
It is important that we keep in mind why we are having these negotiations and why the UK has led international efforts towards an arms trade treaty for so long. Those efforts started under the last Government, for which we give them great credit, and have continued under the coalition. My right hon. Friend the Prime Minister said at Prime Minister’s questions on 27 June that
“we back the arms trade treaty, as we have done for a considerable amount of time, and lobby very vigorously on that issue.”—[Official Report, 27 June 2012; Vol. 547, c. 302.]
The House is genuinely working together on this, recognising the problems that need to be faced.
The problems caused by the unregulated trade in conventional arms need to be addressed. The lack of effective and coherent global regulation fuels conflict, destabilises regions and hampers effective social and economic development. It can also have devastating effects on communities and individuals, with armed violence destroying lives and livelihoods and displacing communities. A lack of regulation means that arms can slip into the hands of those who would use them against our own troops and civilians. That situation has gone on too long, and we need to stop it now.
Those are the reasons why we have placed such a high priority on securing a treaty described as comprehensive, robust and effective. Ministers and senior officials regularly raise the arms trade treaty in our bilateral and multilateral meetings around the world, so that we can both work through particular issues that states may have and encourage positive and constructive engagement in the diplomatic conference in New York. We have used our international networks of posts to lobby in support of an arms trade treaty, and we have provided funding for non-governmental organisations from developing states to attend the conference.
No matter how committed we are to securing an arms trade treaty—I do not think anyone is in any doubt about that commitment—we cannot deliver it on our own. That is why we have put so much emphasis on working with our international partners, NGOs and representatives of the UK defence industry in the run-up to the conference. We have collaborated closely with the treaty’s co-authors, the EU and the P5, and will continue to do so as the negotiations progress, to seek to achieve a successful conclusion.
To get a truly effective treaty, we need standards not only high enough to meet our aims but with the global reach provided by the broadest participation of states, including the major arms exporters. It was always my intention to travel to New York for the start of the diplomatic conference, to signal the UK’s continuing commitment to securing an arms trade treaty. I arrived at the beginning of the first week and saw at first hand the real challenges that our delegation and other treaty supporters will need to overcome to ensure a successful outcome by the end of the month. In fact, the start of the conference was delayed for a couple of days by one such challenge, which threatened the start of the negotiations. The question of Palestine’s status in the United Nations is important, and there are plenty of colleagues in the Chamber tonight who understand that very well, but it cannot and should not be decided by the UN process on the arms trade treaty.
Despite the distraction and the loss of a couple of days, negotiations are now firmly under way, but challenges remain. To answer the first question that the hon. Member for Gower asked me, a particular problem that has dogged the first two weeks has come from a small group of states that continue to try to thwart the will of the vast majority of the international community, using a smokescreen of procedural points to stop substantive engagement on the issues that really matter. Of course, when a country has a real concern about what an arms trade treaty might contain or how it might operate, we will listen to it and work through its concerns, as is only right. However, we will not allow the conference to be railroaded by states that want only to prevent eventual agreement. We have already lost two days to procedural wrangling, and we cannot afford to lose further time.
Despite all that, the process is well under way. Ambassador Moritan continues to steer us towards our eventual goal, despite the choppy waters. Following my visit last week, I spoke to the ambassador on the telephone on Tuesday and offered him the UK’s full support. As I mentioned, my right hon. Friend the Minister of State for International Development will be in New York next week, helping to sustain the momentum of the process and maintain our leading role at this critical time.
I have seen the engagement of our delegation in negotiations, and I do not think the House can overestimate how effective and useful its members have been, how much they know and how engaged they have been in the process in the many years since it started. A Minister’s presence can add a bit of weight. Whether that comes through my right hon. Friend’s physical presence or through me making the telephone calls that are needed to certain capitals, the House can be assured that our comprehensive effort will continue across Government right until the very end.
A programme of work for the conference has been agreed, and two main committees have been formed to look at different aspects of the treaty. They are being ably chaired by the Netherlands and Morocco and are gathering the views of UN member states quickly and effectively, trying to make up for the time that has been lost.
I regret that agreement on a programme of work has meant that some meetings are closed to the public. Despite that, we still recognise the important part civil society has to play in the ATT negotiations. The UK delegation is in constant touch with non-governmental organisations in New York and meets with them regularly to ensure their views are heard. It is important that we continue to work closely with them at this crucial point. They have been instrumental in the progress we have made on the ATT and we still very much need their help and expertise if we are to be successful.
I tried to remain close to NGOs in the run-up to the negotiations and considered whether they would formally join the delegation. For perfectly understandable reasons— namely, for their independence—they felt that that was not the right thing to do, but we continue to stay close. At the end of this weekend, I intend to speak on the telephone to our ambassador in New York who is dealing with the negotiations. I will probably also call the representatives of Amnesty International and Oxfam on behalf of others to see how they are with the process and to maintain my contact with them. That emphasises how much the Government are trying to keep engaged with NGOs.
Jeremy Corbyn
Can the Minister give us some good news about the involvement of NGOs in the monitoring process when the protocol is finally agreed, which will hopefully be soon?
Alistair Burt
The role of NGOs in monitoring and in the transparency efforts that we are trying to make in the treaty will be vital. They can see an important role for themselves and we will certainly encourage that. I am very keen to keep them involved but practically, not everybody can go to the same meetings. The chair has taken the view that to get things done now—we have lost a bit of time—he has had to produce this programme. Everybody over there understands that, but we will do our best to keep everyone in touch.
It is too early to say how the negotiations will conclude. A lot can change in two weeks in a multilateral negotiation of this sort—I am sure colleagues appreciate that momentum builds either towards success or something different. It is already clear that contentious issues remain, particularly around the treaty’s scope and criteria. As the hon. Member for Gower has noted, and as he said in his second question, a new chair’s paper has issued. The text is a discussion paper based on his consultations with all UN member states. Although the Government believe the paper is a good basis for discussions—we welcome large parts of the document, including, for example, the retention of ammunition in the scope—there are undoubtedly aspects that we believe need further work and strengthening.
One such aspect is the section on criteria. The UK delegation has made it clear in its interventions in New York and its bilateral consultations that the UK would like the language on criteria to be strengthened. The UK supports an ATT containing a mandatory refusal if there is substantial risk that the export would be used to commit a serious violation of international humanitarian or human rights law. Ministers and senior officials are echoing those sentiments in their bilateral and multilateral meetings on the treaty.
The hon. Gentleman also rightly raised in his third question the positive role the ATT could have in reducing armed violence and gender-based violence. Let me assure him and the House that gender-based violence is an important issue for many states, not least the UK. We want it included in the treaty. All groups, whether characterised by age, gender, ethnicity, religion or other, should be afforded protection by an ATT. We will continue to work with like-minded states to ensure we secure the strongest possible ATT.
John McDonnell (Hayes and Harlington) (Lab)
May I reiterate on behalf of the House the view expressed by my hon. Friend the Member for Gower (Martin Caton)? We need firmer measures. If that means fewer measures, so be it. We then take the battle into the Assembly itself.
Alistair Burt
As the hon. Member for Gower suggested, I do not want to indicate at this stage what the likely outcome will be, but I am on record as saying at one or two meetings that we will not sign an agreement that makes things weaker. There is no point in that, and there has to be a moment when we walk away, but I will not hide it from colleagues that the choice might end up being very difficult. We want to get enough in to make it worth while and we want enough people to sign to make it effective, but there will be some tough choices to make at the end. All I can say is that we will do our best to be as inclusive as possible when we get there. Then we will see. There will always be a tomorrow. That is important. Whether or not this is as successful as we want—it is highly unlikely to be written as we would want it—there will always be the opportunity of a further process.
The commitment of the Government, the UK delegation, the wider team in London and our network of posts around the world remains clear, and reflects the view of the House. We will work tirelessly, co-ordinating closely with civil society and the UK defence industry in support of our common goal. This is an historic opportunity to make the world a safer place. The international community owes it to the people whose lives have been blighted by conflict and armed violence associated with the unregulated trade in arms to use the remaining two weeks to maximum effect. The UK will be working tirelessly to this end. One of the purposes for which the UN was founded was to achieve co-operation in solving problems of a humanitarian character and to encourage respect for human rights. An effective, legally binding ATT will help to do that and more, and we are sparing no effort in our pursuit of that aim.
Question put and agreed to.
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(12 years, 5 months ago)
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backbench business
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Banking Competition
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Andrea Leadsom (South Northamptonshire) (Con)
What an astonishing few weeks it has been in the banking sector. It is a pleasure to serve under your chairmanship today, Mr Chope. I am sure that my colleagues my hon. Friends the Members for Wyre Forest (Mark Garnier) and for Mid Norfolk (George Freeman), the hon. Members for Strangford (Jim Shannon), for Erith and Thamesmead (Teresa Pearce) and for Wells (Tessa Munt) who supported the application for this debate with me will be feeling, as I do, that the debate could not come at a more important time for such a key British industry.
Banks are incredibly important to Britain’s economic well-being. Financial services employ more than a million people in Britain and generate more than 10% of our annual tax revenue. The vast majority of those who work in the sector are doing an honest day’s job every day for an average salary and, if they are lucky, a modest bonus at the end of the year.
Banking is a vital industry that could lead us back to economic recovery. However, that will not happen on the back of what we have heard about the fraudulent and corrupt practices of the small number of massive earners who have done so much to destroy the image of our banks. It is vital that we re-establish banks as calm, measured and instinctively cautious guardians of the trust and confidence that account holders place in them. For a long time, I and many others have believed that more competition in the banking sector is key to that turnaround, and the events of the past few weeks have brought that sharply into focus.
I know it is annoying when people say, “It’s not like it was in my day,” but that is honestly how I felt after hearing Bob Diamond’s evidence to the Treasury Committee last week. For 25 years before becoming an MP, I worked in finance, including in Barclays’ dealing room just after the big bang in 1987. It was a different world. In those days, asking the treasury team what the LIBOR setting was would be a bit like asking you what the time is, Mr Chope; I would not expect you to tell me anything other than the facts.
However, that was in the late ’80s, when there were about 45 major banks in the UK. In the past 10 years, according to the British Bankers Association, that figure has halved to just 22. Not only that, but five of those banks have between them 80% of the personal current account market and the small and medium-sized enterprise market. I feel sure that the scandals of the past few years simply point to the disastrous consequences of the mergers and takeovers that took place during the 1990s. We now have a small group of vast institutions, where the culture has been shown to be, “Heads, I win; tails, the taxpayer loses.” That is a far cry from my day when “my word is my bond” was the ruling mantra in the City.
British people across the country are furious about the behaviour of the banks and they have every right to feel that way. Banks—already seen as greedy and arrogant— have stooped to a new low of corruption and fraud. The inquiry into wrongdoing, how widespread it may be among banks, and how many other areas of finance could have been manipulated has to run its course. However, we also have to think long and hard about the future. People are quite rightly asking, “What are the Government doing about it?” The answer is, “A lot.” Since 2010, the coalition Government have put forward radical proposals to ditch Labour’s appalling tripartite regulatory regime that enabled almost every regulator off the hook for the financial crisis. We have instigated the Vickers commission and accepted the retail ring-fencing proposal, as well as faster account switching. We have also proposed a new responsibility for financial stability for the Bank of England.
However, we could do more. In light of the Commodity Futures Trading Commission and Financial Services Authority judgments against Barclays, as well as investigations into other banks, we should be re-opening the debate in three key areas. The first is regulation. There is an old saying that investment bankers operate under equal measures of fear and greed. However, for years now, there has been vast greed with no fear of consequences. Regulators in the future will need extremely sharp teeth, so that if criminal behaviour is taking place in a financial institution, all those responsible go to prison like any other thief, and there should be new criminal negligence tests for bank boards.
The bizarre evidence from Bob Diamond that he found out only one month ago about the corruption and fraud that had gone on at Barclays since 2005 should not be an acceptable excuse. Enormous earnings require enormous accountability. And I say to those who think we will never find another bank chief executive, that I do not believe for one minute that banks will struggle to find people willing to take their shilling in return for that responsibility. I would be delighted to hear from anyone who thinks that they would not give it a go for a couple of million a year. There would be plenty of takers.
The Government should be returning to the objectives of the new regulators—the Financial Conduct Authority and the Prudential Regulation Authority. They should both be given a specific objective to reduce barriers to entry and promote competition. Only one new high street bank has launched with a full banking licence in the past 100 years; that was Metro Bank. Or was it in the past 300 years—[Interruption.] Sorry, 100 years. Other recent new entrants have tended either to be backed by one of the big five, such as Marks and Spencer financial services which is backed by HSBC, or have benefited from Government sell-offs, such as Virgin buying the good bit of Northern Rock.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Before the hon. Lady moves on from the point about greater competition for banks, will she welcome the discussions between Lloyds bank and the Co-operative bank about a possible sale to the Co-operative bank, which would create one challenger bank in the marketplace?
Andrea Leadsom
Absolutely. I agree with the hon. Gentleman. That is a very good move. Personally, I think that a reversal of the Lloyds-HBOS merger would be better.
Secondly, the issue of a complete separation of retail and investment banking should return to the agenda. It is right that the Government should be the ultimate guarantor of retail deposits, but that guarantee should not extend to high-risk transactions. If an investment bank goes under, the losses should be borne by those who were happy to take the profits in better times, something to which the Government are already committed. Vickers has proposed ring-fencing already, but we should be examining again the prospect of a total separation.
Thirdly, the key issue is that of competition. The Government need to take further steps to inject greater competition into the banking sector. People have lost faith in the banking industry. Small businesses are finding credit hard to come by, taxpayers are furious at the billions spent on the bail-outs, pay for bankers is too often unrelated to performance, and customer service levels are, in many cases, utterly appalling.
Mr Sam Gyimah (East Surrey) (Con)
I congratulate my hon. Friend and her colleagues on organising the debate, which is long overdue. I thank her very much for that. On the issue of competition, one of the challenges, especially from the business banking perspective, is that 90% of the market is held by the five major banks. That means that if a small business is looking for a loan, it will find it incredibly difficult to get one if it has been turned down by its main bank. Also, if someone is offered a loan, they often have to agree to switch their account to the new bank. That lack of competition is a serious problem in terms of getting lending to businesses in the market. However, does my hon. Friend agree that such competition should be about not only having more banks but the diversity of provision in the sector? It does not have to be a bank that lends to a business.
Andrea Leadsom
My hon. Friend is absolutely right. We need far more diversity of financial service providers. Some of the issues I am about to discuss will address that because bringing down barriers to entry will, by definition in a capitalist society, encourage new entrants of all different sorts.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I share the hon. Lady’s view and that of the hon. Member for East Surrey (Mr Gyimah) that more diversity in the financial markets is essential. Does she accept that it was a missed opportunity on the part of the Government to reject an amendment requiring the new regulators to have regard to promoting diversity in the financial markets?
Andrea Leadsom
I am not aware of the specific amendment that the hon. Gentleman is talking about. However, I certainly think that the Government will be wanting to promote diversity, and I am very much aware that they want to promote the diversity of financial service providers. I can tell him that, at a recent hearing with the Treasury Committee, the Governor of the Bank of England assured us that he, too, was very interested in promoting more competition and greater diversity. We unanimously agree on that point.
The best way to shake the banks out of their complacency is to allow new entrants into the market, bringing with them the high standards of service—including IT that works—that customers believe they should be able to take for granted. One significant step in that direction would be to break up and sell off the state-owned banks. That would create overnight potential new challenger banks in Britain, and I urge the Government to look at it again. The market concentration of the big five is appalling. Lloyds, the Royal Bank of Scotland, HSBC, Santander and Barclays have an estimated market share of 85% of the personal current account market and 67% of the mortgage market. That is a classic oligopoly, and they do behave like one. We can see all over the place barriers to entry, not least of which is the fact that those banks own, among them, the Payments Council and VocaLink—two crucial entities that enable the financial services markets to operate.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
In an earlier Westminster Hall debate this week on the Royal Bank of Scotland, I heard from one of the hon. Lady’s colleagues what was essentially a call to mutualise RBS. Does she agree that that would be one option? Is she proposing that?
Andrea Leadsom
I am grateful to the hon. Lady for intervening. Not specifically, no. My point is more that we need the market to decide on diversity. I do not think that the Government, in any area of our economic life, should be the ones who pick who should be doing what. What Government need to be doing is facilitating greater competition and greater diversity so I would not be prescriptive in that way.
The key point that I want to focus on is that a real game changer for competition would be for the Government to introduce full bank account portability. We take that for granted with our mobile phones. Why should our bank accounts be any different? I have been pressing for it, along with various colleagues, since becoming an MP. If people were able to switch instantly between banks without having to change their bank account number, bank cards, standing orders, direct debits and all their online shopping, that would remove a massive barrier to entry that is currently constraining new, innovative banks.
Bank account portability has five basic benefits. The first, obviously, is that it creates greater bank competition. That is because a new bank can say to its customers, “Come and give us a try. If you don’t like us, you can move back to your old bank tomorrow.” The enormous inertia on the part of customers, who do not want to move bank because of the hassle and aggravation for them personally, would be removed instantly. They could switch between banks every day of the week if they chose to do so.
Secondly, personal and business customers would be able to force banks to compete for their business. New banks would therefore be putting forward innovative ideas—perhaps paying customers to move to them at one end and giving particular services to business account customers at the other end. That would completely change the choice available to consumers, and the consumer choice argument is a very strong one. At the moment, with the big banks, most people feel that there is no choice.
The third benefit is better regulation. The regulator would be able to shut down a failing bank while avoiding the risk of a run on the banks. With account portability, all personal and business accounts could be switched immediately to a survivor bank.
Fourthly, there would be a reduction in fraud. The highly overestimated costs of account portability need to be set against the significant reduction in bank fraud. I was talking to Intellect, the IT trade body, which reckons that bank fraud could be reduced by up to 40% if we had full account portability, because one of the major reasons for fraud is the poor legacy systems in some of the big banks.
The fifth benefit would be support for SMEs. It is crucial that we have that in our economy; we have to get businesses going again. Funnily enough, if banks had a single system, they would also have a single customer view, so they would be able to evaluate, calculate and assess their small business customers far more accurately, enabling them to meet the needs of small businesses far better.
Making it easier for people to switch bank account provider is not a new concept. Don Cruickshank, who led a review of the banking sector and whose report was published in 2000, has long been committed to the idea. In 2000, Halifax launched the stand-alone telenet bank Intelligent Finance, with the express aim of making it easier for consumers to switch bank accounts. In March 2001, the Competition Commission identified reluctance on the part of small and medium-sized businesses to switch banks as a major problem. Later that year, the Bank of Scotland announced its intention to capture business from what was at the time the big four with a new “Easy to Join” service, which would assign a staff member to oversee the account switching process and to deal with direct debits, standing orders, international transfers and the like.
In June 2002, James Crosby, then chief executive of HBOS, said that he was concerned by delays to greater account portability and that the move was vital for competition. More recently, the Independent Commission on Banking, led by Sir John Vickers, called for a system that would make account switching easier. However, the ICB’s proposals stopped short of full account portability.
This year, Virgin Money has added its support for full bank account portability. It has said that it is happy to support the ICB proposal that a current account redirection service should be established by September 2013, but that it is
“not sure that it will be sufficient to overcome consumers’ inertia, and their concerns that switching may be difficult.”
In its submission to the ICB, it expressed a preference for full account number portability.
The ICB published its final report in September 2011, following an interim report that April. The Treasury Committee took evidence in relation to both reports, and several bankers said that account switching was important. Mr Horta-Osorio, chief executive of Lloyds Banking Group, told the Committee:
“There has been progress made in terms of customers being able to switch effectively and without risk, but more progress can be made. We are proposing a seven-day automated redirection of direct debits whereby customers in seven days can be sure that their account and their direct debits are automatically redirected to the new account without any risk. All banks have now endorsed that solution and the Payments Council as well.”
At the weekend, Jayne-Anne Gadhia, Virgin Money’s chief executive, said that
“banking doesn’t have to be remote, distant and just transactional. There can be a new and different future where customers are at the centre of the banking experience…For too long, banking has been more head than heart. We want to put more heart into it.”
The ICB reported that there was a switching rate of just 3.8% for personal current accounts in 2010, that three quarters of consumers had never considered switching their current account, that 51% of SMEs had never switched their main banking relationship and that 85% of businesses surveyed by the Federation of Small Businesses had not switched their main banking provider in three years. Which?, the consumer focus group, estimates that people are more likely to get divorced than change their bank account. Those switching rates compare very unfavourably with those in other industries. In 2010, 15% of consumers changed their gas supplier, 17% switched electricity supplier, 26% switched telephone provider and 22% changed insurance provider.
Jayne-Anne Gadhia of Virgin Money says that
“retail banking has been underinvested in. When retail banking becomes the focus of senior banking executives again, which the splitting of retail and investment banking would bring about, bank customers will get a better service. If that happens, then I would be delighted.”
I agree with her. Making it easier for consumers to switch provider would be a boost to new entrants in the market and therefore to competition, because consumers would know that if they did not like the bank they had moved to, they could always move again.
Mr Love
The question that I am about to ask is one that I have some feeling about, as I have tried to shift my bank account in the recent past. The industry would argue that it is shortening the process and making it more secure, and that we should give that an opportunity to bed down in order to see whether it works. The industry also claims that it is very expensive. How does the hon. Lady respond to those concerns and how important does she think it is that we create a fully portable system?
Andrea Leadsom
I am grateful to the hon. Gentleman for asking that question. If people consider the cost to the taxpayer of the financial crisis and if people believe, as I do, that the reason for the financial crisis was that banks were too big to fail, it makes sense that if banks were no longer too big to fail, the taxpayer would no longer bear that massive liability. We need to consider the costs of achieving competition in the context of what has happened in the recent past, but yes, it would be expensive to achieve it.
The likes of VocaLink and Intellect, the IT trade body, have advised me that the costs are not in creating the centralised account-holding system required for fully transferable bank accounts, but in the big oligopoly banks changing their systems of sort codes, cheque books, bank account numbers and so on to fit in with a new system. The ultimate irony is that the challenger banks, such as Metro Bank, Virgin Money and Aldermore, would love account transferability because it is a minor cost to them; it is a major cost to those banks that, by dint of having legacy systems, have a lousy ability to feed in to a single system, so would find it very expensive.
You will be pleased to know that I am coming to a conclusion, Mr Chope. Now is not the time for timidity over reform in our banking sector and nor is it the time for false economies. We need to focus on enabling new entrants into the market, taking the steps that will be good for the consumer and for small businesses, and beginning the long process of restoring the reputation of our banking sector.
Teresa Pearce (Erith and Thamesmead) (Lab)
Some of the points that I was going to make have already been raised by my fellow member of the Treasury Committee, the hon. Member for South Northamptonshire (Andrea Leadsom). I was glad to add my support to the application for the debate, because it is important to my constituents.
I represent Thamesmead and Erith. Thamesmead is an estate built by the Greater London council in the 1960s. There are 45,000 people living there and not a single bank in the whole of Thamesmead. I have met all the major banks to ask whether they would be wiling to open a branch or have a mobile bank—anything, really—but they have all said no because it would not be economic for them. They have no thought for the customers there—mainly basic bank account holders, some of whom cannot even use one of the few ATMs there. People in my constituency have to take two bus rides to draw their own hard-earned money out of an ATM without incurring a charge. The service is simply not good enough.
Markets are supposed to operate on the principle of the virtuous circle. I doubt whether anybody in the country at the moment thinks that that applies to the banking market. Well-informed consumers are supposed to drive a competitive business to deliver what people want, and that is simply not happening in my area or many other areas. Banks are not delivering what my local small businesses want or what my local bank account holders want—they are just not delivering at all.
The market is supposed to respond to customer need and customer power, but at the moment, consumers do not seem to have any real choice or power. When people come to me and say that they have a problem with their bank, and I ask if they have tried another bank, they say, “They all seem to be owned by each other; what difference will it make?” There is no consumer choice. It is a market, but not a proper market, because it does not operate as any other market would.
Cathy Jamieson
I know that my hon. Friend cares passionately about people’s exclusion from financial services. Would she agree that part of the problem is that it is not easy for people who are in debt or do not have high incomes to switch? Going to another bank is fine if they have money, but it is not easy at all if they are trying to pay off an overdraft or loan.
Teresa Pearce
That is completely right. Debt is a big issue in my constituency, and I believe that that is why there is no particular interest in opening a branch, which would alleviate some of that debt through giving advice. That said, the staff in a branch of Barclays, which was a Woolwich, in my constituency have taken it upon themselves to try to help their customers. If they see people coming in and just paying off the minimum amount on their credit card for three months in a row, they sit them down, talk to them and explain that they are not paying off the debt. The people in that branch do a fantastic job. I feel sorry that they do not find saying, “I work for Barclays” something to be proud of at the moment. We should be thinking of the people who work in such branches and call centres in the current environment.
Mr Thomas
North Harrow, in my constituency, sounds a little like Thamesmead in that it does not have a bank branch. It has a post office through which personal banking customers of Lloyds can access services, but there is no equivalent for small businesses in north Harrow. Given our anecdotal experience of areas of the country that are unbanked, does my hon. Friend think there would be benefits from full disclosure by the banks of what and where they lend by postcode? We could then have proper understanding of which areas are unbanked and a proper debate about how to respond to that gap in the financial market.
Teresa Pearce
That is an excellent idea. There are very few things in society that do not benefit from transparency; the more we know, the more we can make a judgment. We should all press for it.
The hon. Member for South Northamptonshire mentioned that people are more likely to get divorced than switch their bank account, which is certainly the case in my experience. Only 36% of consumers have ever switched their bank account, and 45% of marriages are expected to end in divorce. I have been with the same bank since I left school, but it has changed, because it has been taken over repeatedly. That is a common experience. Lots of us will have sat in an office with a friend or spoken to a family member who has tried to switch bank accounts and heard the catalogue of horrors that ensued—from mortgages not paid to bounced direct debits.
As we heard today, the hesitancy to embrace bank account portability is a big barrier to customers being able to exercise choice. The seven-day switching programme is good step forward, but we should be working towards full bank account portability in the long term. I ask the Government to commit today to undertaking a full and comprehensive cost-benefit analysis of account number portability to start that process. Years ago, it was not easy to transfer a mobile phone number from one provider to another—in fact, the mobile phone companies told us that it was impossible. As consumer pressure grew and more providers entered the market, it became very possible, and now is common and simple to do. I see no reason why banks accounts cannot go down the same road. It would make a big difference to consumer behaviour—43% of consumers say that they would be more likely to switch their current account if they could keep the same number.
Even after the banking crisis, our banks are still too big to fail. It is not a proper market when the huge rewards are taken by some, but the risk is always sold on further down the line to other people, ultimately ending with the taxpayer. With only one new high street bank launched in over 100 years, it is pretty obvious that there is no true competition. Increasingly, new entrants need to be backed by one of the big five banks—as with the Marks and Spencer bank, which is backed by HSBC—or to have benefited from Government sell-offs, such as Virgin’s acquisition of Northern Rock.
The big banks are represented on standards-setting bodies, such as the Payments Council, which sets the level of access. There is clearly not a lot of incentive for them to lower the barriers to access for new entrants and thereby decrease their market share. That is why the Government should step in and establish a framework with increased competition and customer experience in mind. To increase competition, it is important to increase not only the number but the diversity of organisations operating, so that consumers have real choice.
Many of us will have read in the papers this week that there is a big consumer push towards ethical alternatives after the recent banking scandals: Charity bank, which lends its savers’ money to charity, has had a 200% increase in depositors; the Ecology bank has had a 266% jump in applications; and there has been a 51% increase in applications at Triodos, a Bristol-based sustainable bank. Credit unions also report week-on-week increases of at least 20% and up to 300%.
Building societies and credit unions obviously have an important role to play in constituencies such as mine. Unlike banks, they are accountable to their members, who are also their customers. There is no discrepancy between the aims of the shareholders and the customers, because they are one and the same. Building societies and credit unions are a true service industry, not a self-serving industry. There is usually a big culture difference in the way they operate in comparison to banks. Most markedly, they are free from the pursuit of short-term returns for shareholders that has contributed to risky behaviour in the big banks and in turn threatened the stability of banking system as a whole.
What we are seeing with the banking crisis is the result of the demutualisation agenda kick-started in the 1980s and peaking in 1997, when a host of building societies became banks, including Woolwich building society, which is a mere mile from my constituency. The Woolwich was founded in 1847 as one of the first permanent building societies. It had a proud local tradition—it was a major employer and an asset to its community. Ultimately, it demutualised and was eventually taken over by Barclays. People used to say, “I’m with the Woolwich.” They were proud to be so, but I do not think they say, “I’m with Barclays and I’m proud to be.”
During the demutualisation period, the investment banks toured the boardrooms of the building societies, putting the case for demutualisation, often making large fees as advisers in the eventual takeover. The end result is that there are now five big banks—Lloyds, the Royal Bank of Scotland, HSBC, Santander and Barclays—with a disproportionate market share. They have an estimated market share of 85% of the personal current account market and 67% of the mortgage market.
When I was writing my speech, I thought back to when I was young, which was a long time ago, and to when the Greater London council used to give mortgages to homebuyers. The GLC was one of the two biggest mortgage lenders in London at the time. Getting a mortgage from the GLC was a great incentive for local people. They felt a sense of ownership of the GLC, and the GLC had invested in their homes, which created a stable society. They did not have what we now have in parts of London—rogue landlords profiteering from renting out terrible accommodation. Giving people a stake in something makes them better citizens. It is a shame we do not have the same model now.
Taxpayers have ploughed enormous sums of money into rescuing the banking system. Northern Rock, RBS and Lloyds TSB have received direct bail-outs, and all banks have benefited from some form of public subsidy, especially quantitative easing and deposit guarantees. The publicly funded support of the taxpayer does not appear to have translated into banks acting in the public interest. In fact, it appears that in some areas of banking, few lessons have been learned, and the banks’ existing priorities and practices seem to be a return to business as usual.
UK banks also hold 85% of the business banking market. In other countries, the picture is different. In the US, there are some 15,000 banks and credit unions operating in the market. In Germany, there is a network of 431 locally controlled banks with public interest criteria in their governing constitutions. Change, therefore, is possible. With the political will and the right Government intervention, it could take place.
Earlier this year, the chief executive at the Office of Fair Trading said:
“For too long banks have needed pressure, often sustained, from regulators and enforcers to introduce the things they should have already been doing.”
In a relatively short period of time, we have ended up with banks taking over each other, leaving just five major banks, and with the deputy governor of the Bank of England describing his own industry as a cesspit. That is a reflection not only on London as a financial centre but on the whole of the UK. The finance sector is a major employer and we should be proud of it. As this issue crosses party lines, it is important that we all put our minds to finding a solution to the problem. We have made piecemeal alterations, but we need a full-scale inquiry into the banking sector. Opening up the sector to competition is one of the major ways to achieve that aim. So far, regulation has not altered culture or behaviour. Perhaps losing profits and customers will bring about such a change in the banks.
We need Government intervention to put the experience of customers at the heart of regulation. The Labour leader and the shadow Chancellor recently made a series of proposals for a banking system that serves not just the bankers but the real economy. They include a British investment bank backed by the state to increase lending to small businesses; a code of conduct for bankers; a greater push for international changes to limit bonuses; selling off high street branches; and greater transparency. All of those proposals would be welcome steps forward.
I have a couple of ideas to float to the Minister. The big high street banks could control the clearing systems, and any new entrant would have to use those systems. As it is unrealistic to presume that a new entrant could create their own systems because of the cost of infrastructure, why not use the Bank of England to monitor and regulate the cost of accessing the clearing systems? Even better, we could make it a condition of the big banks’ banking licence.
Businesses, especially small businesses, pay higher fees to the banks. Will the Minister discuss this matter with the Minister for Housing and Local Government? We could get local authorities to set up a membership system to negotiate bank charges on behalf of local businesses. For example, some small businesses are paying around 50p per £100 cash banked, while the big supermarkets are paying around 6p per £100. Those businesses should come together and collectively borrow. A local authority could perhaps help in this regard, through the local chambers of commerce. We must look at using customer power in a way that helps customers.
I have one final thought, which I doubt the Minister will agree with. Government, both national and local, could pay all their salaries into the local credit union or similar not-for-profit institutions such as Postbank. Obviously, each individual would be free to withdraw their money and put it somewhere else once it has been paid in, but many would keep their money in the local credit union and that would provide a strong impetus for alternative retail banking. Although I doubt the Minister will agree with me, it is a possible way forward.
In conclusion, I hope that one day, the residents of Thamesmead can choose which bank to go to, rather than choosing which bus to catch to get to the nearest bank.
Mark Garnier (Wyre Forest) (Con)
Let me apologise to the Minister at the start, because I will miss his winding-up speech. Unfortunately, I have to rush back to Kidderminster for an important meeting about Kidderminster hospital. Members who remember the 2001 general election will know that any Member of Parliament who does not pay attention to Kidderminster hospital when called upon can suffer dire consequences.
I am grateful to my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) for securing this debate and for gathering such enthusiasm for it. It is an incredibly important issue in the regeneration of our economy.
I specifically want to turn the focus of attention to the problem that arises when a regulator is still reeling from the fall-out of the banking crisis. Here we are, nearly half a decade on from the crisis, and we have just started a new round of scandal as the results of the FSA investigation into LIBOR fixing hit the headlines. The story will no doubt run and run for some time as other banks are brought into the mire. The Government’s response—the so-called Tyrie commission—is as good a start at understanding the problems as I can imagine, and, I hope, a significant step in the direction of truth and reconciliation between the banks and the taxpaying consumers.
The FSA’s response to the banking crisis has been reactive, and it is in its reaction that significant barriers have been established that limit competition in banking. Over the past few months, my hon. Friend the Member for South Northamptonshire and I have been meeting a number of smaller, existing banks as well as potential challenger banks to the banking marketplace. In nearly every case, their experience of the FSA has been problematic. All parties concerned were either small banks—banks with balance sheets under £2.5 billion—or individuals representing organisations that had experienced the FSA’s application process. Those interested parties came forward with points about the FSA’s process of issuing banking licences, and the regulator’s attitude to, and regulation of, smaller banking institutions.
It is significant that just one of the organisations we met detailed a positive experience of the FSA and its practices. It is also worth noting that banking licences are very rare commodities. There has been just one ab initio banking licence granted in the past 100 years and that was to Metro Bank. All other new entrants to the market, such as Virgin Money and Tesco, have done so as a result of buying existing licences and transferring their use to the new operation, or from overseas banks passporting in their expertise. That in itself says a great deal about banking competition in this country.
I want to concentrate on two specific areas of concern: the FSA’s application process for banking licences, and the FSA’s regulation of smaller banks.
Mr Thomas
I share the hon. Gentleman’s concern about the regulators and his understanding of the potential for new players in the financial markets. The all-party group on building societies and financial mutuals held an inquiry into the work of the regulator in relation to building societies, friendly societies and credit unions. It was far from clear that regulators had any real experience of working for and in those organisations. Will he support a call to encourage the new regulatory bodies to ensure that among their senior staff they have people with real practical, hands-on experience of working for a financial mutual?
Mark Garnier
Yes, I will. One of the problems is that, with the potential move of the FSA into the new regulatory regime, there has been an exodus of staff. As the hon. Gentleman suggests, that is of course something to do with the employment process within the new regulators, but it is absolutely right that any regulator should draw on people’s extensive experience. As we look forward, it is important that we provide leadership and that mutuals and other models of banking should be encouraged. The regulator should accordingly take account of that when employing staff. I wholeheartedly agree with the hon. Gentleman on that point.
The second problem is the FSA’s regulation of small banks, starting with the application process for banking licences and significant changes. That process has two tiers. It starts with an initial inquiry, and if an applicant is given the nod, the process continues with a formal application. The initial inquiry can be likened to a conversation on the doorstep of the FSA, with the aspirant bank seeking permission to come through the door simply to start the application process formally.
However, that initial inquiry—it should be remembered that it is not a formal inquiry but just an opening conversation—can cost the applicant more than £1 million to process. That is because the applicant requires a corporate body to make the application, which is not unreasonable, but also needs evidence of capital committed, advisors, auditors and, it seems, evidence of system design and building, which can be very expensive as there are no off-the-peg systems available.
So far we have found just two organisations that have proceeded past the initial stage from an ab initio enquiry. Trying to establish the reasons for that, we found that the cost and delay involved in the application process appear to be disproportionate. New applicants are effectively required to create a functioning, fully staffed banking operation before any type of licence is granted. We found that one applicant was forced to resubmit their application because the application process was stretched beyond the 12-month time limit and consequently a second application fee of £25,000 was demanded. One individual spent £1.3 million just to get to the formal stage of the application process. The application was then denied by the FSA.
The applicants we met had many complaints about the FSA process, and I will go through some of them. All applicants felt that the FSA had an arbitrary power to grant or refuse applications. They felt that the FSA should provide a publicly available checklist of criteria that, if satisfied, will result in the award of a licence. Such a change would lead to a more transparent application process. Apparently there is no requirement for the FSA to apply the same criteria to all applications in its internal processes or to explain its reasons for advising that applications should be withdrawn. Representatives of one small licensed bank said that they were given the “impression” that their application was progressing but “never a green light”. A representative of an individual who tried to buy a failing bank said that, although the FSA might appear to favour an applicant, they were capable of
“changing their opinion with no prior warning”.
One applicant was encouraged by an FSA official to proceed with an application for a change of control. However, a few months later, and after incurring considerable cost, they were advised by a different FSA official that their application would not succeed and should therefore be withdrawn. Worryingly, in one case the absence of objective criteria allowed the FSA to engineer the withdrawal of the application by putting the applicant in a cleft stick. The FSA imposed a very high tier 1 capital requirement, which had the effect of suppressing the profitability of the applicant’s business plan. The applicant was then told that the proposed venture was not sustainable because it was insufficiently profitable, and they were advised to withdraw.
In short, applicants felt that the individuals concerned within the FSA feared the prospect of having their name associated with any bank that might possibly fail in the future, and so they felt that the FSA staff regressed to having a bias of ultimate safety, and that bias meant that they favoured rejection of applications.
Let me turn to the regulation of existing smaller banks, of which there are 50 or so. Those banks are penalised for being small. It is quite interesting that the department within the FSA that looks after smaller banks is called “Smaller banks, smaller building societies and spread betters”. It seems curious that banks that are so important to this country can be regulated alongside spread betters, which are perhaps less important to the financial system.
The first and most basic problem that the smaller banks face comes in the form of the capital ratios that they must have. Small start-up banks are required to have a capital ratio that is potentially three times larger than that of a big, systemic bank. Although it can be argued that that is to ensure the bank is stable as it builds up its lending book, it restricts the opportunity to become a new entrant to the market to those who have very deep pockets indeed. Even if a new bank grows, its capital ratios are frequently twice that of the big banks’ capital ratios. Moreover, risk-weighted valuations of property lending, with regard to items such as a property lending book, are skewed against small banks, which may lack the database and breadth of client type available to the big banks to justify a similar risk-weighting. That means that a small bank will need a third more capital for its property books than its bigger competitors.
Small banks are also likely to have a more limited loan book. For example, a small bank’s loan book might be restricted to the UK. That incurs a 1% increase in capital ratios. That is quite an interesting proposition because it implies that big banks lending to Greece and Spain face a lower risk than those banks that are just lending in the UK. That so-called “concentration of risk” has further implications, as small banks are likely to seek niche markets. Doing so means that a bank incurs a further 2% increase in its capital ratio.
Meanwhile, liquidity reporting has resulted in small banks seeing the cost of their compliance increase tenfold. Representatives of a small private retail bank whom we met said the bank used to charge its customers £25 a month for the privilege of banking with it. Those customers are now being charged £65 a month, just to cover the increased cost of compliance. Another small bank that has only a £50 million balance sheet is required to submit 160 liquidity reports every year.
In addition, it has been suggested that for a small bank the staff to accountant ratio, which is obviously an overhead cost, is 17 members of staff for each accountant who is examining what is going on. In a recent survey, chief executives of small banks complained that 40% of their time was spent on compliance. And non-executive directors, far from contributing a wide range of skills to the bank’s board, must now demonstrate extensive banking experience and sign up to what amounts to a full-time job. Is it right that banks’ boards should be so monochrome?
There are many reasons why businesses might face problems in getting started, but in an environment in which we expect banks to lend more and to contribute to our economic recovery is it right that the regulator is apparently creating a blockade for new entrants and increased competition? Including me, there are three members of the Treasury Committee still in Westminster Hall—the other two are my hon. Friend the Member for South Northamptonshire and the hon. Member for Erith and Thamesmead (Teresa Pearce); and there was another member here earlier, the hon. Member for Edmonton (Mr Love). I hope that the Treasury Committee will proceed with a forensic investigation of banking competition and seek to separate myth from fact as regards this problem. However, as we progress with the Financial Services Bill and the soon-to-come banking reform Bill, it is crucial that we consider competition as part of the mandate of the regulators.
This is a very difficult time for our financial services industry, including banking, and we must ensure that we strike the right balance between regulation that is effective and easy to apply and regulation that ensures international confidence in our financial system. Striking that balance is too important for us to get wrong, but we must ensure that in achieving it we allow, and indeed encourage, healthy competition within the banking community. That must be the approach taken by the regulator.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to serve under your chairmanship once again, Mr Chope.
I congratulate the hon. Member for South Northamptonshire (Andrea Leadsom) on securing this important debate, which is of great interest and importance to all our constituents.
Our banking system is badly broken: Members of this House know it, the public know it and the industry knows it. Almost four years on from the collapse of Lehman Brothers and the part-nationalisation of two major banks in the UK, our banking system is failing to support the wider economy with the lending that is required to promote growth; there is still regulatory uncertainty over the mis-selling of derivatives; there is insufficient competition; and pay and bonuses in the banking sector are rocketing out of control. Last month, a major UK clearing bank could not even ensure that employees received their salaries or that businesses could pay their bills on time. The public are therefore right to demand further radical change and to seek new entrants to the banking sector.
Despite being given support—both directly and in guarantees from the taxpayer—on the awesome scale of £1.4 trillion during this crisis, and despite our central bank having printed £325 billion of new money since 2009 through quantitative easing, with up to another £50 billion on the way following the decision of the Monetary Policy Committee last Thursday, the banking system is failing to bolster growth or to provide a satisfactory supply of credit.
Steve Baker (Wycombe) (Con)
On that point, I notice that the banks are simultaneously failing to provide savers with a decent return. I am sure that the hon. Gentleman will agree that that is an astonishing failure of a system that is supposed to act as an intermediary between savers and those who wish to borrow money for productive uses. It is astonishing.
Mr Bain
Indeed. The hon. Gentleman makes a very powerful case.
Bank lending to businesses fell by 11% between 2008 and 2010 and it has continued to slump since, with bank lending to small and medium-sized businesses having fallen for five consecutive quarters. It is small wonder that in such circumstances economic demand in the UK is at rock bottom. In the G20 this year, economic demand is lower only in the eurozone, the Czech Republic and Hungary. As the Nobel laureate economist Joseph Stiglitz wrote about the financial system in an article in Vanity Fair in January:
“We have poured money into the banks, without restrictions, without conditions, and without a vision of the kind of banking system we want and need. We have, in a phrase, confused ends with means. A banking system is supposed to serve society, not the other way around.”
Sadly, the same is true of the financial sector in the UK too.
Studies by the International Monetary Fund and the European Central Bank powerfully demonstrate that financial systems in which there is more banking competition with institutions less dependent on wholesale funding are less prone to systemic shocks of the sort the UK and others experienced in 2008. The banking sector has expanded hugely in the past five decades. In 2010, the assets of the 10 largest UK banks had soared to 459% of GDP. Barclays assets exploded from 10% to 110% of GDP in the same period. That size, the implicit public guarantee and the resultant lower borrowing costs allow the big banks to maintain a large competitive advantage over any small competitors trying to enter the market. It comes as no surprise that business organisations such as the British Chambers of Commerce, the Federation of Small Businesses and EEF are calling for more competition in the banking system.
The European Commission found in its inquiry into the financial system in 2007 that the retail banking sector accounts for more than 50% of total banking activity, measured by the gross income indicator, but that banks face greater pressure on profits where consumers are more mobile. In this country, the Office of Fair Trading issued a report on the banks in 2008, finding that many consumers do not know the fees associated with their accounts, and that three quarters of them are not aware of the credit interest rate, because of both a lack of transparency in fees and their self-evident complexity. It also established that few consumers monitor the account market to switch to accounts offering better conditions. Only 6% of account customers had switched in the previous year and 61% of customers had held their main account for more than 10 years. It also found cross-subsidies from those consumers who incur insufficient fund charges, who are more likely to be in the socially or economically vulnerable categories, to those who do not—those on higher incomes or who have reasonable levels of savings with the banks—which create significant market distortions, as well as resulting in social unfairness.
On the structure of the banking system, the Independent Commission on Banking chaired by Sir John Vickers had a limited remit and was unable to consider the level of support that the banking system provides to growth in the economy, the existence of potentially criminal practices, the nature of the products being traded by banks, or the culture of greed exposed by excessive bonuses and pay. That is why we need to consider further whether the Vickers proposals for ring fences and higher capital buffers will be enough to protect against future scandals, or whether a complete separation of retail and investment banking services, or the break-up of those institutions, with the creation of new banks, is the only answer. As my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) and the hon. Member for South Northamptonshire said, there have been recent additions to the challenger bank market in the form of Metro Bank, and Virgin Money’s acquisition of Northern Rock. The Lloyds Banking Group’s divestment of branches will bolster the role of the Co-operative bank as a stronger mutual institution, too, which I welcome.
The Bank of England revealed in a report in 2010 that the implicit taxpayer subsidy to the banks could be as much as £100 billion, and a further Bank of England study from this year emphasises that that is largely a transfer of resources from Government and taxpayers to creditors, staff and shareholders. The effect of that could be to allow the amount of risk adopted by protected banks to rise. A more comprehensive examination of the banking system would make it possible to determine the underlying issue of whether it currently offers sufficient value for that investment by the taxpayer. There is much evidence from the IMF and the London School of Economics that it has not done so, and that higher pay and profits have been the principal results, at the cost of a slower flow of credit.
Interest rate swap arrangements that were mis-sold could affect up to 28,000 small businesses in Britain. The LIBOR scandal will undoubtedly draw in other financial institutions, and create the potential for court cases involving billions of pounds in compensation awards. Morgan Stanley produced figures today revealing that the global cost to the banking sector of every basis point of LIBOR suppression could be $6 billion, or $400 million for every bank affected. Other countries have been better able to survive the financial crisis because their banking systems have more competition, more effective direction from Government, and more socially beneficial lending practices. In Germany, the state-owned investment bank KfW last year provided €11.4 billion in new loans to small and medium-sized enterprises, focused on exports and job creation. Because of their statutory duty to put the good of the local economy over the maximisation of profit, the local savings banks, or Sparkassen, continued to lend even in the depths of the 2008-09 slump in output. While the major commercial banks in Germany cut lending to businesses by 10%, the Sparkassen increased lending by 17% between 2006-2011. Three in every four SMEs in Germany have links with the Sparkassen. A system whose ownership and remit were more diverse would help SMEs in the United Kingdom, too.
In a very good discussion of the banking system on “Newsnight” last night, it was startling that Jim O’Neill, the investment banker from Goldman Sachs, powerfully made the case for a state investment bank in this country, to support economically important industries. A more comprehensive examination of the banking system, including its structure and competition, could also consider the case for making the bank balance sheet levy more progressive, as Duncan Weldon, the chief economist of the TUC, has recently proposed, and whether it should be larger for bigger banking institutions, while greater competition would be promoted through a lower levy for smaller banks.
Lack of competition is also leading to a culture of excessive pay and bonuses within the banking system. The work of the High Pay Commission last year exposed the fact that within Barclays, while the average pay of employees rose by 866% in the three decades from 1980, the pay of top directors in that bank rose by a staggering 4,899%. Top directors’ pay at Barclays and Lloyds Banking Group rose from 14 times that of ordinary tellers working in the bank’s branches to some 75 times that of an average Barclays or Lloyds employee’s pay by 2011. That is the extent of the culture of greed that has grown in our banking system.
In other countries, over the decades, the need for a wider examination has been clear. The Pecora commission, founded in the United States in 1932, under an independent chief counsel, led to the uncovering of the reasons behind the Wall street crash of 1929, and to radical legislation to separate retail from investment banking under the Glass-Steagall Act. It created new criminal penalties and re-regulated the stock exchange. The work of that commission safeguarded the US financial system for the next fifty years. Afterwards, in his memoirs, entitled “Wall Street Under Oath”, Ferdinand Pecora wrote of the ills of the banking system across the world in the 1930s:
“Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker’s stoutest allies.”
It is our constituents, particularly the poor and working families with children, and most of all the growing army of unemployed and underemployed, who are paying the price for the recession—the longest since the 1870s—that has resulted from this financial crisis. They did not cause the recession, but they have been asked to shoulder the heaviest burden, while the super-wealthy at the top of the financial services sector have continued to enrich themselves, and our banking sector is being protected from the radical structural reforms we now need. The very least that we as parliamentarians can do is to give them the fullest account of why our banking system is so badly broken, why it lacks effective competition, and why it is failing to promote any kind of recovery or sense of responsibility from people at the top. Only then can we begin the task of creating a banking system that serves the people of this country, and not the other way around.
Steve Baker (Wycombe) (Con)
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on securing this debate with particular serendipity. She called for more heart in banking, and tonight there will be a documentary on TV that I expect will be wonderful. “Bank of Dave” is about David Fishwick, an entrepreneur who sought to start a bank. It is a remarkable tale, and I hope the Minister will take a look at the programme because it speaks very much to the problem of barriers to entry.
Mr Fishwick is a successful entrepreneur who sells minibuses. He owns a Ferrari, a helicopter and a nice pad. He is a self-made man. He discovered that his customers could no longer get finance to buy his minibuses, and so his own business was endangered by the lack of credit. He therefore began to lend them the money himself. It seemed straightforward enough, and he thought, “I could do this, and serve my local community.” He set out to establish a bank, and his documentary, which is a series, talks about the difficulties he had. He is legally forbidden to call his institution a bank, so he does not take demand deposits but instead takes people’s life savings, personally guarantees them with his own wealth, and then lends them to productive businesses based on trust and relationships. That speaks very much to all the calls we have had from Members on both sides today for a new kind of banking. It is super local, personally guaranteed and based on trust and relationships, so I very much hope the Minister will watch Channel 4 at 9 pm to see Dave Fishwick and “Bank of Dave”.
I want to talk about the personal guarantee in particular. Members have talked about the loss of faith, and Mr Fishwick is restoring faith by knowing the people from whom he is borrowing and those he is lending to, and personally guaranteeing the finance. I introduced a private Member’s Bill in the last parliamentary Session to give directors of financial institutions strict unlimited liability for their banks’ losses, and to require them to post personal bonds to be used as capital and to place the bonus pool into capital for five years. That might seem a harsh measure, but it is based on the idea that without moral hazard, people will behave well.
Andrea Leadsom
That takes me back to the old days—I sound very old. Before the big bang, most small banks and financial institutions were run on a partnership basis and people ate what they killed. If they had a good year they took a huge bonus, but if they had a bad year they gave back the car, the house and the children’s school fees—I do not quite know how they would have done that. That changed when the institutions all became plcs and it was one-way traffic only, so I have a lot of sympathy with what my hon. Friend is saying.
Steve Baker
My hon. Friend demonstrates that the accusation of inexperience that is often levelled at this House is wholly false. Both she and my hon. Friend the Member for Macclesfield (David Rutley), who is sitting next to me, have extensive experience in the City and understand the changes and how things have moved on.
Historically, there were three ways of restoring trust in an industry—taking deposits—that has always been risky: mutuality; the historic trustee savings bank model, in which the directors were not able to take any personal reward; and unlimited liability. Some of the greatest bankers in history—the original J. P. Morgan and Nathan Rothschild—operated with unlimited liability, so everyone understood what they would lose if they got a deal wrong, and there was trust.
The implications of my private Member’s Bill would be, first, that banks would have a much better culture and people’s interests would all be aligned to the banks’ success. Secondly, if we gave directors sufficient warning that they would shortly be accepting unlimited liability for their banks’ losses and that the losses would come out of their personal possessions—their pensions and homes, and forgone school fees—we would soon find that they would break up the banks for themselves, because they would not wish to try to manage unmanageable behemoths. That would stimulate a natural diversity across the banking system, as directors created institutions that they could manage and understand. Similarly, as someone is hardly likely to keep retail and investment together if it is not in their interests, I would expect them to separate them.
Thirdly, if directors and staff stand to lose, there is a good case for lowering barriers to entry. If we can expect good behaviour from bank staff, and responsible lending, it is legitimate to lower barriers to entry, and a virtuous circle could be created. It might well be that going for strict, unlimited personal liability for directors would be a step too far as a first measure, but I invite the Government to consider it as an alternative way forward, which could lead to a more self-regulating banking system that served society more positively.
I think I am well known for believing that the state is the problem and that there should be less intervention, but if we must have intervention the suggestion of account portability made by my hon. Friend the Member for South Northamptonshire is a good one, because it promotes competition. We just need the banks to move accounts into.
I urge the Government to be cautious about the idea of a state investment bank. Whenever any Government—not necessarily this one—get into lending, it is to ensure that loans are made that would not otherwise be made because they would be bad loans. There is no kindness in encouraging a small business man to put his home at stake by taking on a loan he will never repay, because small business men, in all practical terms, often take unlimited liability. It would be better if they were employees. I urge the Government not to intervene too excessively in credit markets, although I realise that there are some elements they will proceed with.
Finally, I have some questions for the Minister. To what extent have the Government considered how their policies, such as the national loan guarantee scheme, promote big banks? We have all seen examples of officials being institutionally better at dealing with large companies, including banks, be it risk aversion or the simplicity of dealing with a small number of contacts to achieve a big result. Does current policy promote a small number of large institutions? That is the antithesis of the direction we want to go in.
Chris Evans (Islwyn) (Lab/Co-op)
Thank you, Mr Chope, for calling me to speak. In debates such as this, I always think of the time I spent working in a bank, in the retail sector.
Last week I sat behind Bob Diamond at the Treasury Committee, and watched as he was grilled by parliamentary colleagues. It got me thinking: this man is walking away with a £2 million bonus for doing something that is categorically wrong. It made me realise why people are so angry. The worst thing, which people do not seem to understand, is that Bob Diamond will not get the dogs’ abuse that someone working behind the counter in Newbridge or in Risca will get. They will be told that they are criminals, thieves and crooks. It is the people working on the front line who will get the abuse.
What really annoys me is the current sales culture in banks. I understand that banks are private businesses and need to make money—nobody needs to intervene on me to tell me that—but they seem to be pushing their staff to the limits. For example, when I worked in a bank, I was told to stay until 7 o’clock at night to phone people who were arriving home from work to arrange sales appointments for the following day. My contract of employment ended at 5 o’clock, yet I was expected to stay until 7 o’clock, because, I was told, my bonus would be my payment for doing so.
Another frustrating thing—this annoys me when people bash bankers about their bonuses—is that, while most people who work in a bank get a bonus and often make up their money with it, they have to look on and see those in charge who have done wrong and who have affected people’s trust in bankers walk away with big bonuses. The term “bonuses” is absolutely meaningless.
People who work in banks also have a raw deal on training. When recruits turn up at a bank, they are not told anything. Many of my colleagues when I worked at a bank did not know what a clearing house automated payments system or a bankers’ automated clearing services payment was, and did not understand mortgages, yet they were being told to sell to people. The fundamental question we have to ask ourselves on the future of banking in this country is not what do we want, but what do consumers and those working in banks want? First, when people go to a bank, they do not want to be flogged products that they do not want. When I move my money between accounts every month, I do not want to be asked, “Mr Evans, have you paid off your credit card? Do you want a loan? Do you want to buy a new car?”, when all I want to do is transfer my money.
We need to get away from a culture of high-pressure sales and of computers making decisions, and get back to a culture of bankers actually offering advice. When I first joined the bank, I naively thought that it was a profession similar to that of a lawyer, but then I was told—this was 20 years ago—that people did not bother with banking exams because they were meaningless. I find that strange. When I ask the Financial Services Authority, Lloyds TSB or HSBC what they are doing to train staff so that people know that their bank manager is giving them the best possible advice, they reply, “We have in-house training,” but is such training given across the board and is it an industry standard? On education—I hope the Minister will focus on this, because nobody ever talks about it—can we find a way of returning banking to its previous status as a profession with recognised exams at an industry standard, so that everybody knows that their bank manager is giving them the best possible advice? That would be good for the banks and for the consumer.
In March, I tabled a private Member’s Bill called the Banking (Disclosure, Responsibility and Education) Bill. It was based on the Dodd-Frank Act in America, which enables each and every bank transaction to be monitored. Perhaps we would have discovered the LIBOR scandal earlier if we had been tracking everything and had an office of financial research.
The constituency represented by my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) is not like mine—mine is a valleys seat—but we have similar problems with huge amounts of debt and illegal lenders. We have organisations such as Provident Personal Credit and Shopacheck. Cash Converter has popped up on the high street and its representatives even want to meet me to discuss their social responsibilities. Many people are unbanked and it would be a good idea, as my hon. Friend the Member for Harrow West (Mr Thomas) suggested—he is not in his place—to track people by their postcode and for the banks to release a report every year stating to whom and to which demographics they are lending money, and how they are contributing to society. That way, we could introduce a rating system so that, if people wanted to change banks, they would know whether they were moving to a bank rated A, AA, B or C. Also, there would be competition between banks and they would have to “up” their game, which is something I want to see.
I support switching and agree with the hon. Member for South Northamptonshire (Andrea Leadsom) that we need to have more portability between bank accounts, but from what I can see—I will probably be attacked for this—the services offered by banks are much of a muchness. The interest rate on loans provided by different banks is usually the same—it is very low—and the differences between individual savings accounts are small, as are the interest rates on credit cards, so people do not actually move to anything better. I want to remove the barriers to entry, which many hon. Members have mentioned, and we could achieve that by considering the role of credit unions.
I represent the Co-operative party as well as Labour, and it says that the way forward is to have community banks and to introduce regulations for more credit unions. In Wales, everybody has access to a credit union, which is fantastic. A credit union is owned by members and all its profits are pumped back into lending to people. I want to see its role expanded, so that it lends not only to people but to businesses—micro-businesses and small businesses—that cannot get money elsewhere. We need to consider that.
I want to address what was a personal bugbear of mine when I worked at a bank. I have raised this issue on numerous occasions with various Ministers from the Ministry of Justice and the Department for Work and Pensions—I am now raising it with a Treasury Minister—and I hope it will be addressed. Whenever I go into banks, members of staff tell me that they have a number of very good customers who pay their bills on time and whom they want to lend to and develop a relationship with. However, when they credit score some of those customers’ accounts, it reveals bad credit information, because they have received a county court judgment. When the bank’s staff speak to them, they discover—this happened when I worked at a bank as well—that they have a bad credit rating not because they defaulted on their mortgage or on a financial product, but because they got into a dispute with a gym or a mobile phone company, which, rather than trying to resolve the issue, went straight to a county court to get a judgment against them that completely messed up their credit record.
[Philip Davies in the Chair]
I recently read Duncan Bannatyne’s book, “Anyone Can Do It”, in which he says that if someone does not pay their final payment, even if they have cancelled their contract, he would have no hesitation in taking them to court. I hope the Minister will address that issue, because it is a real one for many customers and for banks whose good customers are being cut off. If someone is in a dispute with a mobile phone company or a gym, such organisations should not be allowed to impose a CCJ and wreck their credit rating, especially if they can show that they have been in a dispute.
On the unbanked, I still have serious concerns about the basic bank account. It has been a very good innovation that has brought more people into the banking sector, but, even though it allows people to have an electron card and a bank account, it does not credit score for any products. Therefore, if someone is put through a credit-scoring process for a classic account or a traditional bank account, the credit score agency cannot be told that they have been a basic bank account holder for five years and that things have gone really well; it can only go on the information that it has. How can we manage people from the basic bank account on to mainstream banking, which is a huge issue, especially in areas such as mine? That would break down the fear that some people have of talking to their bank manager. They think that it is easier to borrow money from the woman from Provident, or Shopacheck, who visits on a Monday night. We need to tackle those issues.
Finally, I want to see the development of a mutual sector in banking. Conventional banks used £60 billion when they were bailed out, but the mutual sector did not use any money. Bradford and Bingley was a building society for 150 years, but it lasted only 10 years as a bank. We have to do more to encourage mutuality in the banking sector, and the starting point for that is a discussion about community banks and credit unions. I hope the Minister will address some of those issues.
David Rutley (Macclesfield) (Con)
It is a pleasure to serve under your chairmanship today, Mr Davies—the first time I have done so.
I congratulate my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on securing the debate. She is a champion of competition in banking, which she has consistently fought for and campaigned on as a Member of Parliament.
It is great to participate in the debate, because financial services are undoubtedly an important part of our economy, which we have all discussed. The sector is vital in its own right—10% of GDP, more than 1 million employees and a contribution of £53 billion in tax to the UK Exchequer in 2009-10—so we cannot afford not to pay attention to what goes on in it. More to the point, the sector has major implications for a sustainable recovery, because if we do not have a sound banking system that is trusted by all participants in the economy, we will not see the sustained economic growth that we all want and that we all champion—on the Government Benches at least.
According to the World Bank, the UK banking sector, and in particular its assets, is one of the most concentrated banking markets in the G8—if not the most concentrated market—with the combined assets of the three largest banks comprising 88% of the market; in the US, the three largest banks comprise 37% of the market, which is a fundamental difference. That state of affairs cannot be attributed to the financial crisis, because in 1993, almost 20 years earlier, the UK still had 86% of assets tied up in the three largest banks, while the US stood on a much lower total of 21%. For a market economy, which my hon. Friends and I fully support, such a situation is clearly sub-optimal and must be addressed, and I am delighted that the Government are taking it seriously.
I am pleased to see new entrants to the market. The hon. Member for Islwyn (Chris Evans) was concerned about the lack of new entrants and the over-emphasis on a sales culture. I understand such concerns, but the fundamental approach of Metro Bank on entering the market has been about customer service, and it is encouraging to see businesses trying to take a different approach and a different market niche. Not only Metro Bank has a presence in this important market but Virgin Money, Tesco, Sainsbury’s and Asda, my old employer—yours, too, Mr Davies. Their role is increasingly important in making life more challenging for those banks that have been all too comfortable about their position in the marketplace.
Recently, The Times reported on the retail financial services sector, and I will refer to that article, because to see what has been happening is important. Tesco bank now has 6.5 million customers; it started in 1997, after buying out RBS, and in the near future intends to offer mortgages—an important step by a non-traditional bank or retail financial services operation. Marks and Spencer, with 3 million customers, will soon open bank branches in its stores—again, a chance to make a bit of a difference and to move things on. Sainsbury’s has 1.4 million customers and Asda, which I had the chance to establish in financial services, has rebranded this past week as Asda Money and is looking to launch a new credit card.
There are moves afoot therefore, and given the new depths of the lows of trust in banks and financial services, businesses such as retailers have a clear opportunity to come in with their much higher levels of brand trust and to reassure customers that they have something different to offer. I wish them success in making progress; it is not all doom and gloom on increasing competition, but we need to get behind the providers offering new opportunities for customers.
I agree with my hon. Friends the Members for Wycombe (Steve Baker) and for South Northamptonshire about the portability of accounts and increasing the switching capability. It cannot be right that inertia is the basic building block of a business model. The model has to be more dynamic. We must ensure that dynamism and competition lead to profit, not inertia, which is insulting to customers, frankly. From our own experience we all know that trying to transfer banks is an absolute nightmare—that must be addressed.
United Kingdom Financial Investments has a real opportunity to contribute to shaking up the lack of competition in financial services. The paper by the Free Enterprise Group has set out some bold, radical alternatives—characteristic of the group—and UKFI should look carefully at how it disentangles taxpayers from the Lloyds Banking Group and RBS, to sell off business units and branches to enable the more competitive financial services marketplace that we all want and shout out for.
We also need a stronger foundation to enable that competitive environment to thrive and flourish, and it is worth while pointing out how fast the Government are moving on regulation to help put that into place. I applaud the Government for introducing the Financial Services Bill—it was an honour to be on the Committee—which will be critical to restoring accountability to the Bank of England and away from the completely failed tripartite model that was found so wanting in the previous crisis.
The Government also intend to introduce a banking reform Bill, on which they should be congratulated. Others will want it to go further, but it is important that the Bill will provide for the ring-fencing of investment banks, separating them from the retail banking functions in the same organisation. The LIBOR-fixing scandal is only further evidence for the importance of the proposed legislation, which has the potential to be a vehicle for change. The proposed parliamentary inquiry, which we could call the Tyrie commission, can use the Bill as a vehicle to bring about any recommendations, which are so urgently needed. I hope that my colleagues on the Treasury Committee will have a chance to play their role in that commission, to help restore the trust needed in the financial services sector.
Regulation alone will not help bring about the foundations for genuinely competitive and trusted markets. We need to look at the shareholders, who have been too absent in the past. They need to speak out. The shareholder spring of increased shareholder activism is to be applauded, and it was refreshing to see BlackRock, one of the major shareholders in Barclays, speak out quickly and urgently during the recent problems with leadership in the bank. We need to see more of that. Shareholders must not duck their responsibilities in recalculating and rebalancing reward for results. In my opinion, those excessive bonuses are discrediting the market and the trust that we have in our financial institutions.
Having said all that, Members present might find it odd for me to say that I agree with Bob. That is, I agree with something that Bob said on the “Today” programme business lecture in November 2011:
“Culture is difficult to define, I think it’s even more difficult to mandate—but for me the evidence of culture is how people behave when no-one is watching.”
Sadly, while thousands if not millions of our constituents are working professionally when no one is watching, or even when their customers are watching, the leaders of our banks—recently, of Barclays in particular—have not displayed those virtues. Ultimately, real leadership will be required, and I wish Barclays well in finding a successor to Bob Diamond—an individual who will help to create that culture.
As we proceed with many of the ideas we have discussed today—to put in place the regulatory foundations, proper shareholder activism and the right culture and leadership—we stand a chance to have a financial sector that we are proud of. We will only achieve that, however, when we have proper levels of competition. I support the efforts of my hon. Friend the Member for South Northamptonshire and urge the Minister to press forward with every effort and his strength of character to enable us to see the new measures put in place so that we have true competition in the financial services and banking sector.
George Freeman (Mid Norfolk) (Con)
I thank Mr Speaker for allowing this important debate to take place, and for my chance to contribute to it. I congratulate my hon. Friends on securing the debate and on their contributions, particularly my hon. Friends the Members for South Northamptonshire (Andrea Leadsom), for Wyre Forest (Mark Garnier) and for Wells (Tessa Munt), but other hon. Members who have spoken, too.
I am not, never have been and never will be a banker, unlike hon. Friends who have specialist expertise in the world of high finance and banking. It is important that hon. Members bring to the House expertise in sectors that we need to regulate and guide. My interest, and my contribution today, is offered not with great expertise in the specific measures needed to put the banking sector right, but to articulate concerns about the implications of the banking crisis for what is sometimes referred to as the real economy.
I speak as somebody with a deep interest in growth, small business, enterprise and innovation. In a 15-year career before coming to the House, I was involved in starting small companies in the field of science and innovation, principally the biosciences. Typically, they were companies with an idea, a small team, a business plan and no money, raising funding for ambitious businesses to develop innovative products and services, often through a number of financing rounds, before acquiring another company or being acquired, or achieving an exit through the public markets.
I therefore speak with a particular interest in the life sciences, of which colleagues will be aware. The sector has much to offer the nation, as we seek to build a rebalanced recovery and a sustainable economic model. It has vast potential to help us to grow our trade links with the emerging world—the BRIC economies. A reference to Jim O’Neill and Goldman Sachs has already been made, and we met recently to discuss his latest analysis that, on top of the BRIC countries, the next 11 coming behind have phenomenal rates of growth in already large economies. Our life sciences have the potential to allow us to seed—literally, in some cases—the markets of tomorrow and to grow the alliances of tomorrow, which will, among other things, have the benefit of de-leveraging our financial dependence on the sclerotic eurozone.
I speak also as somebody with a long and passionate interest in the East Anglian innovation economy, a region that the Government increasingly recognise as a key driver for sustainable growth. It is a net contributor to the Treasury and has at its heart Cambridge, a globally recognised centre of science innovation, entrepreneurship and companies in need of finance. In my own county of Norfolk, the Norwich Research Park, a globally recognised centre of innovation, is becoming increasingly linked to Cambridge through the Government’s excellent investment in infrastructure.
I speak also as the father of two children. I am concerned about the world in which they will grow up and the economy in which they will have to make a living. Our generation in Parliament is important if we are to get this right. I want to touch on the context in which it is helpful to view this issue. This is not just a crisis of debt, although it is surely that. It is not just a crisis of regulation. It is not even just a crisis of political leadership. We are living through a deep crisis of political economy, which is shaking the very foundations of the world as we have come to know it in the past 20 or 30 years. One of the profoundly unsettling things about crises of political economy is that they undermine the very legitimacy of the institutions through which we seek to tackle them. That creates something of a perfect storm—a financial and political hurricane that fuels itself. As we see trust in the media, trust in the political class, trust in the bankers and trust in the regulators undermined—not least by the way in which those groups, in the past 20 or 30 years, have become too cosy—we start to fuel a growing public distrust of the idea that there is any institution capable of fundamentally tackling this problem. I am more optimistic than that. If we are honest about the causes of the problem, and rigorous and robust in our analysis, we can be optimistic about the future.
Steve Baker
My hon. Friend is making an absolutely magnificent speech. He has reminded me that, in his Bagehot lecture, the Governor of the Bank of England said:
“Of all the many ways of organising banking, the worst is the one we have today.”
I am sure that my hon. Friend can be assured of Sir Mervyn King’s support.
George Freeman
I thank my hon. Friend for that helpful and extremely generous intervention.
As the Chancellor put it so eloquently in his Budget speech, the recovery will require a new economic model. That is at the heart of this debate. The banks have a crucial role to play in that economic model, but for them to play that role we need to restructure the way they work, and retune what we expect of them and the people who run them. I shall concentrate on that point.
At the heart of the new economic model, we need a much more profound commitment to an enterprise economy and to a rebalancing of the relationship between risk and reward. I do not think any of us on either side of the House—indeed, I think it was the former Member for Hartlepool who said he was passionately relaxed about wealth creation—have a problem with wealth creation through people who take risks, or for reward to flow from risks. At the heart of the problem is the fact that people have been receiving huge rewards without taking the risks. If the public saw people paying back some of what they have earned for success on failure, there would be much more public support for the industry. It is about the break-up of some of the old structures, the big and literally bankrupt structures, that are saddling this economy with debt and a lack of leadership. It is about unleashing a creative revolution of hungry, entrepreneurial little platoons who can rebuild an economy of which we can be proud and on which we can rely.
I come now to three points: the nature and causes of the problem; my particular rural constituency interest; and what we need to do, with particular emphasis on the importance of competition and new entrants, and encouraging new sources of finance for the small companies that we will need to grow our sustainable recovery.
As other hon. Members have more eloquently testified, we are seeing multiple failures: the mis-selling of payment protection insurance; a manipulation of LIBOR, which, of course, is a benchmark used to set payments on a vast amount of money, up to $800 trillion-worth of financial instruments affecting the price of everything from simple mortgages to interest rate derivatives, as The Economist set out clearly recently; and the mis-selling of complex interest rate products. They are symptomatic of a much deeper shift in recent years in our banking culture out in the regions.
Banks in Norfolk and East Anglia have moved from the traditional model of looking after savings and lending money to small companies. They have shifted their emphasis, closing local branches and investing in new types of staff who are more salesmen than bankers in the traditional mould, and they seem to be much more interested in making money from complex charging structures, and instruments and derivatives. Instruments and derivatives may be appropriate—indeed, vital—for the City of London. There is a perfectly legitimate trade in such instruments; indeed, they sit at the heart of any functioning market economy. They are not, however, appropriate instruments on the high streets of such towns as Watton in my constituency, which has been the victim of the inappropriate selling of inappropriate products. I will say a little more on that in a moment. Swaps, options, warrants, futures and forwards should not be the concern, and are not the concern, of most couples taking out their first mortgage, or most entrepreneurs starting a small business. The mentality which says that complex bank products and charging structures are a more attractive source of revenue than the traditional role of banking has been deeply corrosive of the real economy.
I plead guilty to being slightly misty-eyed—I am, after all, a Conservative. I remember as a boy going with my stepfather, who was starting a business, to our local bank. The bank manager knew his name. Rather to my amazement, he knew mine. He offered us a cup of tea. He had a notepad and a file, he knew the business and he knew what had happened at the last meeting. He wanted to talk about the cash flow, the harvest, the outlook for business and how he could help. What a long way that is from small businesses’ experiences of banks in today’s economy.
As for my particular constituency interest, the mis-selling of complex instruments has devastated a number of individuals and businesses, the most celebrated of which—if that is the word—is Adcocks of Watton, featured recently on the BBC. Adcocks is a historic business on the high street of Watton, one of the four towns in my constituency, that is now saddled with £175,000 in bank charges. They threaten to cripple that small business, which is at the heart of the high street as a major employer. Also, a constituent of mine, Mr Leonard, was the subject of international property fraud by an equity trust. Investigations have been conducted over the past several years, and still have not concluded.
Those are just a couple of examples, and the more the debate unfolds—I do not know whether other Members have had the same experience—the more people come forward. I believe that we are witnessing the beginnings of something rather bigger than has hitherto been apparent. There is an iceberg of hidden claims and effects in my constituency, and if that is true in Norfolk I suspect that it is true elsewhere. The impacts in a rural area are far more profound than in an urban area. It takes only one business to fail on the high street of a town like Watton for the whole town to feel the reverberation. In that context, it is important that whatever the small print in the contracts says and whatever the findings may be under contract law, the Government should be sensitive, as I know they are, to the need for accountability, responsibility and appropriate compensation in order to send a signal that such things must and will stop, and to prevent the fall-out from undermining the Government’s efforts to drive an economic recovery and growth in the regional economy.
I have one or two thoughts on what needs to be done. Several colleagues have discussed culture and the importance of a new culture, and whether we should agree with Bob. I remember hearing Mr Diamond say, as The Economist reported:
“We all know that these events are not representative of our culture.”
I do not believe that to be true. It is precisely because much of that activity was deeply representative of a culture that we need to tackle that culture.
Not all in the City take that view. I was struck by the comments of John Nelson, chairman of Lloyd’s of London, who stated in a recent Financial Times article that
“the future for banks…is dependent upon finding the right model, and critically the right culture…None of the revelations over the last week means that the City is inherently corrupt”,
but:
“It is imperative that we tie performance to longer-term incentives and sustainable profits.”
We need responsible banks with a culture of fostering local business growth and a strong understanding of their role in helping to generate economic growth and innovation on the ground, and good banks that encourage a competitive marketplace in which the local bank can flourish and real banking for the real economy.
A number of good measures have been put in place. I commend the Government for the fundamental restructuring in the banking reform Bill, and the Treasury White Paper issued in June on banking reform sets out numerous important initiatives and measures. I suspect that more may have to be done over the coming years. The Merlin agreement covered a number of important initiatives, and it is important that we ensure that it is enforceable and has appropriate teeth to guarantee that it is followed through.
Principally, my concern and my call are for much greater focus on competition and new entrants into the banking sector, as other Members have discussed. Colleagues may be familiar with some of these facts, but I think they bear repeating. The size of the top 10 banks in proportion to UK GDP in 1960 was 40%; in 2010, it was 459%. Something has gone profoundly wrong with how we have allowed the banking industry in this country to develop. It needs serious reform. In the US, the top 10 banks were equivalent to 10% of GDP in 1960 and 62% in 2010, so it is not a global phenomenon; it is a distinctively British one. Only one new high-street bank has launched in more than 100 years. The big five have an estimated market share of 85% for personal current accounts and 67% for mortgages.
Statistics from the Federation of Small Businesses show that 15,000 financial institutions compete in the US market: about 7,700 banks and 7,000-odd credit unions. The German Sparkasse network comprises 431 locally controlled banks, and Switzerland has 24 cantonal banks, which explicitly recognise social and economic responsibility. We should not be hidebound as we deal with the fallout from the crisis. There are other models for reforming our banking system in terms of retail banking on the ground that supports the local economy. I encourage us to look as far and widely as we can.
We need two things: a much more competitive retail banking sector with many more new entrants and a regulatory structure that encourages rather than hinders new entrants. After the glad, confident dawn of new entrants to the banking sector in recent years, I was depressed to see that a number of them had floundered against reportedly impossible regulatory barriers. It is shutting the stable door after the horse has bolted. What we need now are new banks. Cambridge Bank is one, and there are numerous other excellent local initiatives. We should do whatever we can to encourage local entrepreneurs to set up new banks.
Finally, alternative sources of finance are important for our innovation sector. In my 15 years of starting more than 20 companies, the banks never came in and invested in risky ventures in the first five years. They needed to see positive cash flow and revenues, and they always wanted all their risks covered. The innovation sector relies on a much broader group of people who should be promoted, celebrated and encouraged. Angel investors put their personal wealth into extremely high-risk ventures. Their return is often more personal wealth, but I argue that if the reward is balanced to the risk, it is all to the good and should be encouraged. Venture capital trusts have put substantial funds to work in less risky but still emerging ventures. Corporate venture funds are coming into the UK, and there is good news in the sector. In the past six months, we in the life sciences sector have raised more than £1 billion. International money is coming to the UK, not through banks but through new investment vehicles.
More locally, I highlight the importance of credit unions, mutuals and innovative microfinance schemes such as the excellent Kiva, which I commend to you, Mr Davies, when you are next browsing the internet. It is a powerful global microfinance network providing debt finance to small ventures in the emerging world. A lot of money in this country sits in our banks earning very little, and it could be put to use supporting small ventures. Particularly in the localities with which people are affiliated, such as counties, towns or urban neighbourhoods, we may be able to consider unlocking money from personal bank accounts to provide £500 or £1,000 microfinance loans to support small companies. We need an innovative, entrepreneurial and early-stage company financing sector, and we need to reform our banks to allow one.
Tessa Munt (Wells) (LD)
I meant no discourtesy by not being here earlier; I had another meeting. I wish purely to echo the concerns expressed by my colleagues. Although tradition requires that, as I am Parliamentary Private Secretary to the Secretary of State for Business, Innovation and Skills, my right hon. Friend the Member for Twickenham (Vince Cable), I should not necessarily contribute fully to this debate, my enthusiasm for it and for the whole subject is without bounds, which is why I backed the request for this debate.
The Liberal Democrats have been warning for a long time that banks are precariously large and inadequately regulated. I found myself reading an Adjournment debate initiated on 19 June 2000 by my right hon. Friend, in which he discussed the Cruickshank report. It is good to see that the Government are now making moves in the right direction.
Many of the headline issues that I would have mentioned have been brought up by my colleagues. For example, people do not transfer from bank to bank; banks are still too big to fail; there are barriers for entering and exiting the banking market; and the market is concentrated into fewer providers, with little choice for consumers and customers, because of various things that have happened over the years.
I should like to highlight some concerns of my constituents in rural Somerset. The situation is such that everybody must have a bank account. Those who work have to be paid through a bank account, and those who do not work and may need some assistance from the taxpayer with their everyday costs therefore need to have a bank account to receive any benefit or help that they get. The move to universal credit will require larger numbers of people to have basic bank accounts. I am concerned that those bank accounts—that sector of the market—may be concentrated in a few ethical banking organisations, particularly the Co-operative bank and credit unions. I should declare that I hold a Co-operative bank account. I made a positive decision to switch to the Co-op, mainly because I felt that it was an ethical bank. However, it should not carry an undue burden in helping people who need more assistance with their banking than others.
The restrictions that are being placed by various banks on the features and functionality of basic bank accounts make it much harder for people to access their own cash, particularly in a rural area, where they may have to travel eight or 10 miles to find a free cash point. I am particularly concerned about that. The ATM network is creaking slightly. Certain parties withdraw from offering free ATM services, meaning that others have to carry a greater burden. I am acutely aware of that issue and we, as a Government, might want to deal with it. We should try to ensure that more people have access to their own cash. I am glad that a number of banks are now issuing £5 notes in their cash machines. That is particularly helpful in my constituency for people who need to use small sums and want to keep complete control over their cash flow. However, only a certain number of banks are helping to bring such elements together. We should consider carefully how they might be developed and how we might ensure greater fairness across the whole market.
The portable account number mentioned by the hon. Member for South Northamptonshire (Andrea Leadsom), who called the debate, is a fantastic solution. We do that with our phones and all sorts of things, and it would be helpful if people could switch their accounts much more smoothly.
I do not wish to add more—otherwise, I shall find myself in trouble. I hope I have expressed adequately my concerns and those of my colleagues.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I declare my interests, which are in the Register of Members’ Financial Interests. I am a Labour and Co-operative Member of Parliament and have connections with various parts of the co-operative movement and a number of credit unions.
I thank the hon. Member for South Northamptonshire (Andrea Leadsom) who ensured that the debate took place, and other hon. Members who supported the application for a debate. This has been a welcome opportunity to look in more detail at competition in banking and to hear some thoughtful speeches. The fact that nine hon. Members have contributed, in addition to the hon. Lady’s opening speech, and that hon. Members have made many interventions shows the level of interest.
I should like to respond to points made in the debate and set out our policy position. It goes without saying that there was consensus on this matter; I am glad about that. We need real change in the British banking system if we are going to rebuild our economy. That message was set out clearly as a way forward by the Labour leader, my right hon. Friend the Member for Doncaster North (Edward Miliband), and the shadow Chancellor earlier in the week, when they visited the Co-operative bank. That message is important and worth restating today, notwithstanding differences of emphasis across the political parties. I think hon. Members agree that we need to build a banking system that recognises that it is not just an industry that serves itself. That came through in a number of hon. Members’ speeches. Banking must have a fundamental and higher responsibility to serve the economy, but Members gave examples of banks not necessarily having served either constituents or local businesses.
As the hon. Member for South Northamptonshire said, the revelations of the past two weeks have shown precisely what has gone wrong in some aspects of banking—it has had an impact on our economy—and what has gone wrong over decades, with cultural changes taking place slowly and not necessarily being picked up until crisis point. Problems have been highlighted that require further scrutiny.
As in the wider economy, we need a banking system that is based not just on short-termism. It is not about making the fast buck and not about people taking what they can and not worrying about the longer-term consequences. Instead, we should begin to look again at how we can rebuild the economy and our banking system through patient investment, looking to do the right thing in the longer term and sharing responsibility for how the process moves forward.
The short answer is to try to shift the culture so that it is not about predatory behaviour and banks trying to make the hard sell and the quick extra buck by selling a product and pushing it on people, whether they want it or not. It is about productive behaviour and considering how we encourage people to save and how to use those savings productively for local communities and small businesses. Hon. Members have focused on that.
Above all, I want an economy and a system that do not work just for the powerful, privileged few. My hon. Friend the Member for Islwyn (Chris Evans) mentioned how angry people are when they see what has happened in the banking system, particularly when they have worked all their lives and saved and done the right thing, and now find that they and their families and communities have been let down and left out, because many of them have used their savings and now have nowhere else to turn. It will be difficult for many people approaching their retirement years, or in retirement, who thought that they would be okay and that they had done the right thing, but now discover that they are in difficulty.
Again, as the Labour leader set out earlier in the week, the move from what has been described as casino banking to stewardship banking is important. That use of language is interesting, because the idea of stewardship is that we have responsibility for looking after the money and the people who have invested their money in the banks.
The point was made strongly that we need a banking system in which the bankers are not given incentives, overtly or in other ways, to focus only on a short-term return. We should move to a system that is about building up long-term, trusted relationships with customers, whether individuals or small businesses. The hon. Lady also made an important point: we need a banking system in which no bank feels that it is either too big to fail or too powerful to be challenged. Yes, banks need to face real competition and customers must have proper choices, but above all we need a banking system in which all the people in the UK have confidence once again.
I say with feeling as a Scot—we have at times been castigated for our thrifty nature, and sometimes even been described as mean rather than thrifty—that the values and principles I spoke about are the foundations on which the Scottish banking system was built. Many of us have taken it badly that those values and principles were cast aside. Not only did the banks find themselves in difficulties, but there were wider questions about the culture of Scottish banks, which we were once upon a time extremely proud of.
Steve Baker
I have always admired the Scottish banking system. My friend Professor Kevin Dowd is a huge advocate of Scottish free banking. At its height, its key distinguishing feature was the almost complete absence of the state. Banking was at its best when the state was at its least intrusive.
Cathy Jamieson
That is an interesting point, but I will speak about some collective approaches to banking. The nub of much of this debate is what caused the banking system, which at its height was doing well for the economy and working well for people, suddenly to tip over. It put people on the wrong side of the decision-making process, and forgot that it was supposed to be looking after other people’s money. That is the issue I would like to explore in more detail when we have the opportunity to scrutinise the matter.
In her opening speech, the hon. Member for South Northamptonshire referred to the culture in her day. As a young person, I saved threepence a week in old money and took it to school every week to put in a school bank account. I still remember the day I got to the wonderful point of having £1 and, in addition to having a school bank account in which to save threepenny bits, or whatever it was, became the proud owner of a Trustee Savings bank account book.
I did not live in an affluent area—far from it—and my family was not well off. My father was often unemployed, but the principle of saving a little every week for a rainy day established for me and many of my generation at a young age the importance and responsibility of saving. I remember my horror at secondary school when I had to buy a set of drawing instruments and had to go the bank and take money out. That was the first time I realised the trauma of having to take money out instead of putting it in, and then to work doubly hard to replace it.
At that time, banking was a respectable job, as hon. Members have said. It was a job that people vied for.
Cathy Jamieson
Before the Division, I was talking about banking being seen as a respectable job that people vied for and expected would be a lifetime career, if they were lucky enough to get a start in the industry. That is certainly how things were when I was considering my career—not that I ever actually considered a career in banking. I do feel, however, for the decent, honest, hard-working staff of the banks, and that has been echoed by Members from across the House, and particularly by my hon. Friends the Members for Erith and Thamesmead (Teresa Pearce) and for Islwyn.
I feel for those decent, hard-working people who have seen their industry and work force castigated and vilified. Bankers now appear to be even less popular than politicians and the media—we would once have found that hard to believe—and that is despite the fact that the individuals, the ordinary workers in the banks, have done nothing wrong. Indeed, as we have heard, many of them probably did query, at whatever level they could, the hard-sell sales targets that they had to achieve, but because of decisions taken by others, they now face guilt by association and they are the ones on the front line who have to deal with the public.
I also feel sorry for the front-line staff who lost their jobs in the aftermath of the banking crisis. Those people did not walk away with millions of pounds and, as we heard from my hon. Friend the Member for Islwyn, if they did get a bonus, it was part of what they had to work to achieve in order to make a decent wage by the end of the month. Those people did not walk away with multi-millions, and indeed, as I know from some of my constituents, many have been unable to secure permanent employment since. That makes it all the more galling when those who made the bad decisions—the wrong decisions—are able to leave with massive pay-offs, and that is also why the public are so angry.
What more should the Government be doing? This debate is about banking competition, and we have heard a little about that. We have also heard, in one of the interesting threads running through the debate, about mutuality and different forms of common ownership of the banking system. Over recent weeks and months I have found it absolutely fascinating to hear about the number of converts to the principles of mutuality and that form of common ownership. That is very welcome. I do not want to sound a discordant note, but that level of support for and understanding of the principles of mutuality would have been helpful a number of years ago, when the media and other commentators were urging people to become customers of particular banks in order to get a windfall on demutualisation. Many of us argued against that, saying that it was short-termism of the worst sort. We said that a day of reckoning would come, and we have now seen that happen.
However, mutuality and co-operation must not be just for a time of crisis or to fill a gap when the private sector has failed or stalled. They offer a successful alternative business model, which should at least have a level playing field. Opposition Members remain disappointed that the Government did not accept the strong case made during the campaign run by the Co-operative party, called “The Feeling’s Mutual”, which focused on the need for remutualisation of Northern Rock. That sent the rather unfortunate message that the Government did not have much faith in the mutual sector in reality, despite the warm words in policy documents and the coalition agreement, which stated that the Government would bring forward detailed proposals to ensure a strong and growing mutual sector. Again, I hesitate to sound a discordant note, but I do not think we have seen evidence of such proposals yet. I recognise, though, that the building societies White Paper, which we had been waiting for, was published this week. I will go through that with interest. I see the Minister nodding. I am sure that he knows, from our time together on various Bill Committees, that we will indeed scrutinise it closely.
Many hon. Members have pressed the Government on a range of issues relating to financial services, including the capping of interest on loans, financial inclusion, financial education and access to finance. We have heard about many such issues today.
Mr Thomas
Before my hon. Friend moves on to deal with the particular remarks of hon. Members, may I ask her about Northern Rock? The Government have clearly made their decision, but does she think it would be helpful for the Government to publish their assessment of the different proposals? Clearly, some information would have to be redacted for commercial reasons, but would it not be helpful to release the paperwork and enable us to have a proper understanding of the assessment that the Government made? That would perhaps inform the debate about the building societies White Paper and it would certainly help financial mutuals to understand what on earth they have to do to convince the Government of the case for expansion of their part of the sector.
Cathy Jamieson
My hon. Friend makes a very interesting and valid point. Opposition Members are reasonable people. We understand that sometimes things have to be held in confidence and that it may not be appropriate to put some information in the public domain. We would not be unreasonable about that, but my hon. Friend makes a valid point about informing the debate and looking to the future, because if we are serious about promoting and supporting the mutual sector, we need to understand exactly why the Government did not think that was the right thing to do in the case of Northern Rock.
As I said, many hon. Members have pressed the Government on a range of issues. We think it rather unfortunate that the Government have not agreed to include those measures in relevant Bills, despite the fact that sometimes there were, in our view, appropriate amendments that would have given them the hook to do so. As the Minister will be aware, my hon. Friend the Member for Nottingham East (Chris Leslie) and I tabled detailed amendments to the Financial Services Bill to allow the Government the opportunity to deliver on the coalition pledge on mutuality, but unfortunately they used their majority to vote them down.
The financial mutual sector has proved to be robust during the economic crisis. It was not the sector that required bailing out. The regulated industry, of course, required a public bail-out of £60 billion. In that context, the criticism aimed at some of those in governance structures in mutuals, whether in the Co-operative bank or elsewhere, is ill-founded. Having a few more lay people with a common-sense approach and a grip on what is right and wrong, who would be prepared to flag it up when greed was overtaking responsibility to customers, would have been no bad thing in some of the banks, which had become so out of touch that they had forgotten that it was other people’s money they were gambling with.
I ask the Minister to say in his response to the debate exactly what the Government intend to do to help the mutual sector. I hope, for example, that they will look carefully at the demutualisation regulations, tax system support for the sector and the capital raising requirements for mutuals. Again, we have debated that in various Bill Committees. There is an opportunity to do so again in relation to the legislation that flows from the Independent Commission on Banking.
I hope that we will see speedier progress on that than perhaps we saw on implementing the legislation passed by the previous Government. It took about 18 months to implement the vital changes for credit unions. It is very welcome that hon. Members on both sides of the Chamber have today expressed support for credit unions. Perhaps the Government will take the opportunity to look again at the elements of the Co-operative and Community Benefit Societies and Credit Unions Act 2010 that remain unimplemented and see whether anything else should be done to assist credit unions.
Of course, as well as the Co-operative bank, we have the Nationwide building society, which points out, with some justification, that it is a challenger brand that provides a mass market, mutual alternative to the banks. Like the Co-op bank, it has seen a sharp increase in the number of people looking to join it. I understand that Nationwide has seen an 85% increase, week on week, in the number of customers opening and transferring their main current account online. It has consistently made the point that it needs a level playing field with the plcs if it is to continue and enhance its role. It is not looking for special treatment. It is not looking for anything other than recognition of particular regulatory impacts on mutuals. I am sure that the Minister will want to examine that.
The Nationwide is one of the organisations that support the creation of a current account redirection system to improve switching, and it is actively involved in work on that at the moment. We have heard during this debate about the difficulties there can be in switching accounts. Partly it is a cultural thing—people may have stuck with the same bank for many years—but there is also an issue about financial exclusion. As I said in an intervention on my hon. Friend the Member for Erith and Thamesmead, I know of many constituents who have found it difficult to get a bank account at all. If anyone has ever tried or knows anyone else who has ever tried to open a basic bank account in the not-too-distant past, they will know the hoops that people have to jump through. In addition, the finances of many people on low incomes work in such a way that when it comes to anything that is out of the ordinary or that would upset their regular system of payments or income coming in and going out, on a weekly or a monthly basis, they simply cannot afford to take the risk. They will not take the risk of upsetting things, even for a month or so, to move accounts. Sometimes it is a case of “Better the devil you know” than the uncertainty of what they do not know. Therefore, anything that could be done to assist people in the process of moving accounts would be helpful.
To conclude, I shall make a few remarks about what Opposition Members have set out as a sensible way forward. I have not had the opportunity to say much about the small business sector. I have focused mainly on individual consumers. I of course echo the comments made by various hon. Members about how we support small businesses. That is extremely important. The German model of Sparkassen is creating quite a lot of interest. That is certainly worth looking at, because all of us know what small businesses in our local areas are finding, notwithstanding all the warm words from the banks. I am sure that the people saying those warm words believe them—from their perspective, everything is fine. However, the reality is that week after week, small business people are coming to see us at our surgeries and telling us that their business is under threat, perhaps because of cash-flow problems and perhaps because of changes in banking arrangements that they have had for years and that no one has ever previously questioned. That the banks have a wider responsibility than simply what they do to make money for themselves comes through at that point.
We set out our proposals earlier in the week. We strongly believe that there is a case for a British investment bank—indeed, we have worked on it and published a report. We also believe that greater competition in the banking industry, with at least two challenger banks, not simply one other entrant, would at least make some difference. Banks on high streets are very important, because people need to access local branches and, if we are to change the culture, to build up individual relationships. We need transparency about which communities and sectors do not get services from the banks, as has been mentioned today. We also need a code of conduct for bankers, with those breaking the rules having to suffer the consequences. It happens in other professions; why not in the banking sector? We heard a powerful contribution from my hon. Friend the Member for Islwyn, who worked in the industry, about the lack of training and the downgrading, as he saw it, of professional standards.
We ought to proceed with a new unit in the Serious Fraud Office to tackle fraud in financial services. We must change the bonus culture, by backing international changes to limit bonuses. We want the Vickers proposals implemented in full, not watered down, particularly not the ring-fence between the casino and the retail banks. We want to ensure that it happens. I know that it was controversial in the debate last week, but we continue to believe that we need a further public inquiry to enable us to address the deeper cultural challenges that the banking industry faces and to examine how we genuinely change the way that our banks work and how we make them focus on stewardship once again.
The hon. Member for Macclesfield (David Rutley) mentioned culture being measured by what happens when no one is looking. Notwithstanding the many people who have done well, are doing the right thing, are socially responsible, are working ethically and are supporting their customers, given what has happened, the banking industry will not be judged by the best—it is being judged by the worst. That is what we have to address. I hope that the Minister will outline how he intends to do that.
The Exchequer Secretary to the Treasury (Mr David Gauke)
It is a very great pleasure to serve under your chairmanship, Mr Davies, and to see you, not for the first time, follow in the footsteps of Mr Chope, who chaired the sitting earlier. I congratulate my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and thank her for securing this timely debate. Her thoughtful speech set the tone for the good debate that we have had this afternoon. In addition I thank my hon. Friends the Members for Wyre Forest (Mark Garnier), for Wycombe (Steve Baker), for Macclesfield (David Rutley), for Mid Norfolk (George Freeman) and for Wells (Tessa Munt) and the hon. Members for Erith and Thamesmead (Teresa Pearce), for Glasgow North East (Mr Bain) and for Islwyn (Chris Evans). Hon. Members have brought considerable personal experience to the debate, which has assisted the quality of our debate.
Let me begin by stating clearly that the Government are committed to fostering a strong, competitive banking sector for the benefit of consumers and the UK economy. That is why we asked Sir John Vickers, along with other members of the Independent Banking Commission, to examine the issues as part of his review of the banking sector, and are implementing his recommendations and, in some cases, going further. It is essential that consumers are able to apply competitive pressure and hold their bank to account as to the services it offers. In a competitive market, customers should be able to vote with their feet and switch their custom to banks that provide the best products and services to meet their needs. There should also be a diversity of institutions in the market, capable of meeting the varying needs of consumers. The Government’s strategy for competition encompasses many things, which I will mention in turn.
Creating the right environment for competition to flourish is essential to ensure that consumers benefit in the long term. The Government’s major financial stability reforms will help to enhance competition in financial services. Those reforms implement the recommendations of the IBC, which reported last year. Banks will no longer receive a competitive advantage by being perceived to be too big to fail—a point that my hon. Friend the Member for South Northamptonshire made. The Government’s plans to ring-fence banking services and increase banks’ capacity to absorb losses are also a vital step in creating the right environment for competition in banking to flourish.
By improving the authorities’ ability to deal with the failure of financial institutions in an orderly manner, the Government are substantially reducing the perceived implicit guarantee that benefits the large incumbents. That is part of a broad programme of financial sector reform to solve what my right hon. Friend the Chancellor has called the “British dilemma”—how to host a world-class financial services sector without putting UK taxpayers at risk.
We have seen a number of new entrants into the current account market in recent years, including Metro Bank. It is however essential that prospective new banks can enter the market to compete and that the requirements are not overly onerous or disproportionate. To ensure that that is the case, in the banking reform White Paper the Government announced that the FSA and the Bank of England are conducting reviews of the prudential and conduct requirements for new entrants to the banking sector.
The reviews will reassess the prudential requirements of the new Prudential Regulations Authority and the conduct requirements of the new Financial Conduct Authority, to ensure that they are proportionate and do not pose excessive barriers to entry or to expansion for new entrants. The conclusions of those reviews will be published in the autumn, and the FSA and the Bank of England have committed to introduce, where possible, any changes in advance of the new regulatory structure. That point was raised by a number of hon. Members; in particular, my hon. Friend the Member for Wyre Forest set out his concerns about the difficulties for new banks entering the market and how difficult it can be to obtain authorisation. He raises a fair concern, but of course the right balance, which we have to strike, would ensure that those receiving a banking licence were able to perform the activities that they needed to perform in a secure way. It is right that standards are robust.
That said, the FSA should administer a process that is as smooth as possible. It has already improved the bank authorisation process to make it easier for prospective new banks, and is encouraging potential applicants to attend pre-application meetings, for example. Those meetings allow the FSA to understand better the applicant’s business model and offer tailored guidance. It has also introduced a milestone document on a modular approach to assessing deposit-taking applications. Where appropriate, it will provide a letter stating that it is minded to approve applications subject to specific final conditions for the applicant to satisfy.
The changes significantly improve the process for becoming a new bank and many prospective new entrants will benefit from them in future. The changes also make the process of completing an application easier, while keeping standards high. Combined with the reviews I mentioned on the prudential and conduct requirements, which are under way, the changes help to ensure that the bank authorisation process is not a barrier to entry for prospective new banks.
I note the comments made by my hon. Friend the Member for Wyre Forest on publishing a checklist of the criteria that prospective new banks need to fulfil. I had a little experience of that in my previous career. Becoming a new bank is complex and it is right that the system is robust, but I am grateful for the constructive comments made.
I am also grateful to my hon. Friend the Member for Wycombe for highlighting this evening’s “Bank of Dave” programme and for his suggestion about my television viewing. I happened to be driving in my constituency yesterday, when I heard an interesting interview with Mr Fishwick. I look forward to the programme this evening. In reference to that particular example, the requirements are robust, as is generally the case. I do not want to be drawn into a specific case and I cannot comment on the precise activities that that business undertakes, but it is right that we ensure that the system has no undue barriers to entry. The regulation regime could potentially be such a barrier, and we must be vigilant on that point.
Let me turn to the creation of new challenger banks. For competition to drive better consumer outcomes, new providers must be willing to enter the market to compete with the big banks. Two new challenger banks are being created and will be on the high street in the next 18 months. We have heard a little about the sale by the Government of Northern Rock plc to Virgin Money, which creates a new and innovative challenger to the established big five. The sale was completed on 1 January 2012 and the organisation is a useful addition to the high street. I am sorry that the Opposition party remains opposed to that move, because it has increased competition. The National Audit Office said that the process run by United Kingdom Financial Investments Ltd was fair and transparent and that an early sale was the best step the Government could take to secure taxpayers’ interests. As I have said, the sale has introduced, at an early stage, more competition.
In addition, Lloyds is in the process of selling off more than 600 of its branches—the Verde divestment—and the Government are committed to ensuring that the divestment creates another strong challenger. The Government welcome the news that the Co-op and Lloyds have agreed an understanding on the commercial terms for Verde. If the deal with the Co-op goes ahead, the combined entity will already have more than the 6% of the personal current account market that was recommended by the Independent Commission on Banking and by my hon. Friend the Member for Wells.
Along with the Government’s sale of Northern Rock to Virgin Money, the sale by Lloyds will deliver a much bigger challenger bank to the retail banking market. The potential purchase of those branches by the Co-op is a significant boost to the mutuals, which the Government are committed to promote. Once the deal is completed, Co-operative bank will be a realistic, mutually owned challenger to the big five banks.
The Government are determined to ensure that the Lloyds divestment results in a strong challenger, regardless of the final commercial arrangements that Lloyds arrives at. They have actively engaged with the European Commission and Lloyds to ensure that that is the case.
The Government are also committed to promoting the mutuals sector as an alternative to banks. They are looking to ensure that there is a level playing field for building societies, and that growth of the sector is not hindered. Last Thursday, the Government set out their vision for the building societies sector in their discussion document, “The Future of Building Societies”. The document, which has been warmly welcomed by the sector, confirms the Government’s support for the distinctive alternative offered by building societies. It sets out proposals including aligning building societies legislation with the ring-fencing requirements for banks, and applying loss-absorbency proposals to building societies in the same way as to banks. Those proposals have received warm support from the industry, including from the Building Societies Association and the Nationwide.
Mr Thomas
What steps is the Minister taking to ensure that the staff who work in the new regulators have at least some genuine understanding of the mutual sector, be it credit unions, building societies or friendly societies? How many staff who have actually worked in that part of the sector are now part of the regulatory environment?
Mr Gauke
The hon. Gentleman would not expect me to be able to give him a precise answer as to how many staff within the new regulatory bodies have got specific experience of mutuals and some of the bodies that are under discussion today. Of course it is important for a regulatory authority to have sufficient depth and breadth of knowledge of the institutions that it regulates, and the Government are keen to ensure that that is the case.
Let me say a little about credit unions. The Government have removed unnecessary burdens on credit unions through the legislative reform order. One important aspect of that was to allow credit unions to admit as members corporate bodies such as local charities and firms, and relax restrictions on membership. Those new members can both deposit in and borrow from their local credit unions, thus providing further opportunities for investment and growth in communities.
Credit unions can act as an alternative to banks and building societies in providing affordable financial services to people who may otherwise not be able to access them. The Government have also announced that they will bring forward a co-operative consolidation Bill. Last month, the Department for Work and Pensions announced its credit union expansion project, which will invest £38 million to help credit unions modernise and grow to offer a real alternative to high-cost credit providers. Through all such actions, the Government are creating an environment in which mutually owned institutions can offer a real alternative for consumers, and compete with the banks to serve families and businesses that need to save and borrow for their future. However, I may have to disappoint the hon. Member for Erith and Thamesmead. I am not sure that we are persuaded by the case that every public sector worker has to be paid through a credit union. Were we to do that, there would be certain issues with regard to competition. None the less, I note her comments.
Let me turn to the issue of switching and portability, which a number of hon. Members raised, not least my hon. Friend the Member for South Northamptonshire. It is essential that consumers are able to apply competitive pressure and to hold their bank to account for the services that it offers. In a competitive market, customers should be able to vote with their feet and switch their custom to banks that provide the best products and services to meet their needs. To that end, the banking industry has committed to introduce, by September 2013, a free, safe and hassle-free switching service to ensure that customers can switch accounts within seven days. To date, banks representing more than 97% of the current account market have committed to being ready to launch the new seven-day switching service by the September 2013 deadline and the Government continue to hold the industry to account to that timetable.
The new switching service will ensure that consumers’ accounts will be switched within seven days, and that all direct debits and standing orders from their old account will be redirected to their new one. The redirection service will last for 13 months. The new service, including a guarantee that the process will be smooth and that consumers will suffer no financial loss, will help to tackle the perception held by many consumers that switching is difficult, costly or risky.
A number of hon. Members have said that we should adopt full account number portability. There are a number of ways in which such an approach could work. In essence, a customers’ account number and sort code, which links the account to a branch, would not change when the customer switched banks, thereby avoiding the need for the customer to change any payment or credit instructions, which would reduce the risk of payments being sent to the wrong account.
The Independent Commission on Banking considered full account number portability carefully and decided not to recommend it in its report of 12 September 2011. As we all know, the ICB recommended that a current account redirection service should be established to smooth the process of switching current accounts for individuals and small businesses. It concluded that the costs and incremental benefits of full account number portability were “uncertain relative to redirection” and that
“it appears that redirection may deliver many of the benefits of account number portability at lower cost.”
As I have mentioned, the Government strongly support the ICB recommendation on switching and are holding the industry to account to deliver by the September 2013 deadline. Once the new switching service is operational, the Government will assess whether the service has delivered the expected consumer benefits. If not, further measures, including full account portability, will be considered. Given where we are and the recommendations of the ICB, we believe that it is right to proceed with the plans currently in place.
A number of hon. Members raised the issue of transparency. They want to ensure that customers can see exactly what services are provided and the costs that apply. The Government are clear that banking needs to become more transparent, and that is a perfectly fair point. A number of transparency measures are already being implemented in retail banking, including making charges clearer on customers’ monthly statements and providing an annual statement of charges for each customer. The annual statement will allow customers to see how much their account has cost them and it will provide an opportunity for them to consider whether they are getting good value.
That is a welcome start, but more must be done. As set out in the recent White Paper on banking reform, the Government see increased transparency and financial capability as an integral part of a competitive banking sector. The Office of Fair Trading has announced that it will conduct a review of the personal current account market in 2012, assessing levels of transparency in the market and the impact of the measures that have already been taken to improve transparency, as well as taking forward the recommendations of the Independent Commission on Banking on including interest forgone on bank statements and annual summaries.
Mr Thomas
I thank the Minister for giving way again on the issue of transparency. Why have the Government not included in their proposals for banking reform the idea that there should be a requirement on banks to disclose what they lend and where they lend on a postcode basis, to help us understand where the Thamesmeads, the north Harrows and the other unbanked areas in the UK are, so that we can better direct resources and new challenger banks to those areas?
Mr Gauke
Indeed, that issue was raised by the hon. Members for Islwyn and for Erith and Thamesmead during the debate. I say to the hon. Gentleman that data releases by postcode by each bank for all customers would be a very considerable undertaking for banks. It would also create a significant regulatory burden, and let us not forget that considerable regulatory burdens can prove to be a barrier to entry. At a time when we want to ensure that there is more competition, we must bear that in mind. It is also worth pointing out that there are legitimate differences between different areas for lending figures, including differences in credit risk. One would not expect there to be similar lending figures across the country. I caution against a reaction that would mean the imposition of a further regulatory burden.
Let me return to the issue of transparency. The Financial Conduct Authority will take a proactive approach to consumer protection. It will focus on the transparency of information that is available to consumers of financial services. The FCA will carry out a fundamental review of how transparency will be embedded in the new regime, both by the regulator and by firms, and it will publish a discussion paper in the first quarter of 2013. The review will consider what further measures could be introduced to improve the quantity and quality of the information that customers receive, enabling them to make informed choices and exert competitive pressure on firms.
Let me pick up on some other points that were made during the debate. The hon. Member for Erith and Thamesmead made a point about the payments clearing system; she was concerned that the big banks controlled that system. My response is that the Bank of England already has a large role in the UK payments system, given that the stability of that system is of paramount importance, and shortly the Government will issue a consultation on the future strategy-setting of the payments industry to ensure that consumers and smaller banks have a louder voice. I hope that all Members support that process.
The issue of access to banking services was raised in the debate, including by the hon. Member for Harrow West (Mr Thomas) in his recent intervention. The Government are committed to improving access to financial services and in particular to bank accounts, which was another point made earlier in the debate. It has been amply demonstrated that having a bank account is an essential aspect of modern life for any individual. Being able to access counter services at a branch and interact face to face with staff is very much valued by many individuals and businesses. However, the issue of where particular branches are located and maintained is fundamentally a commercial decision and one for the financial institution in question, rather than the Government, to make. Therefore, the Government do not intervene in such decisions. All banking service providers will need to balance customer interests, market competition and other commercial factors when they consider their strategy. Nevertheless, banks must treat their customers fairly.
I will say a word or two about the FCA. To ensure that consumers are adequately protected in accessing financial services, the Government are reforming the regulation of financial services. Part of that process includes creating a new dedicated conduct of business regulator—the FCA. Securing effective competition in the market for financial services is a key mechanism for securing better outcomes for consumers, and the FCA’s new competition mandate will be central to achieving that. The FCA will have an operational objective to promote effective competition in the interests of consumers, and it will also be under a competition duty, driving it to look for competition-led solutions to conduct issues more generally and in pursuit of its “consumer protection” and “integrity” operational objectives.
The FCA will have the mandate to use its powers to tackle competition problems more swiftly and effectively than the Financial Services Authority did previously, for example by promoting switching, removing barriers to entry or addressing asymmetries of information. A more proactive approach will lead to better consumer outcomes as problems will be tackled sooner, before they give rise to significant detriment. For instance, the FCA will take a keener interest in how products are designed and distributed in the first place, and it will have a new power to ban or impose restrictions on products that it considers could cause significant detriment.
Greater transparency and disclosure will also be at the heart of the FCA’s new approach. For example, it will have new powers to disclose the fact that a warning notice in respect of disciplinary action has been issued, and to publicise details of actions taken against misleading financial promotions.
In conclusion, banking competition is essential for consumers, businesses and the economy to prosper. The Government are undertaking a number of significant reforms to enhance competition and we continue to work hard to consider how best to improve competition in banking while maintaining the UK’s position as a global financial centre. In that context, I thank hon. Members for their well-considered comments and suggestions today. A number of excellent points have been made today by hon. Members and they all contribute to the valuable debate about banking competition.
Andrea Leadsom
Thank you, Mr Davies, for calling me to speak.
First, I thank my hon. Friend the Minister for providing what I thought was an extremely helpful round-up of what the Government are doing. As I said in my own remarks, it is certainly true that this Government have taken huge steps to put right a lot of the problems that have given rise to the financial crisis and the later problems of fraud and the issue of banks being “too big to fail”. I am grateful to him and the rest of the Government for that.
I also pay particular tribute to my hon. Friend the Member for Wyre Forest (Mark Garnier), because he and I have been a kind of two-man whirlwind in trying to get to the bottom—acting on our own and in private—of the issues for those organisations that would like to set up a bank and indeed for those small banks that do not reach a critical mass. We have found evidence that there are some significant barriers to entry, both regulatory barriers and barriers erected by the big banks that are trying to shut them out. I hope that the Minister recognises that we have tried to share that evidence with him today for his information.
It has been an extremely helpful debate today. I am very grateful to all hon. Members who have contributed to it. Some interesting suggestions have been made, and I would just like to summarise what I think are the “highlights” of the debate. First, of course we need many more new entrants to the financial services sector. Secondly, diversity of providers is absolutely key; we need not only “one-stop shop” banks but all sorts of other providers. Thirdly, we want to see far greater transparency, so that customers know what they are getting. Fourthly, access to banks and to branches is vital. Finally, the barriers to entry put up by the big banks need to be broken down, and issues such as the ownership of VocaLink and the Payments Council need to be examined.
I will end with the words of Jayne-Anne Gadhia, of Virgin Money, who said that banking needs less head and “more heart”.
Question put and agreed to.
Written Ministerial Statements
(12 years, 5 months ago)
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Advanced Learning Loans
(12 years, 5 months ago)
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The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
Today we lay regulations before Parliament which will allow adults over 24 to benefit from loans for fees in further education: 24+ advanced learning loans. The regulations are made under the same powers as the Education (Student Support) Regulations, which underpin the higher education student support system. From the 2013-14 academic year, loans will be available for learners aged 24 and above studying courses at level 3 and above, replacing grant funding for this group as we focus our state investment on those under 24 years of age, those without basic skills, and those seeking work.
The intention to offer loans in further education was confirmed in November 2010, as part of the Government’s strategy “Skills for Sustainable Growth”. A public consultation followed in 2011, leading to the publication of impact assessments. Implementation is well under way, and these regulations are the final step in what has been a full and open process.
This is a progressive system. Learners will pay nothing up front, removing one of the main barriers to participation in training that adults commonly report. Repayment will be linked to income so there is nothing to pay until the learner is earning more than £21,000. Rates of interest will be lower than anything in the high street; and outstanding balances will be written off after 30 years.
Research published by the Department for Business, Innovation and Skills shows that 74% of people say they might, probably would or definitely would undertake learning following the introduction of loans. When the terms and conditions are explained, they become even more positive. This is why, in our impact assessment, we conclude that with clear and transparent communication to learners, we expect full take-up of the available funding for loans.
However, this is the first time that loans have been available in further education, and we want to ensure that appropriate safeguards for learners are in place. Our commitment to social mobility, and the critical contribution of further education to it—our mission that learning should drive social purpose and serve the common good—remains unabridged, undiluted.
In this spirit, I can therefore confirm that we will put in place an extensive and substantial range of support measures alongside the introduction of loans. The package will comprise:
An offer to individuals taking access to higher education courses that on completion of their higher education programme, the Student Loans Company will write off the amount outstanding on the loan for their access course. Access courses are designed to help those with low qualifications but high ambitions progress into higher education:, it is our duty to support those learners.
A £50 million bursary fund over two years, disbursed by colleges and training organisations. This will help vulnerable learners such as those with learning difficulties or disabilities, parents who need help with child-care, and ex-military personnel. The level of the bursary fund will be kept under review so we continue to provide the right level of support for those who need it.
Additional information, advice and guidance for adults who are uncertain about loans, provided by the National Careers Service, including a targeted face-to-face session—a “learning healthcheck”—with a careers adviser for older adults who research published by BIS in May suggest are less likely to respond positively to the idea of taking out a loan.
We have been working with the Association of Colleges, the 157 Group of Colleges, and the National Institute for Adult and Continuing Education to develop this package. They are supportive of this additional offer and we will continue to work with them on the detail.
The Government will ensure that potential adult learners who are eligible have the clear information they need about 24+ advanced learning loans. Alongside this, we will align our other resources, such as capital funding, to ensure we can maintain and grow participation in STEM programmes—through investment in infrastructure to provide the tools for learning, and stop costs rising—working with the Sector Capital Group to determine the best means of doing so. It is vital that we continue to drive sustainable growth as well as social mobility.
The existing policy, inherited from the previous Administration, requires the student to contribute in cash before they start the course; loans will ensure that fees are no longer a barrier to access. We want to build an FE system fit for purpose for the future and loans in FE will help to deliver capacity. In a tighter spending environment, it is right to focus available funds on 19 to 24-year-olds who did not complete their education at school, those without basic skills, and those seeking employment; and it is right to maintain access to learning for people outside these groups.
Colleges and training organisations are preparing now, so that as many adults as possible can benefit from 24+ advanced learning loans when the application system opens on 1 April 2013. I urge you to give the sector your support, as I have given my own, as they manage this important change.
Regional Growth Fund
(12 years, 5 months ago)
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The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
The regional growth fund is an important part of the Government’s “Plan for Growth” and supports two of the main ambitions:
To make the UK the best place in Europe to start, finance and grow a business;
To encourage investment and exports as a route to a more balanced economy.
The following details will update you on the current round, as well as progress from the previous two rounds.
Round 3
Round 3 for bidding to the regional growth fund (RGF) closed on 13 June and the team received 414 bids with a value of over £2.7 billion. This shows that the fund is relevant, popular and that businesses are looking for opportunities to grow.
A breakdown of bids by region, and by type (programme or project) is provided at annex A.
During the summer all bids will be appraised by officials, the independent advisory panel and the ministerial group. After an initial assessment, Ministers will shortlist bids: those going forward to full appraisal will be visited by officials and those who are no longer in the running for funding will be notified immediately. Announcements of the successful bidders will be in the autumn.
A significant improvement to round 3 will be that the contracting process timeline has been defined—the timings have been fixed so that the terms of a conditional offer must be agreed within three months of the announcement, and bidders then have a further three months to complete due diligence.
This means that bidders will sign a final offer within six months of Ministers deciding to support the bid.
If the process takes longer than six months despite our best efforts, we reserve the right to withdraw the offer of funding.
Rounds 1 and 2
From the previous rounds, 176 successful bids have been conditionally allocated £1.4 billion.
This translates into 237 final offer agreements because some bids comprise of multiple counterparties.
Of the 237 agreements:
110 (46.6%) have a final agreement in place, to a value of over £718 million. These projects are able to draw down their funding. These projects leverage over £3.7 billion of private sector investment.
50 have agreed terms and conditions including leverage, funding and jobs—these will now proceed through due diligence and represent a further £1 billion of private sector investment.
16 have withdrawn from the RGF process in total, which has released over £40 million to be recycled into the RGF. The additional companies to withdraw include: Vestas Technology UK Ltd, Aggregate Industries Ltd, Sirius Minerals and Shepherd Offshore Ltd. See annex B for full list.
61 companies have received draft offers, but are still considering terms and conditions.
My officials are writing to many of these 61 successful bidders, as progressing their bids is a priority. Projects and programmes where the terms and conditions have yet to be agreed, and where no reasons for the delay have been discussed, will be given a time limit to the conditional offer. This money is intended to be used to stimulate the economy and I am confident that if these bidders are unable to take it up at this time and create jobs, then we will be able to find good uses for it elsewhere.
Some 139 (58.9%) projects have started, which is more than those with final offers. Some projects are able to start in advance of signing a final offer as even a conditional offer of Government support can safeguard jobs and unlock private sector investment. Examples of projects which have started:
Getrag Ford in the north-west will use £3.4 million from the RGF to expand capacity for the production of B6 transmissions at the Halewood plant. The RGF investment will be supported by £28.3 million of private investment and will create and protect 120 jobs.
Cornwall Deep Geothermal Energy Project in the south-west will use £6 million of RGF to drill the deepest onshore borehole in the UK to test the potential to site a geothermal plant near Redruth. If the tests are successful, £45 million of private investment has already been secured to drill a further two boreholes and construct a geothermal power plant. The project includes establishing a centre of research excellence in partnership with Exeter university and aims to create over 100 direct jobs and 1,500 indirect jobs.
Birmingham Post Business Growth Fund in the west midlands, managed by Bournville college will make funding of £10,000 to £100,000 available for SMEs and start-ups, as up to 50% match funding for their investment. Each business supported will be provided with a mentor, as well as skills assessment and training. There will be an extensive media-led campaign with various events to raise awareness and engage the community. They will receive £5 million from RGF, supported by £750,000 of private investment and will aim to create 250 jobs.
Value for money
The NAO has recently reported on the RGF. It found that the average cost per job (£33,000) created by the RGF is in line with other similar funds while also recognising that the projects being supported will, in many cases, create wider benefits on top of the immediate employment boost (such as training spill-overs and economic and social infrastructure). The NAO report and Government response to the Public Accounts Committee (PAC) hearing held on 16 May can be seen online:
http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/writev/104/m02.htm.
The next update on RGF progress will be in October 2012.
Annex A - Round 3 bidding data
Bids | Value (£m) | |
|---|---|---|
Programme | 130 | 1497.52 |
Project | 284 | 1265.92 |
Total | 414 | 2763.44 |
No. | % | £m | % | |
|---|---|---|---|---|
North East | 72 | 17% | 352 | 13% |
North West | 77 | 19% | 414 | 15% |
Yorkshire and The Humber | 61 | 15% | 345 | 12% |
East Midlands | 38 | 9% | 124 | 4% |
West Midlands | 57 | 14% | 410 | 15% |
Nationwide | 27 | 7% | 565 | 20% |
South East | 25 | 6% | 145 | 5% |
South West | 41 | 10% | 322 | 12% |
London | 6 | 1% | 26 | 1% |
East of England | 10 | 2% | 61 | 2% |
Total | 414 | 2763.4437 |
Annex B—Withdrawn projects from rounds 1 and 2
1. | Vestas Technology UK Ltd |
2. | Sirius Minerals |
3. | Pilkington United Kingdom Ltd |
4. | Diodes Zetex Semiconductors Ltd |
5. | CT8-W.D. Irwin & Sons |
6. | Nissan UK P3 |
7. | Messier-Dowty Ltd |
8. | T&N Plastics Limited |
9. | Rapiscan Systems |
10. | Zegen (Wilton) Limited |
11. | Thales Properties Ltd (Leicester) |
12. | Cumbrian Holdings |
13 | Shepherd Offshore Limited |
14. | Ames Goldsmith UK Ltd |
15. | CE3-Conitech |
16. | Aggregate Industries Ltd |
Fiscal Sustainability Report
(12 years, 5 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
Today the independent Office for Budget Responsibility (OBR) published its second fiscal sustainability report (FSR). This document meets their requirement to prepare an analysis of the sustainability of the public finances each financial year, and provides an important insight into the state of the public finances taking into account the significant impact of demographic change. The report was laid before Parliament earlier today and copies are available in the Vote Office.
The FSR shows that, without additional policy change, an ageing population is projected to increase age-related spending by 5.0% of GDP between 2016-17 and 2061-62, as health, social care and pension expenditure become an ever larger proportion of total public spending and the economy. The OBR projections show that public sector net debt is expected to fall to a trough of 57% of GDP in the mid-2020’s, before rising to reach 89% of GDP in 2061-62 in the absence of further policy change.
The Government are committed both to shoring up our fiscal position now and making it sustainable for the long term. The OBR analysis makes it clear that our medium-term consolidation plan is essential to restoring long-term sustainability in the public finances. They show that a deterioration in the primary balance in 2016-17 worth 1% of GDP could increase projected public sector net debt in 2061-62 to around 130% of GDP. This shows the scale of impact if the medium-term consolidation was not achieved.
The OBR discusses the impact of changes to policy on their long-term projections. They show that excluding policy changes announced since the 2011 FSR and the new population projections, public sector net debt would have been projected to reach nearly 200% of GDP by 2061-62. They identify the additional spending reductions announced at autumn statement 2011 as one of the key factors in preventing this increase in projections, as well as highlighting the long-term decisions we have made in bringing forwards the state pension age increase to 67 and public service pension reforms.
The FSR presents the first estimates for the savings delivered by our public service pension reforms. These independent projections show that net spending on public service pensions is projected to fall from 1.5% of GDP without reform to 0.9% with reform in 2061-62. The Government’s reforms will bring total spending on public service pensions in line with the long-run average over the last 40 years. This will save 40% of net expenditure by 2061-62, so freeing up funding for other services. The Treasury estimates that this represents around £430 billion of savings in current GDP terms over the next 50 years. This shows that the deals confirmed last week are good for taxpayers, as well as public sector workers who will continue to receive pensions that are among the very best available, providing a guaranteed pension level for all members.
The long-term projections presented in this report also provide important context to ongoing debates about public service reform, such as on social care. The OBR’s projections suggest that spending on social care will increase substantially over the next 50 years as the UK’s population ages and it is clear that the UK will need to take into account the likely pressure on public services from demographic change as we consider reforms in this and other areas.
We will bring forward the necessary legislation to reform public sector pensions in this parliamentary Session and set out proposals this autumn to ensure the state pension age is reviewed to take into account future changes in longevity. These and other decisions reflect the Government’s continuing commitment to make the right decisions for the long term, including for the long-term sustainability of the public finances.
Charm-3 (Legal Review)
(12 years, 5 months ago)
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The Minister for the Armed Forces (Nick Harvey)
I informed the House on 31 October 2011 that I had commissioned officials to undertake a legal weapons review of our depleted uranium (DU) anti-armour tank rounds, known as Charm-3. Although Charm-3 was introduced before the Government were obliged to undertake such reviews, I ordered this review, as a special case, to address concerns that have been raised in Parliament and by civil society.
The review is now complete and has concluded that Charm-3 is capable of being used lawfully by UK armed forces in an international armed conflict. Charm-3 is the only munition within the UK arsenal manufactured using DU. We judge this capability necessary in any land battle to defeat the armoured vehicles of an adversary state and no alternative tank round (using another metal or substance) has been shown to provide a comparable effect on target. It is self evident that use of Charm-3 will be limited to a war fighting role, specifically in tank battles, and likely therefore to be employed only in exceptional and limited circumstances.
Legal weapon reviews are carried out in accordance with article 36 of the first protocol of 1977 additional to the Geneva conventions of 1949 (Additional Protocol I). Article 36 states:
“In the study, development, acquisition or adoption of a new weapon, means or method of warfare, a high contracting party is under an obligation to determine whether its employment would, in some or all circumstances, be prohibited by this protocol or by any other rule of international law applicable to the high contracting party”.
Such legal reviews are undertaken routinely in respect of weapon systems brought on to the UK inventory following UK ratification of additional protocol I, on 28 January 1998. The acquisition of Charm-3 pre-dates ratification and for that reason only, no review had been undertaken before now.
The legal review process under article 36 of additional protocol I required the use of Charm-3 to be considered in the light of certain key legal principles, namely:
Whether it is prohibited by any specific treaty provision;
Whether it is of a nature to cause unnecessary suffering or superfluous injury;
Whether it is capable of being used discriminately;
Whether it will cause long-term, widespread and severe damage to the natural environment;
Current and possible future trends in international humanitarian law.
The legal weapon review considered each of these points. The review itself comprises legal advice provided in confidence, but I wish to set out the rationale for reaching the judgment that the rounds are legal:
The use of DU in weapon systems is not prohibited by any treaty provision.
There have been extensive scientifically based studies, undertaken by the World Health Organisation in relation to the long-term environmental and other health effects allegedly attributable to the use of DU munitions. In the light of the reassuring conclusions drawn by such scientific studies, and noting the continuing military imperative underpinning retention of Charm-3 as a weapon system, it was concluded that use of Charm-3 does not offend the principle prohibiting superfluous injury or unnecessary suffering in armed conflict.
Crew training, weapon design and automated targeting systems mean Charm-3 is capable of being used discriminately.
Where DU ordnance residues have existed, in the aftermath of an armed conflict, annual potential radiation doses have been shown by scientific study to be well below the annual doses received by the general population from sources of natural radiation in the environment and far below the reference level recommended by the International Atomic Energy Agency as a criterion to determine whether remedial action is necessary. An environmental footprint inevitably will be left by use of DU munitions but one where a credible and authoritative body of scientific evidence (drawn from both international and national sources) has demonstrated there is no proven link between exposure to DU and, neither, a significant risk to public health, nor, a significant risk of any long-term damage to the environment.
Finally, it was concluded that DU continues to be a material of choice used by states in the manufacture of anti-armour munitions. To date no inter-state consensus has emerged that DU munitions should be banned and the available scientific evidence (developed in the aftermath of the Gulf war in 1991) continues to support the view held by the UK that such munitions can be retained for the limited role envisaged for their employment.
The UK policy remains that DU can be used within weapons; it is not prohibited under current or likely future international agreements. Given the challenging situations in which we expect our service personnel to operate, it would be wrong to deny them legitimate and effective capabilities that can help them achieve their objectives as quickly and as safely as possible.
Marchwood Sea Mounting Centre
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Defence (Peter Luff)
The 2010 strategic defence and security review identified a number of Ministry of Defence (MOD) assets that would be considered for disposal. I would like to update the House on progress we have made on our commitment to sell the Marchwood sea mounting centre in Hampshire.
Sea mounting activities are vital to meeting the UK’s military requirements and will remain so in future. Our personnel at Marchwood, including 17 Port and Maritime Regiment, deliver a key capability to our armed forces overseas and the centre provides a valuable training facility for them at home.
Options for the sale of Marchwood have therefore been assessed with the continued availability of these capabilities in mind, including consideration of alternative UK locations from which sea mounting activities could be undertaken.
Based on this work I can reaffirm the intention to sell Marchwood. However, our analysis has led us to conclude that the preferred option is to continue to meet the sea mounting requirement from the same site. This will ensure that the military outputs can still be met while allowing greater economic and commercial benefit to be realised from the site. In doing so we envisage a much closer relationship between the MOD and industry in delivering these capabilities from a privately owned sea mounting centre.
MOD will now focus on developing the commercial proposal by the end of this year. Any sale will be dependent on the prevailing market conditions at the time, and the transaction will need to demonstrate that the required, assured defence capability can be delivered in a way which represents value for money.
Olympics Security (Military Support)
(12 years, 5 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
In my statements to the House on 15 December 2011 and 3 July this year, I set out the defence contribution to the safety and security of the Olympic and Paralympic games in support of the Home Office and Department for Culture Media and Sport. Elements of that support are now deploying and I am writing to update the House prior to the start of the games.
RAF Typhoon aircraft have deployed to RAF Northolt; RAF Puma helicopters have arrived at Ilford Territorial Army Centre and ground-based air defence systems and air observers are beginning to deploy to their sites today, all to support the air security plan when the airspace restrictions over London come into force on 14 July.
HMS Ocean will arrive on the Thames on 13 July with Royal Marines to provide security on the river and further helicopters to support both the air and Thames security plans.
Other elements of support to police-led security will deploy at different stages between now and the start of the games, including a range of personnel, both regular and reservists, and other assets including HMS Bulwark and RFA Mounts Bay which will provide support in Weymouth bay. Along with an Olympic military contingency force, and enabling units, this support amounts to some 6,000 personnel.
In my earlier statement to the House, on 15 December 2011, I said that we would also deploy, at peak, 7,500 personnel to support the London Organising Committee for the Olympic games’ venue security operation across the period of the games. These personnel have also begun to deploy to venues to support the rolling search and lock-down process between now and the start of the Olympics, alongside the police, the commercial security provider, G4S, and volunteers. As the venue security exercise has got under way, concerns have arisen about the ability of G4S to deliver the required number of guards for all the venues within the time scales available. Ministers have been monitoring this situation and, where necessary, preparing contingency measures. G4S has now agreed that it would be prudent to deploy additional military support to provide greater reassurance. The Home Secretary, the Culture Secretary and I have therefore agreed the deployment of a further 3,500 military personnel. This will bring the total number of military personnel, from all three services and including reservists, contributing to the safety and security of the games to 17,000. The chiefs of staff recognise the importance of the Olympic games and support this deployment, confirming that this deployment is feasible and will have no adverse impact on other operations.
Ministers across Government recognise the burden that this additional short-notice deployment will impose upon individual service men and women and their families, especially over the summer holiday season. We will ensure that all those taking part receive their full leave entitlement, even if it has to be rescheduled, that no one is out of pocket due to cancelled personal arrangements and that all deployed personnel are appropriately supported.
I can confirm that there remains no specific threat to the games. Nor is there an increased threat to the games. We are confident that the UK is ready and able to provide a safe and secure Olympic games for the whole world to enjoy.
Circuses (Wild Animals)
(12 years, 5 months ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
On 1 March 2012, the Government set out their approach to the use of performing wild animals in travelling circuses in England.
The Government have said they will pursue a ban on ethical grounds on wild animals performing in circuses. Today we are announcing that we are working on draft legislation, which will set out the exact details of that ban.
We have said before that getting primary legislation right on such an emotive issue as this will take time, and we expect to be able to publish draft legislation for pre-legislative scrutiny later this session.
We are laying draft regulations today to introduce a new licensing scheme that will protect the welfare of such animals while they are in use in travelling circuses.
The regulations will be made under the Animal Welfare Act 2006. They will safeguard the welfare of wild animals in travelling circuses and ensure that they receive regular welfare inspections.
In line with the 1 March statement, it is our intent that the regulations are in force from the start of the 2013 touring season.
The public consultation on the licensing proposals closed on 25 April 2012. The analysis of responses and Government response have been published on DEFRA’s website.
During the eight-week period of public consultation, DEFRA officials carried out further engagement with the circus industry, veterinary bodies and other interested parties.
A period of “road-testing” of the draft welfare standards was undertaken. Road-testing involved multiple visits to circus sites by a DEFRA veterinary team to test the welfare standards alongside the public consultation. Findings have been used to refine the standards.
A total of 236 formal responses to the consultation were received. Responses were generally supportive and the overarching conclusion is that our proposed licensing regime would be robust and workable, subject to careful consideration of the detailed points of feedback received. The analysis of responses and Government response sets out in detail how feedback has been used to improve the package.
The main provisions of the regulations include:
A requirement that any travelling circus in England that includes wild animals first obtains a licence from DEFRA;
That a licence can only be obtained on payment of an administrative fee and circuses will also be liable for the cost of inspections;
A requirement of an initial inspection before a licence can be issued;
Provision for further inspections;
That licences can be suspended or revoked; and
Detailed licensing conditions covering all aspects of welfare in a travelling circus which must be met and adhered to.
In addition to the core welfare standards which are included in the schedule to the regulations, detailed guidance on welfare standards will be revised and updated over the summer period, and take full account of feedback from the consultation.
In line with the 1 March statement, formal inspections would be undertaken by Government-appointed vets before a licence may be issued or renewed. If a licence were issued, compliance checks would be carried out during the period of a licence, including a combination of announced and unannounced visits both to winter quarters and to tour sites.
In conclusion, the new regulations will protect the welfare of wild animals in travelling circuses in the intervening period before a ban can be brought into effect. We expect to publish draft legislation for a ban as soon as parliamentary time allows.
General Affairs Council
(12 years, 5 months ago)
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The Minister for Europe (Mr David Lidington)
I attended the General Affairs Council (GAC) in Luxembourg on 26 June.
The GAC was chaired by the Danish EU presidency, Mr Nicolai Wammen, Minister for European Affairs. A provisional report of the meeting can be found at:
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/EN/genaff/131236.pdf
Montenegro
The first item discussed at the GAC was whether to open accession negotiations with Montenegro. Some member states had argued that this decision should be postponed pending further progress on improving rule of law issues, including the fight against corruption and organised crime. I agreed that these were valid concerns but argued that Montenegro had met the criteria set at the December 2011 European Council and that opening negotiations now was the best way to increase the EU’s leverage on the issues where further progress was needed. The GAC was able to agree to the opening of Montenegro’s accession negotiations and the European Council endorsed this decision on 29 June 2012, and negotiations were opened at an intergovernmental conference later that day.
Multiannual Financial Framework
The General Affairs Council had its final discussion, under the Danish presidency, on the multi-annual financial framework (MFF) for the period between 2014 and 2020. The discussion focused on the latest version of the “negotiating box”, of which I have placed a copy in the Library of the House. This discussion gave member states the last opportunity to address specific issues in the text before it went to the June European Council. There, leaders took stock of progress before the negotiations were taken over by the Cypriot presidency, which officially commenced on 1 July 2012.
The negotiating box text contains positive language on the need to focus EU spending on areas that promote growth and explicitly states that
“it is essential that the future MFF reflects the consolidation efforts being made by Member States to bring deficit and debt onto a more sustainable path.”
Less helpful parts of the text are the possible reform to own resources, including the rebate, and the possibility of a financial transaction tax.
The UK Permanent Representative to the EU Sir Jon Cunliffe represented the UK on my behalf for this part of the discussion. He argued that the negotiating box still did not go far enough in reflecting the need for budgetary restraint. This sentiment was echoed by Ministers from the “likeminded group” on the budget. Sir Jon also argued that the UK would not agree to any changes to the UK rebate or any new own resources such as a financial transaction tax.
Other Ministers, led by Polish Secretary of State for the EU, Piotr Serafin, argued that the negotiating box was unacceptable in its current form, in particular because of their objection to the inclusion of the proposed reverse safety net which could serve to cap structural and cohesion fund (SCF) receipts received by the newer member states to a percentage of their previous allocations.
Although there are still elements to the negotiating box text that we are not satisfied with, overall we are content that it leans in the right direction. It has therefore been important to continue to be robust in what action needs to be taken going forwards, but also to consolidate the progress made so far. We have done this at both the GAC and the European Council, where my right hon. Friend the Prime Minister argued that despite the opposition from some member states, the European Council should welcome the progress achieved under the Danish presidency.
Cohesion Policy
The presidency sought a partial general approach on elements of the package of cohesion regulations. These were: on the rules for financial instruments; on the performance framework; and on proposals on revenue generating projects. There was some discussion on the technical elements of this package but the presidency was successful in getting broad agreement on all of the four blocks presented at the meeting: thematic concentration, financial instruments, revenue generating projects and performance framework.
The agreement included an amendment tabled by the presidency to add a footnote to the European rural development fund (ERDF) article 4, in the thematic concentration block. This would make it clear that the issue of the percentages for concentration in the transition regions would be reviewed once further decisions were made in the context of the MFF.
We also proposed a declaration on the need for better harmonisation between the rules of the funds of the common strategic framework for 2014 to 2020. In addition to France, Italy, Poland, Spain, the Netherlands and the Czech Republic who formally signed up to the declaration, Austria and the Commission also expressed their support during their interventions.
European Semester
The General Affairs Council agreed the set of country-specific recommendations that had been endorsed by Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) and Economic and Financial Affairs Council (ECOFIN) the previous week. Malta, Bulgaria, Hungary and the Czech Republic all took to the floor to reiterate their particular concerns. The presidency was clear however that a qualified majority existed and so the recommendations were sent to the European Council without an in-depth discussion. The UK, however, maintains its parliamentary scrutiny reserve on this issue.
June European Council
There was also preparation for the June European Council, which had an extensive agenda covering growth, trade, the MFF, energy, enlargement, justice and home affairs issues and foreign policy. This took place on 28 and 29 June.
Economic and Monetary Union
Finally, there was a discussion with European Council President Herman van Rompuy which provided the first opportunity to comment on the Economic and Monetary Union report of the “4 Presidents”, released in the early hours of the morning prior to the meeting and available at:
http://ue.eu.int/uedocs/cms_data/docs/pressdata/en/ec/131201.pdf
I underlined that while we were still studying the detail, the focus of our work should be on the more immediate next steps to help resolve the problems in the eurozone. I stressed the delicate challenge of reconciling the eurozone’s need for fiscal integration with protecting the integrity of the single market. In this vein, I made clear that while we support a banking union for the eurozone with a single eurozone banking supervisor, the UK will not be part of such supervision.
Abortion Providers (Inspections)
(12 years, 5 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
Following reports of potential breaches of the Abortion Act 1967, in March 2012 the Care Quality Commission (CQC) undertook a series of unannounced inspections of all abortion providers. The focus of these inspections was whether abortion certificates (Form HSA1) had been signed by doctors before a woman had been seen in the clinic. The law requires two doctors to certify that at least one (and the same) ground for abortion exists in relation to a specific woman.
At the end of the inspection process, the CQC set up a national quality assurance panel to review findings, judgments and action. The CQC have today published 249 inspection reports on their website, www.cqc.org.uk. Inspectors seized evidence from around a fifth of providers where issues of consistency and completeness of HSA1 forms were identified. Clear evidence of pre-signing was identified in a total of 14 providers and the CQC have required compliance actions be taken by all of these providers to ensure that their practices meet the standards set in law by a set date.
Investigations by the police, General Medical Council, and Nursing and Midwifery Council continue and further referrals may result from the publication of the CQC reports. We await the outcome of these investigations.
In the meantime, my officials will work with a number of bodies including the CQC and the Royal College of Obstetricians and Gynaecologists to address the findings from these inspections.
South London Healthcare NHS Trust
(12 years, 5 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
I wish to inform the House that I have made an order to appoint a trust special administrator to South London Healthcare NHS Trust. The order will be laid in the House shortly with a report setting out the basis of my decision, in accordance with chapter 5A of the National Health Service Act 2006, as introduced by the Health Act 2009.
My decision is based on the recommendation of the NHS chief executive and the responses to my recent statutory consultation with the trust board, the strategic health authority and local NHS commissioners on the proposal to place the trust in the trust special administrator’s regime. In accordance with the legislation, I have decided it is in the interests of the health service and, in particular, of the patients the trust serves to put South London Healthcare NHS Trust in the trust special administrator’s regime.
I have appointed Matthew Kershaw as the trust special administrator. Mr Kershaw’s role will take effect on Monday 16 July and I will issue him with terms of appointment. From this point, Mr Kershaw will assume full control of South London Healthcare NHS Trust, replacing the functions of the trust board and assuming the role of the accountable officer. He will be responsible for maintaining services for patients as well as developing recommendations to secure a sustainable future for services provided by the trust for me to consider. At this point, and pending the outcome of the regime, the chair and directors are suspended from their board duties in accordance with the legislation. However, some of the executive and non-executive directors will support the trust special administrator in the work he leads during the regime. How this is organised is a decision for the trust special administrator.
My key objective for all NHS providers is to ensure they deliver high-quality services to patients that are clinically and financially sustainable for the long term. The purpose of the trust special administrator’s regime is to ensure that services provided by any NHS trust subject to the regime meet that objective.
The regime, included by the last Government in the Health Act 2009, offers a time-limited and transparent framework to provide a rapid resolution to problems within a significantly challenged NHS trust and its health economy. This is to ensure long-term sustainability and the protection of access to quality services for local patients. In addition to maintaining the provision of services during the period of the regime, the duty of a trust special administrator appointed to an NHS trust is to develop and consult locally on a draft report, making recommendations to me in a final report about what should happen to the organisation and the services it provides. The objective is that high-quality, sustainable services are delivered to the local health economy. I must make a final decision based on the recommendations made in the trust special administrator’s final report, publishing that decision and the reasons for it in Parliament.
The trust special administrator’s regime is not a day-to-day performance management tool for the NHS or a back-door approach to reconfiguration. The purpose is to deliver a rapid and robust process when the widest range of other solutions to improve and maintain sustainability have been tried, implemented and not delivered the results required. It is for this reason that Parliament agreed to set challenging milestones for any appointed trust special administrator and for the Secretary of State to make a final decision about an organisation within a usual maximum period of 120 working days from the date the order is made.
I am using my powers to extend by order the overall time frame by 30 working days. For South London Healthcare NHS Trust, it means I will make a final decision on the fixture of the organisation within 145 working days from 16 July 2012 and, therefore, by 4 February 2013 at the latest. The issues affecting South London Healthcare NHS Trust are particularly complex; they are long standing and are built on a history of trust mergers, changes in commissioning arrangements and affect a range of providers within the trust’s area. This is also the first time the regime has been used. Therefore, the trust special administrator in this case is starting, effectively, with a blank canvas and will be unable to draw on learning and processes developed by previous trust special administrators.
Furthermore, the future of services at Orpington are about to be consulted upon, following a public health driven and commissioner-led needs assessment. Extending the time period in which a draft report would be produced by the trust special administrator by 30 working days would allow him to take into account responses to that consultation, so far as they are relevant, as he develops his own recommendations in the draft report, assuming that consultation goes ahead. It is crucial that the first use of the regime is robust and has the greatest possible chance of success. I believe that the particular complexities and issues that affect South London Healthcare NHS Trust, coupled with this being the first ever use of the regime, and the opportunity to take into account responses to the planned consultation on Orpington, mean that this is an exceptional case which warrants an extension to the time frame in the interests of the health economy and, most importantly, the patients of south-east London.
Despite recent improvements in quality of services and access times, there is a long-standing history of underperformance, particularly around financial management and some key access targets, within the area now served by South London Healthcare NHS Trust. There has been a consistent inability by the trust to deliver high-quality services whilst balancing income with expenditure over the last seven years. A number of solutions have been implemented to attempt to resolve the worsening problems and ensure the NHS in this area can provide consistent quality services to patients and the public within the designated budget. These systemic, long-standing challenges mean that South London Healthcare NHS Trust has historically underperformed against key quality, performance and finance requirements outlined in the national NHS performance management framework. The trust has also failed to make progress towards a viable foundation trust application. In 2011-12, it incurred the largest financial deficit of any of the 248 NHS provider organisations in England, at over £65 million. The deficit equates to an average weekly overspend of £1.3 million of taxpayers’ money on top of an average allocated weekly income of £8.4 million.
For South London Healthcare NHS Trust, the regime will be used because of the particular nature and scale of the financial and performance challenges, the complex interrelationship, the failure to make the scale of change required in the trust and with its partners and the absence of any viable, alternative strategy to ensure long-term clinical and financial sustainability.
The trust special administrator, working with clinicians, staff, commissioners, patients and the public, and other stakeholders, must now prepare recommendations for a sustainable solution for South London Healthcare NHS Trust as part of the south-east London health economy. The scale of the challenge means that Mr Kershaw will be expected to engage with, and consider the implications of any recommendations he makes with regard to the South London Healthcare NHS Trust on, other providers. Whilst it is not possible to speculate on the effect any decision may have pending the outcome of the regime, providers in the south London health economy could be affected and will be engaged throughout the process.
The trust special administrator will also constitute a clinical advisory panel, comprising prominent clinical leaders, to support and advise him in developing his recommendations. This will provide further reassurance that the TSA’s proposals are based on strong clinical evidence and are in the interests of local patients.
In accordance with my statutory duty, I have published guidance for trust special administrators appointed to NHS trusts, to which they must have regard in undertaking their legal duties. This can be found at: www.dh.gov.uk/health/2012/07/statutory-guidance-tsa/
A copy has been placed in the Library.
British Citizenship (War Crimes Screening)
(12 years, 5 months ago)
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The Minister for Immigration (Damian Green)
The Equality (War Crimes etc.) Arrangements 2011 and the corresponding Race Relations (Northern Ireland) (War Crimes etc.) Arrangements 2011 enable the Secretary of State to subject certain applications to more rigorous scrutiny than she subjects like applications from persons of other nationalities to, for the purposes of determining whether the applicant has committed, or been complicit in the commission of, or otherwise been associated with the commission of war crimes, crimes against humanity or genocide.
The condition for subjecting these applications to more rigorous scrutiny is that the applicant is a national of a state specified on a list approved personally by the Minister for the purpose of the arrangements. I have now reviewed and approved this list in accordance with our commitment to do so annually. I am satisfied that the conditions set out in the arrangements are met in respect of the countries on the list.
The arrangements will continue to be reviewed on an annual basis and will remain in force until revoked.
A copy of the arrangements is available on the Home Office website via the following link:
http://www.ukba.homeoffice.gov.uk/sitecontent/documents/policyandlaw/IDIs/idischapter1/section11/annexee8?view=Binary
Criminal Records Bureau
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)
The 2011-12 annual report and accounts for the Criminal Records Bureau is being laid before the House today and published on the Home Office website. Copies will be available in the Vote Office.
Independent Safeguarding Authority
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)
I am pleased to announce that the annual report 2011-12 and accounts of the Independent Safeguarding Authority (ISA) will be laid before Parliament and published today.
Copies will be available in the Vote Office.
Firearms (England and Wales 2010-11)
(12 years, 5 months ago)
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The Minister for Policing and Criminal Justice (Nick Herbert)
The latest figures from 1 April 2010 to 31 March 2011 show that:
The number of police operations in which firearms were authorised was 17,209—a decrease of 1,347 (7%) on the previous year.
The number of authorised firearms officers (AFO’s) was 6,653—a decrease of 326 (5%) officers overall on the previous year.
The number of operations involving armed response vehicles was 13,346—a decrease of 743 (6%) on the previous year.
The Police discharged a conventional firearm in three incidents (down from six incidents in 2009-10).
Full details are set out in the tables below:
Year | |||||||||
|---|---|---|---|---|---|---|---|---|---|
2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07 | 2007/08 | 2008/09 | 2009/10 | 2010/11 | |
AVON & SOMERSET | 262 | 311 | 333 | 247 | 285 | 328 | 339 | 267 | 250 |
BEDFORDSHIRE | 301 | 442 | 475 | 575 | 663 | 1,217 | 1,229 | 869 | 1,047 |
CAMBRIDGESHIRE | 57 | 104 | 241 | 201 | 207 | 316 | 460 | 490 | 402 |
CHESHIRE | 451 | 397 | 358 | 367 | 340 | 317 | 269 | 314 | 244 |
CLEVELAND | 170 | 453 | 530 | 657 | 293 | 577 | 667 | 430 | 581 |
CITY OF LONDON | 131 | 364 | 404 | 323 | 239 | 365 | 63 | 38 | 64 |
CUMBRIA | 77 | 72 | 152 | 112 | 92 | 92 | 86 | 80 | 109 |
DERBYSHIRE | 401 | 369 | 287 | 305 | 223 | 211 | 310 | 198 | 179 |
DEVON & CORNWALL | 96 | 112 | 71 | 84 | 80 | 143 | 170 | 185 | 189 |
DORSET | 193 | 231 | 223 | 263 | 354 | 258 | 369 | 351 | 242 |
DURHAM | 83 | 156 | 144 | 291 | 340 | 206 | 181 | 140 | 205 |
ESSEX | 312 | 275 | 296 | 432 | 245 | 529 | 529 | 444 | 384 |
GLOUCESTERSHIRE | 185 | 127 | 176 | 229 | 280 | 162 | 132 | 175 | 133 |
GTR MANCHESTER | 518 | 507 | 461 | 478 | 481 | 497 | 524 | 415 | 360 |
HAMPSHIRE | 162 | 208 | 237 | 289 | 352 | 382 | 362 | 292 | 360 |
HERTFORDSHIRE | 172 | 195 | 185 | 187 | 280 | 303 | 343 | 205 | 334 |
HUMBERSIDE | 187 | 183 | 206 | 362 | 235 | 209 | 123 | 133 | 166 |
KENT | 137 | 207 | 163 | 219 | 170 | 202 | 280 | 275 | 213 |
LANCASHIRE | 238 | 318 | 241 | 240 | 410 | 388 | 281 | 245 | 169 |
LEICESTERSHIRE | 268 | 295 | 260 | 363 | 334 | 318 | 347 | 280 | 196 |
LINCOLNSHIRE | 392 | 386 | 294 | 220 | 157 | 158 | 133 | 73 | 97 |
MERSEYSIDE | 628 | 751 | 733 | 669 | 727 | 829 | 556 | 701 | 663 |
METROPOLITAN | 3,199 | 3,563 | 2,964 | 4,711 | 3,878 | 4,948 | 5,044 | 5,534 | 4,672 |
NORFOLK | 200 | 178 | 195 | 175 | 153 | 174 | 274 | 192 | 252 |
NORTHAMPTONSHIRE | 138 | 148 | 158 | 137 | 156 | 159 | 120 | 109 | 129 |
NORTHUMBRIA | 1,275 | 1,140 | 977 | 611 | 332 | 229 | 154 | 156 | 167 |
NORTH YORKSHIRE | 100 | 147 | 185 | 183 | 282 | 329 | 289 | 272 | 228 |
NOTTINGHAMSHIRE | 452 | 459 | 408 | 394 | 289 | 270 | 245 | 194 | 279 |
SOUTH YORKSHIRE | 463 | 484 | 546 | 749 | 737 | 628 | 538 | 533 | 434 |
STAFFORDSHIRE | 281 | 255 | 216 | 171 | 250 | 244 | 209 | 183 | 231 |
SUFFOLK | 270 | 251 | 153 | 202 | 256 | 193 | 237 | 225 | 227 |
SURREY | 247 | 203 | 151 | 222 | 222 | 375 | 479 | 188 | 162 |
SUSSEX | 204 | 280 | 187 | 190 | 201 | 331 | 331 | 227 | 205 |
THAMES VALLEY | 167 | 195 | 289 | 427 | 264 | 293 | 344 | 319 | 257 |
WARWICKSHIRE | 149 | 164 | 124 | 180 | 162 | 150 | 145 | 129 | 93 |
WEST MERCIA | 91 | 197 | 162 | 122 | 155 | 202 | 171 | 122 | 98 |
WEST MIDLANDS1 | 902 | 1,377 | 1,264 | 1,044 | 1,557 | 1,063 | 1,109 | 933 | 750 |
WEST YORKSHIRE | 604 | 575 | 853 | 1,335 | 1,272 | 1,130 | 1,367 | 1,512 | 1,344 |
WILTSHIRE | 58 | 63 | 88 | 139 | 226 | 128 | 158 | 152 | 86 |
DYFED POWYS | 29 | 28 | 51 | 63 | 72 | 155 | 92 | 71 | 91 |
GWENT | 37 | 40 | 81 | 94 | 133 | 334 | 152 | 151 | 139 |
NORTH WALES | 259 | 197 | 223 | 350 | 340 | 259 | 185 | 126 | 182 |
SOUTH WALES | 281 | 250 | 236 | 279 | 308 | 293 | 555 | 628 | 596 |
TOTAL | 14,827 | 16,657 | 15,981 | 18,891 | 18,032 | 19,894 | 19,951 | 18,556 | 17,209 |
Year | |||||||||
|---|---|---|---|---|---|---|---|---|---|
2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07 | 2007/08 | 2008/09 | 2009/10 | 2010/11 | |
AVON & SOMERSET | 84 | 122 | 118 | 117 | 103 | 123 | 127 | 124 | 129 |
BEDFORDSHIRE | 53 | 58 | 56 | 59 | 57 | 53 | 50 | 54 | 55 |
CAMBRIDGESHIRE | 71 | 60 | 60 | 50 | 46 | 49 | 51 | 45 | 46 |
CHESHIRE | 89 | 75 | 76 | 73 | 80 | 72 | 88 | 95 | 87 |
CLEVELAND | 80 | 95 | 100 | 100 | 105 | 97 | 83 | 72 | 74 |
CITY OF LONDON | 72 | 86 | 89 | 86 | 45 | 49 | 50 | 51 | 53 |
CUMBRIA | 87 | 89 | 90 | 89 | 90 | 97 | 86 | 91 | 92 |
DERBYSHIRE | 69 | 70 | 74 | 75 | 69 | 61 | 61 | 71 | 65 |
DEVON & CORNWALL | 115 | 132 | 123 | 122 | 132 | 142 | 146 | 157 | 146 |
DORSET | 59 | 60 | 64 | 62 | 67 | 71 | 79 | 65 | 62 |
DURHAM | 102 | 97 | 103 | 100 | 102 | 89 | 82 | 81 | 70 |
ESSEX | 184 | 186 | 202 | 205 | 220 | 225 | 223 | 223 | 207 |
GLOUCESTERSHIRE | 80 | 82 | 93 | 92 | 94 | 95 | 97 | 108 | 102 |
GTR MANCHESTER | 202 | 205 | 187 | 245 | 217 | 250 | 296 | 237 | 227 |
HAMPSHIRE | 94 | 94 | 92 | 97 | 83 | 85 | 93 | 96 | 87 |
HERTFORDSHIRE | 47 | 50 | 53 | 52 | 49 | 53 | 50 | 46 | 47 |
HUMBERSIDE | 96 | 96 | 101 | 92 | 83 | 87 | 80 | 77 | 72 |
KENT | 93 | 90 | 94 | 94 | 98 | 87 | 110 | 103 | 97 |
LANCASHIRE | 129 | 122 | 115 | 123 | 103 | 143 | 105 | 94 | 92 |
LEICESTERSHIRE | 68 | 51 | 53 | 59 | 67 | 64 | 73 | 76 | 71 |
LINCOLNSHIRE | 87 | 78 | 86 | 87 | 75 | 77 | 69 | 60 | 71 |
MERSEYSIDE | 84 | 94 | 93 | 129 | 139 | 153 | 154 | 141 | 127 |
METROPOLITAN | 1,823 | 2,060 | 2,134 | 2,331 | 2,584 | 2,530 | 2,740 | 2,856 | 2,665 |
NORFOLK | 109 | 114 | 125 | 119 | 127 | 114 | 106 | 111 | 112 |
NORTHAMPTONSHIRE | 56 | 52 | 50 | 56 | 59 | 53 | 50 | 55 | 50 |
NORTHUMBRIA | 99 | 90 | 93 | 98 | 92 | 96 | 95 | 102 | 96 |
NORTH YORKSHIRE | 64 | 60 | 56 | 78 | 67 | 67 | 63 | 64 | 72 |
NOTTINGHAMSHIRE | 131 | 138 | 138 | 149 | 146 | 137 | 133 | 91 | 98 |
SOUTH YORKSHIRE | 100 | 98 | 122 | 116 | 118 | 106 | 99 | 102 | 86 |
STAFFORDSHIRE | 63 | 67 | 76 | 70 | 82 | 82 | 75 | 85 | 81 |
SUFFOLK | 80 | 96 | 88 | 84 | 78 | 74 | 67 | 68 | 79 |
SURREY | 48 | 53 | 49 | 51 | 45 | 54 | 54 | 60 | 56 |
SUSSEX | 141 | 134 | 130 | 129 | 129 | 123 | 123 | 114 | 129 |
THAMES VALLEY | 180 | 172 | 176 | 180 | 186 | 180 | 180 | 193 | 194 |
WARWICKSHIRE | 51 | 46 | 53 | 55 | 59 | 63 | 66 | 76 | 60 |
WEST MERCIA2 | 131 | 139 | 141 | 152 | 133 | 163 | 137 | 115 | 132 |
WEST MIDLANDS | 110 | 124 | 134 | 145 | 175 | 177 | 165 | 180 | 167 |
WEST YORKSHIRE | 132 | 140 | 130 | 150 | 148 | 147 | 135 | 156 | 140 |
WILTSHIRE | 78 | 80 | 74 | 72 | 69 | 67 | 74 | 69 | 65 |
DYFED POWYS | 62 | 58 | 79 | 68 | 72 | 67 | 63 | 64 | 72 |
GWENT | 60 | 71 | 74 | 86 | 64 | 63 | 54 | 61 | 59 |
NORTH WALES | 75 | 73 | 65 | 57 | 56 | 57 | 53 | 76 | 57 |
SOUTH WALES | 125 | 139 | 134 | 130 | 115 | 138 | 121 | 114 | 104 |
TOTAL | 5,763 | 6,096 | 6,243 | 6,584 | 6,728 | 6,780 | 6,868 | 6,979 | 6,653 |
Year | |||||||||
|---|---|---|---|---|---|---|---|---|---|
2002/3 | 2003/4 | 2004/5 | 2005/6 | 2006/7 | 2007/8 | 2008/9 | 2009/10 | 2010/11 | |
AVON & SOMERSET | 215 | 249 | 312 | 167 | 192 | 292 | 231 | 137 | 135 |
BEDFORDSHIRE | 269 | 414 | 419 | 534 | 639 | 1,171 | 1,188 | 819 | 991 |
CAMBRIDGESHIRE | 45 | 155 | 172 | 160 | 172 | 221 | 366 | 393 | 307 |
CHESHIRE3 | 337 | 356 | 773 | 807 | 793 | 642 | 221 | 244 | |
CLEVELAND | 63 | 86 | 154 | 285 | 290 | 554 | 661 | 426 | 481 |
CITY OF LONDON | 131 | 364 | 275 | 234 | 183 | 200 | 63 | 32 | 63 |
CUMBRIA | 45 | 65 | 134 | 90 | 72 | 74 | 56 | 51 | 75 |
DERBYSHIRE | 363 | 312 | 254 | 257 | 183 | 187 | 252 | 169 | 141 |
DEVON & CORNWALL | 32 | 94 | 54 | 54 | 76 | 120 | 138 | 168 | 174 |
DORSET | 180 | 215 | 195 | 246 | 322 | 238 | 347 | 349 | 200 |
DURHAM | 66 | 96 | 91 | 256 | 204 | 192 | 164 | 140 | 204 |
ESSEX | 176 | 138 | 138 | 155 | 224 | 226 | 391 | 273 | 187 |
GLOUCESTERSHIRE | 166 | 109 | 121 | 145 | 213 | 147 | 120 | 100 | 78 |
GTR MANCHESTER | 406 | 440 | 364 | 306 | 214 | 196 | 460 | 292 | 288 |
HAMPSHIRE | 108 | 128 | 167 | 178 | 270 | 271 | 247 | 194 | 312 |
HERTFORDSHIRE | 129 | 157 | 155 | 160 | 226 | 262 | 311 | 182 | 286 |
HUMBERSIDE | 170 | 158 | 184 | 335 | 232 | 183 | 94 | 111 | 115 |
KENT | 132 | 193 | 124 | 183 | 373 | 364 | 325 | 227 | 203 |
LANCASHIRE | 185 | 273 | 228 | 232 | 383 | 313 | 279 | 239 | 166 |
LEICESTERSHIRE | 232 | 269 | 232 | 328 | 313 | 268 | 332 | 263 | 180 |
LINCOLNSHIRE | 367 | 355 | 276 | 210 | 147 | 153 | 128 | 63 | 89 |
MERSEYSIDE | 547 | 687 | 677 | 611 | 644 | 734 | 445 | 631 | 491 |
METROPOLITAN | 2,447 | 2,423 | 2,322 | 2,572 | 2,770 | 2,303 | 3,283 | 3,563 | 2,912 |
NORFOLK | 186 | 169 | 163 | 149 | 133 | 165 | 252 | 176 | 217 |
NORTHAMPTONSHIRE | 90 | 99 | 89 | 101 | 119 | 127 | 117 | 88 | 104 |
NORTHUMBRIA | 1,204 | 1,063 | 893 | 585 | 299 | 199 | 129 | 134 | 112 |
NORTH YORKSHIRE | 67 | 110 | 144 | 208 | 268 | 318 | 287 | 267 | 210 |
NOTTINGHAMSHIRE | 397 | 404 | 336 | 342 | 256 | 246 | 197 | 175 | 220 |
SOUTH YORKSHIRE | 280 | 322 | 438 | 632 | 522 | 493 | 387 | 325 | 307 |
STAFFORDSHIRE | 241 | 212 | 183 | 154 | 222 | 231 | 192 | 155 | 224 |
SUFFOLK | 160 | 194 | 119 | 149 | 204 | 148 | 206 | 189 | 166 |
SURREY | 240 | 190 | 140 | 204 | 209 | 380 | 469 | 174 | 155 |
SUSSEX | 171 | 250 | 163 | 162 | 165 | 311 | 248 | 177 | 175 |
THAMES VALLEY | 167 | 179 | 265 | 355 | 227 | 254 | 292 | 272 | 225 |
WARWICKSHIRE | 31 | 138 | 102 | 144 | 121 | 113 | 100 | 92 | 73 |
WEST MERCIA | 111 | 241 | 152 | 94 | 120 | 121 | 128 | 148 | 93 |
WEST MIDLANDS1 | 592 | 975 | 952 | 745 | 518 | 716 | 739 | 689 | 597 |
WEST YORKSHIRE | 565 | 543 | 656 | 1,040 | 1,048 | 1,098 | 1,361 | 1,203 | 1,163 |
WILTSHIRE | 39 | 28 | 54 | 124 | 190 | 359 | 499 | 120 | 49 |
DYFED POWYS | 29 | 28 | 48 | 55 | 72 | 135 | 80 | 59 | 71 |
GWENT | 16 | 23 | 74 | 85 | 109 | 257 | 138 | 147 | 131 |
NORTH WALES | 198 | 153 | 180 | 299 | 295 | 221 | 156 | 107 | 165 |
SOUTH WALES | 253 | 161 | 165 | 223 | 283 | 222 | 485 | 570 | 567 |
TOTAL | 11,848 | 13,218 | 13,137 | 14,355 | 14,515 | 15,425 | 16,564 | 14,089 | 13,346 |
Year | |||||||||
|---|---|---|---|---|---|---|---|---|---|
2002/03 | 2003/04 | 2004/05 | 2005/06 | 2006/07 | 2007/08 | 2008/09 | 2009/10 | 2010/11 | |
Incidents | 10 | 4 | 5 | 9 | 3 | 7 | 5 | 6 | 3 |
% of incidents compared with number of authorised operations | 0.067 | 0.024 | 0.031 | 0.048 | 0.017 | 0.033 | 0.025 | 0.032 | 0.00017 |
Source: Association of Chief Police Officers
(Does not include discharges for animal destruction or during police training)
Notes for tables:
1. Revised figure for 2007/08 from West Midlands Police.
2. Revised figure for 2008/09 from West Mercia Constabulary.
3. Cheshire did not record ARV operations for 2009/10.
Source: Home Office Public Order Unit, based on information aggregated from figures provided by individual police forces as part of the Home Office annual data requirement. This was followed by a further quality assurance process involving the Home Office asking individual forces to verify and sign off their figures.
The information provided is a regular annual update of figures previously published and available on the Home Office website here:
http://tna.europarchive.org/20100419081706/http:/www.police.homeoffice.gov.uk/operational-policing/firearms/index.html
Home Office guidance to forces for providing these figures is contained within the booklet Annual Data Requirement, Police Personnel and Performance Data, Notes for Guidance. For the purpose of this statistical return AFOs are deemed to be deployed when “
“they are required to conduct a specific task during which their possession of a firearm (with appropriate authorisation) is a required element” [Chapter 3, paragraph 3.1 ACPO Manual of Guidance on Police Use of Firearms].
In addition to the total number of operations, a further sub-category is required regarding those operations where the initial or sole response is by Armed Response Vehicle (ARV).
Each incident will be classed as only one operation regardless of the number of personnel/deployments or tactics employed to deal with the incident.
Deployments also include those incidents where AFOs “self-authorise”.
The number of officers authorised to use firearms as at 31 March 2011.
UK Border Agency
(12 years, 5 months ago)
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The Minister for Immigration (Damian Green)
The UK Border Agency annual report and accounts 2011-12 will be laid before the House today. Copies will be made available in the Vote Office.
Third Parties (Rights Against Insurers) Act 2010
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
In response to the written parliamentary question from the hon. Member for Aberdeen North (Mr Doran) about the commencement of the Third Parties (Rights against Insurers) Act 2010 (UIN 98039)—5 March 2012, Official Report, column 537W —I undertook to make a further statement before the summer recess.
The position remains that no date has yet been set to bring the Act into force. The Ministry of Justice is continuing to work with interested parties to prepare the way for commencement at the earliest practicable date. As stated in the report on the implementation of Law Commission proposals (HC 1900) presented by the Lord Chancellor to Parliament on 22 March 2012 this is unlikely to be until 2013.
I will make a further statement in the autumn.
Public Reading Stage and Explanatory Statements on Amendments (Pilot)
(12 years, 5 months ago)
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The Leader of the House of Commons (Sir George Young)
I am today announcing a pilot of the Government’s Public Reading Stage system for the Small Charitable Donations Bill.
Lobby groups, industry and other third parties, who tend to have a close understanding of the legislative process, already actively engage as a Bill goes through its various stages in Parliament. But there are thousands of other private citizens who may have expertise in a certain area but either do not know how to or are unwilling to use the current channels to get involved in providing MPs with their views. Public Reading Stage will allow us to end up with more open and better laws by harnessing the experience of the public.
A trial of a Public Reading Stage was undertaken for the Protection of Freedoms Bill in the previous session of this Parliament. Following an evaluation, my Office has worked with the Government Digital Service to develop a new, simple digital platform that allows members of the public to read the Government’s proposed Bill and related information, comment on specific clauses and to make suggested amendments. The site can be visited at: http://publicreadingstage.cabinetoffice.gov.uk.
It is the intention that a normal Public Reading Stage would run for around three weeks, from First Reading to seven days before a Public Bill Committee meets for the first time. In reflection of the pilot status of this stage and the natural interval that the summer recess provides, the site will be open for six weeks, until 23 August 2012, allowing the greatest possible number of comments to be made. Following this, officials in HM Treasury will collate these into a report to be presented to the Public Bill Committee and made available in the Vote Office and online.
I intend to bring forward proposals later in the session for a second Public Reading Stage pilot, following an evaluation of the Small Charitable Donations Bill Public Reading Stage.
The evaluation will consider:
The volume of comments received and their relevance to the legislation.
Any amendments proposed to or made to the legislation in response to specific comments.
The reception of the Public Committee and the whole House at report stage to the comments.
Any other feedback received from contributors to the site and Members of Parliament who contributed to scrutiny of the Bill.
I would also like to remind the House that the Small Charitable Donations Bill will be the second of the pilots for the tabling of explanatory statements to amendments, covering both Public Bill Committee stage and report stage, as I set out in my written ministerial statement of 23 May 2012, Official Report, column 72WS.
The Government intend to continue to participate fully in the pilot, and I would encourage all Members who table amendments at both Public Bill Committee stage and report stage to take part.
Boundary Commission
(12 years, 5 months ago)
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The Secretary of State for Northern Ireland (Mr Owen Paterson)
I have today placed a copy of the Boundary Commission for Northern Ireland’s annual report for the period 2011-12 in the Libraries of both Houses. Copies are also available on the Boundary Commission website at: www.boundarycommission.org.uk.
Intelligence and Security Committee (Annual Report)
(12 years, 5 months ago)
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The Prime Minister (Mr David Cameron)
I am grateful to the Intelligence and Security Committee for its valuable work and its latest annual report (Cm. 8403). Following consultation with the Committee over matters that could not be published without prejudicing the work of the intelligence and security agencies, I have today laid the report before the House.
The Government’s response to this report will be laid before the House after the summer recess.
Copies of the report have been placed in the Libraries of both Houses.
Aviation Policy Framework
(12 years, 5 months ago)
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The Secretary of State for Transport (Justine Greening)
In March 2011, the Government launched a scoping exercise towards developing a new sustainable policy framework for UK aviation. I am grateful to the more than 600 organisations and individuals who responded. We have given careful consideration to their responses in preparing the draft aviation policy framework consultation document, which I am publishing today.
The responses to the scoping exercise reflected a wide degree of consensus on aviation’s significant economic contribution and its other benefits, that its global and local environmental impacts are real and need to be tackled effectively and that maintaining the UK’s excellent international connectivity is critical. The consultation document sets out the Government’s high-level policy in each of these areas and seeks views on some of the measures we propose in support of our approach.
We clearly recognise the value of aviation as an important economic sector in its own right and as a key driver of UK economic growth. It contributes around £17 billion of economic output and employs over 220,000 workers directly and many more indirectly. And we recognise the strength of the UK’s aviation connections which give us the third largest aviation network after the US and China and make London one of the best connected cities in the world with direct links to over 360 destinations worldwide, more than either Paris or Frankfurt.
The Government have a package of measures underway to improve the passenger experience at our airports and make the best use of existing capacity, as well as taking forward a process to address the UK’s international connectivity needs in the medium and longer term.
First, we are improving efficiency at our borders. My right hon. Friend the Home Secretary is reviewing the UK’s visa regime, to improve the passenger experience and to ensure that our border policy supports our prosperity agenda whilst maintaining effective security. Any changes to the UK’s visa regime will be implemented during the course of 2013. The Home Office has also brought forward the recruitment of 70 additional staff at Heathrow to provide additional flexibility to secure the border while dealing with increased passenger numbers. And it is looking at how we can improve the role of automation in the expedited clearance of passengers, linked to the development of a registered traveller scheme to replace the current IRIS scheme which has been extended.
We are improving reliability and reducing delay at Heathrow through the trial of measures introducing greater operational flexibility. If operational freedoms show clear benefits in terms of resilience, reducing delays and allowing planes to land more effectively, thereby reducing the impact of noise for residents under the flight path, then we will consult on making these benefits permanent.
We are taking forward other recommendations of the South East Airports Taskforce, such as airport performance charters which will set out the level of service that airlines and their passengers should expect, as well as new guidelines developed in a Civil Aviation Authority (CAA) chaired industry group which will make the best use of existing capacity.
We are transforming the economic regulation of airports through our Civil Aviation Bill to promote passengers’ interests. We propose to replace the current uniform approach to regulation—where designated airports are subject to mandatory five-year price caps—with a modern licensing regime where licence conditions can be tailored to the specific circumstances facing individual airports. By allowing for more proportionate regulation, the new regime also enables the CAA to take steps to reduce the degree or scope of economic regulation imposed on individual airports if they decide this would benefit passengers. The Bill will also ensure that airports can respond more flexibly to real-time events such as severe weather or volcanic ash and put in place a long-term framework for improving quality of service and investing in better infrastructure and facilities. The Bill is on track to receive Royal Assent by spring 2013 and we expect the new licensing regime to be implemented from April 2014.
We are improving surface access to airports with significant new investment. In total over this spending review period the Government are supporting investment of £1.4 billion on rail and road schemes which will directly or indirectly benefit airports across the UK.
This includes a fleet of 30 new electric trains on the Stansted Express to London which entered service last year and a £53 million upgrade of Gatwick airport station with improved passenger facilities, an extra platform and more track and signalling by 2013 and a regional growth fund contribution of £19.5 million for junction enhancements to be completed by 2014 which will improve access from the Ml to Luton airport.
And the Metrolink extension to Manchester airport is due to open in 2016 which will provide a tram every 12 minutes between Manchester airport and Manchester city centre.
In the future, Luton and Gatwick will receive improved rail services through the Thameslink programme and we expect Heathrow passengers to benefit from Crossrail.
But we recognise that we need to go further now in enhancing the capability of UK airports, particularly in the south east. So today we are also announcing:
The commitment of up to £500 million towards a western rail link to Heathrow, subject to a business case and conclusion of agreements with the aviation industry. This recognises the continued importance of Heathrow as our major international hub.
Businesses west of the airport have been calling for this vital investment for many years. It will cut typically 30 minutes off the journey to Heathrow from the west of England and south Wales, with significant benefits for growing cities like Swindon, Bristol and Cardiff. The service could come into operation as early as 2021. I will shortly publish a rail investment strategy, which will recognise the importance of transport investment to the economy, including improving connectivity between cities and airports.
Proposals to further liberalise the UK aviation market to encourage foreign airlines to develop new routes by extending to Gatwick and Stansted the ability for foreign airlines to pick up passengers when flying to other destinations.
Our proposal to remove bilateral restrictions on air services on a case-by-case basis. This will mean open access to airports outside the South East for new air services, in order to facilitate inward investment in new routes and extra choice for business and passengers without necessarily having to secure reciprocal access for UK airlines to the airports of the other country.
Our commitment, building on the Olympics and the GREAT brand, to develop a new marketing package, working with BIS, UKTI, and others to market the benefits of flying to a range of UK airports and to target new carriers, particularly carriers in emerging markets such as Latin America, India and south-east Asia.
That we will work with airports to explore, with the US authorities and others, the feasibility of US pre-clearance facilities being made available in the UK, which could improve the competitive offer airports operating such a scheme would be able to make.
That we will invite train companies to explore the potential of “code-sharing” between flights and long-distance train services, to enhance competition between trains and domestic flights.
Our intention to identify options, within the EU legislative framework, aimed at ensuring that slots at our congested airports are used in the most economically beneficial way for the UK. The focus of this work is on seeking to optimise the functioning of the secondary trading market for airport slots. We expect to engage with key stakeholders later in the summer and publish a progress report in the autumn. We are also working with the EU, in the context of the Commission’s proposals on reform of the rules on landing slots to secure measures to support UK regional connectivity, such as protecting the provision of air services between Northern Ireland and Heathrow.
Our support for the introduction of new rules by airport operators aimed at maximising the use of existing capacity at our busiest airports—for example, by limiting access to smaller planes.
In doing so, we recognise the very substantial efforts the aviation industry is making in continuing to invest and respond to the market.
For example, Heathrow and Gatwick are investing £5 billion and £1 billion respectively over the next few years in better infrastructure and Birmingham airport will shortly begin constructing a £65 million runway extension which will increase the airport’s scope to open new routes to long-haul destinations.
Airlines are launching new routes to key emerging markets, such as British Airways who recently announced a new service to Seoul. China Southern Airlines is now flying from Heathrow to Guangzhou and Gatwick is showing its potential, for example with Air China’s new service to Beijing.
These are positive developments and will help to maintain the UK’s excellent international aviation connectivity in the short term. The Government recognise, however, that they must not only take steps for the short term but also address the issue of fixture airport capacity and we are committed to doing so.
Following our scoping exercise last year, our draft aviation policy framework is the next step towards that and we welcome responses to this consultation. We will follow this, later this year, by issuing an open call for evidence inviting stakeholders to submit specific, evidence-based proposals for consideration in identifying the medium and long-term steps needed to meet the Government’s economic and environmental objectives for aviation. This is a structured process towards delivering a solution that is sustainable, not only economically and environmentally but also politically. The failure of successive Governments to tackle this issue shows that we need to get it right this time. Success depends upon agreeing a solution that can be delivered regardless of the political cycle and that requires an objective evidence-based process which draws on the views of the full range of interested parties.
High Speed Rail (Property Compensation)
(12 years, 5 months ago)
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The Secretary of State for Transport (Justine Greening)
In January I announced the Government would proceed with plans to build a high speed rail network linking London with Birmingham, Leeds and Manchester. This is a vital project that will create jobs, drive economic growth and provide a solution to the capacity crunch facing our existing rail network. Work on the project continues apace and I will be publishing my preferred routes for the second phase of the project in the autumn.
Alongside January’s decision I confirmed my intention to deliver a generous compensation package for those affected by the route which goes over and above the minimum required by law.
I am acutely aware of the impact that the proposals for HS2 are having on the property markets along the line of route from London to the west midlands. The impacts on property are some of the most direct and personal effects of HS2. This is why we have committed to going above and beyond the statutory requirements for property compensation.
Developing the right property compensation package is complex as it needs to be fair to those living and working along the HS2 London to west midlands route while recognising our broader responsibility to the taxpayer. It was clear from the responses to the consultation that we held last year that property compensation was an issue that generated a considerable amount of understandable concern from those affected. In addition, from personally dealing with the casework from the operation of the existing exceptional hardship scheme, I recognise the range and complexity of issues that the property and compensation package for HS2 will need to deal with. This all means that it is imperative that we put in place the right package.
I am keen to consult as soon as possible to provide people with certainty but, given the nature of the issue and its implications for phase 2 and work to assess stations and route options, it is clear to me that the detailed work to fully assess options means that we will consult on the property and compensation package for HS2 after Parliament returns from its summer recess in September. I understand that this delay will not be welcomed by individuals and businesses who had hoped to see an earlier resolution to the uncertainty surrounding HS2 property and compensation policies. However, this will enable the Government to put forward a comprehensive, practical and affordable package of property and compensation measures. I will be writing to those likely to be most directly affected by the project to explain this change.
Sure Start Maternity Grants
(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to announce that later today we intend to lay regulations to extend entitlement to Sure Start maternity grants.
It is our intention that the scheme be extended to provide for payment of a Sure Start maternity grant where there is already a child under the age of 16 in the family, and there is a subsequent multiple birth.
This change recognises that even where there are already children in the family, additional items will be needed where there is a subsequent multiple birth and a Sure Start maternity grant will be provided for these requirements.
The further extension of these rules will be due to come into effect for multiple births expected on or after 29 October 2012.
Independent Living Fund
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
In December 2010, the Government announced that the independent living fund (ILF) would not continue to run as a discretionary trust in parallel to the mainstream social care system. The system was poorly structured, leading to unnecessary complexity, duplication of some functions and an unjustifiable geographical variation in take-up. This was followed by the temporary closure of the fund to new users in 2010 when it became clear that insufficient funding had been made available to the fund by the previous Government.
The Government have committed to protect the programme budget for existing ILF users until the end of this Parliament in 2015 and committed to carry out a formal consultation on how support could be made available in the future.
In the care and support White Paper “Caring for our future: reforming care and support”, published this week, the Government have set out their plans for reforming care and support in England. This includes building on the progress that has been made in giving disabled people greater choice and control through the new legal right to a personal budget. It is in this context that we have considered how the future needs of ILF users can be met.
In a consultation document to be published today, the Government are proposing that funding is devolved to local government in England and to the devolved Administrations in Scotland and Wales from April 2015. This will ensure that the needs of all ILF users are met within a single cohesive statutory system in line with local priorities and local authorities’ broader independent living strategies. The Government recognise the role that the ILF has played since it was created for a transitional five year period in 1988, but believe that transformed policy context means that to maintain a parallel funding stream for the provision of care and support for disabled people would perpetuate inequity in the system.
The consultation will last for 12 weeks and be on a UK-wide basis given the implications of the closure of the fund for all parts of the United Kingdom. It will be important that we get the views of as wide a range of interested individuals and organisations as possible, in particular ILF users and their carers, their families, local authorities and the many organisations that support disabled people in living independently.
Industrial Injuries Advisory Council
(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Chris Grayling)
In accordance with the Cabinet Office’s guidance on public bodies, which took effect from 1 April 2011, a review of the Industrial Injuries Advisory Council (IIAC) was undertaken. It examined the council’s functions and whether it should exist at arm’s length from Government and ensured the council’s control and governance arrangements continue to meet the recognised principles of good corporate governance. The review is now complete and I am happy to inform the House that reviewers concluded the IIAC remain as an arm’s length body sponsored by the Department for Work and Pensions and that it continues to meet the recognised principles of good governance. At the same time and in the interests of proportionality and value for money, IIAC was reviewed as a Scientific Advisory Committee. I will place a copy of the combined review in the House Library.
Social Fund and Social Fund Commissioner (Annual Reports)
(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The Secretary of State’s annual report on the social fund for 2011-12 is to be laid before Parliament and published later today.
The report records that total gross expenditure in 2011-12, excluding winter fuel payments, was over £940 million. This figure includes over 216,000 non-repayable community care grants and almost 3.2 million interest-free loans awarded worth over £581 million. Also, cold weather payments worth £129 million, funeral payments worth £46 million and Sure Start maternity grants worth £45 million, were paid.
In addition over 9 million households benefited from a winter fuel payment at an estimated cost of around £2.1 billion.
The Social Fund Commissioner’s report will also be published later today, and I will place a copy of this report in the House Library.
State Pensions Reform
(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I should like to inform the House about the progress this coalition Government are making with their plans for state pensions reform.
At Budget 2012, the Chancellor confirmed that we will reform the state pension system to introduce a simpler, single tier state pension for future pensioners to better support saving for retirement. A simple flat-rate state pension above the basic level of the means test will bring much needed clarity and simplicity to the pension system, and provide the foundation needed to support automatic enrolment into workplace pensions, enabling people to save for their retirement with confidence. The reforms will be introduced in the next Parliament and will not cost any more than the current system overall.
The Budget also confirmed that the Government will introduce a mechanism so that future increases in state pension age take changes in longevity into account.
Together, these reforms will deliver a state pension system that is fit for the 21st century.
Given the scale, complexity and importance of these two significant reforms we are still working on the details, to ensure we get them right. Therefore, we will set out further detail on both the single tier reform and state pension age review mechanism in a White Paper in the autumn.
Universal Credit
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
Universal credit has been designed to ensure that people are better off in work. The benefit will be for claimants both in and out of work, and will enable a smooth transition into work.
Universal credit will improve work incentives as financial support will be reduced at a consistent and predictable rate for claimants moving into work or increasing their working hours. People will generally keep a higher proportion of their earnings. The intention is that any work pays, in particular, low-hours work. Reducing the complexity of the current system and removing the distinction between in-work and out-of-work support, will make clear the potential gains to work and reduce the risks associated with moves into employment.
The new in-work incentives of universal credit mean that some current measures are not needed. To this effect, I am announcing today that the Government intend to end the following payments to prepare the ground for the introduction of universal credit. The payments will be removed beforehand to aid a smoother migration into the new system.
Job grant; a one-off payment made to eligible claimants who leave benefits to start work. Claimants must have been on benefits for at least 26 weeks.
In-work credit; a weekly payment made to eligible lone parents who leave benefits to start work. Claimants must have been on benefits for at least one year and can receive payments for up to 52 weeks.
Return-to-work credit; a weekly payment made to eligible claimants with a health condition or disability who leave benefits to start work. Claimants must have been on benefits for at least 13 weeks and can receive payments for up to 52 weeks.
Under universal credit, in-work support will be part of the benefit system. In this context, we do not believe that cash payments based solely on the amount of time a person has spent on benefit regardless of actual need make sense. Universal credit will provide in-work incentives to all who receive it rather than these specific groups and allow us to target help more effectively.
These payments will start to be phased out for new benefit claimants from October 2012; payments can continue into 2013 for those eligible. Further information will be made available shortly for those affected.
Work Capability Assessment
(12 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Chris Grayling)
Later today the Government will publish a call for evidence as part of Professor Malcolm Harrington’s third independent review of the work capability assessment (WCA).
Professor Harrington’s first two reviews were published in November 2010 and November 2011. His overall view was that the principle of the WCA was sound but the processes that supported the system were not working as well as they could. The Department have made a number of changes to the WCA process as a result of the recommendations made by Professor Harrington in his reviews. These were noted in his 2011 review when he said:
“The WCA has, in my view, noticeably changed for the better”.
The call for evidence is one of several methods Professor Harrington is using to gather information to support the review and inform its final recommendations. He is particularly interested in views and evidence about any changes that claimants have experienced since the introduction of the first year’s recommendations.
The call for evidence runs until 7 September 2012.
Professor Harrington will make his final recommendations to the Secretary of State for Work and Pensions by the end of the year.
I will place a copy of the call for evidence in the Libraries of both Houses it will also be available on the Department’s website later today.
Grand Committee
Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2012
(12 years, 5 months ago)
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Baroness Verma
That the Grand Committee do report to the House that it has considered the Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2012.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments.
Baroness Verma
The Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2012 amend the Local Authorities (Mayoral Elections) (England and Wales) Regulations 2007, which I will refer to as “the 2007 regulations”, to provide for a revised set of statutory forms and notices to be used by returning officers for the conduct of mayoral elections in England and Wales. The updated forms and notices reflect the Government’s commitment to improving the quality and design of voter-facing materials, with the aim of assisting voters to effectively engage and avoid errors in the completion and casting of their ballots.
The key reason for making the changes now is to ensure that the forms and notices for mayoral elections are consistent with the ones that the Home Office developed for the first elections for police and crime commissioners that will take place on 15 November this year. The voter-facing forms and notices that the Home Office has developed and user-tested for use at these new elections are different in design and content from the forms and notices specified in legislation governing the conduct of other elections, and are intended to be clearer and more accessible to voters.
As a mayoral election is scheduled to be combined with a PCC election in Bristol on 15 November, these regulations will amend the 2007 regulations to ensure that the forms and notices are consistent with those set out in the draft Police and Crime Commissioner Elections Order 2012, which was debated in another place on 26 June. The need for consistency is particularly important here, due to both mayoral and PCC elections being run under the same supplementary vote system.
The Committee may be interested to know that, in common with other legislation governing the conduct of elections, two sets of forms and notices are prescribed in the 2007 regulations: one set to be used when a poll at a mayoral election is taken alone and another to be used when a mayoral election is taken in combination with another poll. Schedule 1 of the regulations before us contains new forms and notices for stand-alone mayoral elections, and Schedule 3 deals with the materials that should be used when a mayoral election is combined with a police and crime commissioner election.
The changes that we have made to the election materials for the mayoral elections are supported by and consistent with recommendations that have been made by the Electoral Commission, the Association of Electoral Administrators and Scope. Further, we acknowledge the work undertaken by the commission in producing and undertaking valuable user testing on the statutory voter-facing material for last year’s referendum on the voting system, and we believe that it is important to keep up the momentum in improving standards in this area.
The first steps that we have taken to achieve this have been to develop the electoral materials for the PCC elections and to revise the forms and notices for mayoral elections. We will continue this work by looking at the statutory voter-facing material in respect of other scheduled elections and will continue to work with the Electoral Commission, electoral administrators and other stakeholders, such as those representing disabled people, in taking this work forward.
While the main purpose of the regulations is to amend the mayoral forms, we have taken the opportunity to rectify textual errors which have been identified in the 2007 regulations. Rule 5(3) of Schedule 1 and Rule 5(3) of Schedule 3 to the 2007 regulations are concerned with the deadlines for applications to vote by post and proxy which must be included in the published notice of election. Currently these rules make reference to the returning officer when voting registration is, of course, a matter for the registration officer, so we are amending these rules accordingly.
In conclusion, these regulations represent a small but none the less important step in improving the experience of the elector by providing for forms and notices that are up-to-date, clear and easier to use than those prescribed in current legislation. I commend the draft regulations to the Committee.
Baroness Hayter of Kentish Town
I thank the Minister for introducing this draft statutory instrument. Of course, these forms are essentially just for the lucky people of Bristol who on 15 November will have the chance to make themselves more like a US town with a vote for the head of the police and the local town sheriff—sorry, mayor. And apologies to the city of Bristol—and it is the city of Bristol, which I fondly remember from my schooldays there at Downend Infants. However, it will be a first in our country, with an elected mayor and a police commissioner—who we must hope will get on rather better than some other cases closer to my current home—to be selected by the good citizens of Bristol on the same day. Our rather strange UK set-up means that the mayoral elections are the purview of one department, the DCLG, and the police commissioners of another, the Home Office, with the Minister’s department holding the ring and seeking to ensure some consistency. We are delighted that she and her colleagues have done as well as they have in producing this statutory instrument, but I have a few questions and a couple of comments.
First, I note that Scope and the electoral administration officers have quite rightly been consulted and involved in the design of the forms but there is no mention of political parties. Given their extraordinary experience and expertise in this area, why have they not been asked for any input? Like other party activists, I have helped umpteen people fill in forms for proxy and postal voting, guided people into polling stations and chatted endlessly, especially on quiet election days that I rather fear 15 November will be, to both voters and fellow tellers from the other parties about the whole business of voting. As I am sure she knows it is the one day we all get on well together. It seems a real shame if none of us—as the real activists who know the use of these forms really well—has been involved. I am sure that some of these people would have commented on the contrast between the extremely clear ballot papers on pages 3 and 4 and excellent directions for the guidance of voters on page 11 and the horribly confusing postal voting statement on page 8, to say nothing of the type size—which is too small for my 62 year-old eyes, so I am sure that it will beat those of an 82 year-old. So my question is: are party activists and agents at all involved in the design process?
Secondly, why are there two such different systems for getting candidate information out to voters when the aim appears to be, particularly in Bristol, to make this one seamless election day? Information on the police chief candidates will be on the web but information on the mayoral candidates will be in leaflets distributed to the electorate. Does this reflect the Government's lack of interest in the election of police commissioners or their lack of concern about those without access to the internet? Even if people have access to the internet, they often do not have access to a printer to be able to print off such documents to look at them at home or with colleagues or family. For the very first of these elections in particular, have the Government so little interest in ensuring real community engagement? The issue was of such importance to the coalition that it three-line whipped it through Parliament. Given the importance of policing to the elderly, the disadvantaged and the young, is this really the best way of promoting interest?
Thirdly, as well as being a new voting system, it is an election for two new posts. Is the Minister confident that everyone eligible to vote will both know about the elections and what the two new postholders will do and be clear about the choices that will face them as they enter the polling booth?
Those are my three questions. I turn to my comments, to which the Minister may not wish to respond. First, I wonder whether the case for a threshold in these elections should be considered. What if turnout for the police commissioner elections was only 8%, or that for a mayoral election was as low? Is there a level at which the Government should ask whether this is really more representative and accountable than what went before? Secondly—the Minister will be used to my counting by now—I assume that the Minister’s department has now stood down its work on equivalent forms for the election of Senators in May 2015.
Baroness Verma
My Lords, I thank the noble Baroness, Lady Hayter, for her words in support of the regulations. Like her, I have spent many elections as a teller and in weathers of all sorts. Perhaps I may first put her mind at ease on the question of information on PCC elections being available only on the web. I reassure her that such information will be available and not only on the web. Voters will be able to access hard copies if they so wish by calling a freephone number. People who find using internet services difficult will be able to utilise that.
The noble Baroness asked why booklets would be available for mayoral elections. PCC elections will be nationwide, whereas, in this instance, the mayoral election will be in only one place. The Electoral Commission will make sure that an effective campaign is conducted so that voters are fully informed about elections in their areas.
The noble Baroness raised quite a complex issue in relation to postal voting. If she will allow, I would rather take that question away and perhaps give her a more in-depth response in due course. A number of questions will need to be asked of postal voters which are perhaps better set out in a written response.
The noble Baroness asked about turnout. Of the 1 million people who responded in referendums on mayoral elections, nearly 430,000 said that they wanted a mayor. On the basis of those numbers, I think that there is an appetite. If the people of Bristol have decided that they want a mayor, it is likely that they will turn out to vote. The reason for making the ballot papers similar is to remove confusion, because it will be the first time that supplementary voting takes place. As a Government we have tried to make this task as easy as we can—I know that the noble Baroness accepts and acknowledges that—to ensure that the voter has the information at hand.
The noble Baroness asked about the consultation with political parties. We consulted actively with the Electoral Commission and others on voter-facing forms. I suspect that that would have been undertaken across a lot of people although not aimed specifically at political parties. We note the value of that for the future, in the light of the comment made in the Chamber earlier. Of course it does not prevent us looking at how these elections fulfil the obligations to ensure that we have greater participation by the voter, and there will always be lessons to be learnt.
On that note, I am pleased that the noble Baroness supports the regulations. If I have not answered her questions, I hope that she will allow me the opportunity to write to her.
Baroness Hayter of Kentish Town
Perhaps I may ask a question which I should have asked previously. Are these two elections coterminous? Is the election for the PCC in Bristol exactly the same as the one for the mayor? My only other comment is to ask whether she would take back the idea of early engagement with political parties. Sometimes there is a reluctance, even in the Electoral Commission, to understand the role that political parties play in the democratic process. That is more a message for the noble Baroness to take back than a question for her to answer now.
Baroness Verma
The answer to the noble Baroness’s first question is yes. Of course, as with all things, it is always best to review things after the event.
Police and Crime Commissioner Elections (Functions of Returning Officers) Regulations 2012
(12 years, 5 months ago)
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Lord Henley
That the Grand Committee do report to the House that it has considered the Police and Crime Commissioner Elections (Functions of Returning Officers) Regulations 2012.
Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, 3rd Report from the Secondary Legislation Scrutiny Committee.
The Minister of State, Home Office (Lord Henley)
My Lords, these instruments will ensure that all necessary preparations are in place for 15 November 2012 when the public go to the polls to elect their first police and crime commissioner. I know that the House has always taken a keen interest in shaping electoral law and we have drawn from that existing body of tried and tested law wherever possible.
The Committee will recognise the provisions in respect of electoral registers, the timetable for nominations and the ability to vote by post or by a proxy. It will also recognise the provisions for elections offences and for the combination of PCC elections with others held on the same day, such as the mayoral elections in Bristol. Your Lordships will recall the processes for counting the supplementary vote from mayoral elections. PCC elections will be part of the framework under the Political Parties, Elections and Referendums Act 2000—with which, again, I think the Committee will be familiar. Your Lordships will also see that our police area returning officers, or PAROs, are similar to regional returning officers in European parliamentary elections.
However, there are some notable differences from existing practice. For example, while candidates’ campaign spending limits will be based on the existing rules for mayoral candidates, these limits will be set out numerically for each area rather than requiring each candidate to calculate the formula themselves. We are grateful to the Electoral Commission for its advice on this.
PCC candidates will need to obtain 100 nominations and tender a deposit of £5,000, which is more than most elections but less than London mayoral elections. We have worked closely with the Electoral Commission and others to design ballots and forms that are more user-friendly, with a special focus on those who may find it more difficult to read, or to read English.
Rather than a paid-for mailing, the Government will offer every PCC candidate the chance to have a page on a new website and will offer a freephone line for the public to order a free hard copy. This will be the best approach in the circumstances. Both the web address and phone number will appear in all Home Office and Electoral Commission literature, in all advertising on PCC elections, and on poll cards delivered to every elector. Electors will know where to go to find information on candidates.
This policy is primarily driven by cost, but there are other advantages. The fact that hard copies will be provided on request means that they can be tailored to the needs of the individual. For example, we can provide copies in formats such as Braille, and under our plans electors will be able to choose the address to which the information should be sent. They might find that a work address is more convenient, or an address where they are staying temporarily.
This is very different from the position in 2000, when your Lordships’ House considered the rules for the London mayoral elections. The then Government proposed offering no candidate information, whereas we are confident that everybody who wants candidate information will be able to access it under our proposals. The order and the regulations before the Committee are the culmination of months of work and close consultation with expert planners, including the Electoral Commission, the Society of Local Authority Chief Executives and the Association of Electoral Administrators. I will echo the thanks to them of the Minister for Policing and Criminal Justice in another place. They are the foundation of an entirely new model of policing that will connect the police directly with the public they serve. I commend the order and regulations to the Committee.
Lord Kennedy of Southwark
My Lords, I am a member of the Electoral Commission and have been for nearly two years. Will the noble Lord tell the Grand Committee why the Home Office has been involved in this? It is as if we have tried to reinvent the wheel and ended up back where we started. There is expertise in the Cabinet Office. We may have National Park Authority elections in future and there is another unit in Defra. There seems to be complete duplication, with different units doing the same thing. Would it not be more sensible if all these things were contained in one unit which had expertise in the nuts and bolts of elections?
Lord Rosser
My Lords, we welcome the chance to debate the order and regulations, which address a number of matters related to the running of elections for police and crime commissioners. We strongly opposed the move to elected police and crime commissioners for a number of reasons, including the amount of money needed to conduct the elections. It could and should have been used to support front-line policing, which is being adversely affected by the cuts, contrary to government assertions that this would not be the case. However, the Government’s Bill passed through both Houses of Parliament, so elections for police and crime commissioners are a reality, and we are putting up candidates since we do not intend to let the coalition partners—I think they are still partners, just about—have a free run.
Of course, the Government originally wanted to rush through the elections in May of this year. However, eventually and grudgingly they put them back to November. The Government’s bright idea was that they could be run on the same date as a number of mayoral elections in our major cities, which would enable some of the costs of the police and crime commissioner elections to be shared. Unfortunately, that bright idea made an assumption that proved somewhat wide of the mark—namely, that the citizens of our major cities would in droves endorse and vote for elected mayors. Apart from in Bristol, they did not. Therefore, we have almost exclusively stand-alone elections for police and crime commissioners. Perhaps the Minister will tell us what will be the cost of these elections in November compared with the cost of holding them at the same time as local elections, which was clearly the Government’s intention but which has now been dropped.
Holding elections in November is not designed to maximise turnout—but to this Government, the only thing that appears to matter is getting elected police and crime commissioners in place. Other considerations that one might think were important when holding countrywide elections for these new posts for the first time seem to take a back seat.
One of the orders in front of us proposes that each candidate can have,
“an election address included on a website”,
but that there will not be any publicly funded mailing or locally distributed booklets. We know that, despite being short of money, the Government have other priorities—such as reducing government income through a 5p in the pound reduction in tax for millionaires—but trying to make up this self-inflicted shortfall by not publicly funding mailings from candidates or locally distributed booklets in what are countrywide elections for new elected posts with responsibilities over wide geographical areas, which the Government regard as of great importance and significance, is a kick in the teeth for the democratic process.
As has already been said, we will presumably have the situation in Bristol where there will be a publicly funded mailshot or locally distributed booklet for the mayoral election but no such provision for the election on the same day for the police and crime commissioner, who will have responsibilities over a much wider geographical area and bigger population than the elected mayor.
In its original submission as part of the consultation, the Electoral Commission said that the Government’s proposal was,
“a significant departure from what is provided for UK Parliamentary, European Parliament and Mayoral elections”.
The commission went on to say:
“Delivering information primarily via a website will exclude the still significant number of adults in England and Wales who do not have easy access to the internet: as many as 7 million adults in England (excluding London) and Wales are estimated not to have used the internet at all in the last 12 months”.
The commission also commented:
“Candidates for PCC elections will also need to communicate with a much larger number of voters across their ‘constituencies’ than usual; and there may be significant numbers of independent candidates who do not have the support of a party behind them to promote their campaign”.
The Office for National Statistics has said that well over 8 million people have never used the internet, of whom 5.5 million are over the age of 65, with the majority being women. The gross income figures also show that the better-off members of the community use the internet the most and it is the least well-off who do not have access to the internet. There are also regional disparities: internet usage is lower in other parts of the country than in the south-east and south-west of England.
So we have disparities of income, gender, age and region—but if you ignore all those considerations of course we have a level playing field, which is no doubt what the Government will claim. Perhaps the Minister can tell us the outcome of the equality assessment that one presumes the Government have done on the order, or will he tell us that, for obvious reasons, they have not dared to do such an exercise?
A website alone will not be enough for individual candidates, many of whom are likely to be not well known, to get their message across; leaflets to every household are also important. Only wealthy candidates will be able to afford to produce their own leaflets and then pay for their distribution, and only parties with significant numbers of volunteer supporters will be able to undertake a leaflet distribution throughout what in most cases will be constituencies of considerable geographical size and population.
The cross-party Association of Police Authorities has asked for the proposals for voter information and awareness-raising for PCC elections to be strengthened so that they are at least equal to those for mayoral elections, in order to help raise voter turnout on 15 November and address its concerns about the potential impact of a low turnout. I am not sure whether or not these concerns have been ignored. No doubt this is something the Minister will be able to tell us about.
Recent newspaper articles have claimed that the Home Secretary has asked the Treasury for money to fund an advertising campaign to encourage stronger candidates to come forward. One newspaper quoted a Whitehall source as admitting:
“The policy is in disarray. There is a chance it will be a damp squib”.
Perhaps the Minister can do a little bit more than his colleague in the House of Commons in answer to a straight question and tell us: is it true that the Secretary of State for the Home Department is seeking or has sought additional money from the Treasury to fund a publicity campaign to attract more people to stand for office?
Perhaps the Minister can also tell us what level of turnout the Government are expecting under their proposed arrangements, and what level of turnout they would deem had shown the new arrangements to be a success. Maybe I will be surprised, but I suspect that the last thing the Minister will do is give a specific answer to that question. Perhaps the Minister will tell us that there is no problem because the millions of people who rarely or never use the internet will of course be able to make a free telephone call to ask for written information about and from the candidates to be sent to them. If he is going to come out with that one, I hope that he can manage to keep a straight face when he says it.
Lord Henley
My Lords, before I respond to the rant of the noble Lord, Lord Rosser, I will answer some questions from the noble Lord, Lord Kennedy, who is rather worried about why it was not the Cabinet Office that was dealing with this matter, particularly in light of the fact that there were other elections coming along in due course which Defra, my former department, and DCLG might have an interest in. I would very much welcome the Cabinet Office dealing with all of these things, in which case I would be able to deal with the Statement on home affairs business that is taking place in the Chamber at the moment and which my noble friend Lady Stowell has to do on my behalf. It is for the Home Office to develop policy on elections for PCCs, so I am dealing with this, and that is why I am here. I can assure the noble Lord that the Cabinet Office, DCLG and all the other interested parties have been involved in all these matters from the beginning. Obviously we will continue to consult them as and when appropriate.
As I said, I listened to the rant of the noble Lord, Lord Rosser, if I can put it like that. I think that we know what his party’s views on PCCs are. We have had yet again, as we had in another place, this rather confusing message saying, “We oppose PCCs on the grounds of cost. But having opposed them on the grounds of cost, we now think that we should spend yet more money on providing more information to the public than is necessary”. I find that a confusing line to put forward.
I say to the noble Lord that the only significant cost of PCCs is the cost of the elections. I appreciate that the cost is £75 million. However, I again give an assurance—which I and my colleagues have given on other occasions—that it will not come from funds that would have gone to forces. We believe that democracy is a justifiable cost, making the police more accountable to the public.
I can also assure the noble Lord, Lord Rosser, that we are not making information on these matters available solely by the website, as he said. Although we are making it available on the website, there will also be other ways of accessing that information—by means of a telephone call or having the information sent to any address that people particularly want to have it sent to. The noble Lord and his party are really coming on a bit rich by demanding yet further expenditure on these grounds—sending out leaflets to all electors—particularly when, as he will remember, his party refused to provide any such information on candidates for the London mayoral elections until there was opposition pressure on them to do so.
The noble Lord also asked what we would consider a successful turnout level. Obviously I will not give any estimate of what the turnout is likely to be—it would be a very foolish Minister who did so. However, we expect that the public will be enthusiastic about having their first elected PCCs. We hope that that enthusiasm will build over the years and that we will see more commissioners elected. Some might be from the noble Lord’s party and some might be from others. Certainly the hits on the police.uk website seem to demonstrate an interest in this. It certainly demonstrates that the interest in PCCs is much greater than the interest in the current system of police authorities.
I am not sure that I have dealt with every question put by the noble Lord but I think that I have dealt with the vast majority of them. I hope that he will accept that. My final point concerns his remarks about regional variations and the access of the less well-off to the website. That point was dealt with earlier. There will be other means of accessing information—I hope that the noble Lord will accept that. The Electoral Commission, of which the noble Lord, Lord Kennedy, is a member, also agreed that all the information it will make available, such as poll cards, will go to all households. I hope that the noble Lord will accept that the appropriate information will go out and that everyone will have access to information regardless of whether they can access the website.
Lord Kennedy of Southwark
Apart from saying that the Home Office is doing it, the Minister has not answered my point. The Home Office will look at the regulations. I suspect that there will be very little difference between these regulations and what the Cabinet Office would have produced. Perhaps the Minister can come back to me and point out what is different. I suspect that it will be next to nothing. If that is so, why has it not been done by the Cabinet Office? It is nonsense that we have different units in different departments doing this. It is a complete waste of taxpayers’ money.
Lord Henley
My Lords, I am more than happy to write to the noble Lord on the matter of whether the Cabinet Office should do this or whether, if the Home Office does it, it will merely replicate what happens in other elections. I will look very carefully at what the noble Lord said.
Lord Rosser
I think that the Minister claimed that he had answered the questions that had been asked—and of course he did nothing of the sort. I asked him whether an equality assessment had been done and what the outcome was, or whether the Government had dared not do such an exercise. I got no answer to that question. I also asked him whether he would clarify what the Parliamentary Secretary at the Cabinet Office meant when he said on 18 June that the Government,
“may consider a similar procedure for a general election, with an eye on overseas voters”.—[Official Report, Commons, 18/6/12; col. 652.]
I asked the Minister if he could clarify whether that meant that the Government were considering a similar procedure for overseas voters in a general election, or for all voters in a general election.
I also asked the Minister what the cost would be of holding elections in November, compared to the cost of holding them at the same time as local elections. As I recall, I received no response. I also asked him if it was true that the Home Secretary, as was reported in the newspapers, had asked the Treasury for money to fund an advertising campaign to encourage stronger candidates to come forward. I do not think that I got an answer to that question either. I am not surprised. I always know when I am on to a good thing because the Minister stands up and announces that what I said was a “rant”. One always knows that this means one will get no answers to the questions one has asked or the points one has raised.
The Minister sought to argue that somehow we had opposed the police and crime commissioner elections on the grounds of cost. That is true; that was our ground for opposing it. However, the game has changed now. The Government have got their Bill through and we are going to hold the elections. What we are saying is that now that the decision has been made to hold the elections, we should do it properly—in the same way, for example, as the Bristol mayoral election. Doing it in this way, with its emphasis on a website, will make it much harder for many people to find out about the candidates and what they are saying. I do not share the Minister’s apparently complacent view that they will all phone the free telephone number to ask for a copy of the information on candidates to be sent to them.
Lord Henley
Oh dear. Possibly I described the noble Lord’s speech as a rant because most of his speeches are a rant, but let me answer just one or two of the points that he has made. We have already published the equality assessment and it is available on our website. I invite the noble Lord to have a look at it there. I also have a copy here. On the cost of having the elections in November rather than May, that figure has been out in the public domain for some time, as the noble Lord well knows, but I will repeat it: it is going to cost some £25 million more—so £75 million rather than £50 million—than if we could have had the election in May. I think that the noble Lord has some understanding of the reasons why it was delayed, because he may have been part of the opposition Home Office team that was dealing with the matters that caused some delays to the relevant Bill. He also asked about tailoring the website for overseas voters. Let us just get through the PCC elections; we are not considering general elections at the moment but we can look at that in the future.
I hope that I have now answered the noble Lord’s points, but if I have not, I will no doubt write to him in due course.
Lord Rosser
I asked whether it was true, as was claimed in the newspapers, that the Secretary of State had asked the Treasury for money to fund an advertising campaign to encourage stronger candidates to come forward.
Lord Henley
My Lords, I do not comment on what I read in the press; I leave it to the noble Lord to look at these matters.
Police and Crime Commissioner Elections Order 2012
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
That the Grand Committee do report to the House that it has considered the Police and Crime Commissioner Elections Order 2012.
Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, 3rd Report from the Secondary Legislation Scrutiny Committee.
Nationality, Immigration and Asylum Act 2002 (Authority to Carry) Regulations 2012
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
That the Grand Committee do report to the House that it has considered the Nationality, Immigration and Asylum Act 2002 (Authority to Carry) Regulations 2012.
Relevant document: 1st Report from the Joint Committee on Statutory Instruments.
The Minister of State, Home Office (Lord Henley)
My Lords, the purpose of the regulations and the Security and Travel Bans Authority to Carry Scheme 2012 is to prevent specific foreign national individuals who pose a terrorist threat flying to the UK. The objective is to enhance the protection of aircraft flying to the UK and to prevent certain individuals doing harm on board the aircraft or on arrival in the United Kingdom.
Aviation remains a target for terrorists. On Christmas Day 2009, we saw an attempted terrorist attack on board an aircraft over Detroit. The recently foiled plot by al-Qaeda in the Arabian Peninsula to repeat that type of attack demonstrates an enduring intent to attack commercial aircraft. This Government gave a commitment in the strategic defence and security review to,
“make changes to pre-departure checks to identify better the people who pose a terrorist threat and prevent them flying to or from UK”.
The provision under which the regulations and the scheme are being made is Section 124 of the Nationality, Immigration and Asylum Act 2002. The regulations and accompanying scheme will, first, require carriers to which the scheme applies to provide advance passenger information to the e-Borders system and seek authority to carry to the UK certain foreign national passengers specified in the scheme before. Secondly, they will make carriers liable to a civil penalty of up to £10,000 if, without reasonable excuse, they carry a passenger without seeking authority or if they carry a passenger for whom that authority was denied.
I do not anticipate the scheme having a dramatic impact on aviation industry operations. Our current estimate is that refusal of authority to carry might occur two or three times a year. Preventing just one terrorist attack must justify its introduction. The scheme will apply to all air carriers operating to the UK issued with an IS72 form. This is a written notice requiring the submission of passenger data to e-Borders. The scheme does not apply to British nationals. It applies to passengers on flights to the UK who are third-country nationals, EEA nationals who have been excluded or deported from the UK because they pose a threat to public security, and individuals who are the subject of an UN or EU terrorist-related travel ban.
Individuals in respect of whom authority to carry will be refused and who would be refused leave to enter the UK are those EEA nationals who are the subjects of travel bans; third-country nationals who have been excluded or deported from the UK on grounds of national security; and third-country nationals who have been or would be refused a visa because of national security. The scheme will not affect the free-movement rights of EAA nationals and carriers will not be required to seek authority to carry in respect of any EEA national exercising those rights.
The regulations and the scheme concern inbound foreign nationals only. The strengthening of pre-departure checks also extends to outbound journeys and the threat posed by British nationals. For outbound journeys, the National Border Targeting Centre will use e-Borders data to alert ports police to intercept any individuals travelling from the UK who pose a terrorist threat and are subject to legal restrictions preventing them from travelling internationally.
There is a power to make directions under the Aviation Security Act 1982 to prevent the boarding of British nationals who are assessed to pose a direct threat of terrorism to aircraft. I commend the order to the Committee.
Lord Berkeley
My Lords, I am grateful to the Minister for that introduction. I have read all the documents about this with considerable interest. Before I comment on the regulations, perhaps I may say that I am also grateful to the Minister for the improvements that appear to have been made to the Eurostar immigration services. I came back yesterday and there seemed to have been some improvements. Much more work has to be done, and I am sure that we will have many more meetings, but it was good.
My concern about this draft regulation is its exact purpose. The second paragraph of the evidence base document which came with the draft regulation states:
“Existing powers are available to direct airlines not to carry a UK national who poses a threat to an aircraft, and to prevent people who pose a terrorist threat”,
within the country. The end of the paragraph says that this provision is to close a gap.
Can the Minister explain whether the real purpose is to prevent people blowing up an aircraft; to prevent them coming here to do nasty things on the ground, so to speak; or whether it is a bit of both? I can totally understand it if the purpose concerns the aircraft—in that respect, it all looks quite reasonable, and I shall come on to some of the detail later. However, if it concerns people coming to the UK generally, presumably it would be possible for them to avoid any problem by travelling across the frontier from the Republic of Ireland to Northern Ireland, or coming in by sea on a ferry, or coming in by train. I think that one of those means is included in these regulations, and I am pleased about that, as it might plug one gap. However, there might be one or two other gaps that should be looked at. Alternatively, we might need to consider whether this is all necessary.
I was interested in the consultation responses. I do not always read consultation responses but there is a long paragraph, in which it says:
“A response was received from a member of the public who was very supportive”.
If only one member of the public was supportive and nobody thought it was a bad idea, does that justify going to all this length? In a telephone conversation, a civil liberties group was also “supportive”. That is good, but to push these as the only two responses to the whole consultation indicates that people either did not understand it, were bored by it or did not think it would do any good anyway. If the Minister has any comments on that, I would be glad to hear them, because one could say that it was a bit of a job creation scheme and not much else.
Paragraph 18 of the Explanatory Memorandum says:
“Carriers will be informed by the Home Office if they do not have authority to carry any of those passengers. Those passengers should not be brought to the UK”.
I think that there is already legislation to enable those who come in to Heathrow or another airport to be turned round and sent away again. If the aim is to avoid terrorists doing bad things in this country as opposed to on an airplane, why do we need this if they can be turned round and sent back anyway without it?
From a practical point of view, if the airlines are happy that they have to send all this information in and the Immigration Service can respond within 15 minutes to a list of several hundred passengers, all I can say is, “Good luck to them”, and I hope that there will be a certain amount of settling-down time before people start sending out lots of fines. Frankly, it looks quite challenging, even if the Home Office’s computers work properly, which I do not think they do all the time.
My final point concerns the evidence base for this. I do not know whether it is a joke or we are supposed to take this seriously, but it talks about “hit” rates and “false positive” assessments, and the “movement search” covering five years of travel using the e-Borders system. It then uses a planning projection that is made by multiplying the result by 300%,
“which allows for a reasonable margin of error and ensures a prudent planning response”.
It goes on to say:
“Where the result is zero, the planning projection is taken to be 3 (as zero cannot be multiplied upwards)”,
which is helpful. I do not know who has produced this but is such a load of rubbish really value for money? “You cannot multiply zero by three”. Perhaps the Minister can suggest to his officials that they think of something better to do because if this is not a job creation scheme, I do not know what is. Apart from that, I will be pleased to hear the Minister’s response to my comments.
Lord Bradshaw
I wonder if the Minister can answer a very simple question; if he cannot, perhaps he can write to me. If people arrive here by plane, train or ferry who have not got permission to enter the country, is it possible for the carrier to send them straight back to wherever they came from without them getting any recourse to the immigration procedure?
Lord Rosser
The Minister has explained the purpose of the regulations, which, as I understand it, is to require carriers to provide advance passenger information and seek authority to carry to this country certain foreign national passengers specified in the scheme. As the Minister has said, the regulations also make carriers liable to a penalty of up to £10,000 if they carry a passenger without seeking authority when required to do so, or if they carry a passenger for whom authority was denied. The people for whom prior authority will be required will be those who pose a known security or immigration control threat, and the documentation indicates that through doing that it seeks to reduce,
“the probability of a terrorist attack on an aircraft bound for the UK”.
As I understand it, the Government’s estimate is that the exercise of this power to refuse a carrier authority to carry a specific passenger will be likely to occur on only a limited number of occasions a year. Of course, that is not the same as the number of times an airline will need to seek authority. Can the Minister say a little more about the process? I take it that it involves the airline providing details of foreign nationals on each flight to the UK before the flight leaves the point of departure—that is, the names of all foreign nationals on that flight—although perhaps the Minister could clarify that. As I understand it, the air carriers involved are likely to be issued with an IS72 form.
Lord Rosser
And that will be for some or all of their routes. In the hope that it does not breach national security, can the Minister say a little more about the considerations that would determine whether an airline was going to be issued with an IS72 form?
Queries have already been raised about the length of time it will take to give authority, and I appreciate that that is dealt with in the documentation. But what is the maximum length of time it is expected to take for authority to be given one way or the other to an airline? And is one to assume that until that authority has been given or refused, the flight concerned cannot leave its point of departure for the UK?
Finally, I have one question about the fine of up to £10,000. How will the Secretary of State decide what level to impose? Will there be clear criteria laid down which all occupants of the Secretary of State’s position over the years will be required to adhere to? Or will it be an entirely subjective decision with the approach potentially varying from one Secretary of State for the Home Department to another?
Lord Henley
That is a very interesting question given the range of Home Secretaries under the previous Government. I will have to come back to it at the end of my remarks.
First were the questions put by the noble Lord, Lord Berkeley, about the purpose of the regulations. I can give him assurance that, although the risks are pretty small, it is all about security. As I said in opening, the objective is to enhance the protection of aircraft flying to the United Kingdom and to prevent certain individuals from arriving here and doing harm on board the aircraft or on arrival in the United Kingdom. The purpose is to prevent such individuals boarding aircraft to the United Kingdom in the first place, both for the protection of that airplane and of the United Kingdom.
The noble Lords, Lord Rosser and Lord Berkeley, asked about the process and how quickly the airlines would get a response. Our aim is to give a response to the airlines within 15 minutes, which is relatively easy with modern communications. Airlines are required as of now to submit passenger information no later than 30 minutes before departure. We encourage airlines to provide that earlier if they possibly can but we are offering an assurance that we will be able to respond within 15 minutes.
The noble Lord, Lord Berkeley, also had some concerns about the consultation. He cited the fact that there was one response from a member of the public. I am very grateful that at least one member of the public put their name forward.
Lord Henley
The noble Lord says that it was not himself. This is one of the problems with consultations; not necessarily everyone with an interest responded. I can say, with regard to the important people in the airline industry, that we had respondents from three representative groups with a total membership of 161 different airlines. I cannot remember how many airlines there are in the world, but that number probably means that most of those who have an interest and who had concerns about this made an effort to respond.
The noble Lord, Lord Rosser, asked about IS72s. These are being rolled out across carriers and ultimately we envisage making sure that they are served on all of them, but that is not the case at the moment. He also asked whether imposing fines—as the order says, the level is up to £10,000—was purely a matter for the Home Secretary. The important thing is not the level of fines; obviously, for some of the big airlines a fine of £10,000 is neither here nor there, although I imagine that if there were a lot of fines they might begin to worry about them. We want to work with the airlines and prevent harm to their aircraft and to the UK. I think that I can say to the noble Lord that fines will be imposed only in fairly extreme circumstances.
If I may consider the matter of the level of the fines, which was the other matter that he asked about, I would prefer to write to him. As I said, though, at the moment there is a fairly free discretion that might allow, thinking of the different sorts of Home Secretary that we had between 1997 and 2010, for a fairly broad range of penalties being imposed.
My noble friend Lord Bradshaw also asked a simple, straightforward question: if a passenger is refused leave to enter the UK, is the carrier responsible for removing them from the UK? I assure him that that is the case. Whether or not the passenger has any appeal rights will depend on the circumstances of the case itself.
On this occasion, I think that I have answered every single point that the noble Lord, Lord Rosser, and other noble Lords have put. However, I see that the noble Lord, Lord Berkeley, wants to intervene again.
Lord Berkeley
I am grateful to the Minister for his explanation of the purpose, because it is important that we understand it. However, I then said to myself, “Well, if people are going to do harm, they can come in by ferry or small boat or across the land frontier from Ireland, and can still do harm in this country, although they’d have more of a job in sorting out an aeroplane because they haven’t got an airport”. Ours is not a completely secure boundary from that point of view. I am assuming that the real purpose of this is the problem of the aircraft itself, and I support that.
Lord Henley
My Lords, obviously we have certain advantages in that we are an island entire unto ourselves—I think I could probably quote a bit more from John of Gaunt’s death speech in “Richard II”. There are easier ways in and harder ways in. We will continue to look at all different routes and at what is possible—what we can and cannot do. Airlines are important. That is why we are doing this.
Lord Rosser
Perhaps I could ask the Minister one more question in the light of the response he gave. I wonder whether I heard that correctly. He confirmed that it was the case that an IS72 would be issued to some carriers, which might apply to all or some of their routes. Did he go on to say—or did I mishear this?—that eventually it might be applied to all carriers? If that is the case, would it then become in effect a blanket requirement for every carrier flying people into the UK?
Lord Henley
Ultimately we envisage the IS72 being rolled out to all carriers—so yes, that is the case.
Police and Crime Panels (Modification of Functions) Regulations 2012
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Henley
That the Grand Committee do report to the House that it has considered the Police and Crime Panels (Modification of Functions) Regulations 2012.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments.
The Minister of State, Home Office (Lord Henley)
My Lords, I will come to the regulations in a moment. First, I will set the context and talk about police and crime panels more generally. The introduction of directly elected police and crime commissioners is the most significant policing reform in a generation. It was set out in the coalition agreement and is now enshrined in the Police Reform and Social Responsibility Act. Forty-one directly elected police and crime commissioners will take office across England and Wales on 22 November this year, having been elected by the public the week before. The first commissioner is, of course, already up and running in London: in January 2012, the Mayor of London took over responsibility for oversight of the Metropolitan Police.
The Act lays out the framework for the strict checks and balances that will be fundamental to the reform. A key element of this is the introduction of police and crime panels, comprising local councillors and independent members. Panels will be established in every force area and will undertake an important scrutiny function, providing both support and challenge to police and crime commissioners as they perform their duties. It is vital that there are no barriers to panels being established. Every force area must have a panel, with arrangements in place to ensure that police and crime commissioners are appropriately scrutinised once they are elected in November.
I turn to the secondary legislation that is intended to provide this safeguard, which is the subject matter of today’s debate: that is, the regulations before us. They provide that, where a local authority defaults on its duty to nominate and appoint one or more councillors to the police and crime panel, the authority will no longer be required to agree the arrangements that govern the establishment and operation of the panel. As we have constantly emphasised, local leaders, not politicians or bureaucrats in Whitehall, will know what works best for them. Local negotiations are critical and the Act requires that all local authorities across the force area should work together to establish and maintain their panel, including agreeing panel arrangements and membership.
We understand that local government is rising to this challenge and we anticipate that panels will be established in all areas across England and Wales. However, in the event that a local authority chooses not to engage or is deliberately obstructive, it is important that it is not able to frustrate the efforts of the remaining local authorities in that force area to establish the police and crime panel. To this end, the regulations provide that where a local authority defaults on its statutory duty to nominate and appoint one or more councillors to the police and crime panel, that authority will no longer be required to agree the panel arrangements. This will allow the remaining local authorities to establish a police and crime panel and, crucially, will ensure that panels are in place in time for the arrival of the police and crime commissioners in November.
The regulations have been developed by the Home Office in consultation with key stakeholders representing those who will be affected by the proposals set out in the regulations. The regulations provide clarity and necessary safeguards while minimising bureaucratic burdens and central prescription relating to the panels. They will help ensure that police and crime panels are established later this month and that they are in full flow by November, in time to provide vital support and scrutiny to the new police and crime commissioners when they take office.
In conclusion, as I said earlier, Parliament has spoken on the police and crime commissioner model. The Government’s focus is now on making the model a reality and maintaining progress in local areas. The regulations before us are an important part of the legislative jigsaw that will make this happen. I commend them to the Committee.
Lord Shipley
My Lords, the purpose of the regulations is to stop a defaulting local authority from preventing the making of panel arrangements. This is understandable and should be supported. However, there are two issues of detail that I would appreciate the Minister’s clarification of in order to avoid doubt.
First, the Secretary of State has the power to nominate and appoint the appropriate number of members in the event of a failure by a relevant local authority to exercise its power to nominate or to appoint. It would be essential for the Secretary of State, in exercising this duty, to have due regard to the opinions of the other local authorities and to maintain due political and/or geographical balance in making such appointments. I say that because during the passage of the Bill there was significant discussion about the importance of geographical balance and political balance and, where there are two-tier authorities, of lower-tier councils having representation on the panels.
Secondly, will the Minister clarify the meaning of the words in paragraph 2:
“In the case of a multi-authority police area, all the relevant local authorities, with the exception of a defaulting local authority … must agree to the making or modification of the panel arrangements”?
I seek clarification of the words “must agree”. Do they mean that the relevant local authorities are compelled to agree by the decision of the Secretary of State—that is, they must agree to what the Secretary of State wants—or do they mean that only with the agreement of those authorities can the panel arrangements proceed? I took the Minister to mean that it was the latter, but I seek confirmation of my interpretation. If it is the former, I seek the Minister’s reassurance that due regard will be had by the Secretary of State to full consultation with the remaining local authorities and balance being secured in any nominations or appointments that the Secretary of State deems it necessary to make.
Lord Rosser
My Lords, the Minister has explained the reasons for the order. I will be interested to hear the response to the two points that have been raised. On the second one, where reference is made to the wording,
“In the case of a multi-authority police area, all the relevant local authorities … must agree to the making or modification of the panel arrangements”,
it cannot be a requirement that they must agree or presumably the order would not be necessary, because the defaulting authority would not be able to block it. That would be my interpretation, at least, but of course it is what the Minister says about the Government’s interpretation of the wording that counts.
I have a couple of further points. Will the Minister confirm that the Local Government Association does not see any difficulties in implementing the order as it stands? I take it that this is, let us just say, to clarify certain wordings in the Police Reform and Social Responsibility Act.
The Minister made reference to police and crime panels. We have doubts, which we expressed during the passage of the Bill, about the extent to which they will be any meaningful check on the exercise of his or her power by the police and crime commissioner. Do the Government intend to monitor the development of the effectiveness of these panels when they are operational? Will it be their intention to brief Parliament on the findings of any monitoring exercise that they carry out if it is their intention to do so?
Lord Henley
My Lords, a number of questions have been put to me. First, I shall deal with those asked by my noble friend Lord Shipley. I can assure him that, yes, the Secretary of State will take note of views from other local authorities and will want to take account of political and geographical differences. That is the point behind what we are trying to set up in these authorities. The noble Lord will know as well as I do how police areas vary very much from authority to authority.
My part of the world, Cumbria, has a county council and six regional councils. Thames Valley Police has something rather complicated with, I think, 18 authorities, which are all single tier. I cannot remember whether I am right on that. However, it is very different from the traditional county district. In areas such as the noble Lord’s in the north-east, there are other set-ups. Obviously, we will want to take account of political and geographical differences. My noble friend’s second question was about what was meant by the words “must agree”. As regards the second part, obviously it is only with the agreement of all the local authorities, as he said.
The noble Lord, Lord Rosser, asked whether the LGA had any concerns. I can assure him that, as always, it has been closely involved in the development of the policy and regulations, and is working with us very much on the transition programme. As regards any monitoring of the effectiveness of the panels, I do not believe that that is a role for central government. I believe that local authorities will be key to ensuring the success of panels. If those panels turn out to be toothless, or whatever, it will be for local authorities to challenge that. I think that the noble Lord and others will be the first to raise their concerns should that be the case.
Lord Harris of Haringey
My Lords, perhaps the Minister can clarify his answer to the noble Lord, Lord Shipley, about political balance. Is he talking about the political balance of the entire police force area or of the defaulting authority? As I understand the construction of the police and crime panels, there is one representative from each authority and the purpose of this order is to deal with a situation in which one local authority has failed to put forward a suitable nomination. Is the intention under those circumstances that the Secretary of State will appoint someone to achieve some form of political balance across the whole area or simply to reflect whatever is regarded as the political majority within that particular local authority area? They are very different things.
Lord Henley
My Lords, we are trying to achieve some sort of balance across the whole area of panels covering a police force. I can think of some areas where every local authority is Labour or every local authority is Conservative. That does not mean that one would want every member of the panel to be Labour or Conservative—to take those two extremes—as obviously a vast number of voters would not be represented. We hope that there will be negotiations between local authorities, even if—dare I say?—some Tory authorities want to push forward a Labour candidate for the panel to make sure that overall, throughout the entire area, there is a proper balance that represents the views of the electors of that area. That might be despite the authorities being red in one case or blue in another. Does the noble Lord follow what I am getting at? We are trying to achieve genuine cross-party representation with a balance that represents the constabulary in a proper manner.
Lord Harris of Haringey
I am grateful to the noble Lord for that clarification. I am not sure it completely helps me. In a two-tier area, with which he is familiar, you will have a county council that will be elected on a specific date. You will then have district councils either elected in thirds or possibly on specific dates but not the same date as the county council. Are we talking about a political balance that relates to the county or to the districts? They will not necessarily be the same thing—they might be by chance, but not necessarily.
The Local Government Association spent many happy years devising a system that is supposed to balance elections held at different times and the different status of counties, districts, unitary authorities and so on. That sort of formula might be the approach that is taken. But I had understood that this legislation did not necessarily prescribe for political balance but simply for area balance.
Lord Henley
I do not want to be overprescriptive on these matters, particularly as every authority varies quite dramatically. I will use my own county, Cumbria, as an example because I happen to know it well. Cumbria County Council coincides with the police authority and so it is quite an easy one to do. There is a county council that has elections every four years. There are six district councils, one or possibly two of which have an election every four years while the other four have elections in the three years when there are not county elections. So everyone is electing at different times in different ways. All we are trying to do is ensure that local authorities act together to try to produce something that is reasonably practical. Possibly the model that the noble Lord is suggesting is not a bad one. He was taking it from the Local Government Association. We are not demanding anything absolutely precise; we are just trying to make sure that, as far as is reasonably practical, all views can be taken into account.
Lord Shipley
Can I just explain further my concern about political balance? There are existing committees, joint boards and so on that cross council boundaries and there are clear rules that apply to political balance in those cases. I hope that in the regulation it will be made absolutely clear that one-party control of panels would not be acceptable, even if all the councils in a given geographical area belong to one party.
Lord Henley
That is what we are saying in the regulations. As far is practical, we want to make sure that there is this cross-party control. This does not happen in Cumbria, but even if all six councils happened to be Labour-controlled, we would not envisage that all the members of the panel should be Labour. We should get the appropriate balance that broadly reflects how people voted. The same will be true in the north-east and here, there and everywhere. It is balance—a word that I have been using a great deal since I came to the Home Office—that we are seeking, and balance is not just in the regulations but in the Act itself, set down there in letters of stone.
Further Education Institutions and 16 to 19 Academies (Specification and Disposal of Articles) Regulations 2012
Baroness Wilcox
That the Grand Committee do report to the House that it has considered the Further Education Institutions and 16 to 19 Academies (Specification and Disposal of Articles) Regulations 2012
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, as you know, the Government are committed to improving standards of behaviour of young people in schools. An increasing number of young people of school age are being educated in colleges. We believe that they should have parity of treatment with their peers in schools.
Your Lordships will be aware that powers to search students without consent, and the list of prohibited items that students can be searched for, were introduced by the previous Government in 2007. The list then comprised knives, guns and weapons, and was extended in 2009 to include stolen items, illegal drugs, and alcohol if the student is under 18.
The Department for Education has recently extended by regulation the list that applies to schools to include tobacco products, fireworks and pornography. We are now doing the same in further education and sixth form colleges so that teenagers, and their parents, will have the assurance that expectations of behaviour will be the same, regardless of the educational institution attended.
While seeking to treat all under-18 year-olds equally, we should not impose on the civil liberties of adults. Colleges, particularly further education colleges, provide for a wide age range of students, and the majority of these are adults. Common sense, if nothing else, tells us that searching adults for cigarettes is an unwarranted intrusion on their privacy. This is why only students aged under 18 can be searched for these items, which is already the case for searches for alcohol.
I will set out briefly what these regulations mean in practice. Members of college staff can already search students and their possessions for knives and other weapons, illegal drugs and stolen items, irrespective of the student’s age. They can also search for alcohol if the student whom they believe possesses it is under 18. We are now seeking to add tobacco products, pornographic images and fireworks to this list. Like alcohol, they are only prohibited for students under 18.
Your Lordships will be aware that new provisions introduced by the Education Act 2011 also enable searches to be made for any item where there is reasonable belief that it has been, or is likely to be, used to cause an offence or cause harm or damage to property. Noble Lords may ask, therefore, why we need to specify further specific items for which a search may be undertaken. The answer is because of the substantial numbers of young people now being educated in colleges for whom these items are either harmful or illegal.
Baroness Jones of Whitchurch
My Lords, noble Lords will have noticed that we are somewhat embarrassed on this side because our spokesperson is not here. For the sake of completeness, if it helps, I can say that I am persuaded by what the Minister has said today and we are therefore prepared to support the order.
Baroness Wilcox
My Lords, I am grateful to the noble Baroness for being here and for saying that. I was aware that this issue has already been discussed in another place and that, apart from one or two points that I have been able to pick up on in my speech, we were in agreement. I feel that this is one of those times when this is okay. As I have said, the extension of the existing legislation will provide young people and their parents with the reassurance that they will have equal treatment regarding expectations of behaviour, regardless of the education institution that they have attended. We believe that it is important that all students at school age are treated equally. This is particularly so at the moment because of the increasing numbers of younger students in colleges. I trust that noble Lords agree—indeed, I know that they do, for which I am extremely grateful.
Motion agreed.
Legislative Reform (Annual Review of Local Authorities) Order 2012
Baroness Garden of Frognal
That the Grand Committee do report to the House that it has considered the Legislative Reform (Annual Review of Local Authorities) Order 2012.
Relevant document: 1st Report from the Delegated Powers and Regulatory Reform Committee.
Baroness Garden of Frognal
My Lords, this draft legislative reform order seeks to remove the unnecessary bureaucratic requirement on the Chief Inspector of Education, Children’s Services and Skills annually to review and rate the performance of each top-tier local authority in England in relation to its children’s services functions. The process is simply an amalgamation of other inspection evidence and data, rather than an inspection in its own right. My honourable friend the Parliamentary Under-Secretary of State for Children and Families announced in December 2010 the Government’s intention to repeal this requirement, imposed under Section 138 of the Education and Inspections Act 2006, at the earliest legislative opportunity. The draft order would effect that repeal.
Ofsted’s children’s services assessment is a remnant of a more centralised local government performance management framework and formed part of the previous Government’s comprehensive area assessment regime, which drew together separate assessments from other inspectorates including the Care Quality Commission, HM Inspectorate of Constabulary, HM Inspectorate of Prisons, HM Inspectorate of Probation and Ofsted. Although the annual assessment was intended to provide the general public with an independent judgment of the performance of their local council in respect of children’s services, there is no evidence to suggest that the general public engage with the process. The assessments and the associated bureaucracy are also not valued by local authorities themselves, with the Local Government Association suggesting their termination and directors of children’s services making it clear that they do not find the process helpful.
The repeal of Section 138 and the resulting removal of the requirement to undertake annual children’s services assessments will eliminate an unnecessary regulatory burden on both Ofsted and local authorities. It would bring a cost saving to Ofsted of between £1.3 million and £1.7 million per annum. It would also bring cost and administrative savings to local authorities, which the Association of Directors of Children's Services has said are “unquantifiable but … not insignificant”. The same organisation said of removing the requirement to conduct annual children’s services assessments that the benefit should not be understated. Indeed, it is not only the local authority that would like to see the requirement removed. The NSPCC stated in its response to the consultation on the use of a legislative reform order to repeal Section 138 that it was,
“not aware of any evidence to show that the annual assessment process has had any impact on the protection of children”,
and that it is,
“too superficial to add anything of real value to the inspection regime”.
I should add that the repeal of Section 138 would not affect the wider inspection of local authority children’s services. Ofsted will continue to inspect all services covered by the children’s services assessment, including child protection and safeguarding, looked-after children’s services, fostering and adoption services, schools and early-years provision. Indeed, Ofsted has recently introduced a new universal child-focused inspection regime for local authority services for the protection of children. A similar new inspection regime for local authority fostering, adoption and looked-after children’s services will follow in early to mid-2013.
The new inspection regimes will focus more closely on front-line practice than previous inspection frameworks and, particularly in relation to adoption services, will raise the bar for what constitutes good or outstanding practice, which will more effectively help drive improved services for vulnerable children. Ofsted will also continue to make an annual report to the Secretary of State under Section 121 of the Education and Inspections Act 2006. Ofsted’s annual reports summarise the overall results of inspections conducted under the various different frameworks that span its remit. Such annual reports must also be laid before Parliament.
To sum up, this repeal is necessary to remove unnecessary and costly bureaucratic burdens from Ofsted and local authorities. I beg to move.
Baroness Jones of Whitchurch
My Lords, I thank the Minister for her explanation of the order. She will know that the issue of the quality of services for children and young people provided by local authorities is particularly sensitive, not least because of the ongoing concerns about standards in children’s homes and the need for vulnerable young people to be protected. Therefore, it is crucial that if we are to change the inspection arrangements, we have to be satisfied that the new regime is an improvement on what has gone before.
I am unconvinced by some of the key justifications for these changes, which centre on the need to reduce the regulatory burden and the pressures on Ofsted to operate within a 30% budget cut. It is hard to envisage how a shift in policy from centrally designated and measured standards to local monitoring and accountability can work when dealing with the most vulnerable and powerless children and young people, who do not have a voice to demand quality services at a local level.
Nevertheless, I am persuaded that the inspection regime as it is currently composed and implemented is not achieving the objectives originally set for it. This seems to be the view not only of Ofsted and local authorities but, more importantly, as the noble Baroness said, of children’s charities, which clearly have the interests of children at heart. With this in mind, I will ask the noble Baroness a few questions about the proposed new inspection arrangements.
First, will she clarify what funds are being put in place to ensure a comprehensive inspection service is maintained, and reassure us that the changes are not being finance-driven? Secondly, will she clarify the start date of the new arrangements should the order go through? Ofsted has talked about putting in place the new inspections provision between May 2012 and mid-2013. Can we be sure that there will not be a gap in regulatory coverage in which poor practice could go undetected?
Thirdly, as the noble Baroness said, Ofsted has announced that it is working on a joint framework for multi-agency inspection of services for the protection of young people, including the Care Quality Commission, Her Majesty’s Inspectorate of Prisons and the probation service, to be implemented during 2013-14. Is the Minister concerned that this further imminent upheaval in local authority inspection arrangements might cause confusion and further bureaucracy? Can we be assured that the transfer of arrangements will take place seamlessly? Will she also clarify how the strengthening of the role of the Children’s Commissioner, announced by Sarah Teather yesterday, which will include the power to carry out investigations, will fit with the new multi-agency inspection arrangements?
Finally, and most importantly, will the Minister assure the Committee that once the order has been implemented, the replacement provision will be more comprehensive and more stringent, giving vulnerable children and young people the protection they should have a right to demand of modern, caring local authorities? I look forward to hearing her response.
Baroness Garden of Frognal
My Lords, I am grateful to the noble Lady, Baroness Jones of Whitchurch, for the thought and consideration that she has given to these important issues. The questions that she posed all raise key points. I am pleased to be able to address them and, hopefully, to put reassurances on the record.
I start by stating clearly that the removal of the requirement on Ofsted to undertake annual assessments of local authority children’s services is intended, first and foremost, to reduce bureaucratic burdens on local authorities and Ofsted. In the context of the budget savings that all public sector organisations need to achieve, the repeal of Section 138 will have a secondary benefit of allowing these organisations to free up resources that would otherwise be spent on bureaucratic activity and redirect them to the front line where they will have the greatest impact on helping protect vulnerable children and young people, which is something that we all seek to do. Ofsted’s inspection budget, although reduced, will still run to some £167 million in 2012-13. It is also important to be clear that other inspectorates will also contribute resources to the new child protection and looked-after children inspection frameworks.
The noble Baroness also asked for further clarity on the start dates for the new inspection arrangements. This is another vital point; it should all happen seamlessly. Yesterday, Ofsted published for consultation its proposed arrangements for the inspection of services for looked-after children and care leavers, as well as proposals for the joint inspection of multi-agency arrangements for the protection of children. Ofsted set out scheduled start dates for the new inspections in the consultation documents. The looked-after children and care leavers inspections are due to start in April 2013, and the multi-agency child protection inspections will start in June 2013. Of course, until then, existing fostering, adoption and child protection inspections will continue.
On the noble Baroness’s third question, I can understand her concern to ensure that changes to local authority inspection arrangements will not cause confusion and generate bureaucracy. Obviously, that is something that we would wish to avoid when there are any changes in arrangements, particularly with such a vulnerable group as the one that we are talking about. That is certainly not the Government’s intention and I am sure that Ofsted will work diligently to minimise both these factors. The repeal of Section 138 is intended to reduce unnecessary bureaucratic burdens, and Ofsted has been explicit about its plans to minimise bureaucracy in its multi-agency child protection inspection consultation proposals. The move to unannounced inspections, too, is intended to reduce the bureaucracy that was generated as a result of the previous announced inspections of safeguarding and looked-after children’s services, so we hope that there will be improvements and benefits from what is being proposed on a number of fronts.
I also assure the noble Baroness that the removal of the requirement to conduct annual assessments of local authority children’s services will in no way impact on the protection of vulnerable children and young people. This was another point that she raised. The new inspection frameworks that Ofsted and its partner inspectorates are developing and introducing are intended to focus far more intensively on front-line practice than the frameworks that have gone before. This focus on front-line practice is intended to examine forensically the services being received by vulnerable children and young people to ensure that they are properly protected from harm and receive high-quality services from local authorities. The multi-inspectorate approach to the new frameworks is also intended to ensure that the vital contributions of other agencies, in particular to child protection, are appropriately reflected in inspection judgments.
The noble Baroness asked about the relationship between inspection and the new investigative role of the Children’s Commissioner. The proposed legislation to reform the Office of the Children’s Commissioner would include a requirement on the chief inspector and Ofsted to have regard to any matters raised by the Children’s Commissioner. Placing this requirement on the chief inspector and Ofsted is designed primarily to ensure that the views and interests of children within the Children’s Rights Director’s remit will continue to inform Ofsted’s work when the CRD’s functions transfer from Ofsted to the Children’s Commissioner. As a result of the “have regard” requirement, Ofsted will take account of the matters raised by the Children’s Commissioner when carrying out inspections under its various frameworks. I hope that this provides reassurance about the fit between the Children’s Commissioner’s strengthened role and Ofsted inspections, and that the noble Baroness will see that these things have been thought through thoroughly.
I hope that the noble Baroness will also be reassured that the new inspection frameworks that Ofsted will introduce are intended to be more stringent and to raise the bar in our expectations of local authority services for the most vulnerable children and young people in our society. The repeal of Section 138 is intended to help remove bureaucracy and allow both Ofsted and local authorities to refocus their resources on the front-line services that contribute to helping vulnerable children and young people.
I hope that I have addressed all the noble Baroness’s questions. If any are outstanding, I will write to her. With those assurances, I commend the order.
Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012
Relevant documents: 1st Report from the Secondary Legislation Scrutiny Committee, 1st Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the order was laid before Parliament on 23 April under the powers granted by the Public Bodies Act 2011. It provides for the abolition of the Child Maintenance and Enforcement Commission and the transfer of its functions to the Secretary of State for Work and Pensions. I am satisfied that this instrument is compatible with the European Convention on Human Rights.
Before addressing the order in detail, I emphasise that there is no intention to change the services currently delivered by CMEC when its functions are transferred. The promotion of financial responsibility and child maintenance, the provision of information and support and the delivery of the statutory service will all continue. However, it would be helpful to provide some background on CMEC and the proposed abolition and transfer.
CMEC was established by the Child Maintenance and Other Payments Act 2008 and took over responsibility for the child maintenance system in Great Britain. Its primary objective is to maximise the number of effective child maintenance arrangements in place for children who live apart from one or both of their parents, whether these are made collaboratively between parents through family-based arrangements, by court order or through the statutory scheme. To achieve this objective, CMEC has three core functions: promoting the financial responsibility that parents who live apart have for their children; providing information and support to help parents make effective maintenance arrangements; and providing an efficient statutory child maintenance service with effective enforcement.
CMEC currently has two delivery bodies: Child Maintenance Options, which provides a free and impartial information and support service, and the Child Support Agency, which continues to administer the two existing statutory maintenance schemes. Together they are staffed by some 8,000 committed and dedicated people but, despite their best efforts, CMEC does not properly achieve its key purpose. Noble Lords are well aware of the complexities, inefficiencies and poor IT that have been a well publicised feature of the existing schemes but, crucially, around half of children living in separated families do not benefit from effective child maintenance arrangements—that is more than 1.5 million children.
CMEC costs taxpayers £500 million a year, but at present the Government spend less than 10% of that on positively helping families to address relationship issues or helping them to work together for the benefit of their children. That is why the system needs reform, and that is what we are working towards. I know that there will be particular interest in the planned reform of the child maintenance system but I do not propose to dwell on those matters here. I will write to noble Lords soon, inviting them to a meeting to discuss our proposals in more detail.
The proposal to abolish CMEC was announced as part of the Public Bodies Bill review on 14 October 2010. The review’s overriding aim was to increase transparency and accountability as well as to cut out the duplication of activities. Three criteria were set out by the Minister for the Cabinet Office in the Public Bodies Bill review which determined whether a body or function should be delivered at arm’s length from Ministers. I am satisfied that CMEC does not meet any of these criteria because, first, it is not a technical or fact-gathering body that needs independence, nor does it require political impartiality to discharge its responsibilities, nor does it need to act independently to establish facts. CMEC performs an administrative function and the services that it provides should be managed within the Government rather than by a non-departmental public body.
Child maintenance is an important part of the Government’s central aims and objectives in supporting families, particularly the 3 million-plus children living in separated families. It is right that Ministers should be directly accountable and responsible for the operational delivery, strategic direction and policies relating to child support without an additional layer of external management, as currently exists with the CMEC board. As I have already mentioned, the current system needs reform, and the proposed integration into the Department for Work and Pensions will enable us to do that much better. In the longer term, efficiencies can be achieved and I am convinced that the change will enable a better service to be provided to parents and children.
In accordance with requirements of the Public Bodies Act, which this House requested, a consultation on the abolition of CMEC ran from 10 October 2011 to 3 January 2012. Only 11 responses were received, a rate that indicates that this really is not a contentious change. Indeed, five responses were broadly supportive of our proposals, either agreeing with or welcoming the change, albeit with some minor concerns. Three responses disagreed or asked for reconsideration. One respondent had no comments to make and another had misunderstood the consultation criteria.
The order was laid on 23 April 2012. Orders under the Public Bodies Act have a minimum 40-day scrutiny period, with a Committee of either House able to extend that to 60 days by resolution if it feels it is necessary. The order has been scrutinised by several committees within Parliament: in this House by the Secondary Legislation Scrutiny Committee, as it is now called; in the other place by the Work and Pensions Committee; and collectively by the Joint Committee on Statutory Instruments. None of those committees chose to trigger the optional 60-day scrutiny period.
The Secondary Legislation Scrutiny Committee reported on the order on 15 May and concluded that it increased direct ministerial accountability by reversing the provisions of the Child Maintenance and Other Payments Act 2008. In the other place, the Work and Pensions Select Committee held an evidence session on the draft order on 25 April, which the Child Maintenance Commissioner and the Minister for Disabled People attended. The committee raised a number of issues, including how CMEC’s current objectives and functions would be pursued, how its activities would be reported following the transfer and whether the transfer could be justified on the grounds of improving value for money.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of the order, which is to abolish CMEC and transfer its functions back to the DWP, where it will operate as a business unit within the department. As we have heard, CMEC has not been around for long; it was created by the 2008 Act but was an integral part of the reform of the CSA that broadly followed the recommendations of the Henshaw report. This was essentially the third attempt to make it fit for purpose after its flawed creation in 1991.
That third attempt—we have heard some of this from the Minister—included a simplified assessment system, based on gross income, to be provided directly by HMRC; an overriding objective to maximise the number of effective maintenance arrangements; the removal of the compulsion on benefit claimants to use the statutory system; the obligation to promote awareness of the importance of maintenance arrangements; the obligation to provide information and guidance to parents by the Child Maintenance Options service; new IT systems eventually facilitating the provision of just one statutory calculation system; and a range of strengthened enforcement powers. All this was placed under the control of CMEC, an NDPB and, unusually, a Crown one at that—there are only a couple in existence.
We acknowledge that the transfer of the CSA was not a popular decision among staff who were concerned about losing their Civil Service status, although terms and conditions were protected. Truth be told, it was not the only possible structure within which the CSA revamp could have taken place. At the time, though, it was seen as having the merit of being part of giving the CSA a fresh start and of having not only a dedicated operational management but dedicated board oversight to see that the range of objectives were progressed. This was seen as important for the efficiency of the fundamental assessment, collection and payment arrangements but also for the wider obligations of the promotion of child maintenance and the provision of information.
It is understood that the Government contend that each of the objectives of the revamp endure and that reverting to be a part of DWP will not change this; the Minister has pretty much confirmed that. It is contended that the abolition of CMEC will allow for greater ministerial accountability for child maintenance. Frankly, that is at best a marginal argument. It suggests that there are not clear lines of accountability between NDPBs and Ministers. These are generally through regular reporting but technically through the department’s framework agreement and, of course, through budget-setting. These provided a natural separation between operational matters and policy, and the oversight of the board was important in ensuring a balance of effort and resource going to the collection process and the support service.
The Minister will be aware that, as in the other place, we seek assurance that the removal of the explicit objective to maximise the number of effective maintenance arrangements does not mean that it will not remain the key objective. Can we understand what data will be routinely available to monitor whether this is so? There is a risk that this will get subsumed into broader issues around family policy with which we might entirely agree but where there is a loss of focus on this aspect.
Incidentally, I note that the order is to take effect soon. Would it not have been better to have any transfer at the end of a financial year? Will the Minister confirm that there are no adverse tax consequences of the transfer of property, rights and liabilities from CMEC to the DWP? Can we please have an update on the move towards a single statutory system of child maintenance? What is the latest timetable?
Specifically on the enforcement powers, can it be confirmed that the powers set out in the 2008 Act can be implemented equally as effectively by DWP as by CMEC? What is the timetable for bringing them all into effect?
We are not sure this move is necessary or the right one at this time but will not oppose it, although we will seek to keep up to date with progress under the new arrangements.
Lord German
My Lords, I come to this discussion with some background knowledge of bodies being taken “in house” under the previous and present Labour Administrations in Wales. Accountability is crucial. The question we should ask is whether a body has the right purpose. In this case, the purpose is correct, in that CMEC provides a determined service and does not require the same flexibility of operation or fleetness of foot as, for example, an economic development body might need in attracting new investment into one’s country. However, the question of accountability remains. Any change of this sort works only if it provides a better outcome for customers at the other end and in terms of the services being provided. Does my noble friend the Minister agree that having a phone number for complaints, when last year there were 23,000 complaints, would not be a helpful way for the Government to proceed? Asking in a year or two whether there had been a certain level of complaint about the service and whether it had improved as a result would be the way to judge whether this is the correct move.
Additional funding for voluntary agencies and third-sector organisations to support this work was announced during the passage of the Welfare Reform Act. How does my noble friend see that dovetailing with the in-house operation? Will it deal with the level of change being anticipated? What relationship is there to be between those third-sector organisations and the department?
One of the criteria that always worry customers is, “Is there somebody who I can call or who I can contact who is dealing with my case?”. Will there be someone in the in-house regime who holds the file for a particular customer so that the customer can know who they will be talking to if they wish to make contact?
It would be to the advantage of the in-house service if other parts of the DWP were to provide supportive services. We know that people call CMEC at present with a variety of problems. They are not purely financial but relate to other sorts of service and support. Some of them are to do with local authorities; some are to do with caring responsibilities; and some are to do with work and so on. Can my noble friend indicate what range of on-call services the department will be able to provide to the new in-house operation? For example, data held under the universal credit system might be made available to people working in the new part of the department, thereby making things quicker.
At family breakup, a complex web of issues faces parents. What will be the scope of advice and signposting in the new regime? Will a sympathetic ear be available? Will there be someone who can provide a range of signposts to different services or make the connections if some of them are within the department?
I return to the issue on which I started: accountability. There will now be accountability to Ministers, but that accountability will be tested by Parliament. Does my noble friend intend to produce an annual report or regular update on performance in this area of work, so that noble Lords might be able to test whether the regime has worked effectively? Clearly, this service has not worked effectively over the years since its creation. It has caused a great deal of heartache for a large number of people. The ambition is to improve but we need to be able to test that improvement, and I wonder in what ways that will happen, apart from the normal scrutiny of the Minister through questioning. Perhaps the Minister could lay before Parliament some of the issues that have been successfully achieved or otherwise in data form so that we can make that judgment.
Baroness Sherlock
My Lords, first, I apologise to the Minister for having missed the beginning of his opening remarks. I am afraid that I misjudged the timings somewhat. In speaking to these regulations, I remind the Committee of my registered interests. In particular, although the Child Maintenance Enforcement Commission had a brief life, I managed for two of its years to be a member of its board, serving as a non-executive director until 2010, shortly after I entered the House. I also declare that I am a former chief executive of One Parent Families, now Gingerbread, to which I am grateful for the briefing.
These are small regulations to effect a major reorganisation. I want to ask the Minister a couple of questions, picking up some points made by my noble friend Lord McKenzie. When CMEC was set up by the Child Maintenance and Other Payments Act 2008, its primary objective was,
“to maximise the number of those children who live apart from one or both of their parents for whom effective maintenance arrangements are in place”.
The wording is significant. As the Minister knows, this does not refer simply to maximising the number of maintenance arrangements made through the statutory system but to maximising the number of arrangements in total. In other words, CMEC had a duty, which it took very seriously, to maximise the number of private maintenance arrangements alongside those undertaken using the statutory system. Given that, what assurance can the Minister give us that this objective will be taken on by the Secretary of State, to whom CMEC’s functions are being transferred? How will that be discharged? The noble Lord, Lord German, suggested that perhaps a report to Parliament might work.
Before CMEC was created, when the Secretary of State had responsibility for child maintenance, the Secretary of State actually issued targets and then reported publicly to Parliament on the extent to which those targets had been met—or not. That might be something that the Minister might like to take on board. Can he tell us if the Secretary of State would be willing to do that, and if not, what other mechanism is there for reporting to Parliament and for ensuring that Parliament can have some criteria for judging the report that is thus made?
The Minister, I am sure, will have read the report on CMEC by the National Audit Office of 29 February 2012, as well as the report of the Public Accounts Committee from April. In relation to the decision to charge parents for using the statutory maintenance service, the PAC report noted:
“A successful fee regime will depend on the Commission being able to deliver reasonable standards of service”.
However, it also said that because of problems with the service, there was a danger that parents would not want to use it. The committee noted:
“The risk is that parents who cannot agree private arrangements and do not trust the statutory system are left without effective child maintenance arrangements and that could impact on child poverty. The Commission should work with stakeholders to monitor whether more separated families agree their own arrangements and understand any service-related reasons for lower than expected applications”.
It also suggests that:
“The first monitoring report should be carried out six months after the introduction of fees”.
What is the Government’s response to that recommendation from the PAC? I apologise if the Minister mentioned that in the first five minutes of his opening remarks. Will the Government accept that recommendation and the timetable, and if not, by what other means are they going to address the concerns raised by the PAC?
Can the Minister give the Committee some assurances about the readiness of all involved for this transfer? The PAC report also noted that the commission’s plans to deliver the £117 million of cost reductions imposed on it by 2014-15 were “high risk”. It said:
“There is a £16 million funding gap for 2014-15 which could widen by some £3 million for every month the new IT system is delayed. A further shortfall of up to £30 million could arise in 2014-15 if projected fee income does not materialise”.
What assurances can the Minister give the Committee that the statutory service has adequate funding to deliver the service promised when the Welfare Reform Act was passing through this House?
Finally, I know that the Welfare Reform Act has made the decision to transfer this but can the Minister tell us what lessons the Government have learnt from history? The department has had the opportunity to see the CSA operating both inside and outside government. In bringing it back in, what lessons has the department learnt and how does it hope to avoid some of the very considerable problems the CSA had in the early 1990s?
Lord Kirkwood of Kirkhope
My Lords, I am delighted to follow the noble Baroness, Lady Sherlock, because she said just about everything I had in mind to say. I concur with the important points that she made.
I am very pleased that the noble Lord, Lord Freud, offered us a meeting later in the year. That is part of his unique way of doing business and it is very helpful to the rest of us as we try to understand what is going on. I understand that he and his colleague in the other place are putting a great deal of work in to this important area.
I will stress—because it is easily forgotten—that the client group with whom we are dealing may be disproportionately affected by the impact of the austerity measures that the country faces. I am sure that the Minister and his advisers are already aware of this. As a board member of the Institute for Fiscal Studies, perhaps I could draw his attention to the analysis by James Browne that was published by the IFS for the Family and Parenting Institute in January 2012. It predicted an 8% net loss of income for working single parents and a 12% loss for non-working single parents. We are dealing with a particularly vulnerable client group here, and we all know that. The IFS analysis is useful as a reminder of the importance of getting it right. I know how concerned the noble Lord, Lord Freud, is about these vulnerable groups because he is doing a lot of work on universal credit to try to make sure that these issues are addressed.
In addition to the points addressed to the Committee by the noble Baroness, I will say that other NAO and PAC reports that came out earlier this year—particularly on client fund accounts and on CMEC’s plans to reduce its own spending, which was in an NAO report on 12 February this year—raised matters about which we should all be concerned, including the ability of CMEC to achieve its estimated £117 million savings between now and the fiscal year 2014-15. That is something I would like to put on the agenda for the meeting later in the year, which I would be very pleased to attend—if I get an invitation after this speech.
The NAO was also concerned about the plans to levy charges. I do not need to repeat the point that there is some disjunction between the early planning and the work that the NAO did in highlighting some of the gaps. This will have been worked on and I hope that there will be further and better particulars available. At any future meeting I would like to try to understand how much risk there is in the levying charges policy that is currently being publicly promoted, at least by CMEC.
I agree with the NAO analysis about planning for a 71% take-up of the new statutory system. I have no way of knowing the metrics, systems or processes that CMEC has for measuring that 71%. It is relying very heavily on that as an income stream from which it hopes to move forward. The Comptroller and Auditor-General, the NAO and the PAC were interested to learn more about that, and again expressed concerns. I will also reinforce the point about maximising payments. That is an important duty that will be lost. Any system, whether or not it involves annual reports, should underpin efforts to win back as much of that as we can in the circumstances. That would be useful.
Finally, we still expect a consultation on charging mechanisms. That is a very important piece of outstanding work in which the community, pressure groups and others to whom this area of public policy applies are particularly interested. Perhaps we could add that to the agenda of what now looks like quite a busy meeting some time in the autumn.
This is an important area. I am very ambivalent about this change but I can understand that the costs have to be reduced in a sensible way. I just hope that we are able to do that in a way that does not disproportionately affect the client group we are seeking to serve here. But I have trust that my noble friend Lord Freud is aware and alive to all these things. I hope that the Committee can look to him to give us reassurance, whether privately or publicly, going forward.
Lord Freud
My Lords, as ever, there have been some very thoughtful and knowledgeable speeches. Why am I not surprised? I will set the context of the process we are going into in terms of consultation. I deliberately kept my speech very focused on this order. As we are all aware, there are a lot of issues around CMEC charging generally, which we will have a lot of time to address. As I said in my opening remarks, I plan to write to noble Lords reasonably soon. I made a commitment to involve noble Lords particularly in the charging process and the plans that we have. I said that I would do that at two points: first, at the outset in order to allow noble Lords to see plans at the beginning as we develop and discuss them and, secondly, before regulations are laid towards the end of the process as the debate has gone through. There is time outside the formal calendar in which to go through this.
I am conscious that when things are difficult—and in this area of child maintenance there is a lot of sensitivity and concern—an involved process is much better than just slamming a set of regulations on the desk. That is why I have done it in that way and have made some cuts. We could easily spend all night on this and I am trying to concentrate just on the core transfer.
There were quite a few questions from noble Lords on the reporting process and the data process. The group will be included in the DWP’s annual report and accounts. It will continue to publish a quarterly summary of statistics of child maintenance and the figures will be included in the biennial Understanding Society survey. We will respond to the question asked by the noble Baroness, Lady Sherlock, and the PAC through a Treasury minute, which will be published in the near future. I do not have a translation for “near future”, so we will have to go on the commonplace interpretation of what that means.
My noble friend Lord German asked about historic debt and our strategy. It remains a priority. We have a debt of £3.8 billion outstanding. We want to collect as much of that as we can and are using all the powers available to us to do so. He also asked about effectively co-ordinating family support services. A number of principles are involved here: we need to make sure that families have the right information when they separate and that they are encouraged to have a collaborative relationship. That, as noble Lords are fully aware, is a core part of the Government’s strategy here. In the main, services will be voluntary and community sector-led. That is why we have formed a steering group of representatives from the sector to inform our thinking and propose how best to evolve those services. My colleague, the Minister for Disabled People, Maria Miller, announced in January that £20 million was available to support this work and on 25 June she confirmed that £14 million of it would be placed in a new innovation fund to finance effective and innovative interventions. I will not go into that in any greater detail.
Lord Freud
Actually, I would like to turn that around on the noble Baroness; I will accept a letter from her on the lessons from history, and I will pass it on and make sure that they are applied. I look forward to receiving that.
On my noble friend Lord Kirkwood’s question about how we will achieve the savings, we are talking about securing ministerial accountability—this is not about driving savings. The amount of savings from this measure is pretty modest: direct savings are probably running at about £500,000 a year, and that is due to changes to IT systems and one-off costs. We would hope to see longer-term savings from integrating services more deeply into the department. I think, and this point was raised by my noble friend Lord German, that there are some real opportunities here to get holistic support. The longer that I have been in this job, the more I have realised that bringing support together for people and families in trouble is the way to go. There is an opportunity for us to pull the services together in this context as well as in other contexts.
I am tempted to offer to write to the noble Lord, Lord McKenzie. I always feel that it is a triumph if I can get out without offering him a letter because I can answer all his very clever questions. I think that I am down to the one on adverse tax consequences. Although it is always difficult to prove a negative, I cannot imagine how there can be adverse tax consequences because we do something in the middle of the year, when they are both effectively Crown bodies. If that is a wrong tentative statement, I will commit to write, but I hope that I will have avoided any need to put pen to paper for him on this occasion; that would be one of my personal targets. This is about making sure that Ministers are fully accountable to Parliament.
Lord McKenzie of Luton
So that the Minister does not have to commit anything to paper, will he deal with the question about the enforcement powers? There is a whole raft of them in the 2008 Act. Those are all presumably going to be taken over by DWP. Where is the department on bringing those into effect?
Lord Freud
My Lords, the noble Lord is right: we just transfer those powers over. There is no change in them. As to the detailed timetabling of all that, we are preparing to show that to noble Lords. The easiest way is if I come to that, unless I have a miraculous answer—which I do not think that I have to this specific question. I will deal with that when we assemble, quite soon, on that issue. I will not write.
I close by reassuring noble Lords that ensuring that children get the support that they require, both financial and otherwise, when their parents cannot live together and ensuring that they have the best opportunity to thrive during their childhood is what this is about.
Social Security (Civil Penalties) Regulations 2012
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Social Security (Civil Penalties) Regulations 2012
Relevant document: 2nd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I can confirm that, in my view, the statutory instrument is compatible with the European Convention on Human Rights.
These regulations support the powers introduced by Section 116 of the Welfare Reform Act 2012, which allow both the Secretary of State and local authorities to impose civil penalties in relation to benefit claims and awards in certain circumstances. That section allows for the amount of the penalty to be set by regulations. Our reason for bringing forward these regulations is straightforward. It is right that claimants should take responsibility for the information which they provide in order to receive benefit, or to notify us of important information affecting their entitlement. Claimants are in the best position to tell us of these facts and of these changes as soon as they occur. When you consider that £1.3 billion is lost each year as a result of claimants who fail to do this, it is clear that we have an immediate issue to address.
Introducing a civil penalty will help to make claimants more personally responsible for the overpayments they incur and encourage a positive change in future behaviour. We remain committed to tackling the intolerable financial loss through claimant error and the regulations before the Committee support that aim, the detail of which I will now explain.
In bringing forward these supporting regulations, we have set the civil penalty at £50 in all three cases where a penalty may be imposed. The amount of £50 was previously announced in government publications and was stated by me and my honourable friend in another place during the passage of the 2012 Act. I trust, therefore, that the penalty level is no great surprise today. In setting the penalty at £50, we aim to be tough but fair in our approach. It is also a significantly lower amount than the harsher consequences which would apply to those who commit benefit fraud offences. The penalty is directed at a failure to take proper care of a benefit claim, as distinct from fraud. We believe that £50 is an appropriate amount for the penalty level. It is high enough to encourage claimants to take more personal responsibility for overpayments incurred through their negligence as well as encouraging a positive behaviour change in any future dealings with the department. The penalty will be simple to calculate and easy for the claimant to understand and recognise. Providing for the same penalty to be imposed in all three cases where they can be imposed will allow for this.
I reassure noble Lords that we will always consider the individual circumstances of the case when deciding whether to impose a civil penalty. To be clear, we must tackle claimant errors which results in losing as much as £1.3 billion each year. This penalty will help us to achieve that. Those who continue not to take proper care of their claim in future will also risk incurring a £50 civil penalty on top of having to pay back the overpaid money. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of these regulations. They have of course already been considered in another place. We do not object in principle to what is proposed, given that some £1.3 billion is lost through claimant error each year. I do not know if the Minister has an update on estimates of benefit overpaid through official error; if he does, it would be of interest to hear what that number is.
As we have heard, the civil penalty is set at £50 for each of three types of error, namely incorrect statements, failure to provide information and failure to notify changes of circumstances. So far as incorrect statements are concerned, they must have been made negligently and reasonable steps not taken to correct the error. In the case of disclosure of information and failure to provide details of changes of circumstances, there is the defence of “reasonable excuse”. It is therefore acknowledged that application of the civil penalty should always require a judgment to be made; the Minister confirmed that.
Can the Minister confirm first that, except in the case of housing benefit and council tax benefit, the judgment will always be made by Jobcentre Plus decision makers and not by contractors? The Minister of State in the other place confirmed that guidance would be available to staff, but we would be grateful if the noble Lord, Lord Freud, could say a little more about that guidance. We have discussed many times the situations of those with mental health conditions, especially those with fluctuating conditions, in connection with the issue of sanctions. The same issues must surely run for the issue of penalties. Can the Minister say specifically what the guidance is likely to cover in this respect?
The Explanatory Note says that DWP will,
“draw on the expertise of interested outside stakeholders to ensure that guidance, communication products and decision making processes are suitably tailored to meet the needs of the range of claimants”.
Might we be told what this has amounted to, to date?
In passing, we had a very helpful presentation on progress on universal credit earlier today. I did not spot anything flagged as part of the claimant process issues around the prospect of civil penalties in the various bits of information we had, but perhaps we missed it in that presentation.
The Explanatory Memorandum states at paragraph 7.7 that where a failure to disclose could cause an overpayment of more than one benefit,
“only one civil penalty will apply”.
What is the situation where the failure relates to an assessment of, say, jobseeker’s allowance and housing benefit? Prior to universal credit being introduced, the appropriate authority for the latter will be the local authority, not the DWP. How will it be ensured that only one civil penalty will arise?
We debated this during the passage of the Welfare Reform Act, but will the amounts collected in penalties accrue to the Treasury, to the DWP or to local authorities? If the latter, how will a single civil penalty be divvied up?
There was discussion in the other place during the passage of the Welfare Reform Act about the anticipated volume of civil penalties—in excess of 500,000—especially in contrast to HMRC data concerning parallel provisions. If this is right, it is a worryingly high volume and calls into question the real level of discretion that will be available in judging whether someone has been negligent or has failed to take reasonable steps to correct an error. What assessment has the department made of the time and cost involved in making these judgments? There must surely be an impact also on the volume of appeals. What does the Minister think this might be?
The provisions apply to the administration of council tax benefit also. As I indicated earlier, we are doing our best for the Minister to have its replacement inculcated within the universal credit through our deliberations on the government Finance Bill but, I am bound to say, some of our arguments are, unusually, falling on stony ground. Should council tax support be localised, the provisions of this order would presumably cease to have effect for local schemes, even the default ones. Presumably one would have to look to the powers in that Bill to see what alternatives might be available.
Because the universal credit is intended to be the great simplification, one would hope that that would make claims and associated issues easier to deal with and would therefore ease the circumstances in which these penalties might be applicable. However, that remains to be seen. We will not oppose these regulations.
Lord German
My Lords, may I explore one item and ask a cheeky question at the end, related to the universal credit demonstration that some noble Lords were able to hear earlier on? Very welcome it was, too.
Paragraphs 9.1 and 9.2, which the noble Lord, Lord McKenzie, has already referred to, are about the guidance that is to be issued. In response to my questions to my noble friend about the way in which decision-makers behave, the answer has invariably been that we must encourage the empowerment of decision-makers. Of course, written guidance does not necessarily help people to use their discretion.
The other problem that is painfully obvious to many observers of the situation is that, when discretion is used, it may not necessarily be uniform throughout Jobcentre Plus offices. There have been a number of occasions, and some of these have reached the media, when decisions have been made on the basis of what may appear to be fairly flexible guidance but has been interpreted in a very literal way. If these penalties are to be most effective, then they are a weapon that has to be used with great discretion. Is my noble friend prepared to outline a little more about the nature of the work that will go on with Jobcentre Plus decision-makers to advise and empower them but also to train them in a method that does not simply consist of reading written materials from the department, and whether he has put in place a reviewing or monitoring mechanism—some way of judging whether that discretion is being used in a fairly uniform way? Nothing could be worse than if people were to rigidly apply rules in one office while next door someone was being treated with discretion and therefore differently. Noble Lords will know that it is difficult to strike a balance between discretion and uniform application. I wonder how that circle is being squared by the department, particularly in relation to paragraphs 9.1 and 9.2.
One of the problems found in the employment support allowance process is that claimants often fail to provide full evidence of their condition until perhaps after the decision has been taken and their appeal is on its way or reaches the tribunal stage. Does my noble friend see any use in the threat of these penalties that might assist people to come back earlier and give their full position and provide all the details in evidence that may be relevant to their claim up front in order that decision-makers might help to get the claim right at the first attempt?
This is a minor and very cheeky question. Under the universal credit, where real-time information is to be provided, is there a double banking system—does the claimant of universal credit also have to report these matters to the department? Is there a double check or, if there is a failure at one end of the system, will the claimant be blamed for what may have gone wrong in, say, information being inputted wrongly by his or her employer? Will any form of double-checking take place? Does the claimant stand any liability for what might happen in that respect?
Lord Freud
My Lords, I shall try to deal with as many questions and to avoid writing as many letters as possible. The noble Lord, Lord McKenzie, asked about the latest figure on official error. The latest figure is £0.8 billion. As regards making sure that one civil penalty will apply, we have put in place processes for decision-makers to check whether a penalty has already been applied for the same failure or error resulting in the overpayment. Only the JCP and the decision-makers, PDCS, are dealing with the non-housing matters. The way in which we ensure that we do not get a double whammy with local authorities and DWP is for local authorities to apply their penalties only when the standard housing benefit or council tax benefit is the only benefit in payment. In that way, there is no possibility of an overlap.
We are drafting the guidance and we hope to share the final draft guidance with SSAC by the end of this month. We will look to share it with other relevant stakeholders at that time to take on board their comments. The guidance will cover the obvious examples of negligence, reasonable steps and reasonable excuses. As one would expect, there will be intensive training, which will explore definitions of the penalty criteria. I do not think that the figures have changed from the impact assessment that we discussed when we were looking at the Bill. The cost is £19 million over 2014-15. The appeals estimate, which we discussed, remains purely an estimate.
In response to my noble friend Lord German’s question on the difficult mix of discretion and consistency, it is important that we have clear guidance about what constitutes the penalty criteria. Each case will be individually considered by a decision-maker. They will have general duties, such as to look at only what is relevant and to explain their decisions to claimants. My noble friend’s idea had not occurred to me. He is more devious than me about using this process to make sure that we do not have different information going to decision-makers and later to tribunals. I think that I shall take that away and think about it, as it is rather clever. That is a design issue that we shall explore.
I say in answer to the noble Lord, Lord McKenzie, that we will monitor the new penalty to ensure that it is effective—and to what extent—and that there is equality of treatment. We will use evidence from a range of sources such as administrative data and wider data sets. In practice, one of the main success criteria will be that we impose fewer penalties as time goes by.
We talked in the past about the fact that we now have a framework for conducting trials much more coherently right through the system. Clearly, we will pick out the key behavioural impacts of different aspects of the policy. How sanctions will work in that area is something that we will look at with randomised control trials. It is a very obvious test and there will be mechanisms for conducting it. We will look at the results very closely, and rather earlier than at the results of other tests, once UC has come in. I hope that I have dealt with all the issues.
Lord McKenzie of Luton
Perhaps the Minister would just confirm whether the penalty revenue accrues to the department or to the Treasury.
Lord Freud
My Lords, I distinctly remember writing a letter to the noble Lord on this matter—and I really regret that I cannot remember what I said. So I will let my letter on the matter stand. Perhaps the noble Lord would look through his files. I have just received a note to say that penalty revenue will go into the Consolidated Fund. I remember writing that now; I laid it out in detail. If the noble Lord would like amplification on that letter, which was quite long, I would be happy to give it to him, perhaps over a cup of tea.
Lord McKenzie of Luton
I am grateful to the noble Lord. That means that the costs associated with the system will fall on the department and the revenue will go to the Treasury.
Lord Freud
Yes, but in reality there will be a transfer one way and then a transfer the other way within the overall DEL settlement. There may be some minor timing discontinuities, but my officials in the DWP are extraordinarily well versed in discussing these matters with equally well versed Treasury officials and getting the flows of funds to work together—so not even tea on that issue.
As ever, noble Lords asked very informed questions. I hope that I have dealt with all of them and welcome the fact that there is general support in principle for the regulations. I commend them to the Committee.
House of Lords
Introduction: Lord Trees
Drugs: Prescribed Drug Addiction
(12 years, 5 months ago)
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The Earl of Sandwich
To ask Her Majesty’s Government whether they plan to develop separate treatment programmes for those suffering from acute symptoms of addiction to and withdrawal from legally prescribed drugs, distinct from programmes for illegal drug addiction.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, treatment should be based on individual need, not the legal status of a drug. The Health and Social Care Act places responsibility for commissioning services to treat dependence at the local level. My honourable friend Anne Milton is leading work to improve the prevention and treatment of addiction to medicines, and has visited local areas where support for dependence on prescription drugs is an integral part of the local treatment system.
The Earl of Sandwich
My Lords, I thank the Minister and I know that he and his fellow Minister are fully aware of the problem. However, there are only a handful of voluntary organisations and one or two primary care trusts dealing with this. The basic question is surely the control of prescription drugs. Does the Minister recognise that the British National Formulary guidelines are being routinely breached? Is there nothing that the Government can do effectively to control and monitor these prescription drugs, separately from illegal drugs?
Earl Howe
My Lords, the report commissioned by the Department of Health from the National Addiction Centre brought together published evidence on the scale of the problem. That report suggested that while some GPs prescribed for longer than the recommended period, most prescribing in fact falls within current guidelines. I say to the noble Earl that what matters most in these circumstances is that patients should be treated according to the level of their need, regardless of what the dependence is and where it has come from.
Lord Patel of Bradford
My Lords, while there certainly is a focus on recovery for illegal drug users, does the Minister agree that the journey from being a drug user to becoming “recovered”—that is, to abstinence—is very complicated? It may require that person to have treatments, including methadone, Subutex and other drugs. It is not simply a matter of someone becoming abstinent, especially in the current economic climate. Does he agree that that is still the direction of travel?
Lord Taverne
Will the Minister ensure that whatever else is done, nothing shall prejudice the treatment of illegal drugs and of alcoholism, which is the greatest problem? Will he also take note that in the distant past, when I was a Home Office Minister and Roy Jenkins was Secretary of State for the first time, the use and possession of drugs such as heroin was not a crime and that this greatly facilitated the possibility of access to treatment?
Earl Howe
There are no plans to revert to the former situation as regards heroin, but my noble friend makes the point that alcohol addiction is an extremely important issue. The commissioning of services to treat addiction will in the future architecture of the system be devolved to local areas. The all-party group on benzodiazepines on which the noble Earl sits has done some important work in exposing those areas where services are not as good as they should be.
Baroness Meacher
I applaud the Minister’s comment that treatment must be based on need rather than on whether a substance is legal or illegal. Is he aware of the excellent work being done to treat heroin addicts in Switzerland, where a third of people are in employment and two-thirds of people are living legally within 18 months? Will he consider introducing to this country these highly cost-effective approaches?
Lord Howarth of Newport
My Lords, does the noble Earl think, as I do, that if the Department of Health were to be the lead department for the Government’s policy on drugs we would get better results than we have been getting with the Home Office as the lead department?
Earl Howe
My Lords, the Home Office has a particular responsibility for drugs which is distinct from my department’s responsibility, which is to do with ensuring that those who are addicted to drugs get the proper treatment. The two are distinct and it would not necessarily be helpful to blend them together.
Baroness Finlay of Llandaff
Will the Government ensure that the recommendations from the Royal College of General Practitioners for increased training in psychiatry is implemented in workforce planning after the new Act is in place? The inappropriate initiation of prescriptions is a major problem for those becoming dependent when alternative therapies, such as cognitive behavioural therapy, or simply better social support, would have avoided the inappropriate prescription of a drug on which physical dependence then develops.
Earl Howe
The noble Baroness is absolutely right, and I am very pleased that both the Royal College of General Practitioners and the Royal College of Psychiatrists have been keen participants in the round table group on addiction to medicines convened by my colleague Anne Milton. The actions agreed by the group have included greater recognition of the risk and the treatment of dependence on prescription drugs within the core competencies of psychiatrists and the further development of training and guidance on this issue for GPs and other healthcare practitioners.
Lord Brooke of Alverthorpe
My Lords, does the Minister agree that one of the biggest obstacles to recovery for people with addictions to alcohol and drugs is stigma? Will he confirm that there is no thought in mind of moving down the avenue suggested in the Question because that would lead to greater stigma?
Earl Howe
I am well aware of the point that the noble Lord appropriately raises. Stigma is an issue and we need to take account of the risk of it. That means that quite often when treatment services are provided to those who are addicted to medicines, they take place in a different setting from those administered to addicts of illegal substances.
Lord Crisp
Will the Minister recommend that, given that withdrawal from legally prescribed drugs is every bit as dangerous as withdrawal from illegal drugs, more should be done, for example, to print warnings in bolder lettering on packaging, to put notices in doctors’ surgeries and to make the public and the patient more aware of this issue as well as making doctors more aware?
Earl Howe
I agree that dependence on prescription medicines can be just as devastating and debilitating as dependence on illegal drugs. The round table on addiction to medicines has agreed actions to improve public and professional awareness of the risk of dependence. They include a review of the updated warnings on prescription painkillers by the Medicines and Healthcare products Regulatory Agency and the development of further materials for GPs and other healthcare practitioners to support patients in understanding the risks.
Schools: Copyright Exemption
Baroness Bakewell
To ask Her Majesty’s Government what assessment they have made of the impact on authors of a copyright exemption for schools; and whether they plan to put in place any safeguards to protect authors’ incomes.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Government’s recent consultation on copyright explored a number of options to update the current exceptions to copyright provided for educational establishments. None of the options considered has proposed a copyright exemption for schools. We are clear that any changes to the current exceptions should clarify the position for teachers but must not undermine the important incentives to creators of new works.
Baroness Bakewell
I thank the Minister for that Answer. I understand that the situation is still fluid and that decisions have not yet been made. That is why it is important to raise the issue at this time because in the autumn there will be a substantial opening up of the UK’s copyright exemption regime that is estimated to cost the writers of this country something like £12 million. Are the Government aware that where such exemptions exist in the vast majority of European countries, they are balanced by a fair compensation scheme which provides remuneration for authors? The Government’s own consultation paper states that,
“there is a danger that going too far will undermine the financial incentives that encourage the creation of new educational works”.
Will the Government bear in mind those words?
Baroness Wilcox
The noble Baroness was kind enough to give me an outline of what this Question was likely to be about. I know that there have been worries among writers, specifically of textbooks, who are people who do not make a great deal of money out of doing things. It is nothing to do with the fact that we do not want them to carry on writing. We absolutely want them to carry on writing these textbooks. I am delighted to reassure the noble Baroness that the Government have not proposed a copyright exemption for schools. They will still have to pay for their licences. The last thing we want is for writers to stop writing. If they keep writing, they will keep getting their money.
Lord Jenkin of Roding
My Lords, does my noble friend realise that, reassuring as her first Answer was, Clause 56 of the Enterprise and Regulatory Reform Bill, which is now at the other end, has caused a great deal of anxiety, not only to authors but to composers, musicians and others who depend on copyright for their living? Does my noble friend agree with the advice that has been given to the Authors’ Licensing and Collecting Society by the Intellectual Property Office that the clause has been introduced not in order to implement the exceptions suggested in the Hargreaves report? Should it not be made clear in the Bill that the new powers should be solely in the context of restricting the operation of the copyright exceptions?
Baroness Wilcox
My noble friend hits on a point that is absolutely right. In the other place at the moment, my honourable friend Norman Lamb is struggling with Clause 56, trying to clarify it and explain to people that they are worrying unnecessarily. The truth is that we know all about the questions that have been raised on this. As I look around today, I see people who represent those great societies. By the time the Bill gets here, I am absolutely sure that things will be clear. In the mean time, I am happy to write to my noble friend to give him clarification.
Lord Walton of Detchant
My Lords, I declare an interest as I receive tiny sums twice a year from the Authors’ Licensing and Collecting Society. Does the noble Baroness accept that, as the noble Lord, Lord Jenkin of Roding, said, if in consequence of Clause 56 of the Enterprise and Regulatory Reform Bill being enacted, the Government removed the requirement for schools, colleges and universities to have a licence in order to copy, it would take away £12 million per year in secondary royalties currently paid to writers and £15 million a year that goes to publishers? Is the noble Baroness further aware that if this were activated, high-profile writers such as Philip Pullman and others have said that they would seriously have to reconsider writing for schools?
Baroness Wilcox
I am very much aware of all the points that the noble Lord has made. Norman Lamb, my colleague in the other place, is also aware because those discussions are going on at this time. We must remember that the Hargreaves report was directly commissioned by the Prime Minister himself. He wanted to know whether we have an intellectual property office and system that is fit for purpose in the 21st century. We have laws that we cannot enforce and technology is leaping ahead at enormous speed. However, noble Lords can be absolutely sure that we want to do nothing that will impede people earning a living. We are looking for everybody to make as much money as they can at the moment because we have hardly anything left in the coffers.
Lord Wills
My Lords, I draw attention to my declaration of interest, as set out in the register. Will the Minister confirm that copyright lies at the heart of the creative industries, which are so crucial to the economic success and cultural well-being of this country? If she confirms that, will she explain why the Government propose, in the Enterprise and Regulatory Reform Bill, to make important changes to copyright through secondary legislation rather than through the primary legislative process that would give this important issue the full scrutiny that it deserves?
Baroness Wilcox
This will all be discussed during proceedings on the Bill, which is in the other place at the moment. Of course it is important; that is why we have taken so much time to make sure that we get opinions from everybody, particularly on copyright. We know how important it is. We have other voices to listen to as well, including those of consumers and teachers. The original Question was about how teachers could get things on to boards when it is illegal to write something that is in copyright on a whiteboard in this country. It is a very complicated subject, as the noble Lord well knows. However, I am delighted that he still makes his living from writing.
Baroness Benjamin
My Lords, what assessment have the Government made of the impact of copyright exceptions for schools on the ability of bespoke educational publishers, particularly providers of specialist music education material, to continue to develop exceptional international products? I declare an interest as a writer of educational works.
Baroness Wilcox
I can only repeat again that nothing is under threat at the moment, certainly when it comes to schools. We are looking for teachers to take up the licences as they should but, at the same time, to be able to use the facilities that they have. At the moment, the law states that you can write something only on a blackboard—now called a chalkboard—although only 1% of boards in this country are blackboards. The whole law is a wreck as far as this is concerned. I can reassure noble Lords that nobody is taking away anyone’s living but we want teachers to have enough time to teach children. That is what they are there for.
China: Mineral Acquisitions
(12 years, 5 months ago)
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Lord Elton
To ask Her Majesty’s Government what view they take of the increasing acquisition by China of rights and access to mineral and other national resources in Africa and South America.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, the United Kingdom Government welcome increased foreign investment across Africa and South America, including investment from Chinese companies. The Government are working with African and South American countries to ensure that they secure the maximum possible social and economic benefits from resource extraction—for example, through direct support for and promotion of the extractive industries transparency initiative and the natural resource charter.
Lord Elton
My Lords, given that Chinese nationals comprise not quite 20% of the world population and are 20 times as numerous as our own population, their ambitions and intentions are of immense importance to all of us. Does my noble friend consider their motives to be basically imperial, colonial or commercial?
Lord Howell of Guildford
My Lords, the motives behind the enormous expansion of Chinese investment across the whole globe—not just in Asia, Africa and South America—are mixed. In some cases the motives are purely commercial. At the head of the list, I think, one would put the Chinese authorities’ desire to acquire access to resources—minerals and particularly hydrocarbons—around the world to meet their enormous and very rapidly growing needs. There are also some direct concerns in investment to promote the welfare of the recipient countries. The British Government have in fact signed a memorandum of understanding with the Chinese Government on poverty reduction in the low-income countries. This is one of many dialogues that we conduct all the time with the Chinese on these matters.
Lord Anderson of Swansea
What assessment have our own strategic planners and those of our allies made of the dangers of China over a longer term gaining such a monopoly of scarce mineral resources that it will be in a position to manipulate prices and possibly to manipulate other users of those scarce materials?
Lord Howell of Guildford
Of course, these dangers of monopoly control exist in all extractive industries, particularly for scarce resources. We have to watch those matters very carefully. What might be behind the noble Lord’s question is the issue of rare earths, the use of which is essential in practically every mobile telephone and the production of which was very much under Chinese control until recently. However, any attempt to limit the export of rare earths and thereby to manipulate price has been met by the discovery and development of rare earths elsewhere. Therefore, provided that we watch these matters carefully, competition can usually weaken the monopolies. I am not saying that it is a Chinese aim to monopolise these resources, but in the case of rare earths that was a danger.
Lord Ashdown of Norton-sub-Hamdon
My Lords, does my noble friend agree that this country is hardly in the best historical position to lecture others about the morality of taking raw materials from Africa? In so far as we did so, if we had a policy in this area it might be better directed to advising others not to do it as we did it in the last century.
Lord Howell of Guildford
I think we all agree that we do not want to go around lecturing and hectoring, but we have our own values, we have had our own experience, and we have made our own errors in the past. It is possible that by sharing our values and not reneging on them in any way we can help other countries avoid some of the mistakes that we made. I do not think that there is anything much to apologise for in working with other countries to ensure that today’s and tomorrow’s standards for the extractive industries are developed and maintained. I believe that this is a matter that the Chinese Government, as a responsible member of the World Trade Organisation, fully recognise.
Lord Lawson of Blaby
My Lords, is it not clear that the Chinese would not be spending vast amounts of money and a large amount of political capital in getting hold of hydrocarbon resources—in sub-Saharan Africa in particular—if they did not intend to use them? Given that, is it not clear that no global decarbonisation agreement is possible? Since it is not, is it not quixotic, to say the least, that the British Government should be forcing British industry and British consumers, particularly poor consumers, to have more expensive energy in the name of unilateral decarbonisation, which is completely pointless if there is no global agreement?
Lord Howell of Guildford
Well, it is not quite pointless. As my noble friend knows well, China, although reluctant to commit itself to legal binding global agreements for which some others have argued, is in fact investing enormous amounts in decarbonisation and low-carbon technologies. It is working very closely with the United Kingdom and our technologies and developing in those areas. All these are very valuable moves forward in the decarbonisation movement and, one hopes, effective moves worldwide against climate violence in the future. I think there is value in this.
The pursuit of international global targets that are legally binding is going to be a very uphill task in relation not merely to China but to other countries as well. The general message coming to us from Beijing and the vast Chinese industrial machine is that they are well on the path to low-carbon technologies, and we are going to work with them on that.
Baroness Symons of Vernham Dean
My Lords, I draw attention to my declaration in the register of interests. Is it not true that these are largely state-sponsored Chinese acquisitions? They very often come with promises of collateral benefits for the growth of infrastructure in the countries concerned, such as railways and roads. Have the Government done any assessment of the level of delivery from the Chinese on these collateral benefits? There is evidence that much is promised that will go along with access to these mineral resources, and very often not much is delivered. Would the Minister initiate looking at the evidence for what is really the benefit to the country concerned?
Lord Howell of Guildford
We follow these things very closely. The noble Baroness is entirely right that in some cases the benefits have disadvantages attached to them. I am not talking so much about their failing to deliver fantastic new developments in sports stadia, schools, railways, government offices and so on, although that certainly happens. In other areas, the benefit for local people turns out to be non-existent because labour is just imported from China and taken away again. There are lessons to be learnt by our Chinese friends, which, again, we can possibly help with, on the basis of our own experience in the past, as to how to conduct operations that bring real benefit to local people and do not just leave them feeling that they have been ripped off.
Family Planning: London Summit
(12 years, 5 months ago)
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Lord McConnell of Glenscorrodale
To ask Her Majesty’s Government what action they will take following the London Summit on Family Planning on 11 July.
Baroness Northover
My Lords, the UK was delighted to co-host the London Summit on Family Planning yesterday, with the Bill & Melinda Gates Foundation and participants from all over the world. UK support will provide access to family planning for an additional 24 million women who want to avoid or delay pregnancy. The UK is doubling its efforts on family planning to an average of £180 million a year between now and 2020.
Lord McConnell of Glenscorrodale
I thank the Minister for that Answer. Clearly, we would all welcome the summit yesterday and congratulate the Department for International Development and the Bill & Melinda Gates Foundation on their efforts and welcome the commitments that were made globally as a result. All the contraception and family planning in the world would not have helped two girls whom I met in Liberia, who were 15 year-old mothers, one of whom had been raped during the conflict and the other sold by her impoverished family for sex. Those girls need more than access in some city or town elsewhere to family planning and contraception; they need more power over their own lives and an end to violence and conflict.
Will the Government, alongside the commitments made yesterday, continue to make efforts, first to combat sexual violence internationally but also to deal with the issues of conflict that can give rise to these impacts for so many young girls and women in so many countries?
Baroness Northover
The noble Lord is right. I thank him for his congratulations. For me, it was an incredibly optimistic conference; I was extremely glad to see the wide range of commitments that were being made, which addressed not only the financial need to make sure that access is there and available but also the kind of social and cultural concerns that he just flagged up. It is extremely important that women and girls have the chance to choose whether they are to have children and how they might space them—and it is important for the mothers, too. In the case that he mentioned, it would probably have helped if the mother herself had more control over her life, which then would have impacted on her own child.
Lord Chidgey
Is my noble friend aware of reports from Nigeria of rural family planning clinics closing down through lack of resources for service delivery? Will these very welcome new plans include investment in long-term recruitment, training and employment of sufficient health workers who are dedicated to family planning service delivery as well as the provision of family planning commodities?
Baroness Northover
It is extremely important that the infrastructure is there as well and Nigeria made a major commitment yesterday. Hearing some of the speakers from developing countries was very encouraging. For example, the Malawi health Minister said, “No parenthood before adulthood”. That is extremely important and its delivery is absolutely key.
Lord Patel
What plans do the Government have to support the education of girls in this country for them better to understand the value of family planning?
Baroness Northover
The United Kingdom is committed to the support of family planning in the UK. There should be, and is, comprehensive access to contraceptive services and supplies across the UK. The noble Lord, Lord Patel, is quite right that education and information is important here as well as in developing countries.
Baroness Kinnock of Holyhead
My Lords, I add my congratulations on the summit yesterday which made some extremely interesting and innovative proposals. Since no one would deny that there is a large gap between policy and practice on equality in many of the countries represented at yesterday’s summit, was the need to enshrine sexual and reproductive health and rights in law discussed? For instance, South Africa has it in its constitution, as do Guyana and other countries. Was the need for laws to ban child marriage raised? Many countries have laws which permit marriage under 18 and, indeed, it is legal for a girl to marry at 15, which is a breach of the convention on discrimination against women and the Convention on the Rights of the Child. Were these important and critical issues discussed at the summit?
Baroness Northover
These issues were discussed. In fact, I heard the Malawian delegation saying that they would be committing to raising the legal age of marriage to 18—that is above ours. People were acutely aware of the challenges here and the number of girls as young as 12, 13 and 14 who are having their first children and trying to delay that.
Lord Elton
The noble Lord, Lord Patel, raised the question of drawing the importance of family planning to the attention of young girls. Surely the question arises equally in relation to young men. Much more pressingly for our society as a whole, how about telling them about the importance of families themselves?
Baroness Northover
The role of boys and men was also discussed. I was on a panel yesterday with a very impressive young man from Togo who was involved in this. When his brother died of AIDS, his family, who in the earlier stages had opposed what he had done, then took him to task for not having said enough.
Business of the House
(12 years, 5 months ago)
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Lord Strathclyde
That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 16 July to allow the Supply and Appropriation (Main Estimates) Bill and the Finance Bill to be taken through all their remaining stages that day.
Business of the House
(12 years, 5 months ago)
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Lord Strathclyde
That the debates on the Motions in the names of the noble Lord, Lord Campbell-Savours, and the noble Baroness, Lady Rendell of Babergh, set down for today shall each be limited to two and a half hours.
Administration and Works Committee
The Chairman of Committees
That the report from the Select Committee, The Use of Electronic Devices in the House: Follow-up Report, (2nd Report, Session 2010-12, HL Paper 298), be agreed to.
The Chairman of Committees (Lord Sewel)
My Lords, this is a short and straightforward report. On 10 March 2011, the House agreed the committee’s first report, which recommended new rules to clarify where electronic devices can and cannot be used in the House. In that report, the committee recommended that Members should be able to use hand-held electronic devices when addressing the Chamber or Grand Committee. That report also recommended that,
“for a one-year trial period in the first instance, Members taking part in proceedings should be able to use electronic devices to access Parliamentary papers and other documents which are clearly and closely relevant to the business before the House or Grand Committee”.
This subsequent report recommends that Members should be able to use hand-held electronic devices in the Chamber and Grand Committee,
“for any purpose, provided that they are silent and are used with discretion”.
This is in line with the rules adopted by the House of Commons. It also recognises the current reality and the impossibility of policing the purpose for which a device is being used. I see that the opposition Chief Whip is taking a close interest in this.
While reviewing the rules for Members, the committee also considered that the rules should be applied to officials advising Members in the Chamber and Grand Committee. The committee felt that it would be sensible to apply the same rules to officials as for Members, and therefore recommended that officials should be able to use hand-held electronic devices for any purpose, provided that they are silent and, again, used with discretion. Furthermore, the committee specifically recommended that officials should be able to use such devices to access information for use in debate and communicate directly with Members in the Chamber or Grand Committee. Nevertheless, these proposals would deprive the House of the innocent pleasure of observing the cavalry, in the form of the government Whip, riding to the rescue of a besieged Minister grasping a vital note from the Box. Similarly, Ministers would be spared the task—and I speak with some experience—of desperately trying to decipher an illegible note. I hope that both these factors will be of benefit to the House.
The recommendations contained in this report recognise and reflect the evolving use of electronic devices by Members in this House. I believe that the recommendations are a sensible and logical way in which to simplify the current rules and allow Members to use electronic devices in a way that supports them in their parliamentary duties, should they wish to do so. I beg to move.
Lord Higgins
My Lords, does my noble friend agree that the convention in this House, and indeed in the House of Commons, is that speeches should not be read and therefore that it would be inappropriate to read a speech off an iPad or similar device?
Lord Sewel
I thank the noble Lord for that question because it gives me the opportunity to make an important clarification. The use of electronic devices should be used in the same way that notes are used. They should not be used as a means of presenting an entire speech.
The Lord Bishop of Chester
My Lords, in the spirit of self-regulation, does the Chairman of Committees agree that the discretion exercised in the use of these devices should mean that they should not be used to receive and answer general e-mails but only for information that is relevant to the matter being debated at the time?
Lord Sewel
My Lords, quite honestly, the difficulty here is that we can say what the devices could and could not be used for, but there is the total impossibility of policing what is going on. We have to be a little in touch with reality.
Lord Berkeley
My Lords, I worry about the idea of Ministers standing at the Dispatch Box and reading out what officials are typing in. I know they are not supposed to read, but it is quite difficult. I suppose we could all try to see what is going on there, but I think it will change the way in which Ministers take advice from the Box—and not take it sometimes, which adds a bit of fun. It is quite important. I wonder whether a machine on the Box would still be allowed, even if one is not exactly reading from it. I would be grateful for the Chairman of Committees’ comments on this matter.
My other question is: what is the difference nowadays between a laptop and a hand-held device? My noble friend Lord Foulkes has a hand-held device. I have something called a laptop, but it has exactly the same screen size, although it is a bit thicker. I notice that paragraph 5 of the report talks only about hand-held electronic devices, without exception, whereas paragraph 1 says that laptops may not be used. Is the difference between them a little subtle? Should we not just call them electronic devices and not worry about what make or size they are, as long as they are used with discretion?
Lord Cormack
My Lords, I often think of the late, great Lord Weatherill, who said he was all in favour of progress, as long as it did not mean change. As I listened to the Chairman of Committees present this innocuous report, I thought that there was inexorable change here, which, over a period, is making a real difference to this Chamber and will make a greater one in the future. I, personally, regret it. I think it is a pity that electronic devices are so widely used. When we had a brief debate last year, I made the point that people could receive the racing results. That has clearly been conceded; as the Chairman of Committees says, you cannot police it. Nor can you adequately describe, as the noble Lord, Lord Berkeley, has just indicated, what device is permissible and what is not. Although I would not dream of dividing the House on the matter, I want to put it on record that there are some of us who regret these developments.
Lord Kirkwood of Kirkhope
My Lords, I wonder whether I could give a little reassurance on behalf of the Information Committee, which I have the privilege of chairing.
My noble friend Lord Cormack’s concern is well understood, and I respect it. There are significant gains to be made in developing services for Members that are delivered electronically. Speaking for myself, I think that we should take advantage of the new tablet technology, not laptop technology. Laptop technology reinforces my noble friend’s concerns about people using physical keys, which make a noise and create a barrier in front of them because they open a screen. For that reason, laptops are not wholly appropriate for the kind of services that we are trying to develop. I speak of tablets, not iPads, as the House must be very careful about not giving a commercial advantage to any particular manufacturer, although there are some specific security advantages to iPads at the moment, which we are taking advantage of. We are being very careful about how we progress with all this.
I give the same assurance to my noble friend Lord Cormack as I gave him last year: that we will be very careful about how we take the next steps in introducing these new services. Apart from anything else—and this goes for the wider public policy area—there is an important digital divide. There are Members of this House who will always be effective Members on a paper-driven basis. Contrariwise, looking forward to 2015 when we acquire new Members—howsoever they are acquired—they are much more likely to come in with an experience of tablet technology. The technology is changing on a nine-monthly basis. This institution would be left behind if we did not accept this important and small next step—the sensible approach recommended by the Administration and Works Committee.
My next point in attempting to console my noble friend is that there are savings to be made in the budget, if we move carefully in this direction, which can be redeployed in the Library service, for example. These decisions would not be taken by the Information Committee because we are not budget-holders. My noble friend is right to caution us about how we introduce these things, but the savings that we make from the successful introduction of tablet technology for the service of Members could be redeployed in a way that I think he would approve of. Therefore, the wider picture is a win-win situation.
My final point is that by the end of the financial year in March next year we hope to have enabled the entire precincts of both Houses of Parliament for wi-fi technology. That is a significant and wise investment on the part of the House authorities, and I support it because I am an enthusiast of the services that can be delivered. However, I am absolutely sensitive to the need to accommodate the concerns which my noble friend Lord Cormack rightly raises and should continue to raise. We need to take steps in a positive direction, but we need to hasten slowly to make sure that we do not leave other Members behind.
Lord Wills
My Lords, perhaps I may also try to console the noble Lord, Lord Cormack, about progress and change. My point concerns the advantages, as I see them, that would ensue from this technology helping Ministers at the Dispatch Box. During the processing of complex legislation, we have often seen Ministers in this place and the other place at a loss. The officials write too slowly for them to get the information and all too often Ministers have to agree to write in response to particular questions. This technology offers Ministers the possibility of being able to respond at the Dispatch Box, thus giving your Lordships the opportunity to scrutinise legislation more thoroughly and instantaneously, which, after all, is the historical purpose of your Lordships’ House.
Baroness Sherlock
My Lords, I am one of the people who has enjoyed being able to use a tablet in the ways described in the pilot. However, I ask the Chairman of Committees for an assurance. If noble Lords are to use this equipment in the way in which the committee intends—one of the considerable advantages being that we will save a lot of paper in this House—it will be necessary to make it easier for Members to navigate the parliamentary website so as to find more easily the kind of information that we use. Can the noble Lord give us any encouragement that progress is being made in that direction?
Lord Foulkes of Cumnock
I support the recommendation. Until this Motion is passed, I am not sure whether I am breaking any rules by having this hand-held device here. I see that Black Rod has left the Chamber, so I am safe. However, just to illustrate how useful it is, I have been able to check on the noble Lord, Lord Cormack. The House will not be surprised to hear that for many years he was a governor of the English-Speaking Union and is the founder of Heritage in Danger, so he really does do what it says on the packet.
Lord Sewel
My Lords, I shall deal briefly with a number of points made in the debate. There is a slight difference in emphasis between the noble Lords, Lord Berkeley and Lord Wills. I come down heavily in favour of the latter because I think it is important that Ministers have immediate and accurate information to transmit to the House when we are discussing legislation. It is quite good fun to see the scuttling back and forth between the Box and the Front Bench and the Minister then fumbling over a note. However, it would improve the effectiveness of this Chamber if Ministers received accurate information directly.
I agree wholeheartedly with the noble Lord, Lord Kirkwood. I suspect that we will go towards a tablet-based system very quickly. I look forward to that and am sure that people will take it up.
With regard to the parliamentary website, I have to agree that I sometimes find it less than completely useful and easy to use. However, I am sure that those responsible are always endeavouring to improve and I am certain that that message will get across.
I fully recognise that, although the noble Lord, Lord Cormack, is a relative newcomer to this House, he is a doughty defender of the traditions and courtesies of the House. The whole House will agree that, as a courtesy, noble Lords in the Chamber should pay attention to the matters being debated. Along with many noble Lords, I deprecate tweeting, texting or other similar activities that indicate that the minds of noble Lords are otherwise engaged—heaven forfend.
On enforcement, as at least some noble Lords will be aware, the House has many ways of registering its displeasure if it feels that individual noble Lords are slightly overstepping or abusing their rights. I hope the House will accept this report. I think it is a step forward and brings us to a position where we are using technology without being dominated and mastered by it.
Lord Berkeley
Can the Chairman of Committees respond to my question about the difference between a laptop and a hand-held device? My laptop has a touchscreen, so the question of noisy keys does not arise. Can we get rid of all these differentiations?
Lord Sewel
The noble Lord has effectively just destroyed the brief. According to the brief I have, the difference between laptops and hand-held devices is one of noise as you press the keyboard. If you move on to tablets of course—the point made by the noble Lord, Lord Kirkwood—that no longer exists. I commend the report to the House.
Arrangement of Business
(12 years, 5 months ago)
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Baroness Verma
My Lords, in the traditional manner, I remind noble Lords that this is a timed debate and that except for the noble Lord, Lord Campbell-Savours, and my noble friend, all speeches are limited to 12 minutes. When the clock shows 12, time is up.
Parliamentary Boundary Commission: Electoral Administration
(12 years, 5 months ago)
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Lord Campbell-Savours
That this House takes note of the implications for political representation and democracy of the current proposals of the Parliamentary Boundary Commission and matters relating to electoral administration.
Lord Campbell-Savours
My Lords, I start by apologising to the Cross Benches. In all my 11 years in this House, I have diligently avoided provocative party-political contributions, apart from on electoral registration and during the passage of the Parliamentary Voting System and Constituencies Bill. The latter was a blatantly political Bill, introduced for party advantage, with its proposed reduction in the number of parliamentary seats favouring the Conservatives.
This debate is a direct product of that legislation, which was introduced in the wake of the expenses scandal and led to the creation of IPSA and other measures that have so undermined the institution of Parliament. IPSA has so demeaned the role of MPs that they are reduced to scurrying around the Commons Tea Room gathering their receipts for food while they collect Starbucks-type points for refreshments. These are the people we elect to run the country and they are being humiliated. Weak politicians—no match for the great statesmen of the past—have swallowed a tabloid pill and, in many ways, stripped the Commons of the gravitas and dignity that has so characterised the past.
That is the background to this debate—a Parliament of 650, under tabloid pressure, to be reduced to 600. A dark shadow now stalks the lobbies, cafes, bars and corridors of Westminster. We have entered a world of dog-eat-dog as parliamentarians fight it out in what has been described as the largest and most profound redrawing of constituency boundaries in a century.
To those who think I am exaggerating, I say that they should step down the corridor and ask around. The anger is everywhere, with the result that the overwhelming response of MPs to news of this debate has been positive. As one MP put it to me: “Just say what we can’t say”. Young men and women who have been elected, and in some cases committed their careers to underremunerated public service, find themselves caught up in a debate so sensitive that open discussion is often quite impossible. It is not just the 50 seats involved, it is the fact that the whole country is being redrawn, causing deep anxiety. Despair and anxiety have become the hallmarks of many a political household in the land. While spouses fret, long-term political friendships have become clouded in suspicion. There is an overwhelming feeling of injustice among Britain’s MPs, many of whom have spent decades building up relationships with their constituents. At the stroke of a commissioner’s pen their lives, careers, family ties, political organisations and loyalties are to be disrupted, leading to widespread insecurity. It is all so unfair.
It is increasingly clear that the Liberal Democrats will ultimately be the main casualties. Many of them have had to struggle hard to win seats in Parliament, sometimes over decades, and a worried Mr Clegg is reported to have demanded that the commission reviews 69 seats in the south. I am afraid that he is a very late convert to the growing reality of political extinction. For example, Vince Cable must be finding his vital work as Business Secretary greatly disrupted by proposals to abolish his Twickenham constituency and force him into a run-off with Zac Goldsmith. Goldsmith’s bottomless pit of cash enabled him to displace the rising star MP Susan Kramer, who is now a Member of this House, in what can only be described as an outrageous campaign distorted by money over years. Mr Cable should beware.
Then we have Iain Duncan Smith, a man for whom I have much respect. Some of his policies may disturb us on these Benches, but nevertheless he is widely respected for his political courage. I understand that he is beside himself with anger over the carve-up of his seat. He has described the whole exercise as grossly unfair and in unrepeatable language in private. He now has to spend this Parliament worrying anxiously as he casts his eye over his shoulder in search of a seat while gazing blindly forward to the prospect of possible political oblivion in the Commons. His treatment is appalling.
What about Norman Baker, a Liberal Member of Parliament—a beacon of environmental enlightenment on the Liberal Democrat Benches? He has to fight in the most difficult of political circumstances to save himself from political extinction. He is surrounded by a sea of entrenched conservatism, so what will happen to him? How can he keep his eye on the ball as a progressive Transport Minister when he has to worry about the prospect of political survival?
Then we have George Osborne, Chancellor of the Exchequer, whose task is to steer the economy through a sea of international financial turbulence. Could it be that the distraction of a boundary review, which abolishes his seat, accounts for the somewhat erratic decision-taking under his watch as we move deeper and deeper into recession? What of his constituency neighbours? They must be worrying that he is to be given some unreasonable advantage under a Central Office-organised attempt at constituency seat allocation or fix, not because he is necessarily the best candidate—I do not know—but because he is the Chancellor. They might find themselves cast aside totally unfairly on a playing field of fix and manipulation.
What about the flamboyant Nadine Dorries—populist to the core? Some say she is the voice of hardcore Conservative Britain. She is an MP loved and loathed in equal measure—loved by an adoring Conservative public and loathed by many of her parliamentary colleagues who envy her willingness fiercely to spell out what she believes to be true. Her calculation is simple. Faced with extinction she has two options: to speak up, be heard and hope that some Conservative association decides that it wants her; or to keep her head down, be a good girl and sink without trace. She has chosen the former. What is interesting about her case is that her approach may be contagious.
It is not that the populist wing of the Liberal Democratic Party does not have its share of rumbling resentment. We have Mr Timothy Farron of Westmorland and Lonsdale who spends his time criticising the coalition in public in the media and then blithely votes for the coalition’s policy in the Division Lobbies of the House of Commons. He wants it both ways. Well, his constituency party is going both ways. It is the victim of one of the most ludicrous boundary changes in the country. The commission is taking out the lakeland town of Windermere and tacking it on to the constituency of Copeland on the west Cumberland coast, which is currently represented by the excellent MP Jamie Reid. To pass from Windermere to the body of the new constituency, you would have to drive over the highest mountain pass in Britain, the Hardknott, with its 1:3 gradient. When you drive over it—as I have done regularly—it is so steep that you cannot even see the roadway over the bonnet of your car. The proposal is utterly absurd and makes a laughing stock of the commission. I understand that, quite unusually, all the Cumbria parties are united in their desire for revisiting the Cumbria boundary proposals.
Then we have Mr Clegg himself. He is surrounded by a sea of Labour and Conservative MPs. Local Tories trumpet that he is out. He cannot, in some desperate attempt to survive, meddle in neighbouring seats to build a new constituency base. He has only the knackers yard to look forward to. I suppose he could seek election to an elected House of Lords or even move to an appointed one under the patronage arrangements he so strongly opposes, although, as the architect of current proposals for Lords reform—which I support—he may not find too warm a welcome. I suppose he could disappear to Europe as a Euroflunkey, an appointment which is likely to be opposed by a coalition of Conservative Eurosceptics and Labour MPs who resent his support for the austerity programme. However, is he being fairly treated? Or do we turn a blind eye and say that he has only himself to blame? Even Mr Clegg deserves fair play.
Then we have the appalling proposals for Delyn and the Vale of Clwyd in north Wales, where David Hanson, the decisive and highly respected Minister in the Blair-Brown years, is being set against one of Parliament’s most effective campaigners, Chris Ruane—two first-class performers forced into a duel, where the real casualties will be Parliament and the people of north Wales. As Mr Ben Wallace MP, who has to fight it out with neighbouring and fellow Lancashire MP Mr Eric Ollerenshaw, said, “My poor constituents are run ragged by these changes”.
However, ill conceived marriages in Lancashire are not unique. We have the Salford-Manchester marriage, the Rutland-Corby marriage, the Leigh and Makerfield-Westhoughton marriage, the Broxtowe-Rushcliffe marriage, the Chingford-Edmonton marriage, the New Mersey Banks seats, the City of Gloucester-Forest of Dean marriage, the Anglesey-Bangor proposals and the Devon Hall seat. The list is endless. Liberal Democrats in the Midlands have described their marriages as schizophrenic, unnecessary and haphazard. David Davis MP was reported to have claimed that,
“this process is highly corrosive of effective representation”.
A member of the shadow Cabinet wisely drew historic parallels, claiming:
“This is like the partition of India. Somebody has sat down in a room in London and drawn arbitrary lines through communities they know nothing about”.
What I really worry about are the implications for the quality of the membership of the House of Commons. The new regime, the humiliation of MPs, IPSA’s irrational decisions, the uncertainties over electoral registration, the use of the guillotine, the intimidatory approach of the press to MPs as exposed during the Leveson inquiry and the pay disincentive mean that men and women of real talent and potential public service contribution will refuse a role in our mother of parliaments. This is a shame. They notice one massive sense of insecurity that pervades our institution, realise that it is only further aggravated by ill conceived boundary review and refuse to join a system where the earning and retention of constituency loyalty can be destroyed on the stroke of a bureaucrat’s pen. They want security for their families. The result of all this is that we will lose many of the lawyers, trade union leaders, businessmen, doctors, strong leaders from local government and the exceptional that Parliament so desperately needs. All these changes are destroying the incentive to become a Member of Parliament. This whole project is wasteful of talent. We are playing a very dangerous game, and I say “Stop it now”.
Baroness O'Cathain
My Lords, in putting down my name to speak, I took note of the title of the debate,
“That this House takes note of the implications for political representation and democracy of the current proposals of the Parliamentary Boundary Commission”.
I did so not realising the tenor which was going to be set by the mover of the Motion. However, I welcome the debate introduced by the noble Lord, Lord Campbell-Savours, as it provides an opportunity to revisit last year’s debates in what I thought was likely to be a calmer atmosphere than pertained during the passage of the Parliamentary Voting System and Constituencies Bill.
We have had a detailed description of the impact on individuals—and it must be very difficult—but I will not be dealing with any specific cases. I do not think that that is what this House should do. The role of this House is to scrutinise, not necessarily to engage in political developments in the other place. I am quite unprepared to take part but I will deliver the speech that I prepared and hope that it adds to the knowledge of, and interest in, the passage of the Bill.
As an aside, I was interested in the Bill passing through the House but could not face the endless, repetitive, emotional and pretty strident Sessions during the proceedings. I realised even then that there were some very strongly held views based on a lot of first-hand experience but I hope it is recognised that what is now the Act contains several improvements in the workings of the democratic process of the UK. I am sure that all of us are eager to see the recommendations of the boundary review when it is published in 2013.
I believe that the boundary review will be about equality and fairness. It is being conducted independently. The Boundary Commission published its initial proposals in September 2011. A 12-week process of consultation was undertaken and included public hearings. I am convinced that the democratic process will be improved by the reduction in the number of constituencies—I am not talking about the number of individual MPs—from 650 to 600 as it entails a much fairer distribution of the responsibility for each MP to represent a similar number of citizens. Every constituency will have an electorate that is no less than 95% and no more than 105% of the average UK electoral quota of 76,641 voters.
One surely cannot oppose an argument that proposes that all constituencies should be equal. This is fairer to the voters and also certainly fairer to the MP. Why should one MP have to deal with the concerns of 92,000 constituents and another with 55,000? The large variations are due mainly to population creep or population movements, but they are neither equal nor fair.
Noble Lords will remember the long drawn-out debates on the numbers. I particularly remember the debate about the Isle of Wight, where an exemption was made, the case for which was so ably put by my noble friend Lord Fowler, who unfortunately is not in his place. Similarly, an exemption was made for the Scottish islands of the Western Isles and Orkney and Shetland.
The reduction of the number of constituencies not only resulted in equality and fairness but in a reduction in the size of the House of Commons from 650 to 600, as I have said. Let us not forget that at the current level of membership the House of Commons is the largest directly elected national chamber in Europe. This will bring us more in line with other democracies. The reduction was the result of agreement in Parliament that the size should be reduced from 650 to 600 Members.
An added benefit is that it is estimated that this change will deliver a saving of £13.6 million per annum. It is good to have legislation that will deliver a positive financial saving. This is a welcome development as we struggle in the constant battle of tackling deficit and debt. Therefore, in the words of the Motion, I believe that boundary review will improve both democracy and political representation.
However, we cannot just be smug and say, “Yes, good, we should be more democratic and we should reduce the cost of the House of Commons”, and leave it there without being seriously concerned about how to address voter apathy and disgraceful low turnouts at the general election. Even worse is the experience at both local elections and European Parliament elections. It seems almost unbelievable that, until our grandparents’ time, universal suffrage was but a dream. All but a tiny minority of the population were denied the right to have any say in who should govern us or what form that government should take. They also had no rights to influence laws affecting every aspect of their lives. I am reminded of this daily when—if it is not raining—I walk through Victoria Tower Gardens and pass the statue of Emmeline Pankhurst. That is a reminder of the sacrifices made by the suffragettes and many others—including, from my own background, Countess Markievicz—in order that we could enjoy what they did not: the right to vote, the right to have our voices heard and the right to be represented by Members elected by us to represent us.
The greatest sadness I have on this subject is that these rights are of little or no interest to so many young people. In participating in the Lord Speaker’s school outreach programme, I invariably talk about the right and duty to vote. So frequently I can see that this is not exactly the most interesting part of my presentation. Eyes glaze over and boredom is palpable; but I am ready for them. I ask why they are so apathetic. The usual comments are made: “My vote will not count”, “Politicians do not do anything for us”, “My parents say that all politicians are rubbish”, and, “What about the expenses scandal?”. We have all heard these comments and many more. We know, and must admit, that the reputation of politics and by extension politicians is going through a pretty rocky phase. We know that politicians are blamed for everything—even, I suspect, the weather. This apathy, particularly among the young, is worrying but worse it is dangerous.
Several times during the outreach programme, I have had evidence and also a sense that some young people are turned off by the political attitudes adopted by older people in their sphere of influence—parents, friends, friends of the family and neighbours. In addition, snappy headlines in the press catch the eyes of the more alert teenagers. The press in general does politics and politicians no favours. We really have to engage with the young and impress on them that the future is in their hands, with all the opportunities, challenges and responsibilities that that entails.
To that end, I firmly believe that individual rather than household registration for electoral purposes is likely to engage this cohort more effectively in the electoral process. Despite what we may think, the younger generation do take responsibility, do actually like taking responsibility and do know about taking responsibility in many areas. We just have to encourage them to extend that to taking responsibility to engage in the political arena. As a small example, on an outreach visit to a school in Hampshire, I was told that one of the young teenagers there had been asked by his local council to attend council meetings and suggest ideas how the youth in the area could be helped by decisions made in council. I asked him how it went and he said, “I don’t seem to have made much difference”. I said, “Have you made any difference? Can you point to anything that you achieved?”. “Oh,” he said, “we got three skate parks put in”. There was a little titter around the audience. I said, “Why are you decrying this? He has done something that none of the rest of you has done. Have any of you others actually put in, or been responsible for putting in, a skate park that you all use? You have got to remember that you must start small and grow big. Large oaks from little acorns grow”. That young man—I call him a young man, because he was responsible—could be seen almost growing in pride. Suddenly, the attitude of his support group changed. They like the idea that they can have involvement and I think it is up to us to encourage them to have that involvement.
Similarly, this House—we know how it is regarded outside—has the Youth Parliament every year. That has made a huge impact on the people who have taken part. All thanks are due to the House authorities, the Lord Speaker, the Members here and all parties who have supported it. We should concentrate on the positive.
The Government have funded the Electoral Commission to conduct research into the completeness and accuracy of electoral registers. The report was published in December 2011, with data pertinent to December 2010. The results show that the register was only 85% to 87% complete, which means, in effect, that six million people are missing from the register. In 2000, the comparable figure was 3.9 million. That is most worrying and all of us must surely accept that anything that can be done to improve this should be done. We all know the reasons why. However, the research shows that while 90% of those aged 55 to 64 were on the register, only 56% of those aged 19 to 24 were. Again, it is people living in rented accommodation, students, or young people not yet on the property ladder, who do not register. I believe that, if we treat individuals as individuals and if people registered as individuals to vote, that could stimulate an interest in politics and a mindset which would make people realise that the more they get involved in politics, local or national, the more they can get and the more they can influence the way this country is run. I totally agree, therefore, that we should take registration away from households and give it to individuals and I hope that this will happen.
Lord Rennard
My Lords, the longest debates in which I have taken part in the House since I have been a Member were over what was then called the Parliamentary Voting System and Constituencies Bill. I do not intend this afternoon to go over again all the arguments made during those very lengthy debates. However, I recognise that in this short debate we are dealing with some very serious issues. Some of the processes used by the Boundary Commissions are based on the electoral register. It is that issue of the work of Boundary Commissions that I wish to address. Many issues about the completeness and accuracy of the electoral register will be relevant to future parliamentary boundary reviews. This is an opportune time to concentrate on these issues, in advance of our serious consideration of the legislation to implement individual electoral registration.
Looking back to those debates 18 months ago, it is significant that at the time, we were assured by Ministers that the electoral register was estimated to be about 92% complete. However, the recent research referred to by the noble Baroness, Lady O’Cathain—research conducted by the Electoral Commission and paid for by the Cabinet Office—suggests that it may only be 85% complete. That is an average figure, suggesting that there may be many parts of the country where the electoral register is significantly less than 85% complete.
We recently debated in Grand Committee another round of orders for data-matching pilots. During that debate, my noble friend Lord Wallace, who I am pleased to see in his place today, assured us that the aim of the implementation of individual electoral registration was at least as much the completeness of the electoral register as its accuracy. The success of those data-matching pilots will be crucial to the successful implementation of individual electoral registration, on which boundary reviews will be based in future. There has been successful progress on the implementation of individual electoral registration since the publication of the original White Paper.
In particular, it is now accepted that we must retain the principle that it is a legal requirement to comply with the electoral registration process. The legal requirement for the household registration form will be retained and compliance will remain, as now, subject to a fine of up to £1,000. In the debate on 12 January initiated by the noble Lord, Lord Wills, I outlined at col. 238 the wide variety of wording on existing electoral registration forms, but what they all had in common was wording about returning the form being a legal requirement. What was inconsistent in those forms and must, I believe, be made common to all forms in future is a statement that not complying with the process could make you liable to a fine of up to £1,000. That statement must be very clear on all such forms in future. Can the Minister confirm, during this debate if possible, that when the household registration forms are standardised in future and under the direction of the Electoral Commission, they will all clearly state that returning them is a legal requirement and that not complying with the process is subject to a fine of up to £1,000?
We simply cannot allow different local authorities to adopt a pick and mix approach to the fundamentals of electoral registration processes, as these provide the database for our national elections, not only for electing Members of the House of Commons—and, perhaps one day, Members of your Lordships’ House—but for the European Parliament elections, police and crime commissioner elections, the Scottish Parliament elections, the London Assembly elections, the Welsh Assembly elections, et cetera. The process is not just for elections to that particular council, so uniformly high standards must be applied to the process in each local authority area. We need above all to avoid the situation in the United States, where those who are deliberately campaigning to reduce the level of electoral registration are able to adopt different measures in different states, aimed at denying certain groups the opportunity to vote in order to manipulate the outcome unfairly. I would call that cheating in the electoral process.
The principle of consistent best practice must also apply to the new form for individual registration. There will in future be a civil penalty applicable for those who do not return the individual forms to complete the registration process, but the Political and Constitutional Reform Select Committee in the House of Commons was not right to suggest that this fixed penalty should be £500. For a fixed penalty that would apply irrespective of whether failure to respond is simply a matter of forgetfulness or one of deliberately trying to avoid being registered to vote, £500 is in my opinion too high a fixed penalty. Registering to vote, and in the same process registering for jury service, is a significant civic duty and I am glad that it will remain a legal obligation. However, the penalty should be more in line with the level of fixed penalties for parking offences. I know how much it annoys me when I occasionally get a parking ticket.
Repeated failures to register should also be subject to repeat penalties. It would not be right if the fixed penalty could be used as a sort of one-off fee to avoid registration. I hope that anyone subject to the fixed penalty would subsequently register and thereby avoid further penalties. Perhaps the Minister can explain how it is envisaged that this process will work. If someone pays a fixed penalty and still fails to register, I assume that they would be subject to further penalties, just as a car parked illegally may acquire further parking tickets. However, would someone be able to avoid further penalties or even receive a discount on the penalty if they subsequently registered?
We will soon be considering the details of electoral registration in this House. In our consideration, we must look carefully not only at how the process will improve the register’s accuracy but at the fundamental issue of completeness, which is so relevant to the Boundary Commission processes. In Northern Ireland, the introduction of individual electoral registration has, by and large, been deemed a success. It has required national insurance numbers but I remain to be convinced that a signature should not be acceptable if national insurance numbers cannot be found. There are of course a small number of eligible voters to whom national insurance numbers have not been issued, as well as the difficulty some people have in finding their national insurance number. I hope, therefore, that the Minister, in consideration with his colleagues, might consider the use of signatures as an alternative to national insurance numbers, as we are bound to return to this issue. We should all want to ensure that everyone entitled to be on the electoral register is included on it, while respecting the fact that only those people entitled to be on that register should be on it.
I have no doubt that, during this debate, other noble Lords will want to talk about particular recommendations of the Boundary Commissions, about the number of MPs in the context of whether or not your Lordships’ House is reformed, and about how the Boundary Commissions are conducting their work. However, on the general issue I understand the long-standing case—originally put forward by the Chartists—that MPs should represent constituencies of roughly equal size. I hope that noble Lords will, by and large, respect that, as an important principle, MPs should have roughly the same number of electors.
We need to see the final recommendations of the commissions before we can say with certainty that the margin of variation allowed is too small for the creation of sensible constituencies, but the evidence of the initial proposals is that that may well be the case. We do not yet know exactly what the final boundary shapes will be, but we can tell, from some psephological analysis, that Conservative hopes and Labour fears about the current review may have been greatly exaggerated. Some estimates suggest that the advantage to the Conservatives may be to the tune of only 10 or so seats, if they receive the same level of support as in 2010. It seems that, for the Conservatives, the boundary changes could deliver a relatively small haul for a big upheaval in the nature of our constituencies.
Those who are concerned about the number of MPs—in particular the balance between the number of Ministers and Back-Benchers—will remember that during those debates 18 months ago, we agreed, following an amendment, that there must be a review of the number of MPs after the next general election. That amendment, which became Section 14 of the Act, provides for a review of the reduction in the number of constituencies. That review must take place before November 2015. It will be an important review and all these issues, neglected in many previous parliamentary Sessions, should be kept under constant review.
Lord Wills
My Lords, I thank my noble friend Lord Campbell-Savours for securing this debate. In the speeches so far, we have already heard just how important are the issues that he has given us the opportunity to discuss. When the Government brought forward their proposals for redefining the criteria for constituency boundaries, they justified them on the grounds of high constitutional principle. For example, during Second Reading in the other place of the Parliamentary Voting Systems and Constituencies Bill, the Deputy Prime Minister said:
“If we together cannot deliver these reforms, we will have to ask ourselves what we really meant when each of us promised our constituents that we would seek to reform and strengthen our politics. We promised a new politics. Today is the day we must begin to deliver on that promise. We must make the system fair”.—[Official Report, Commons, 6/9/10; col. 44.]
However, we now know what this new politics actually means. We know it thanks to the interview given to the Independent last week by the recently retired director of strategy for that same Deputy Prime Minister. In that interview the recently retired director of strategy promised that these reforms, which, I remind the House, the Deputy Prime Minister promised would help deliver “a new politics”, would be sabotaged if the Liberal Democrats did not get their way on reform of the House of Lords—a reform which, if passed, would incidentally virtually guarantee the Liberal Democrats an entrenched position of power in Parliament. So we see that the Deputy Prime Minister’s much vaunted new politics in fact turns out to be nothing more than an old-fashioned backroom bartering of partisan pieces of legislation.
Today, however, I do not want to excavate any further the motivations behind that legislation. I want to look at the toxic consequences for our democracy of the interaction between the boundary reviews launched by that Bill—now Act—and the Electoral Registration and Administration Bill which is shortly to come before your Lordships’ House. I do not oppose the objectives of these pieces of legislation. Reducing the number of seats in the House of Commons and equalising the size of the constituencies that remain must be a reasonable objective. As a Minister I brought in the legislation which introduced individual electoral registration and which is the subject of the Electoral Registration and Administration Bill. But the way that the Government have set about delivering these objectives has abandoned long-established constitutional proprieties in the pursuit of partisan self-interest. There has been no serious attempt to establish cross-party working on radical changes of the boundary review process or radical changes in the system of electoral registration. Perhaps the Minister could say what happened to that cross-party working group on the introduction of individual registration for which, in January, there was such cross-party support in your Lordships’ House.
The Government have explicitly abandoned the cross-party approach to the introduction of individual registration adopted by the previous Government. I was the Minister responsible in that Government. When we brought in our legislation to introduce individual electoral registration we went to great lengths to consult other political parties and we secured Front-Bench agreement from the Conservative Party and the Liberal Democrats to our approach, which linked individual registration to the achievement of a comprehensive and accurate register. After all this time and after so many questions, we still have not had an adequate explanation from the Government of why they have abandoned such a cross-party approach.
When we look at the detail we can perhaps see a clue as to the consequences of the Government’s change of approach. We have already heard—it is generally accepted—that for all its merits the introduction of individual registration carries with it the severe risk and the great probability that significant numbers of people eligible to vote will not register and so be unable to vote. As we have heard from the noble Lord, Lord Rennard, that was the case in Northern Ireland when it moved to this new system of registration. In evidence to the Political and Constitutional Reform Committee of the House of Commons last year, Jenny Watson, the chair of the Electoral Commission, said that,
“it is possible … that the register could go from around a 90% completeness that we currently have to around, say, a 60% completeness”.
As we have already heard, there is a serious problem with electoral registration in this country. The latest estimate from the Electoral Commission suggests that at least 6 million people eligible to vote were not registered to do so in December 2010. The fact that so many are not on the register who should be, despite all the measures taken by this Government and the previous Government, shows how intractable this problem is. It damages our democracy when so many eligible citizens cannot vote because they are not on the register. That is all the more so when we see that they are disproportionately concentrated in particular groups: young people, students, people with learning disabilities, people with disabilities generally, those living in areas of high unemployment and ethnic minorities.
The introduction of individual electoral registration risks making a bad situation significantly worse. That is why the previous Government delayed its introduction until a comprehensive and accurate register was achieved. We brought in a timetable and allowed for a phased introduction of the system by 2015. There was no undue delay about this. We gave the Electoral Commission power to oversee the process and Parliament the opportunity to monitor regularly what was happening. No one could say we were dragging our feet. We were trying to deal with the real problems that the introduction of individual registration was likely to bring.
This is the approach that has been junked by this Government, who want to bring in individual registration whatever the consequences on the register. I know that the Minister is going to rehearse in his reply all the measures that the Government are taking to increase registration. They are all welcome and I pay tribute to the noble Lord, Lord Rennard, who is largely responsible for removing some of the worst features of the Government’s proposed changes and for restoring the situation to the status quo ante. He is to be congratulated on his hard work. The changes that he has brought about are welcome, but essentially the measures that the Government are bringing in to increase registration are the same ones that I brought in when I was the Minister responsible. I hoped that they would reverse the decline in registration. I looked at these issues for months, but I could not guarantee that we would be able to halt the decline in registration that individual registration is likely to lead to. That is why we took the approach that we did. I could see no justification in advancing towards one public policy objective at the expense of another when I thought that it was possible to advance towards both at the same time.
What will be the consequences of the fall-off in registration to which this Government are opening the door? Most agree that those eligible voters who will not be registered to vote are most likely to vote Labour when they do so. The Liberal vote in the inner cities is similarly likely to suffer. The evidence suggests that the party that will suffer least, if at all, is the Conservative Party. Electoral registration is only 90% complete in Labour seats and 94% complete in Conservative seats. When you look at the demographic make-up of these seats, the explanation is clear. That might be the reason why this coalition Government are junking the principle followed, for good reason, by successive Conservative and Labour Governments that fundamental constitutional change such as this should only proceed, wherever possible, on a cross-party consensual basis. That incidentally is the attitude that the Conservative Party is taking towards reform of your Lordships’ House.
The Government have taken some steps towards acknowledging this problem by allowing for a carryover from the household system of registration for the general election to be held in 2015. Significantly, they have not allowed for such a carryover for the constituency boundary reviews also due to take place in 2015. This means that those boundary reviews will be conducted on the basis of a profoundly flawed register.
What are the consequences of that likely to be? Labour constituencies are likely to see disproportionate declines in those on the register, because those less likely to register are disproportionately concentrated in such constituencies. Because of the tight numerical limits on constituency size and flexibility imposed by the Parliamentary Voting Systems and Constituencies Act, that is likely to mean fewer Labour seats. Because of the way in which Labour constituencies are often surrounded by strongly Conservative constituencies, that is likely to mean that more Labour safe seats will become more marginal and more marginal Labour seats will become marginal Conservative ones.
I heard what the noble Lord, Lord Rennard, said about the likely psephological implications of the boundary reviews but, with respect, that has not properly factored in the interaction between the decline in registration and those boundary reviews. It is clear that this Government are hijacking our electoral arrangements in the interests of the Conservative Party’s. They are turning these electoral arrangements into a matter for partisan dispute for the first time in over a century. This is potentially toxic for our democracy.
I have asked your Lordships to consider the situation before and I ask your Lordships to consider it today. What is the impact on the health of our democracy if it turns out, as it may do in 2020, that the outcome of a general election has been determined by the fact that millions of eligible voters could not vote because they were not registered to do so and that this was the result of a government policy deliberately pursued despite all the evidence that it would have precisely this consequence?
We will return to these issues on 24 July when we debate the Second Reading of the Electoral Registration and Administration Bill. In the mean time, I conclude by asking the Minister two questions and should be grateful if he will reply directly and without equivocation. First, can he guarantee—I use the verb advisedly—that there will be no decline in electoral registration with the introduction of individual electoral registration? Secondly, why will the Government not allow for a carryover from household registration for the purposes of boundary reviews in 2015?
Lord Lipsey
My Lords, the House is greatly indebted to my noble friend Lord Campbell-Savours for bring this matter before it today. I shall talk about only some of it. That is to say, I am not going to talk about individual registration because my noble friend Lord Wills has said clearly everything that needs to be said about that. I am not going to talk about the still undealt with disaster whereby people who went to the polls in 2010 were not able to cast their vote because of failures in electoral law. I will instead confine myself to the matters included in the Parliamentary Voting System and Constituencies Act which occupied your Lordships’ House for a few hours in 2010-11. Those few hours were criticised on some sides and they have been criticised again today. Now, as the car crash that legislation is presenting us with becomes clearer, my regret is that we did not spend longer and were not more successful in persuading the Government that what they planned was bad for Parliament, bad for democracy and bad for our country. We told you so, o Government, but you did not listen.
As Members of another place are slowly coming to realise, the Government’s Act and the boundary review it has set off are having consequences more serious than it is easy to imagine. They come about as a result of three features of the Government’s scheme, each in themselves damaging but, taken together, representing a perfect storm which undermines the very basis of our democracy. The three are: equal-sized constituencies within a very tight 5% margin either way; a reduction of 50 in the size of the House of Commons; and the decision that reviews of boundaries should take place every five years.
Each of these proposals, taken individually and pushed less far, can be defended. Yes, of course, we want more or less equal constituencies; yes, of course, if we can manage with fewer MPs, great; yes, of course, we do not want ossified constituencies, but those were not the reasons the Bill was introduced. It was introduced for one main purpose: to reduce the bias in the electoral system towards Labour. As it happens, although I am a Labour Peer, I applaud that purpose. I do not think electoral systems should be biased and I do not think my party should need bias in the electoral system to help it win elections, but the Bill was frightfully ill designed for the purpose. According to most psephologists, having constituencies all the same size deals with only a third or less of the bias. If you really want to deal with bias, you have to do something quite different.
Anyway, that is what was done, and the Boundary Commissions are now seeking to work to these new, absurd rules under the truncated consultation procedures also introduced by the Act. They have not helped themselves, in England at any rate, by the self-imposed constraint of respecting all ward boundaries. The results are, in many cases, absurd. My noble friend Lord Campbell-Savours dealt with individuals, and I will deal with some individual cases. Gloucester Cathedral is no longer part of that proud city but has been mysteriously relocated to the Forest of Dean. My God, not since Birnam Wood marched on Macbeth’s castle has there been such a takeover. Sheffield seats cease to be Sheffield seats—have you noticed, Mr Clegg?—as you get seats which are part Sheffield, part Rotherham and cross the Ml. I will not go on, although I could. If the House did not forbid visual aids—I am not sure whether they are forbidden on electronic aids—I could wave before Members present a sheaf of constituency maps. At least, I am assured that they are constituency maps, but they look more like the shapeless, pointless scribblings of a one year-old or a Rorschach ink blot test. The existing constituency map of our country is a map of recognisable communities; the new map represents no recognisable communities whatever.
Many more electors than usual after a boundary review will find themselves with a new constituency and a new MP. Without getting too techie, psephologists use an index of change to measure the extent of differences, based on what percentage of constituents after a review has changed and what has remained the same. According to the definitive paper by David Rossiter, Ron Johnston and Charles Pattie in Parliamentary Affairs, after this review, 204 English—only English—constituencies will be changed by 50% of voters or more, compared with just 77 in the previous review in 2007. That is to say, there will be three times as many utter upheavals in constituencies and communities. This matters. What keeps our people attached to Parliament? When you ask people what they think of politicians in general, they say they are rubbish, but when they are asked about their MP, who has helped them with their problems and has worked for them day in, day out, they take a very different view. They respect their local Member although they deny respect to Parliament generally.
It gets worse. Originally, there was at least the hope that this would be a one-off. However, another review starts as soon as the next election is over. It will be based on the numbers on the new registers, which will be based, if the Government get their way, on individual registration, as the noble Lord, Lord Wills, pointed out. The numbers are going to be different. We do not know how different, but they will pretty different from the present numbers. What you have to understand is that it takes only a very small shift in the numbers to require a very large upheaval in the constituency. Constituency A goes a little bit under quota because not many people have registered there, so it needs to pinch a ward from constituency B, which needs to pinch a ward from constituency C. In the end, the whole map is up in the air, there is chaos before the next general election and, thanks to this domino effect, new chaos after it.
A study by Mclean and Johnston for the British Academy concludes that in Britain until now, a majority of constituencies remained substantially unchanged, giving continuity of representation, that in future there will be much less of a sense of place with which a constituency’s MP can identify and that that will be disadvantageous—this is academic understatement—to MPs, parties, electoral administrators and the electorate. In other words, the grassroots of democracy are being destroyed by this coalition Government. That is loony.
Fortunately, there is ray of hope, an unconvenanted bonus of the omnishambles which is Lords election, whose end was, I trust, signalled with the Prime Minister’s address to the 1922 Committee last night. It is possible, just possible, that not only has Lords election been prevented but so, too, has this catastrophic boundary reform. It is a double whammy for the coalition, but a frabjous day for all those who care for Britain’s democracy.
Let me explain. For the boundary changes to happen, both Houses of Parliament have to pass the necessary orders. These have to be laid before those Houses. The Act states that the Boundary Commission must submit reports setting out its proposals before 1 October 2013 and that:
“As soon as may be after the submission of a report ... the Secretary of State shall lay the report before Parliament”.
It should be with us in November 2013. Now, as we have heard, we have had threats in the run up to the Commons Second Reading of the House of Lords Reform Bill that the Lib Dems will refuse to vote for those orders, which would be very strongly in their interests. The previous local elections showed one crucial fact about Lib Dem performance, which will have been noted by every member of the party in another place: they did much better in areas where the local MP was a Lib Dem, and much worse where he was not. If the next election is fought on current boundaries and that phenomenon is repeated, Lib Dem MPs could hope to hold even seats that they look sure to lose on present polling. However, if it is fought on the new boundaries, more of those MPs will face voters who are not the same as those who backed them in the past—wipe-out looms. From my long experience in politics, I note that when self-interest beckons and, as in this case, it accords with sensible principles, the results are generally predictable.
We have, thank God, an emerging coalition in another place against the boundary changes. It includes Labour, of course for entirely principled reasons, the Lib Dems, because it will mean the likely decimation of their party, and many Tories who face the prospect of spending the next couple of years squabbling with colleagues over selection for new seats. A no vote to boundary changes now looks more likely than ever before.
Even in the unlikely event that David Cameron revives his dead parrot, the boundary change orders are not safe. I make no threats but this House must also approve the orders and it will by then be doomed. It might decide—no threats, as I say—as a last favour to our democracy to refuse to pass the orders when they are laid before it. Therefore, it is possible—I am a dreamer—that boundary reform will go down the pan. Aside from any connection to Lords reform, a very good thing that would be too.
Baroness Taylor of Bolton
My Lords, it is a great pleasure to follow my noble friend Lord Lipsey, who is clearly still on very good form and on something of a high from having delivered an Exocet into the Government’s costings for House of Lords reform. His speech reminded me that 10 days ago I saw a great production of that wonderful play, “Close the Coalhouse Door”, in which the socialist alphabet is sung. I think it includes the line, “G is for gerrymandering, which the Tories all think of first”. I wondered whether my noble friend had also been to see it.
I congratulate my noble friend Lord Campbell-Savours on initiating this debate. I echo and reinforce what he said about the damage that has been done to our democracy by attacks on the integrity of Members of Parliament when we all know that the vast majority go into politics for the right reasons and stay in often at great sacrifice to themselves. They should not be pilloried as they have been. I am only sorry that party leaderships across the board have not done more to support the good membership that we have in all parties.
This is a very timely and important debate, many aspects of which have already been raised. My main concern is the importance of this issue for the nature of our democracy, especially when there are so many challenges and other unco-ordinated changes that individually—and especially when taken together—could have very significant unintended consequences. As has been mentioned, we see a reduction in the number of MPs, fixed-term Parliaments and individual voter registration. Who knows what will come of the separation referendum in Scotland, or what the outcome of deliberations on the future of this House will be? The combination of all those things, which have not been thought through in any integrated way whatever, could undermine the fundamentals of our democracy in a very serious way.
Turning to the boundaries themselves, I entirely acknowledge that boundary changes are never easy. They will never satisfy everyone and there will always be winners and losers. I speak as someone who has been on both sides of that while a Member of another place. Boundary Commission reviews always raise big issues that are important to everyone and small issues that can be very important to individual constituents who identify with a constituency and its Member. They can raise tempers and concerns very much.
I shall say a little about my experience of Boundary Commissions and my experience in another place. I have given evidence to boundary inquiries on several occasions. My old constituency of Bolton West was subject to significant change in the 1980s and my constituency of Dewsbury, which I represented from 1987, was redrawn in rather an unusual way. I have always given evidence to the effect that I believe that community and identity should be the main consideration and that, although numbers matter, they are secondary to having a community that you can represent and that can identify you as its Member of Parliament. It is important that people can identify in that way and that that relationship can be developed. No one likes losing an election, but it is one thing to lose an election because of the electorate, which is a risk that you take. If you lose an election because your constituency has been carved up by some arbitrary figure, it is far more difficult to take and no one understands it, including the electorate.
In Bolton, I had a straightforward third of the area—an easy, homogeneous group in which everyone could identify who their MP was and the areas that I represented. Later, in my Dewsbury constituency, there was a different situation. The town of Dewsbury was too small to have a Member of Parliament of its own. So was the next-door town of Batley. They had a lot of common interests because they were the heavy woollen industry district. Had they been put together, there would have been one community and one identity, but that never happened. Dewsbury’s three wards were put with Mirfield, which was just down the road on the ribbon development. There was some logic to that because there was some community of interest in work patterns, travel to work, shopping and so on.
However, the Dewsbury constituency also had two wards that are very familiar to my noble friend Lord Clark. He used to represent one of them, Denby Dale. I am sure he would agree that Denby Dale and Dewsbury did not have much in common. There were some rather large hills between them, very few people travelled from one to the other to work, there were no school links, direct bus routes or direct train routes, and people did not go from one to the other for shopping. There was no community of interest whatever. It was like having two parallel constituencies. I enjoyed representing that whole area, but people in Denby Dale and Kirkburton never understood why they were in the Dewsbury constituency when they had no connection to it. As a Member of Parliament, I would rather have had a larger constituency that had an identity than a smaller one that was chopped up and meant representing lots of different areas.
Those are my opinions and my experiences. However, today I want to mention the consequences of the recent proposals and an article in a journal that will be very familiar to the Minister, Parliamentary Affairs. It was published on 3 July and the article is “Representing People and Representing Places: Community, Continuity and the Current Redistribution of Parliamentary Constituencies in the UK” by David Rossiter and Ron Johnston from the Department of Geography at the University of Sheffield and Charles Pattie from the School of Geographical Science at the University of Bristol. I am glad to see that the Minister has it and hope he will come to the same conclusions. It has no political axe to grind; the authors are geographers, not politicians. They give a very useful history of the geographical basis of constituencies. Before 1944 there was no set procedure for redrawing boundaries. They show that, from that time until these recent changes, community and identity always took precedence over numbers. Obviously there were guidelines, but community and identity were the most important things.
The Boundary Commission was also given a great deal of discretion and judgment about what was appropriate in different areas. The latest changes are probably the biggest ever. The article shows some of these changes and some of the difficulties. Mention was made of the national quota of plus or minus 5% that has now been established, because other factors can be taken into account only within that size constraint. It is not the same as in previous boundary distributions when people looked at communities and adjusted to try to meet guidelines, so I think that this will prove really difficult in the future. Many existing constituencies fell into that plus or minus 5% range, so many MPs, when this was going through, thought that there would be no change whatever to their individual constituencies. Unfortunately many have had to see very significant changes because of the knock-on effect from neighbouring seats, which my noble friend Lord Lipsey touched on.
In summary, this study says that these boundary changes,
“incorporated much less continuity in the pattern of constituencies”,
and that,
“most existing constituencies were dismembered and many new ones incorporated parts of two, if not three, local authorities”.
Many MPs know that dealing with many local authorities is really very difficult. The report goes on to say that,
“the fracturing of the country’s electoral map was much greater than many … MPs … expected”.
That is clearly true and it is clearly a significant difficulty for many people.
Following on the point that my noble friend made, I point out that this study also shows that,
“The greatest fracturing has been in England’s major urban areas”.
I suggest that those are exactly the areas where we need to engage people more in the political process, and I believe that all that has been said previously about individual voter registration by my noble friends Lord Wills and Lord Lipsey mean that we are going to see a very difficult situation. I fear that it might be appropriate to use the word “toxic”, which my noble friend used.
I will finish by quoting again from this report, which is, as I said, not political. It says:
“If the Commissions’ proposals are implemented—or some variant of them with very similar characteristics ... it will start a process whereby—because a numerical criterion is paramount and geographical criteria secondary—the MPs’ representative role will change. The long tradition that UK MPs represent places and communities will be rapidly eroded; many will just represent numerical aggregates”.
That is dangerous for democracy and why these boundary changes should be opposed.
Lord Clark of Windermere
My Lords, I am very pleased to participate in this debate, which is turning out to be a very thoughtful debate with a great many knowledgeable contributions. I, too, am indebted to my noble friend Lord Campbell-Savours for enabling us to have this debate and for launching it in a very fearless manner. It is ironic that we, in this House, are able to raise some concerns—indeed, many concerns— from another place. My noble friend described the concerns absolutely accurately and has done democracy a great service today by permitting this debate and by launching it as he has done.
Although one’s first thought is that this debate is about parliamentary boundaries, my noble friend mentioned electoral administration matters because he has recognised that we cannot examine boundaries in isolation. They are affected by many other factors that were raised so well by my noble friends previously. One thing on which we all agree is that the democracy in this country and in this mother of parliaments, so long seen as a paradigm of democracy, is in severe difficulties at this moment in time.
Only this week the report on a study by the Democratic Audit concluded that democracy in this country is in “long-term terminal decline”, that the British constitutional arrangements are “increasingly unstable”, and that the UK is below average among the wealthy democracies of the OECD. I am sure that those conclusions concern us all; they need to and they do. We all continually bemoan the fact that fewer and fewer people participate in voting, and more and more people say, “It does not matter what we do”. There have been attempts by both the previous Government and the present Government to address the problem. The conclusion must be that very few of these initiatives have actually worked. There have been certain suggestions this morning that are obvious and which in times past we perhaps followed as a norm. We ought to look at those again.
Much more effort ought to go into cross-party, consensual agreement. This is not to the advantage of the Labour Party, the Conservative Party, the Liberal Democrat party or whatever party. This is our democracy, and it is crucial that we work together to try to find a way out of the morass that we are in at the moment. I go along with colleagues who have made the point today that no party leader has been very helpful in the way in which they responded to the crisis in the other place a few years ago. Too many good, honest politicians were left to hang out to dry. We in Parliament are at a loss because of that. It is time to look again at the current state of our democracy.
I can understand that, in opposition, this Government decided that they had to have a new approach. I think that it was a bit simplistic in some ways. They talked about the big society and they wanted to progress localism, and no one can disagree with those ideas; they are very good ideas. In a democracy, no one can be against trying to be more inclusive and to bring more people into the running of the system. Informal arrangements on occasions can work better than a more formal structure, but I think that what we have seen is a substitution of one for the other. I rather deplore the way in which it has been quite commonplace to deplore and to demean the role of the state. The state has a critical role in the way in which society functions and the way in which the quality and the standards of life, and indeed our rights and liberties, are protected.
I cite an example from today. We see on the news the necessity of the state being brought in to ensure that there is security at the Olympics, because G4S, the private company, has failed. At the end of the day, we need the state. I use that as a very pragmatic example. It is not the best of examples, but it is a timely one.
I do not blame this Government, because I believe that generally their response to tackling some of the problems of democracy is well meaning. On occasions, too much stuff is done on the back of an envelope, and things are seen in isolation and not as a whole. I blame my own party in government for how it increased the amount of money spent in constituencies at election time. I used to boast that anyone could stand in Britain at a general election, because all you needed was a couple of thousand pounds. I used to boast in particular to my American colleagues, who spent hundreds of thousands of dollars to contest elections. Access to stand for elections is important.
Quite frankly, I was very shocked indeed when I looked at the constituency in which I live and from which I take my title “of Westmorland”. I was staggered to find that at the last general election the Liberal MP, Mr Tim Farron, who is a very good and active Member of Parliament, in the long election campaign period of six months spent not £2,000, £5,000 or £10,000 but £41,241 in getting elected. His Conservative opponent was not far behind, on £38,000, while the Labour candidate spent less than £3,000. That makes the point. I am not saying for one moment that people buy seats, but the competition and need for financial resources are clearly quite crippling—and I do not blame this Government for that. This is in addition to the normal parliamentary expenses, which rightly the sitting MP claims. That is an example of where we have rushed in to take decisions that have not been helpful.
I was going to say a few words about registration, but I shall refrain from doing so because my noble friend Lord Wills dealt with it very adequately. It cannot be right that we are sleepwalking into a system where millions of people will be removed from the electoral register. We need to be reassured on this balance of accuracy versus completeness, and I hope that the Minister will reassure us in his response today that we will get completeness as well as accuracy before the new system becomes completely incorporated at this point.
My noble friend Lady Taylor highlighted something that is absolutely critical. Our system of democracy in this country is representative. In the past we may have rejected or attacked alternative systems of democracy. We attacked the communist system of democracy, where the farm workers, trade unions and state industrialists had representatives. The Communist Party of the Soviet Union had representatives. We said, “Well, that’s not democracy, because we believe democracy to be representative”. We are now seeing with this boundary review, as my noble friend Lady Taylor said, that numbers are the key. If you start from Cornwall or from Cumbria, you come up with a different conclusion. Because of their nature, if you reduce numbers and stick to a quota with very little movement, the ramifications of where you start are great.
I believe that we have lost a great deal in the notion of representative democracy and the sense of place that is so important. In every country in the world, the identification with a locality is very important. That has been a strength of our democracy. I hope that when the Government look again at the boundaries and come back to us next year, something can be done to work out a system where a sense of place in a representative democracy becomes the centre of the constituency and not just sheer numbers.
Baroness Corston
My Lords, it is a great privilege to take part in this important debate. I congratulate my noble friend Lord Campbell-Savours, who has done us a great service in allowing us to do so. What we are discussing—the proposals of the parliamentary Boundary Commission—is based on what I can only describe as a Faustian pact entered into May 2010, in which in return for an alternative vote referendum the Liberal Democrats agreed that they would support proposals to reduce the number of parliamentary constituencies in this country from 650 to 600. I have read in more than one place that that was based on naked party-political interest, in that there would be a guarantee of an extra 20 Conservative seats should those proposals be implemented.
The tragedy for the Liberal Democrats is that they will be the greatest casualty from all of this, because my experience after a lifetime of politics is that what has guaranteed many Liberal Democrats a seat in the House of Commons is what has been described as incumbency. They have indulged in what has been called “pavement politics”, whereby you are more concerned with dog mess than with China’s position in the United Nations. Actually, there is a lot to be said for that—but that is how they established themselves.
I worked 30 years ago as the regional organiser for the Labour Party in the south-west of England. I remember going to the Yeovil constituency Labour Party in 1981 when everyone was talking about the forthcoming election as if it was a dispute between it and the Conservative Party. I pointed out how misplaced that attitude was. I said, “Do you know there’s a chap called Paddy Ashdown who lives in Norton-sub-Hamdon, who has bought himself an offset litho duplicator, and he is going to snatch this constituency from under the noses of the Tories in doing so?”. And of course he did—I congratulate him. A few years ago I found some of the then Paddy Ashdown’s leaflets, which he distributed to the good people of the Yeovil constituency, which helped him to win the seat. I sent them to him and he was very grateful, because he did not have copies himself.
The success of Liberal Democrat MPs has been about what my noble friends have called a sense of place rather than electoral mathematics. However, I have been told on what I think is reasonable authority that, at an angry meeting of Liberal Democrat Members of Parliament after the proposals of the Boundary Commission were published, Mr Clegg promised those Liberal Democrats currently sitting in the House of Commons that should they not be successful in being elected, they would be at the top of the party list for the new senate. We can probably work out what that is about.
I want to talk here about the implications in the proposals for democratic representation. In doing so, I want to focus on two proposed seats from the Commission. The first is the Forest of Dean, which is probably one of the most enclosed and identifiable communities in this country. It covers what Dennis Potter used to call the “blue remembered hills”. If noble Lords want to know whether the Forest of Dean is special, they should just speak to my noble friend Lady Royall of Blaisdon, a proud Forester herself. I have a long association with that part of the world going back 30 years. The new seat is going to include the centre of the city of Gloucester. One of my noble friends recently referred to what would happen to Gloucester Cathedral, but I point out that the new seat will contain not just the cathedral but the Gloucester docks, the county cricket ground, the city’s ancient gate streets, the council headquarters, the police buildings and the law courts. Everything which is identifiable as what has been described locally as the “historical centre of their city” will not be represented by anybody who is sitting for Gloucester. It will tacked on to the Forest of Dean, and anybody representing the Forest of Dean who has any sense is not going to spend as much time in Gloucester as they do in the Forest of Dean, a seat currently held by Mr Mark Harper, the Minister taking some of this legislation through the House of Commons. Such is the anger in Gloucester about these proposals that not only were 400 of the 503 submissions to the commission implacably opposed, but there was a protest march through the city of Gloucester with banners saying, “Save our city centre”. Anybody who tells me people do not care about this is profoundly misguided.
I now want to talk about the new seat of Mersey Banks. Mersey Banks is, as the name suggests, two areas on opposite sides of the River Mersey. They do not cover the mouth of the estuary; you have to drive right round the estuary to get to the other bit of the seat. It includes three local authorities—two have comprehensive school systems and one has a selective system—two police authorities and two fire authorities. There are absolutely no historical links at all. Nor are there any road links, because you cannot get from one bit of the constituency to the other without leaving the constituency in three places.
I do not blame the commission for what it has come up with because it was given a poisoned chalice. If all you care about is numbers, you are going to have constituencies that make absolutely no sense. It is a bit rich to have Conservative MPs repeatedly criticise the Boundary Commission—as they have done—because it was given an impossible job to do. As many noble Lords have said, electoral representation is not about numbers: it is about a sense of place. I was proud to represent part of the city of Bristol. When the local government financial settlement was announced each year, I looked to see what happened to Bristol. I could get up in the Chamber and fight Bristol’s corner; I could write to Ministers on behalf of Bristol; I could speak in the Bristol media and in meetings in Bristol about the treatment of the city. Just suppose my constituency had covered areas of Bristol, Bath and North East Somerset and Kingswood. What would I have done when the local government financial settlement was published? I would have been a disinterested observer and I would have tried to hold the ring. If anybody from Bristol had complained, I would have said, “Oh well, Kingswood’s not doing very well either” and vice versa. The great thing about being a Member of Parliament is the way in which you identify with the people in that sense of place.
It might sound a bit fanciful, but when I left the other place for health reasons not of my choosing, giving up a constituency—and I am sure it is the same if you are defeated—was like giving up a child for adoption. Even now when I drive down the M32 I look left and remember that that was the place I used to represent. That is an aspect of being a Member of Parliament which is probably ridiculed in the media and not understood, but it enables you to be an effective member because of the possibility of that personal engagement.
Finally, I want to remind colleagues that electoral legislation is based on the Representation of the People Acts from 1949. That is what this is about. It is not about some notion of geographical parity, it is about the sense of representation. As the noble Lord, Lord Lipsey, said, people do identify with their Member of Parliament. There is a great analogy with the NHS. If you ask people what they think of the NHS, they think it is not very good: if you ask them what they thought of the treatment they had a few weeks ago when they had a hernia operation, they say it was fabulous. Many times, people would say to me, “I don’t think much of MPs, Jean, but you’re okay”. There is a huge opportunity being missed here and huge damage being done to the fabric of our political life. All I fear is that there will be even more disengagement and even more trauma down at the other end of this place for people who do not deserve it.
Lord Foulkes of Cumnock
My Lords, it is a great pleasure to follow my noble friend Lady Corston who served for some years, with great distinction, as chairman of our parliamentary Labour Party and is now doing sterling work in this Chamber. As she knows only too well, I have not—unlike our noble friend Lord Campbell-Savours—eschewed party political discussions and debate since I came in here. In fact I quite enjoy them: relish them even, perhaps. I hope that my noble friend Lord Campbell-Savours and others will forgive me if I stray a little into party politics.
I say to the noble Lord, Lord Wallace, and to anyone else from the other side, that I am getting a little fed up with people on the other side lecturing us and saying that we need boundary reviews to try and get an equal number of electors in each constituency. Of course we do. That has happened again and again under Labour Governments and Tory Governments. There have been little problems at the edges and arguments at Boundary Commissions where, incidentally, we were properly heard, with appeals procedures which have now gone. The problems were relatively mild compared with what is being proposed now because then the number of seats stayed roughly the same at about 650. The Boundary Commissions were also given flexibility. They were not given the straitjacket of being obliged to have exactly 600 seats. If they wanted 655 or 652 or more or less, they could use that degree of flexibility to try to take account of geographical communities and natural boundaries and so on.
What we have now is a totally arbitrary figure. What is magical about 600? If they want to save money—although I am not sure that the Liberal Democrats necessarily do—and if money is everything, why not 500, 400 or 300 or any other figure? Why 600 and why no flexibility as we had in the past?
I see the noble Viscount, Lord Younger, on the Benches opposite. He will know that, for many years, I represented a constituency in Ayrshire. I had a very good, co-operative relationship with the neighbouring Member of Parliament, George Younger, for whom I had the greatest respect. We had Boundary Commission reviews and we put our views to them. During the reviews I got a little bit of Ayr sometimes and Annbank and Mossblown moved backwards and forwards. There were two boundary reviews while I was Member of Parliament from 1979 to 2005 and I survived them. In fact, my majority went up from just over 1,000 to just over 22,000, so perhaps more than survived, although not as a result of the boundary changes.
I say to people opposite—although there are not many Tories here—that there is now no such thing as a safe Tory seat in Scotland. There used to be many of them—or at least they thought they were safe—but Labour took a large number of them and the SNP took others. That is a lesson to our colleagues in England. Do not assume that every Tory seat is safe. We can win it by fighting the right kind of fight. Do not assume that if there was, for example, a devolved English Parliament, it would always be dominated by the Conservatives, because that is not necessarily the case.
Returning to the boundary issues, why were those reviews less acrimonious? It was because we always knew that there were about 72 seats in Scotland. The number went up or down, but it was about 72. There was not the reduction that has created the problems here. However, in 2005, the number of seats in Scotland was reduced from 72 to 59. That created the problems. In Ayrshire, the number of seats was reduced from five to four. That is when I took the opportunity of retiring. It seemed right to do so because I was the longest-serving and oldest Member of Parliament in the county, and the other four MPs were younger and elected more recently. That process was therefore relatively painless, but in other parts of Scotland, as the Chairman of Committees and others know, there were acrimonious fights and divisions because of the reduction.
Now the number of seats in Scotland is being reduced to 52 and we will have even more acrimony and concern. That is nothing when compared with Wales, which is being really hard done by because there are effectively two reductions in the number of seats—first to take account of devolution, and now to take account of the arbitrary reduction to 600 in the number of seats at Westminster. Wales will suffer and it will be very difficult for Members of Parliament in Wales. I endorse what has been said by others on that.
I want to use Scotland to illustrate why the whole situation is a mess. The development of the electoral and boundary structure has created problems for us. Let us take our electoral systems, where there has been a piecemeal approach. Our Government, I am afraid, was to some extent responsible for a number of the problems. A piecemeal reorganisation and reconsideration of our constitution have taken place.
We have four completely different electoral systems. We have the list system for elections to the European Parliament. Earlier, we heard about lack of participation. When we had Members of the European Parliament representing constituencies, we had a relatively high turnout. Now that they are on a list, people do not know who they are, there is not the same kind of enthusiasm and the turnout reflects that.
For elections to Westminster, we still have first past the post, thank goodness. A number of us here have been fighting to ensure that, because we believe that democracy is not just about—as the Liberal Democrats think—a simple arithmetic relationship between the number of votes cast and the number of seats. It is also about accountability, which is an essential part of democracy. The great thing about the first past the post system is that the Members of Parliament are accountable. I knew that when I went back to the electorate I was the one who had to convince them to vote for me again, which, thankfully, I was able to do.
In the Scottish Parliament, we also have the additional member system, which has become discredited. As I have said to the House before, I was elected to the Scottish Parliament by mistake. It was an astonishing situation. I did not spend a penny on the election campaign. I did not seek people’s votes, but because I was top of the list and was campaigning for the constituency candidates—sadly, some of them did not get elected, not necessarily because I was campaigning for them—I was elected automatically. This absolutely crazy system must be reviewed.
For local government in Scotland we also have the single transferable vote, which was the result of a deal made when we had a coalition between the Liberal Democrats and Labour. Sadly, the Labour Party conceded the single transferable vote for local government. As a result, we do not have councillors who are accountable to their wards and are well respected there. We have three or four councillors in much larger wards, which creates huge problems.
That is an illustration of the problems of the electoral systems but there has also been piecemeal constitutional reform. I supported devolution but it has thrown up the West Lothian question, and we now have Sir William McKay—I call him Bill McKay and get told off—looking into the issue of Scottish, Welsh and Northern Ireland MPs voting on English-only matters. We still await the results of that. We still await the referendum on Scottish independence. In England, we now have elected mayors and police commissioners. We have had a fixed-term Parliament forced upon us. We of course have Lords reform—in inverted commas. All of those are outstanding issues that have to be dealt with. At the same time, we have what my noble friend Lord Campbell-Savours has put on the agenda today causing further problems.
The Clock has been very helpful to me for some unknown reason. I did not realise that time was on my side. I think I am using my noble friend Lady Corston’s extra time. I wanted to make three final points. In relation to what the noble Lord, Lord Rennard, and others have said about the electoral register, I hope that the Minister and others will look at what was done in Glasgow about canvassing by sending people to knock on doors—“chap on doors”, as we say in Scotland—and getting the register filled in there and then on the doorstep. If people are not in, the canvassers go back to make sure that people are registering. There needs to be active participation by the Government to ensure that people register.
Returning to the mess that I was talking about, the minority report, or alternative report, that came out on Lords reform recommended setting up a constitutional convention. Day by day, issue by issue, it becomes more and more attractive, logical and sensible to look at our constitution in a coherent way that will pick up all these loose ends and do something about them.
Finally, I want to ask the Minister another question. I hope, by the way, he answers the questions he was asked today a bit better than he answered my Written Question, in which I asked what the ministerial responsibilities of the noble Baroness, Lady Warsi, were. Rather than answering the Question, the noble Lord sent me a document with a list of all ministerial responsibilities. However, I looked through the list and it is astonishing that she has no ministerial responsibilities. When I received a phone call the other day from Conservative Central Office inviting me to tea with the noble Baroness, Lady Warsi, I had to say, “I think you have got the wrong Peer. Will you try Lord Faulks? This is Lord Foulkes”. She is spending our money inviting Tory Peers to tea, and I know that only because I have a similar name.
I hope that the Minister will answer a question that was raised by the noble Lord, Lord Lipsey, in his erudite and splendid contribution to the debate. The order for the boundary changes has to be approved by both Houses. Let us suppose that it was pushed through because of the coalition majority in the House of Commons but we were able here to persuade the Cross-Benchers and maybe some others of the unwisdom of the proposals in the order—that the boundary changes were wrong—and we voted it down. Will the Minister confirm that that will be the end of it? I hope that he will. That would show that even—I was going to say “in our dying days”, but I think we will be here a little longer than some people would like—in these next few months we have some power. Let us hope that we might seriously consider wielding it.
Baroness Smith of Basildon
My Lords, it is always a great pleasure to follow my noble friend Lord Foulkes, and I will make sure that I do not get his name wrong or mix him up with the noble Lord, Lord Faulks.
This has been a really interesting debate, and I am grateful to the noble Lord, Lord Campbell-Savours. He has done the House a service by his contribution and by bringing this issue before it. Particularly given recent constitutional debates in the other place, and in the political media—although not, I suspect, in the pubs, the clubs and the school gates around the country—the Government’s legislation on constituency borders and electoral registration leads us into a wider debate about what we mean by democracy and political representation. What are the implications of those changes that have been, and are being, legislated for? There seems to be a lack of clarity about whether we will see all those changes, but it is right that we look fully at the implications.
It has been quite clear in the first debates in your Lordships’ House and the other place, that whatever the textbook definition of democracy, there are many different interpretations. I do not think we can see democracy as something we can pick and choose, or pick and mix, which was the phrase the noble Lord, Lord Rennard, used. We cannot choose the parts we like best. There are certain core elements that we have to sign up to. The first and most basic is accountability. The noble Lord, Lord Campbell-Savours, and others pointed out that the Parliamentary Voting System and Constituencies Act 2011 was unprecedented legislation with regard to the changes of MPs and boundaries, which may or may not take place. At its core was the Government’s promise to reduce the size and cost of Parliament, and allow for a referendum on the voting system, to get rid of our current first past the post system and replace it with a system which would count the proportion of votes for each party. To the horror and surprise of some, and the delight of others, the public rejected the change in the voting system. I am sure that the reasons why could fill a debate in your Lordships’ House on their own, but I offer one thought: most significant constitutional change comes from the grass roots up. If we think of women’s suffrage and universal suffrage, we think of the campaigns that took place, the marches, and the demonstrations. Politicians of those times wrote and spoke about the lobbying that took place on those issues.
In knocking on doors during my 21 years as an elected representative—13 in Westminster and eight on a county council—I can probably count on the fingers of one hand the number of times the issue of PR or an alternative voting system was mentioned. The noble Lord, Lord Foulkes, hit the nail on the head as to why that is. The first past the post system is understood, it is straightforward, and it clearly gives a relationship of accountability between the elected representative and the elector. That can also apply to another debate that is taking place at the moment.
There is a real danger that the electorate feel enormous frustration and disengagement at the drive for such constitutional change coming from above, from the Westminster elite, rather than by public demand. Part of accountability is understanding and knowing those issues and the concerns that most affect our constituencies. I do not want to imply that there was some kind of golden age, when boundary changes were always easy, when no one was ever upset by them, and there were never any difficulties caused, because we know that that is not the case. However, the Government’s legislation creates a very different situation, and very substantial changes of a kind we have not seen before.
The most substantive point about the Bill and accountability is that for the first time ever Parliament decided how many constituencies there should be, what the approximate size should be, and imposed on the Boundary Commission—again, for the very first time—strict rules on the variation in size of seat: just 5%. All the other factors that were taken into account before—geography, history, natural boundaries and communities, and that sense of place that we have heard so much about today, of local wards and parishes—came second to playing the numbers game.
My noble friend Lord Wills spoke of the high constitutional principle that was at stake, as mentioned by the Deputy Prime Minister, in the necessity of boundary changes. However, we now know that those boundary changes are subject, not to high constitutional principle, but whether the Liberal Democrats get their Bill through to change or abolish the House of Lords and create a new body.
I recall the debate during the Second Reading and passage of the Bill. I am not wedded to a particular number or size of constituency. However, we have to have a justification for change. I recall asking the Minister, as did other noble Lords, what their reason was for the choice of 600 constituencies. What was the significance of the number? I was told, as were other noble Lords, that it was a nice round figure. That is not good enough for such a significant constitutional change.
The noble Lord, Lord Rennard, quoted the Chartists and the size of constituencies being similar. In the same way that he spoke about pick and mix earlier, perhaps we should not pick and mix when we talk about the Chartists. I notice that although the proposals for the elected House of Lords were for 15-year terms, and fixed terms of five years for the House of Commons, the Chartists argued for annual elections. There is greater credibility for annual elections than 15-year elections.
The noble Lord, Lord Campbell-Savours, was the first today to talk about the relationship between MPs and constituencies. That is well rehearsed, and it is genuine, as my noble friend Lady Corston says. I represented a seat from 1997-2010; Members of Parliament identify very strongly with their constituencies and feel a great affinity with them.
We have also heard a considerable amount about the impact these changes have on the work of a Member of Parliament, and how towns feel about changes. I would like to say something about the impact on voters and constituents when constituencies change. My home town in Basildon is known as Pitsea. I represented Pitsea on the county council, although in 1997 when I was elected to Parliament it was taken out of the constituency of Basildon which I represented, and into another constituency, Billericay.
Until 1997 Pitsea was in Basildon. It was in the Basildon council area, the main shopping area was there, and Basildon was the focus for services. There was a distinct community of which it felt part, and it knew who its MP was. From 1997-2010 it went into Billericay. It did not feel as if there was much of a common link with Billericay, and there were difficulties, but it was part of the district of Basildon, and there was some logic to it. However, Basildon took in the East Thurrock area. The constituency name remained Basildon, which was totally unfair on the people of East Thurrock, who had no named identity and no connection for their constituency.
In 2010, Pitsea was back in Basildon. In 2015, Pitsea, under the proposed boundary changes, will go to Rayleigh. It has no common links with Rayleigh, no shared services, and no common councils, and it is really hard to understand what links these areas, other than the numbers game. In 2020 who knows what will happen, because under the new legislation the boundaries will be reviewed for every general election? This means that every time there has been or will be a boundary change, the voters of Pitsea have had, and will have, no opportunity to hold their Member of Parliament to account, because they are at the margins of the constituency and are the ones most likely to be moved for every single election. They did not have the opportunity in 2010 to hold their MP to account, and they will not have it in 2011.
The noble Lord, Lord Clark, made a comment about disengaging people. I have already spoken to a number of people in that area who tell me, “Why should we bother to vote? We don’t know anything about Rayleigh. We are not connected with Rayleigh”. Instead of engaging people in the political system, we are disengaging them from the political process completely. The Government say that the changes are at the margins, but it is those margins that move from constituency to constituency each time. Rather than being more democratic, it reduces the accountability of MPs to their constituents.
I have great admiration for most MPs, and I believe that the majority of MPs will faithfully represent all of their constituents whenever there is an opportunity to do so. However, for some MPs, such as the lazy and the overworked—and they will be overworked because of the larger area they will represent—or those in the most marginal of seats, there will be an opportunity to prioritise the areas they know will be in their constituency at the next election, and whose votes they will need.
Accountability is also about the individuals’ and communities’ abilities to participate in the political process. I want to say something about wider participation, but part of that participation means being able to vote. We all know—politicians have been saying it for many years—that turnouts at both general and local elections are too low. Governments constantly say that they want to increase turnout, but I fail to understand how the accelerated process for individual voter registration does that.
We support individual electoral registration. We argued for it and legislated for it in 2009. However, I can do no better than refer the noble Lord to the speech of my noble friend Lord Wills, who spoke of the very different approach now being taken by the Government compared with the approach that we took when we were in government. It was a measured and cross-party approach and it allowed time for the changes to come in properly to ensure accuracy and fairness. I urge the Government to take note of the comments that have been made today. If they fail to act properly in this regard, not only will they deny thousands of their right to vote but they will be accused of blatant political manipulation, because there is no good reason for the process to be speeded up in this way.
I also want to say something about access to elected representatives. A mistake that politicians sometimes make is to believe that everybody is interested in politics and that they know who their MP is. I can tell the Minister that people in my area would regularly go to the local council or the local library saying that they lived in Basildon, and they were told that I was their MP, regardless of where they lived, because that was the sense of place that they had and understood.
I take on board the comments of the noble Baroness, Lady O’Cathain, who said that it would be easier for MPs if constituencies were of the same size. I say to her that it would not be easier for MPs in the slightest. Better representation, both for the elected and the elector, comes from people knowing who their MP is, being able to contact them easily and sharing a sense of place and community. That is what makes the difference.
Baroness O'Cathain
Can the noble Baroness tell me that it is easier for somebody to have a constituency of 80,000 or 90,000 compared with having a constituency of 55,000?
Baroness Smith of Basildon
In my case, it would have been much easier. If I had had the whole of Basildon as my constituency, rather than part of Basildon and part of Thurrock, the constituency would have been bigger but I would have dealt with two local authorities and one police force. It is dealing with different agencies that complicates matters. I was very lucky in that I enjoyed both parts of my constituency, but to say that it was easier because it was smaller in terms of numbers would be completely incorrect, and I would be doing a disservice to my former constituents if I did not confess that it was harder dealing with two sets of agencies.
I think that I have a couple of seconds of injury time in which to finish. A democracy is more than just a cross in a box or a type of voting system, and it is more than ensuring that constituencies are the same size. Democracy has to be about political engagement, representation and accountability. That is how we get to the sense of place that we have heard about today. Unfortunately, the Government have ignored the latter—the political engagement, representation and accountability—in favour of the former.
Lord Wallace of Saltaire
My Lords, this has been a rumbustious debate. The noble Lord, Lord Clark, referred to the speech of the noble Lord, Lord Campbell-Savours, as fearless. I felt that in many ways it was a tub-thumping speech. I feel the pain coming from past and present Labour MPs at the way they have been treated by IPSA and by the threat of boundary reviews. In terms of economy, I have to say that I feel moderate pain in the current Government. I go around saying to people that this is the leanest Government we have had for many years because we have cut the government car pool in half and we walk more. With regard to economy but not humiliation, perhaps I may share with noble Lords the occasion on which I went with an official to represent the Government at an international conference. At the end of the conference, the government car collected us, delivered us to the VIP lounge at the airport and, from there, the protocol officer took us to the front of the easyJet queue for us to fly back. That is an approach to economy that Members of the other place may need to share.
With regard to spending on elections and on politics between elections, I say to the noble Lord, Lord Clark of Windermere, that over the past 25 years the amount provided to sitting MPs for assistance with casework and allowances for communications has given in-built advantages to sitting Members against challengers. That, again, is an issue that we may need to talk about in more detail.
Lord Wills
With great respect to the Minister, I think that I should correct him on that. There were very clear rules in the other place. The expenses given to MPs were solely for discharging their duties as Members of Parliament. They were explicitly excluded from any kind of campaigning purpose whatever. I can speak for myself and for the great majority of my former colleagues when I say that we scrupulously observed those rules. I just wanted to correct the Minister on a point of fact.
Lord Wallace of Saltaire
I merely referred to the advantages of incumbency and strengthening the advantages of incumbency. I think we both know what we are talking about.
As this Question refers to democracy and political representation, I thought that as an academic I should go back to the Concise Oxford Dictionary of Politics and look up the definition of democracy. It says that democracy is a descriptive term synonymous with majority rule. It goes on to say that the plurality rule, as opposed to the majoritarian rule, which selects the candidate with the largest single number of votes, even if that number is less than half the votes cast, may select somebody whom the majority regard as the worst candidate. It says that, nevertheless, countries using this rule for national elections, such as Britain, the United States and India, are normally described as democratic.
The question of how we choose representatives and the place and size of the electorate is something that we have tried very hard to balance over the past 100 years and more. The issue at stake, after all, is the balance struck by the Boundary Commission between the sense of place and the number of electors. The position taken by the coalition Government is that too great an emphasis had been placed on ensuring a sense of place at the expense of ensuring fairness and equality in the size of constituencies. In terms of numbers, noble Lords may know that in 1922, when the Irish left, Parliament consisted of 615 Members and in 1950 of 625 Members, and it has grown slowly to the current number of 650. Of course, all these numbers are arbitrary.
Baroness Corston
Would the Minister acknowledge that we have also had a vastly growing population?
Lord Wallace of Saltaire
Certainly, and I also acknowledge—this is very important—that there has been an enormous degree of centralisation in the way that British politics, and particularly English politics, has operated. Fifty or 100 years ago, certain casework was conducted by local councillors. However, as the central state has taken on what the local authority used to do, so people have come to their MPs more and more, and that has led to a tremendous growth in the amount of MPs’ casework.
I do not entirely recognise a golden age of constituencies in which every constituency represented a long-term and clear place. The noble Lord, Lord Clark of Windermere, will know that the Colne Valley as a constituency has changed very radically over the years. The first constituency that I fought—Huddersfield West—disappeared very rapidly and is now part of Colne Valley, whereas Saddleworth has long since gone somewhere else. The constituency in which I live, Shipley, has a moor down the middle of it and part of Wharfedale, which is occasionally cut off by snow in winter, is part of the constituency. I found myself at my first election as a candidate there having to explain to people in Wharfedale that they were part of the Shipley constituency and not connected with Ilkley or Pudsey.
One could take many examples of this. The noble Baroness, Lady Taylor of Bolton, talked about some of the Kirklees constituencies. When I first started thinking about politics in that region, the Spen Valley was a constituency. We then had Batley, Brighouse and Spenborough, and Batley and Spen. In the 2005 general election I spent an afternoon standing in Huddersfield marketplace meeting people coming in from Heckmondwike, Gomersal, Cleckheaton and elsewhere who said, one after the other, “Can you help me? I’m not sure what constituency I’m in”. I realised how little I knew about the changing boundaries of those West Yorkshire constituencies. As we all know, MPs identify very strongly over time with their constituencies, but their constituents very often do not identify so closely with them in return.
Baroness Taylor of Bolton
I am grateful to the Minister for giving way. Is there not a slight contradiction in what he is saying? A minute ago, he was saying that the incumbency factor was very significant. Does that not mean that constituents must recognise their MPs?
Lord Wallace of Saltaire
Some do, some do not. However, we have a larger problem which we should also address. More and more constituents—including those who used to vote Labour, according to my experience in Bradford—do not identify with the constituency, any political party or politics as such and, indeed, do not wish to register. We will return to that wider issue in 10 days time, when we discuss the Electoral Registration and Administration Bill. The noble Lord, Lord Wills, asked me to guarantee that there would be no further decline in registrations in the move to individual electoral registration, but of course the Government cannot guarantee that. We know that between 2000 and 2010, the number of people not on the register is estimated to have doubled from 3 million to 6 million. I am sure the Labour Government that were in office at that point had no intention of allowing that to happen—it happened, as we know, for a range of reasons to do with political attitudes and social change. We will be doing everything we can to maximise the completeness of the individual register, but the accuracy and completeness of the household registration system has been going down, which is very much part of the reason for the change.
Lord Wills
I am grateful to the Minister for giving way. Does he recognise that there is a big difference between a Government who are, on the one hand, doing everything they can to improve the comprehensiveness and accuracy of the register and a Government who are doing their best on that but are none the less proceeding with legislation that is undoubtedly going to damage that register even further—and in the interests of one particular political party? That is the difference. Does the noble Lord accept that?
Lord Wallace of Saltaire
I do not accept that and I do not accept that we have not been consulting the Labour Party. The noble Lord and I have discussed this at great length, Mark Harper has discussed this with a number of people on the Labour Front Bench and we are continuing to discuss this as we go on. I have so far dealt with several statutory instruments about the data-matching exercise, which is part of the way in which we are testing the completeness of the register. We know that this will get a great deal more difficult and will be talking with others in the Department for Education and elsewhere about how far we can use school registers and student loan registers to get at some of the mobile young people who are among the most difficult to catch for the register. We will return to this area at some length at Second Reading and in Committee on the Electoral Registration and Administration Bill. We will come back to that, and to the question of carrying over the registration from May 2015 to December 2015, in that context rather than in this one.
Lord Wills
This will be my last intervention for today. The Minister has made a very important point and I want to be sure that I have understood it, because it will obviously inform the approach of many noble Lords to the Second Reading of that Bill. Is the noble Lord saying that the Government remain open to a carryover for the purposes of the boundary review in 2015? Are the Government now prepared to consider that?
Lord Wallace of Saltaire
I was not saying that, I was simply saying that we would need to discuss it further in that context, because we will be spending a good deal of time on the Bill. However, I was saying that a number of continuing experiments are under way with the government statistics authority and with the Electoral Commission about how best to ensure that, as we move to a new register, we maximise the number of people on it. He will know, as we have rehearsed it before, that the argument in respect of the December 2015 register is that maintaining a carryover from a register made over two years before risks carrying over a large number of additional names, particularly in the inner cities, of highly mobile people and those from multiple-occupation residences. There will be a post-May 2015 canvass of all of those who are in doubt on this. We think that the occurrence of a general election in May 2015 should produce the maximum registration available then, but that the question of accuracy and completeness is not best served by maintaining, even after the election, names that have not responded to several attempts personally to canvass them.
The joy and passion that members of the Opposition have for the single-Member constituency is striking. I remind them that the single-Member constituency and the electoral system that the noble Lord, Lord Foulkes, went for are not necessarily part of the ancient British constitution. The official with whom I travelled to a conference last weekend admitted to me that his grandfather had been one of the two Labour MPs for Blackburn between 1945 and 1950. That was one of the last two-Member constituencies. The noble Lord, Lord Foulkes, is perhaps not quite old enough to remember the three-Member combined Scottish university seat, which was there until 1950. However, I am sure he remembers the electoral system used for that, which was of course the single transferable vote. We now regard the single-Member constituency as the only possible thing for Britain, but other things have been tried before and might be tried again in the future. This Government’s commitment to decentralisation and the revival of local democracy means that we see casework in future more often going to the local councillor, and not always, perhaps, all the way up to the MP.
There have been suggestions of gerrymandering. Looking through my preparatory notes on this, I see that in 1978-79, the then Labour Government postponed the introduction of boundary changes. There were accusations in the right-wing press that this was “jimmymandering” by the then Prime Minister, as a means of ensuring that Labour should not lose those relevant seats. I am conscious, as we all are, that the integrity, accuracy and completeness of the register, for the next election and beyond it, matters to all of us. We are also concerned that some of the underlying causes for the decline in the completeness of the register—political disillusionment and disengagement—need to be addressed, and on an all-party basis.
Lord Lipsey
I do not want the noble Lord to get the records wrong. It was 1968-69 and Jim Callaghan was not Prime Minister at the time, he was Home Secretary. Other than that, the Minister’s point is absolutely right.
Lord Campbell-Savours
Does the noble Lord think it proper for prominent Liberal Democrats to trade Lords reform for the reduction in seats?
Lord Wallace of Saltaire
I am deeply grateful to the noble Lord and all those on the other side for their sympathy for the position of the Liberal Democrats. We are a coalition Government and bargain every single day on a whole host of things. I have no knowledge whether what Mr Richard Reeves said as he left for the United States—very unwisely, and without any authorisation or standing, I thought—relates to anything that is being discussed between the two parties.
I hope that I have covered most of the points raised. The noble Lord, Lord Rennard, asked about the application form, which again we will return to when we discuss the Electoral Registration and Administration Bill. I understand that the application form that will be designed by the Electoral Commission must include a statement about the possibility of a fine and the size of that potential fine. We were discussing that in the debate in the Moses Room yesterday on the question of behaviour change and how one designs forms best so as to influence people to do the right thing.
Lord Foulkes of Cumnock
One question that the Minister has not addressed was raised first by my noble friend Lord Lipsey, and to which I have often referred, about the order when it comes to both Houses and that if it is approved by one House but not the other, it will fall. Will the Minister confirm that that is the position?
Lord Wallace of Saltaire
I am trying to answer all the questions. It is not the first time that the noble Lord, Lord Foulkes, has jumped up to ask why I have not answered a question just as I am about to come to it. It is, of course, the rule that statutory orders have to go through both Houses. What would happen if one House said yes and the other said no is a matter that would have to be negotiated between the two Houses. I know that some Members on the Labour Benches sometimes want to suggest that we are not part of the legislature, but for these purposes we are, and we will take part in that decision.
The noble Baroness, Lady Taylor of Bolton, talked about current changes threatening to undermine the very foundations of our democracy. I have to say that from many of the debates we have had in recent months, there are large questions about the future of our democracy and the characteristics of our representation. I was slightly shocked the other day to listen to the greatest parliamentarian among us, the noble Lord, Lord Cormack, promoting the idea of referendums, which are not entirely compatible with the idea of parliamentary democracy. The balance between representative, deliberative democracy and direct democracy, as we slide towards more calls for more referendums, is one of the fundamental issues that we need to address.
I strongly agree with the noble Lord, Lord Clark, when he calls for a wider debate on the crisis of British democracy, the role of the state and the balance between state, society and market. I would also add the balance between the central state and the local state where the coalition Government believe that we have slipped far too far towards overcentralisation. Our system of democracy is not working very well; our public are increasingly disengaged and disillusioned; and we need to think about a whole series of changes in how we behave towards and relate with the public and about the best way in which to engage them again in local and national politics. That goes far beyond the issues raised in discussing representation and democracy in this Motion.
Lord Campbell-Savours
My Lords, we have had an interesting, indeed excellent debate, unlike in the House of Commons where there has been almost no debate on these matters since the passage of the Parliamentary Voting System and Constituencies Bill and a debate that took place on the problems in Wales in Westminster Hall only last week.
I regret that more Conservative Members felt unable to participate in our debate, apart, of course, from the courageous noble Baroness, Lady O’Cathain, who is known for her preparedness to stand up and say what she thinks. She argued valiantly in defence of an impossible case. Equally, the Liberal Democrats are hardly overrepresented. We have their electoral guru, the noble Lord, Lord Rennard, who has substantial knowledge on these matters, although it was noticeable that while he argued for equalisation of electorates, he did not oppose the reduction of seats from 650 to 600 for the next general election. He should impress on his prominent Liberal Democrat colleagues, and Mr Hughes in particular, who have been peddling the line, “No Lords reform, then no boundary change”, that they are not helping the case for Lords reform. They fail to realise that many Conservative MPs, as against the Conservative Party organisation, do not want boundary changes, so their mantra is an invitation to Conservative MPs to block Lords reform. It could all backfire.
I was, as ever, greatly amused by the comments of my larger-than-life noble friend Lord Foulkes, on my self-denying ordinance on the generality of legislation, but he need not worry. The excalibur is as sharp as ever. My noble friend Lord Wills referred to the failure of the Government to establish a cross-party group on electoral registration and the immense danger of underregistration. The latest Bill has just completed its passage in the Commons, so let us hope that by the time we get it in the Lords it will be suitably amended to deal with the looming and inevitable difficulties.
The noble Lord, Lord Lipsey, drew attention to the startling proposal that the electorate of 204 constituencies be changed by 50% or more, tearing up identifiable communities. My noble friend Lady Taylor of Bolton expressed her deep concerns over the lack of a detailed assessment of the combined effect of all the changes on the health or democracy. My noble friend Lord Clark of Windermere was so right when he said that too many people were left out to dry and that party leaders should have been more supportive of Parliament when the institution was under attack.
My noble friend Lady Corston drew attention to the ludicrous proposals for Gloucester and the Forest of Dean, and the Mersey Banks constituencies. They are but two of hundreds of similar anomalous examples where local people are objecting. My noble friend Lady Smith of Basildon in winding up from the Front Bench stressed that local ties and the integrated nature of communities were cast aside in favour of a numbers game. How very true that is. As for the comments of the noble Lord, Lord Wallace, I have to say that I was not altogether convinced by his arguments justifying the seat reduction or by his attempt to assure my noble friend Lord Wills that electoral registration will be successfully introduced.
I can only repeat my proposed concern over what all these changes are doing to Parliament, as set out in my earlier contribution. I only hope that some way to reverse this whole policy of constituency reduction can be found. I believe that all these proposed changes can bring nothing but harm, worry and disruption to the whole parliamentary arrangement. I am indebted to the House for the opportunity provided by this debate.
Olympic Games: Security
(12 years, 5 months ago)
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Baroness Stowell of Beeston
My Lords, with the leave of the House, I shall repeat as a Statement an Answer given by my right honourable friend the Home Secretary to an Urgent Question in the other place. It is as follows:
“Mr Speaker, the Government’s overriding priority is to use all resources necessary to deliver a safe and secure Olympic Games. That is what the public and the House would expect. The security operation has been meticulously planned. It will be the largest and most complex security operation in this country since the Second World War. Police plans and those of the security and intelligence agencies are well advanced. The success of the policing operation around the nationwide Olympic torch relay gives confidence in the robustness of police planning. Contingency planning has always been central to our security work, should any changes be needed at this late stage. The Games security picture can change rapidly, and so we have deliberately built in flexibility to respond to any challenge.
As the Defence Secretary has already told the House, we had always intended to deploy 7,500 military personnel to support the venue security operation organised by LOCOG—the London Organising Committee for the Olympic Games. These military personnel have already started to deploy to venues to support the rolling search and lock-down process between now and the start of the Olympics. They are already working alongside the police, LOCOG, the commercial security provider G4S, and accredited volunteer staff. As the venue security exercise has got under way, concerns have arisen about the ability of G4S to deliver the required number of guards for all Olympics venues and within the timescales available. The Defence Secretary and I, along with other Ministers, have been constantly monitoring this situation and the security contracts over many months. In consultation with LOCOG and G4S, we have now agreed that it would be prudent to deploy additional military support to provide greater reassurance.
I therefore requested additional MoD support, and the Defence Secretary has authorised the deployment of a further 3,500 military personnel. This will bring the total number of military personnel supporting the safety and security of the Games to 17,000 in a variety of roles, including military deployed on wider functions than venue security. The Chiefs of Staff support an increased deployment and have confirmed that the deployment will have no adverse impact on other operations.
The Government have committed £553 million for venue security and remain confident that we will deliver within that budget. Ministers across government recognise the burden that this additional short-notice deployment will impose upon individual service men and women and their families, especially over the summer holiday season, so we will ensure that all those taking part receive their full leave entitlement, even if it has to be rescheduled, that no one is out of pocket due to cancelled personal arrangements and that all deployed personnel are appropriately supported.
We have agreed with LOCOG that there will be 10,000 Olympic and Paralympic tickets donated to the armed services via Tickets for Troops. Access for 2,000 to spectator areas in the Mall for the Olympic cycle road races and Olympic marathon will also be made available, as will the right to buy 2,000 Olympic park tickets. In addition, a total of 7,000 tickets have now been offered to the troops for the dress rehearsals of the opening and closing ceremonies—a significant increase to recognise the extra commitment of military personnel.
I can confirm to the House that there remains no specific security threat to the Games and that the threat level remains unchanged. Let me reiterate that there is no question of Olympic security being compromised. In this country, we have the finest military personnel in the world. They stand ready to do their duty, whatever the nation may ask. Our troops are highly skilled and highly trained. This task is the most important facing our nation today. I know that we can rely on our troops to help deliver a safe and secure Olympic Games that London, the country and the whole world can enjoy”.
That concludes the Answer from my right honourable friend the Home Secretary.
Baroness Smith of Basildon
My Lords, I am grateful to the noble Baroness for coming to the House to make a Statement. It may have been better had the Home Secretary made a Statement to the House of Commons rather than there having to be an Urgent Question. We are 15 days—just over two weeks—from the Olympics. We have enthusiastic and excited athletes, and their families and friends, all over the world. Some are already in London. Many are now making their way to London. I appreciate that an event of this scale presents enormous challenges in terms of security, sporting arrangements and logistics. Obviously, no one can guarantee that there will not be the occasional minor hiccup. However, I wonder what is going on at the Home Office.
We have already had an announcement this week that the Home Office cannot guarantee that all the desks at border control at Heathrow will be staffed as visitors arrive. This, however, is of a very different order. My understanding is that, on Monday, when she was very specifically asked about recruitment at G4S, the Home Secretary told the other place:
“The Home Office has put in place a number of assurance processes to ensure that we have effective and robust scrutiny of venue security planning. We have been testing our plans thoroughly and are confident that our partners will deliver a safe and secure games”.—[Official Report, Commons, 9/7/12; col. 9.]
That was on Monday. Today is Thursday and we have a very different position. This morning I heard James Brokenshire MP on the radio, talking about his conversations with G4S, in which he said that he kicked their tyres. I am not quite sure what that means, but clearly it was as effective as the last time I kicked a tyre when I had a flat travelling to work.
Are the Government now satisfied that all G4S staff are fully and appropriately trained? Has she seen the BBC reports today from recruits who are saying that they are in limbo? They have been appointed but not contacted; they have not been trained, and do not really know what is going on. Also, when did the Home Secretary—or the Home Office—first become aware that there was a problem of this scale and that action would be needed to employ additional troops? What are the implications and penalties of the G4S contract? The number of personnel that have been needed in security has been a bit of a moving feast. There are some planning issues. My understanding is that the contract originally signed in December 2010 with G4S was worth £86 million for a certain number. Then LOCOG received further advice about the security needs and the contract increased to £284 million. What discussions have there been about the nature of that contract and if its terms and conditions have been broken?
I listened carefully to the noble Baroness’s Statement. I had a copy of it when the Answer was given in the Commons, and hope that she can help me with something. She said that it was always intended to employ 7,500 military personnel to support the venue security operation. She also said that there would be an extra 3,500 military personnel deployed and that the total would now be 17,000. I was not quite sure how the original estimate of 7,500, plus 3,500, came to 17,000. Either there have been other increases between the first announcement and the one today, or it is significantly more than 3,500 in addition to the original 7,500. When did the Home Office first have discussions with the Ministry of Defence about the possibility of having to deploy extra military personnel? The Statement says that discussions have been going on with G4S for months. When was the potential for further thousands of troops being required raised with the MoD?
What notice of the loss of leave will the soldiers receive? My understanding—mainly from press reports—is that military personnel are being recalled from leave after serving in Afghanistan. The Statement says that they will not be out of pocket for any personal arrangement that they have to cancel. What other arrangements will be made for them to continue to have leave? It is one thing not being out of pocket. However, I suspect that the value that they place on being with their friends and families on leave is greater than not being out of pocket. Can the Minister tell me if, having cancelled the leave arrangements for service personnel, the Government will give them further leave arrangements? I hope that they will. What impact will that have on future operations in Afghanistan?
All of us want the Olympics to be an enormous success. There is enormous distress over the Home Office’s statements this week. I seek an assurance from the noble Baroness that somebody has got a handle on this, that they know what they are doing and that the Home Office has a knowledge of all security arrangements, knows how many staff it has, know what is required and can guarantee that it can meet those requirements.
Baroness Stowell of Beeston
My Lords, first, let me make it clear that the Home Office took decisive action yesterday once the matter with G4S that we are discussing today crystallised. We were able to do this because we have monitored progress closely and had contingency arrangements in place, so there is no question of our security needs not being met. I stress that we were in a position to act yesterday because we were prepared to act should that be needed.
The noble Baroness, Lady Smith, asked a range of questions and referred particularly to a statement that the right honourable Home Secretary made on Monday. On questions about when the Home Office was aware of the issue, I can say that over the last few months the Home Office has been doing its job properly in monitoring the way in which arrangements for security have been developing. In the last couple of weeks it became apparent that, as we were getting nearer to the Games, some issues might require a different and additional contingency action. That only crystallised yesterday and, because we already had arrangements in place to take action, that is what we did.
The noble Baroness referred to those who have gone through the process of applying to G4S to take up the opportunity for employment in security at the Olympic venues. I share her concern for anyone who has gone through a process of application and is left in a state of uncertainty as to whether they will be called upon and employed to do the work they had hoped to carry out. Although we have taken the action we have because G4S cannot confirm that it is able to deliver all the manpower that it is contractually obliged to deliver, it is not yet the case that it will stop recruiting. The process of getting ready will continue through to the Games. The nature of security deployment is such that the agencies which employ people in this kind of work do so at short notice. Therefore some of the people who are still uncertain as to whether or not they will be employed may yet be contacted. However, that is a matter for G4S.
The noble Baroness asked about the contract with G4S and whether its failure to meet its terms would lead to penalties. I will make a couple of points in response. The contract is between G4S and LOCOG, not the Home Office, so it is a matter for LOCOG to ensure that it is rigorous in its pursuit. Obviously we will make our views on this very clear to LOCOG: that it has the responsibility for deciding and acting on the terms of the contract and for making sure that G4S is held accountable for any deficiencies in the delivery of that contract.
As to the noble Baroness’s questions about troop numbers, perhaps I may offer a little further information by way of explanation. The total number of military personnel that will be deployed for the Olympic Games is 17,000—that is the total number, including the additional 3,500 announced today. However, that 17,000 is for a wide range of activities. The numbers for venue security, which is where the additional troops will be deployed, will now be 11,000. So, of the 17,000, 11,000 are for venue security; the remainder will be deployed on specialist activities which would not be carried out by anyone other than military personnel.
The noble Baroness raised questions about the effect of the announcement today on the military personnel concerned. I restate and reiterate what I said when repeating the Home Secretary’s Statement: we value very highly our military personnel, all of whom do excellent work for the nation both here in the UK and overseas. Clearly we want to make sure that any inconvenience experienced by the military personnel who were not expecting to be deployed but who will now be deployed is taken care of. However, the units that will be deployed were aware of their contingency role. These units were already designated as part of the contingency response to be called upon.
As far as leave is concerned, all military personnel will get the leave to which they are entitled, even if this may involve rescheduling their leave. I realise, of course, that that does not address any disappointment that people may feel when they are required to make changes to their arrangements—I respect that—but we are trying to ensure that any inconvenience or expenses incurred are addressed without any question whatever.
Earl Attlee
My Lords, I remind the House of the benefit of short questions in order that my noble friend will be able to answer as many questions as possible.
Lord Addington
My Lords, when my noble friend replied she referred to the fact that two weeks ago we had an inkling that this was not happening. Can she give a better guide to the process of the information that was being fed to and fro, and give the House an idea of what was happening and when? When did we know there was going to be a problem? That is the core of this situation. We have a reserve and are deploying it, but when did we know that we might have to call on it? That is the big question. Secondly, will anything that goes wrong be brought front and centre in a review process of what happened in the Games? A legacy of learning from mistakes will be important.
Baroness Stowell of Beeston
My Lords, as I said before, this has been an ongoing process. The Home Office and other departments have been properly and actively involved in ensuring that the arrangements for security have progressed in line with our expectations, in order that our security needs are met. However, it was only yesterday that it became clear that the right decision to take was for the Government to deploy additional troops so that there would be no question whatever of our security being compromised, as indeed it will not be due to the action that has been taken.
As to my noble friend’s other point with regard to review, of course after any major event such as the Olympic Games there is a process of review where any lessons will be learned. The most significant point is that the Government have acted decisively. We have been able to act decisively because we have been prepared to do so and can do so. As a result, there has not been any compromise of security at the Games.
Baroness Deech
My Lords, does not the Minister agree that it is tragic that £553 million has to be spent on security at the Games—especially if one thinks back to the way Games were in earlier days—and that ground-to-air missiles have to be placed as a defence on top of blocks of flats? That sum would solve our problems in relation to legal aid and many other matters. Is it therefore not puzzling that the Government have not thrown their weight behind the request from many quarters that the origin of these problems should be remembered—namely, that there should be a one-minute silence in memory of the athletes who were killed at Munich? That was the origin of the problems that we have today in relation to security. In the light of the terrible history of 1972, can she assure the House that the accommodation of athletes will be properly secured?
Baroness Stowell of Beeston
I obviously share the noble Baroness’s concern and consideration for the events of 1972 and their associated history. As to her question about accommodation, while I do not have any specific information today, I am quite confident from the briefings that I have received that arrangements for the athletes are comprehensive and that they will receive all the support and facilities they need to make their stay here successful from their own individual point of view, comfortable and secure. We all hope that they will enjoy their experience in London, which I am sure they will.
Lord King of Bridgwater
In thanking my noble friend for repeating the Statement, I immediately declare an interest because I am a director of ExCeL, where a significant number of Olympic events will take place. The Statement the Minister has made today comes as no surprise to anybody who has been trying to organise and see that there is effective security. I say very simply, and as a strong supporter of this Government, that the Home Office must sharpen up its communications with LOCOG and G4S. A number of people identified for some time the scale of the challenge for G4S in recruiting that number of people who had to be cleared, trained and available. It was a massive undertaking and warnings were clearly given.
Having said that, and wearing another hat, I welcome the fact that troops are to be available. The Minister rightly distinguished between the numbers when the noble Baroness raised the question: the Typhoons and HMS “Ocean” and the famous surface-to-air missiles on the roofs of flats are one lot, and then there are the unarmed, venue security searching parties who will do us nothing but credit. A lot of visitors to our country will meet some of our servicemen and find out what excellent ambassadors they are for our Armed Forces. I am delighted that they are to be offered these free tickets, which is only right.
We still face a major challenge here. The remaining people needed have to be properly trained and checked. I hear one or two very worrying stories about that. Is it essential that they can all speak English? I hope that that is a requirement. There have been one or two stories about that which do not seem very satisfactory. The challenge is just starting now. Having recruited all these people who have agreed to serve for G4S under temporary contracts, they have to turn up on time and they must be there early in the morning, well ahead of the opening of the venues so that they are ready to do their work. They will have to face the challenges of transport in London at that time to get to work. The simple answer is that there needs to be not just the numbers that have been announced today—if those are the numbers that have been precisely calculated of the military support—but also a further strategic reserve of people for the accidents and problems that may well arise with the difficulty of making sure that these temporary people working for G4S are there on time and doing their job. We all wish the Olympics well. It is an amazingly big challenge. However, we need to sharpen up communications and build in now contingency reserves for that.
Baroness Stowell of Beeston
My Lords, I share with my noble friend the warm words of tribute he paid to our Armed Forces. I agree with him that the sight of our Armed Forces in London during the Olympic Games, the work that they will do, and that they will be part of the security effort for the Games—it has always been planned that they would be—will mean they are an important element of the welcoming tone, nature and discipline and the kind of effort and efficiency that are necessary.
On my noble friend’s points about the Home Office, of course I will relay back to the department his comments about the need for improved communication. There is always room for people to improve in that area. However, as I have said before, this is a contract between LOCOG and G4S. LOCOG is the commissioning body with regard to the contract. The Home Office has been very closely monitoring the way in which it has progressed and, because we have been doing that and liaising closely with other government departments, we have been able to act, taking the necessary decision that was made yesterday.
On the effectiveness of those who have been recruited, G4S has rigorous selection processes. My noble friend is absolutely right that everybody needs the right skills to do the job. If they are in a role that has contact with the public, they must be able to communicate with them, which of course requires them to speak English.
Lord Prescott
My Lords, it is complete nonsense for the Government to suggest that they discovered this problem two days ago. It was two years ago that they realised the deficiencies in the security at the Olympics and transferred private contracts to LOCOG to develop the personnel for security. I have raised in the House of Lords this matter of the deficiencies in contracts and the inability to provide sufficiently trained and well-paid people to do the job. I wrote to the Home Secretary protesting about this matter five weeks ago and asking her to investigate it. She referred me to LOCOG as the body with the responsibility. I wrote to LOCOG in July and it told me that the criterion for contracts is value for money. There was nothing about security or safety, only value for money.
Will the Minister recognise that it is not only G4S that has failed? Other companies at the moment are failing to fulfil their contracts. Will she now review those contracts that exist with LOCOG and see what they contribute? During that review, will she reconsider this whole idea of outsourcing public security to private companies? However eminent they look with their boards of chief constables, eminent people and Members of this House, that does not guarantee that there will be security or safety for the public. It only guarantees the prime responsibility of those companies: to make profits. That is the essential difference here. That is what the Minister needs to look at if she is really concerned about the security of the Games.
Baroness Stowell of Beeston
My Lords, as I have already said, the arrangements for security at the Games involve a combination of different participants—the police, the military and the commercial provider, G4S. The noble Lord talks as if only G4S had been commissioned to provide security. That is not the case. As I said, the approach involves the police and the military. That has always been the case.
On the point he made about the other company, about which he wrote to the Home Secretary following the Jubilee weekend, that is a separate matter. The people he referred to in that contract are not part of the security arrangements.
Baroness Stowell of Beeston
But they are not part of the security arrangements. I restate what I have already said because it is important: the Home Office has been reviewing the way in which things have developed. As issues started to develop over the past couple of weeks that made it necessary for us to be ready to act, we took the necessary steps so that we could act. We acted yesterday. The security of our Olympic Games is not compromised because of that.
Lord Stirrup
My Lords, is the Minister aware that the Ministry of Defence started thinking about and planning for a military contribution to the Olympics over four years ago? At that time, it was told that the requirement would be relatively small, limited to a number of specialist personnel and certain discrete capabilities such as air defence. Of course, nobody believed a word of that and two things were predicted with complete confidence: that there would be a requirement for a large number of military personnel and that at least elements of the requirement would emerge only at the last moment.
The Ministry of Defence will not have been surprised at all by this latest development but it will have been very unwelcome—particularly the very late notice. Can the Minister assure the House that there will be sufficient time for these military personnel to be trained in the specific requirements of their duties? Since, I assume, they will be filling tasks that would properly be done by G4S personnel—and, to some extent, still will be—what are the command and control arrangements for these personnel? Who will be in charge? Will there be a military chain of command or will they report through a G4S chain? This is extremely important if we are to ensure the maximum degree of security.
Baroness Stowell of Beeston
I am obviously interested to hear what the noble and gallant Lord says about the initial expectations of the Ministry of Defence about troop requirements for the Olympic Games. I cannot comment on them because they would have been formed during the period of office of the previous Government. I can say that, during the time the coalition has been in power, and as we have got closer to the Games, the process of reviewing and scrutinising these arrangements has been very thorough and has allowed us to take the decision that we did yesterday.
As to the noble and gallant Lord’s question about training, I can be clear that, of course, those who will be deployed will receive the necessary training to do the task that is asked of them. They will be doing a similar kind of work—venue security—that is planned for those military that are already deployed to do it. They have not been called in to do something that is in addition to the kind of work already planned. That would include search of people and vehicles, and perimeter control. As to his question about command and control, the military will have their own command and control arrangements but will work very closely with G4S staff and LOCOG venue general managers. This will have to be a properly integrated operation. By that I mean that there will not be a separate arrangement for different contributors to the security of the sites.
Lord Marlesford
My Lords, will the Government learn a wider lesson from this experience, which is the tremendous resource that the military offers of getting governments out of holes they are in from bad administration? The Minister may not remember, although I certainly do, the way in which the military had to sort out the shambles of the foot and mouth crisis, when there were piles of rotting corpses all over the country that were getting bigger and bigger. That was dealt with. However, will the Government realise that, particularly with the reduction of the number of people in the Armed Forces, there are very competent planners at senior level from all three forces who could be available to do a lot of these sorts of public sector jobs? To give one obvious example, the shambles of the UK Border Force could be taken over and dealt with very rapidly if they found a two or three star recently retired military officer to run it. I also think that there is a quite a lot in what the noble Lord, Lord Prescott, said. One of the things that government is very bad at doing, still, is writing waterproof contracts and monitoring them with the private sector. It is not so much the private sector being wicked; the public sector is extraordinarily bad. An obvious example of that is the failure to monitor the people who are given contracts to clean our roads or to make them do the job which they are paid for.
Baroness Stowell of Beeston
I certainly share my noble friend’s view of our Armed Forces. We are all in their debt for the way in which, from time to time, they step in and take control of situations. My noble friend is absolutely right to make that point and we keep that very much in mind. On this specific issue—notwithstanding the points that the noble and gallant Lord, Lord Stirrup, made a few moments ago—the involvement of the military at the Olympics has always been planned for. Some contingency was built in to our expectations and we are deploying that contingency in order to ensure that we meet our security needs. However, the manner in which we have carried out our decision on this has not been in any way short of what I would have expected it to be. As to the noble Lord’s point about contracts, I will take that on board. I remind him, again, that this contract is not with the Home Office; it is with LOCOG. None the less, he makes some powerful points and I will give them consideration.
Baroness Finlay of Llandaff
My Lords, given that the first consideration of security is to prevent an event happening and that the second one is that if an event does occur, people are kept as safe as possible, will the Minister undertake to verify that there is co-ordination with all the emergency services, particularly with the London Ambulance Service and London’s Air Ambulance, which is a charity? Will the Minister inform the House whether there has been consideration of supplying a second helicopter to London’s Air Ambulance over the period of the Games? It has only one helicopter for a population of 10 million and we have a large increase in the number of people coming in. During the 7/7 bombings inquest, its important role in rescue was highlighted. If anything happens, the air ambulance will be critical to survival.
Baroness Stowell of Beeston
Co-ordination of the emergency services is, of course, essential and arrangements are in place to ensure proper co-ordination. As to the noble Baroness’s question about a second helicopter, I am afraid that I do not have the answer, but I will write to her.
Housing: Rented Sector
Baroness Rendell of Babergh
That this House takes note of the problems faced by families in the rented housing sector.
Baroness Rendell of Babergh
My Lords, in introducing this debate on private renting, I declare an interest as a vice-president of Shelter, the housing and homelessness charity. The renting of one’s home, the place in which one spends most of one’s time, is a big and in many ways dismal subject. The private rented sector in England has grown by almost 1.5 million households in the last decade. High demand has pushed rents up by 66%, while wages have increased by only 35%. In some parts of London, agents report annual increases of 16%. This is at a time when home ownership and social housing have been in steady decline, for the United Kingdom can no longer be called, as it was 30 years ago, a property-owning democracy.
The public—no longer so much the man on the omnibus as the couple in the Prius—generally think of private tenants as young professionals or students, yet of the almost 3.5 million households now renting privately, more than 1 million are families with children. Many of these people are now in the direst straits, a condition that looks likely to get worse. There are 4 million people on council housing waiting lists, many with no option but to rent, possibly for the rest of their lives.
Ideally, private renting could be a beneficial system for both landlord and tenant, but with people planning to augment their incomes by buying or building property specifically to let, and a rising generation locked out of home ownership by rocketing house prices and crippling deposits on house purchase, the situation is far from that. Unless things change, an extra 1.5 million 18 to 30 year-olds will be forced into renting in eight years’ time and a further 500,000 will be forced to stay with their parents into their 30s. Going back to live with one’s parents, once looked on as to be avoided from the moment one leaves to take up further education or an independent existence, is becoming some young people’s only option.
Those back in the parental home are the lucky ones, according to the Joseph Rowntree Foundation, in that while finding their solution to the housing problem, they can put money aside for a deposit on a future home of their own. Currently, 24% of people between 20 and 45 have moved back to the parental home due to the state of the housing market. But what of young people who are homeless due to a breakdown in their relationships with family? They face grave difficulties in securing and living in affordable decent housing. Even if they are fortunate enough to be in work, they may well receive only the minimum wage and be forced to live in transient accommodation with no real place to call home, or no home at all.
If properties to rent were well maintained and offered at reasonable rents, matters would look very different. As it is, the scale of problems in the private rented sector raises serious questions about the suitability of private renting in general. This is particularly so for families who have few other options open to them or none. The students and young professionals I mentioned earlier can, if unwillingly, move to find different accommodation. This is often not a choice that is open to a couple or a single parent with, say, three children. Shelter is concerned about the state of the private rented sector. The sector is blighted by a large number of amateur landlords failing to offer good standards to their tenants and a small number of rogue landlords who deliberately prey on the vulnerable.
While local authorities are aware of some 1,477 serial rogue landlords, in the past year only 270 were prosecuted, so many bad landlords are not receiving a clear message that bad practice will be prosecuted. A fairly recent development has been the conversion of sheds in back gardens to house one, two or more tenants. Converted sheds and garages, as well as breezeblock constructions to let, have become an increasingly mainstream, if illegal, part of the London property market. They are becoming known as sheds with beds.
Forty per cent of private rented homes are classified as non-decent. Shelter has found that 12% of private rented households experienced housing problems last year, including harassment by landlords, unsafe conditions and landlords failing to carry out repairs. No formal licence or training is required of private landlords in England, but the Housing Act 2004 allows councils to take action where they consider housing conditions are dangerous to health and safety. For instance, landlords must arrange an annual gas safety check by an authorised gas safety engineer and protect tenants’ deposits from being unfairly withheld at the end of a tenancy, while the Protection from Eviction Act 1977 and the Protection from Harassment Act 1997 make harassment and illegal eviction criminal offences.
However, some tenants fear negative reactions from landlords, including retaliatory eviction, where a landlord will evict a tenant in response to a request for repairs. The fear of losing their home presents a major barrier for tenants bringing complaints about conditions or practice. Many private tenants have little power to change the practice of their landlord. While landlords value reliable tenants who pay their rent—that is, after all, what their business is about—tenants face significant financial and social costs in moving, particularly in a tight market with rising rents. They may not easily be able to find another home in the area, which is a particular concern for the numerous households with children attending a local school. It is easy to see why tenants put up with poor conditions if the fear of eviction is real.
A case study is that of Sam and his partner, who rented a house that turned out to be riddled with damp. Their small son, who had been free of asthma, had the illness return soon after they moved in and their daughter also suffered from illnesses related to the damp. A huge gas bill resulted from attempts to keep the property warm. Sam asked for repairs to be made but the consequence was that the family was asked to leave, a week before Christmas, while the agent kept more than £100 that Sam had prepaid on the electricity meter. The family is now living in temporary accommodation, having been accepted as homeless by the council.
Another example is that of Lisa, a working mother from Brighton with a 12 year-old son. Lisa has moved five times in five years due to landlords selling up and rent increases. Her current home, a flat costing £750 a month, has had problems with cockroaches, rats and gas leaks. Each time the landlord is served a notice, he does a quick job and the problem comes back. A couple, also in Brighton, have three children aged from three to 11 and pay more than £1,500 a month for their three-bedroom home, which is in a poor state of repair. Their household income is £2,000 a month, so after rent and bills life is a struggle. Shelter regularly comes across cases where tenants have promptly received an eviction notice after making a complaint to their landlord about conditions or the need for repairs. Tenants often do not risk complaining because they are anxious about bad reactions from landlords.
However, complaints about the most serious health and safety hazards have increased by 25% in the past two years. Local authority officers believe that the complaints stem from amateur landlords not understanding their responsibilities and that a small minority of rogue landlords are exploiting their tenants without fear of punishment. Widespread problems with amateur landlords and exploitation by a small minority of rogues are a major concern for professional landlords, whose good reputation is undermined by this poor practice. Local councillors and officials should also be concerned about the volume of problems they face and the financial consequences of not addressing them.
Another fallacious belief, commonly held, is that everyone living in rented property is doing so on housing benefit and is therefore out of work. On the contrary, as the Smith Institute discovered, 95% of the £1 billion rise in housing benefit is paid to people in work. Just one in eight of the people drawing the benefit are unemployed. A relatively new fear will come to tenants when the housing benefit cap may make the difference between being able to pay a rental of £700 and being forced to move out to a less expensive area. A £50 reduction in benefit may not seem much, but to many it can be the last straw that breaks the camel’s back.
Once the benefit cap is introduced in 2013, a migration of poor tenants is expected by Westminster City Council to poorer areas, which are becoming known as benefit ghettos. As a result of these changes, a reduction of 20% is expected in the number of school pupils across the borough. However, it is difficult to see what action can be taken over this, especially if these people are professional landlords complying with their responsibilities and offering good quality homes and management services.
Amateur landlords—and, even more, rogue landlords—are a different story. Around two-thirds of local authorities now offer landlord accreditation as a way of educating well intentioned landlords, helping them to improve their business and giving them a market advantage and access to incentives. Rogue landlords are those who show no willingness to improve their approach to letting and who knowingly let dangerous, poor quality accommodation or carry out illegal management practice. Local authorities should make it clear that they will get tough on those who breach their responsibilities and offer substandard accommodation. Shelter wants to see local authorities taking tough action against rogue landlords immediately, but many of the problems that local authorities face come from tenants who may not come to them complaining about standards or their landlords’ practice. Local authorities dealt with more than 86,000 complaints from private tenants in 2010-11, yet wider research finds that over 350,000 experienced housing problems in the same year.
It was good to see that the Government have recently promised to take firmer action on rogue landlords, the Housing Minister Grant Shapps pledging to set up a dedicated rogue landlord task force, invest £1.8 million to deal with sheds with beds, remove limits to the fines imposed on rogue landlords and send out guidance on rogue landlord enforcement to all local authorities in England. This is a step in the right direction, but more remains to be done. Shelter has stressed that one of the biggest challenges is getting senior local politicians and officials to see enforcement on rogue landlords as a priority. The Government will have to think hard about how they effectively communicate their proposals to local leaders.
Will the Minister agree that the Government need to set up a fund to support local authorities who take enforcement action against rogue landlords, such as criminal prosecution? ARLA, the Association of Residential Letting Agents, has produced a five-point action plan to support the private rented sector. It advises the introduction of government regulation of letting and sales agents. It suggests that investment in the private rented sector should be encouraged by treating rented property as an entrepreneurial business activity for capital gains purposes and reintroducing rollover relief for landlords looking to reinvest in the private rented sector. It recommends building more homes to increase the supply of properties for rent and stresses the need for the removal of VAT on purchases of material and labour for capital expenditure. It recommends the introduction of capital allowances for improvement to property and an increase in the scope of the landlord’s energy saving allowance to include the installation of central heating systems and extending the scheme past 2015.
Estate and letting agents are currently unregulated, meaning that anyone can set up an agency without the appropriate qualifications or knowledge. ARLA believes that full mandatory government regulation of sales and letting agents is the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents from the rental market.
Will the Minister consider the need for the Government to develop a comprehensive regulatory regime to ensure that consumers are protected across the United Kingdom? With government figures estimating that approximately 750,000 homes in the private rented sector are below standard, which roughly equates to 25% of properties in the sector, it is clear that this situation must not be allowed to continue.
Baroness Scott of Needham Market
My Lords, I am grateful to the noble Baroness, Lady Rendell, for securing today’s debate. Her commitment to this issue and to Shelter in particular is well known. Her passion, conviction and knowledge have been much in evidence this afternoon.
I will focus on questions of how the private rented sector is provided for, financed and regulated. First, I ask the Minister a few questions about the overall supply of housing. For some years, it has become apparent that the supply of housing is not keeping up with the growth of formation of households. While arguments about whether housing should be for owner-occupation or social or private rent are valid, unless we increase the size of the cake we end up creating new problems elsewhere. Can she say something about overall housing numbers and particularly how government are planning housing growth now that top-down targets have been removed?
What progress is being made to deal with the issue of empty homes, estimated last year at 720,000 across the country? What is the Government’s policy towards conversion and change of use back to residential? High streets are shrinking,and this is not just a short-term problem caused by the recession. There is an underlying issue caused by the huge growth of online shopping. Areas where many shops are boarded up would probably benefit from a change of use.
When I was first elected on to Mid Suffolk District Council more than 20 years ago, my children were still quite young. Neither as a mum nor as a councillor did I come across many families who lived in private rented accommodation. At that time, it seemed to be the preserve of young people, or of people in some temporary situation. On the whole, families seemed to be living in either owner-occupied properties or social rented housing. I wondered whether this was some false rosy memory on my part, but in researching for today’s debate I found the Treasury figures that showed that 1991 was the lowest point for the private rented sector.
The English Housing Survey, published last week, has shown that the private rented sector has just reached parity with social rented housing. Each has a 17% share. There are now 1.1 million families living in the private rented sector and, according to a Cambridge University study, the number of families with children in the sector has risen by 86% in the past five years. The Rugg review, although carried out only in 2008, is already vastly out of date. It simply did not envisage this rise, and it needs to be re-evaluated.
Does that matter? In one sense, it does not. What really matters is having secure, affordable and decent-quality homes for families, but the trouble is that we know that you are much less likely to have that if you are living in private rented accommodation. For many families, for all those reasons, it is not an option they would choose, but they take it because they have been priced out of owner-occupation and cannot get social rented accommodation.
Affordability is a key issue. Tenants have to find a deposit, a month’s rent in advance and fees for letting agents. It is bad enough if you are trying to do that every five years or so, but in a volatile market people are often having to do it every year. Rents are high relative to the incomes of people in the private rented sector. The English Housing Survey estimates that the cost of housing accounts for 19% of the weekly income of owner-occupiers and 43% of the income of those in the private rented sector. Those figures need to come with a little warning, because the figure for owner-occupation is averaged out and includes those who have small mortgages because they have owned for a long time. Nevertheless, the figures are stark.
In its 2010 report, the Treasury referred to rents being 24% to 40% cheaper than a mortgage on an equivalent property and concluded that renting is a more affordable option. I think that the Treasury is living in cloud-cuckoo-land. It must look at affordability relative to income, not the cost of buying a similar property.
Tenant satisfaction in the private rented sector is much lower, and we all know the horror stories about poor quality accommodation, failure to deal with even serious and life-threatening problems and rogue landlords in general. On top of this, the high turnover rate means that families have little sense of permanence,with all that that means for the education of their children and their general well-being. Concentrations in certain areas mean that there are localities where a significant proportion of residents have no real stake in their area.
We make a big mistake if we think that the growth of the private rented sector is a blip caused by a temporary lack of social housing and the unavailability of mortgages. These problems are here to stay, and so is a more mobile population in an increasingly flexible job market. The Joseph Rowntree Foundation recently published a study about housing and young people which showed that by 2020, 1.5 million more young people will be going into the private rented sector, most with their own tenancy and the rest living with their parents, as we have heard. These young people will very soon become parents, so the number of families in private rented accommodation will also increase.
We cannot continue to think about the private rented sector in the rather piecemeal way that we have in the past. I recognise that organising a sector dominated by individual landlords is difficult. Seventy-four per cent of properties in the sector are in the hands of individuals, and two-thirds of them own fewer than five properties. Nevertheless, local authorities, in their planning and social roles, need to think about how they can engage with the sector. The Treasury needs to think about smarter incentives. Changes to stamp duty have been welcomed, but measures are needed to encourage new building in the sector. It can and should be made conditional. There are schemes in France and Germany which offer tax breaks, but only in exchange for longer, more stable tenancies. Chris Norris from the National Landlords Association recently wrote that a third of his members would be happy to employ tenancies longer than 12 months. Will the Government look at how that might be encouraged and, in particular, work with mortgage lenders, who often will not permit people to let for more than a year?
I know that there is a perception that rents are being driven ever upward by greedy landlords, and having seen what people are asking for accommodation during the Olympics, I am sure that they exist, but I am not convinced that it is such a golden goose because if it were, there would not be such a shortage. I think the truth is rather more complex. Landlords have relied on a combination of capital gain and rental income to give good returns, and that model has broken down. A recent article in the Investors Chronicle suggested that returns on buy to let are currently about 3% to 4%, which is too low to justify people investing when you think about all the work and risk involved.
The idea of rent control is very popular with tenants and the public, which is not surprising, but evidence from around the world suggests that it simply drives down quality and is being removed. Other forms of regulation appear more successful. LSE research points out that most European countries have regulation without limiting the amount of accommodation available. In Germany, the private rented sector accounts for more than 50% of all housing. There is growing support for the notion of accredited landlords, so perhaps the Government could look at that on a more systematic basis.
I have long thought that the obscenity about housing benefit is not its amount but that taxpayers’ money is used to pay bad landlords for poor accommodation. Institutional investment in the UK housing market is low because investors tend to get better returns on commercial property. The current returns in the residential sector of about 3.5% fall well short of the 6% to 7% that investors require. Real estate investment trusts were launched with a fanfare in 2007 to provide a tax-efficient investment vehicle for large-scale housing for private rent, but they failed to meet expectations. Companies such as Aviva have dipped a toe in the water, and there is a view that property unit trusts might be a better vehicle. Sir Adrian Montague is currently reporting on this aspect of private rented accommodation. When can we expect his report?
Other barriers to institutional investment have been identified. They include difficulty in finding sufficiently large investments—about 200 properties are needed. This is where working with planning officers and authorities might also come in. In addition, the sector lacks the housing management skills needed to run such schemes. Is there a role here for housing associations to offer a commercial service, managing the properties and generating profit that they can then reinvest in their social housing?
The private rented sector has now become far too important to be left to chance, as successive Governments have done. I look forward to hearing from the Minister today but also to some action in future.
The Lord Bishop of Chester
My Lords, the current Reith lectures rightly emphasise the need for a healthy society to promote the intermediate institutions between the individual and the state. Healthy participation in civic society itself depends on the stability and place of families and family life in society, in whatever form family life might take. That in turn depends on the proper availability and provision of housing. People generally relate better to others and to society as a whole when they feel secure in themselves and in their home life. That is why this debate is so important. I congratulate the noble Baroness, Lady Rendell, on securing it and on introducing it so powerfully. I shall follow the contribution of the noble Baroness, Lady Scott, in a slightly different way but very much in the same spirit.
There is little doubt that the UK has a housing crisis and that it is likely to get worse. However, there is also a housing benefit crisis, with 5 million claimants, half of whom are in work. As was said, those who are added to the list are mostly in work. There is a very large annual bill. As I understand the figures, the number of people in work who are forced to claim housing benefit has doubled in the past three years, mainly due to the increasing cost of rent. Around a third of households in the private rented sector receive housing benefit. The problem facing households in the rented sector, especially the private rented sector, is rising rents due to a lack of housing supply and the capital cost of new-build housing. The situation is acknowledged in government documents. In Laying the Foundations: A Housing Strategy for England, launched last November, the Prime Minister acknowledged in the foreword that,
“for decades in Britain we have under-built”,
and that the,
“economic and social consequences of this failure have affected millions”.
The housing strategy’s emphasis is on unblocking the housing market, which will help to address the housing crisis, boost economic activity and create jobs. However, as I read it, it is primarily focused on improving the supply of owner-occupied housing. I acknowledge the efforts that are being made to simplify and free up the planning process and to assist first-time buyers in particular to get on to the housing ladder. However, I very much doubt that the problems we face can be solved by promoting a return to greater levels of home ownership. The rented sector will also have a vital role to play, but how, and where will the capital finance come from? The fundamental problem is the lack of supply of new houses for rent because of the lack of finance to provide them.
The number of houses constructed for rental over the years provides a telling story. The post-war construction of houses by local authorities peaked in 1953 at 198,000. This is a poignant figure for me as I moved into one of the new council houses that were constructed in 1953, when I was three years old and it remained my home for 15 years. Of course, that house has now been sold off and would probably be unaffordable to the equivalent of my parents with a young family.
Local authority construction declined to a low point of 50—just 50—in 1999 and remained very low until last year, when 2,300 units were built by local authorities. To some extent, of course, local authority construction was replaced by housing association new-build units, but that never exceeded 31,000 units and last year was under 25,000 units. Housing associations just do not have access to the necessary capital; I assume that that must be the underlying and main reason.
Private enterprise construction of houses in England has only twice exceeded 200,000 units a year, in the 1960s, and in 2011 it had fallen to 82,000 units. I invite the Minister to comment on these figures, which I have taken from the DCLG website. I believe that the private sector and housing associations alone are unlikely to be able to respond to the housing needs as set out over the next 10 or 20 years.
I am all for market-based solutions if they work. However, sometimes they need augmentation or stimulus by government investment, especially where long-term strategies are needed, and housing is a classic example where a five-year horizon just is not enough; we have to have horizons that go beyond a particular Government. Given that such investment would produce real assets in the form of houses and flats, which in the future, when circumstances have changed, could indeed be sold off and turned into other forms of resource, as many council houses were, is there not a strong economic case for investment by the Government alongside their other schemes and the private sector in general? Is this not reinforced by the argument that the best way to address the burgeoning problem of housing benefit is to increase the supply of rented houses and thereby reverse the remorseless rise in the level of rents? I say that independently of the view one might take of the Government’s policy of introducing a benefit cap.
I speak as a fool, no doubt, but could not some of the money created by quantitative easing be invested in real assets, rather than just being shunted on to the balance sheets of banks and then apparently not being lent? Perhaps we should compare the benefits of investment in social housing with, for example, the £32 billion planned to be spent on the new High Speed 2 railway. The recent housing strategy reveals that, for a government investment of £1.8 billion, some 80,000 new homes will be delivered under the affordable homes programme. When I do my sums, that suggests that a government investment of £32 billion would equate to nearly 1.5 million new homes. These things have to be compared, but what would the benefit of 1.5 million new affordable homes be compared with high-speed rail? At least it stimulates the imagination. No doubt I can be accused of the economic equivalent of heresy. If so, I look forward to a tutorial on economics from the Minister when she replies.
I should acknowledge at this point that the Church of England, through the Church Commissioners in particular, used to provide capital for social housing, especially here in London. I very much regret that we are no longer in a position to do this, although there is a growing number of examples of small-scale, local church projects across the denominations to build affordable housing, echoing many schemes in the past that produced local almshouses and so forth. Whatever the source of capital finance for new-build housing might be, the key issue, I think, is the price of land for development. The difference in value between agricultural or social use and development use is quite staggering; it is of the order of 20 or 30 times more, which, it seems to me, cannot be right. There must be something wrong if the value of land for development is that much more than the value of land for other uses.
Perhaps we will not see the construction of affordable housing on the scale that we need, either for purchase or rent, until the price of development land comes down. Reading through the Government’s housing strategy document of last November, I saw no reference to the problem of the price of land.
Perhaps easing planning controls will lead to the necessary readjustments. For my part, I have long been convinced that our planning policies have been far too restrictive. I accept that there are particular issues in a rather overcrowded south-east of England, but in the north-west of England and Cheshire, the area that I know well, communities would generally speaking benefit from a much more open approach to development, subject to the proper planning process and controls on quality, and so forth. There is now a presumption in terms of sustainable development in the planning process. Most of the communities that I know would best be sustained by having some development and a greater range of housing, especially with affordable housing being introduced.
I end, appropriately for the noble Baroness, on a philological or linguistic note. The Greek word “oikos” meant house, household or home; it gave us the root of two important words—economy and ecology, as well as ecumenical. Homes are vital to how we live and the health of society as a whole. I look forward to the Minister’s reply.
Lord Morris of Handsworth
My Lords, I come to this debate with an interest to declare. I chair the board of Midland Heart housing association. I add my name to those congratulating the noble Baroness, Lady Rendell, on securing this timely and important debate.
The debate is timely because it provides for your Lordships’ House the opportunity to consider the collective failure to address equitably the challenges faced by families in the rented housing sector. To inform the debate, we have the benefit of the English Housing Survey, published a few days ago by the Department for Communities and Local Government. The report states that social housing and privately rented accommodation are currently on a par, each supplying some 17% of the housing market, with 66% owner occupied. It is likely that since 2010 private rental has overtaken the social housing sector; in fact, the size of the social housing sector has fallen by more than 1 million homes in England over the past 30 years due to a combination of investment cuts, demolition and right to buy. A recent Joseph Rowntree report suggested that 1.5 million young people between the ages of 18 and 20 will be locked out of access to social housing and forced into private renting. It is also estimated that more than 3 million young people cannot afford to leave the parental home.
One consequence of those changes is the growth of a largely unregulated sector to meet the increased demands created by the decline in social housing and the inability of individuals to access affordable home ownership. This fosters an environment of poorer housing stock and a market where rogue landlords are likely to flourish—and many landlords in the private sector are less than keen to consider people who are on benefits for renting.
Traditionally, housing associations prioritise those with greatest need; people who are vulnerable, disadvantaged and out of work tend to be concentrated in this sector. Unsurprisingly, homelessness is reported to be on the rise, and I am told that in Birmingham the waiting list consists of more than 30,000, and the waiting time is approximately five and a half years.
The Department for Communities and Local Government has acknowledged the risk of families becoming homeless, and figures released recently show that children are increasingly at risk in those situations. The Government’s proposal to discharge their homelessness duty to the private rental sector potentially diverts more families from access to social housing and a less secure form of tenure. The problems for those in social housing are increasing.
As we recently debated in your Lordships’ House, the Government’s proposed bedroom tax will affect working-age social tenants who are in receipt of housing benefit by an average of £14 per week. If there happens to be more than one spare room, it goes up to approximately £25 per week. Speaking for my organisation, Midland Heart, I am told that this will affect about 3,000 of our tenants.
The figures for 2011 show that worklessness affects some 56% of social housing tenants, with the numbers of households in which no adult has ever worked rising by more than 5% in a year to some 370,000. In 2008, the Joseph Rowntree Foundation identified a wide range of workless people including those with poor basic skills, physical and mental health problems, substance usage, homelessness, childcare needs and a history of offending. In addition, there is a worrying skill deficit, with 11.6% of the working population in the UK holding no formal qualification whatever. The figures also show that social housing tenants of working age are three times more likely to be economically inactive than those in other sectors. Approximately 80% of new housing association tenants under 25 are workless and the number of people considered as NEETS—not in employment, education or training—has exceeded 1 million.
According to the Institute of Fiscal Studies, disposable income generally fell by 3.1% over the period 2010-11, the biggest fall since 1981. As a result, the cocktail of recession, benefit reduction and price rises means more and more families are having to make the painful choice between paying the rent, securing the fuel bills or, indeed, buying food. There are frequent reports in the media of growing evidence of family poverty where children are going without food and families are becoming reliant on food banks which are now struggling to cope with the increasing demands. Up and down the country, food banks are reporting that they are supporting more and more families who are struck by the problems of unemployment and benefit stoppage. Working families on low incomes are at the receiving end of all that.
The Guardian reports that responses from teachers to its survey show that the number of children arriving at school with empty stomachs has increased during the past year or two. Head teachers and senior doctors are so concerned at the extent of child malnutrition and hunger that they are calling for children who receive school meals also to be given a free breakfast each morning. Charities, including Action for Children, the NSPCC and the Children’s Society, predict that children in vulnerable families are set to top the 2 million mark by 2015. Meanwhile, what is the Government’s response? They are seeking to redefine child poverty. In this House, and in another place as well as in the media, we hear much about the importance of neighbourhoods and communities. Taken together, however, policies such as the bedroom tax, benefit cap, affordable rent and mixed tenancies will do nothing to sustain strong and stable communities.
Following the riots of last year, the Church of England’s report sounded a clear warning about the social consequences of austerity. Looking at the economy all over the country, the fact of the matter is that the austerity programme is like playing golf with just one club. The response by my organisation, Midland Heart, to the riots in Birmingham was its development of a modest programme called Back on Track. The project was aimed at early intervention and diversion for young people and their families into more productive pursuits. The interventions went beyond merely addressing poverty, and recognised that there were many interlinking factors such as lack of skills and education, social exclusion, poor community cohesion, peer pressure and, of course, poor housing. The Back on Track project has engaged just 24 young people in apprenticeships and business start-ups and has offered mentoring and support to families, including a family jobs club, as well as a family intervention project for troubled families. I am proud to say that a number of our young people have been fortunate in winning major contracts from the authorities to supply more than 50,000 cup cakes to athletes in the Olympics.
Many voluntary organisations have supported projects for families, and many will continue to do so. At the very heart of the need for good citizenship and making a contribution stands the need for good housing. Ironically, funding for all these much-needed projects is subject to the austerity cuts.
In this debate, we have heard much about the problems faced by families in the rented housing sector, yet I sense that the issues that have emerged are, in reality, so far only the tip of the iceberg. We await the full force of the deprivation that is being created. While we wait, I again thank the noble Baroness, Lady Rendell, for leading this timely and important debate.
Lord Greaves
My Lords, it is always a pleasure to follow the noble Lord, Lord Morris of Handsworth, and I, too, thank the noble Baroness, Lady Rendell, for sponsoring this debate.
I want to talk, rather more narrowly, about the particular problems in the part of the world where I live, but I associate myself generally and, in most cases, specifically with the remarks of my noble friend Lady Scott of Needham Market who provided a more general overview.
We are talking about problems faced by families in the rented housing sector. I want to talk about that sector in the area I know best, which is east—or Pennine—Lancashire, the borough of Pendle, the town of Colne, and the ward of Waterside, which leads me on to declaring my interest as a councillor for that ward. I specifically want to talk about that part of Colne and similar parts of Nelson, such as Southfield, which are typical of many areas throughout the north of England and other parts of the country.
We are talking about areas of cheap terraced housing—houses in my ward that are now selling for, depending on location and condition, anything between £30,000 and £65,000, and which at the height of the housing boom might have cost between £50,000 and £75,000. Ten years ago they were selling for between £20,000 and £50,000, and in 1970 you could pick up quite a decent two up, two down, well looked-after modernised terraced house for £1,000. This is cheap housing, and it is no wonder that it has been attractive to buy-to-let landlords in more recent times. The rents in such areas now might be around £400 a month—£80 a week, or of that order—which local people think is outrageous, and everyone else thinks is quite cheap.
These are traditional areas of owner-occupied terraced housing. They were built perhaps 100 to 140 years ago for the people who worked in the mills. They were bought through a form of rental purchase, through deductions from people’s weekly wages. When you had paid enough through rental purchase, you got the deeds, so there is a tradition of working class owner-occupation in those areas.
In the 1960s and 1970s there was a massive programme of improvement of those houses. In 1970, in the ward I was elected for then, which was a bit smaller than the present ward, 70% of the houses had outside lavatories, and most of those were the famous tippler toilets, or long drops, or waste water closets. I have explained to noble Lords in the past exactly how they worked, and I will not do so today, but WCs they were not. The houses had no bathrooms, and some of the worst had one cold water tap, and perhaps a little plastic geyser to heat water. That was all.
Since then there has been a huge programme of improvement, through a programme of standard and improvement grants in the 1960s, 1970s, and into the 1980s, which were provided by local authorities but for which up to 90% of the subsidy was provided by central government. A huge amount of public investment went into those privately owned houses, together with area improvement schemes such as general improvement areas and housing action areas, and the associated environmental improvements. It is not an exaggeration to say that large numbers of those areas were rescued from the bulldozer by such schemes. More recently we had the Labour Government’s housing market renewal scheme, which again provided investment, although in a different way, into some of those areas.
Forty years ago, the private rented sector in these areas was limited, but it existed. They were mainly slum landlords. I say that without any qualification. You could get a house 40 years ago for a rent of 50 pence a week, but what you got was not very nice. The improvement schemes I have talked about by and large drove out those private landlords. Some of their houses were the worst in the area and were knocked down and cleared. Large numbers were purchased by the local authority, either voluntarily or by compulsory purchase schemes, and were often either improved by housing associations or have been subsequently transferred to housing associations, and are now providing perfectly decent accommodation.
Since the end of the 1980s, the private rented sector has made a reappearance. One noble Lord said that 1991 was the low point of private rented accommodation in this country. In the whole of Waterside ward, which I represent, in the census 10 years ago there were 17.6% privately rented, and in the ward in Nelson that I am talking about, Southfield, there were 16.9%. It is significantly more than that now. I suspect it is about 25% in both of those areas. In critical areas, where it is causing real problems, it is now up to 30%, 40% or 50%.
The causes are well known: the deregulation of rent, for instance. My noble friend said that rent control had, in the past, resulted in poor conditions. There is no doubt that that was the case, and it was one reason why rent controls were abolished. However, the deregulation of rent has allowed people to move in on a market basis. The second factor is the relaxation of security of tenure.
The third is the large amount of finance available for buy-to-let schemes. Let us not think that buy-to-let purchases are no longer taking place. People who do not live in areas such as Pendle look at these prices and think that the houses are incredibly cheap. They work out how much rent they can get and still make quite a substantial profit from a buy-to-let purchase. Many are absentee landlords. I have to laugh at some of them. From time to time, I get an absentee landlord from, typically, London or the south coast ringing me up. They say, “We’re ringing you because we understand you are our councillor”. I say, “No, I’m not. You live in London”. They say, “Yes, but I own a house in a particular street in your ward. I had these tenants who weren’t nice people and they wrecked the house. Then they just moved out and I’m left with a real problem. I can’t let the house because of the condition it’s in. What are you going to do about it?”. My answer is, “If you will donate your house to the local authority, I will do something about it. Apart from that, it’s your responsibility. You bought the house and you know what the street is like”. They reply, “Oh no. I’ve never been there”. They probably bought it at an auction without seeing it. They “manage it” through a local letting agency and that is the extent of their personal involvement with it. I say to them, “I consider that you are an anti-social person and you deserve an ASBO”. They do not like that and they put the phone down.
That is the difficulty that we have. We have had people living in Johannesburg, Jerusalem and all over the world—it is quite astonishing—but, in particular, they live in London or on the south coast for some reason, and they have been causing real problems with these houses.
The laws and rules that govern private rented accommodation, as with so much else in this country, have been designed for London, the south-east and the big cities. They have not been designed for areas such as ours, where the problems and consequences are quite different, and they have been a disaster. Of course we have good local landlords who own a house in the same street or who let out a house where elderly relatives have moved on or whatever, and we have lots of good tenants. However, the situation with private landlord accommodation in areas of cheap terraced housing where the market is not buoyant, where it is difficult to sell houses and the vacancy rate is high, is entirely different from the situation in London, in particular, where the main problem is a shortage of housing.
What are the consequences? Despite what I have been saying, people buying to let have kept prices higher than they would otherwise have been. Noble Lords may think that the prices I have quoted are ridiculously low for housing but they are higher than they would have been. Ours is a low-wage area and, like many others, it is struggling to keep going in the present economic circumstances. That, together with other factors, such as the impossibility of getting a mortgage, has pushed down the potential for young couples to buy these houses.
I have talked about absentee landlords letting through agents and having no personal, hands-on involvement in the management of the houses. A lot of these properties have a high turnover of tenants. People move in, live there for a year and move on to the next town or to another part of the town to a similar property. This has huge consequences for the area and for local schools, for example, where pupils do not stay for very long and move away, often missing schooling in between. This results in some problem tenants.
I do not suggest that all people living in private rented accommodation cause problems. Clearly, they do not. My daughter lived in a house in my ward last year. It was a very nice little house and she is a very nice tenant. However, you need only one problem family to cause real problems in a street. While they are being moved on, persuaded to move on or whatever, those problems are there. It results in other people in the street saying that they have had enough and moving out, whether they are owner-occupiers or tenants, and in the deterioration of some properties. If you then get two or three of them together, and particularly if the empty properties get vandalised, the problems in those streets are huge and the only way they can be solved is by the active intervention of the local authority. That costs a lot of money and a lot of resources—and there is not a lot of that around at the moment. Councillors, the council, other agencies, residents and, indeed, the residents’ groups that exist in many of these areas are waging a defensive battle. It is damage limitation against what is, in these areas, a lose-lose situation.
There have been lots of initiatives over the years. Housing market renewal came and provided hope on the horizon, but that has all gone away. We now have an empty homes initiative from the present Government, although we do not know whether it will work. Local authorities grasp whatever is offered to them, but one problem is that there is no consistency. I keep saying that local authorities are presented with one lot of schemes and solutions, which then goes away and they have to grasp the next one. It is about always running to keep up.
A few years ago, the Housing Act 2004, I think, introduced the concept of selective licensing of private sector landlords. We looked very hard at this, in both the areas I am talking about, but in the end the council felt it could not go ahead with it. That was partly because it did not stack up financially and the council would have had to substantially subsidise it and partly because it was no way to tackle the problem of empty houses. Poor landlords could simply opt out of the scheme by leaving properties empty, which was obviously a lot worse than having tenants in.
Following the Rugg report, the previous Government talked about a national landlord registration scheme. It is interesting that the Welsh Government have—only last week I think—issued a consultation paper suggesting one in Wales. That would go some way towards tackling the problem, because it would at least provide people with facts and information and provide councils with a way of relating directly to landlords. Voluntary accreditation schemes do not work because the people who join them are the good landlords. They are worth while for them but do not tackle the ones we really want to tackle.
I do not know what all the answers are. I am absolutely certain that solutions developed for areas such as London where the housing market is grossly overheated have very little relevance to us. We need the flexibility to tackle things in different ways in different parts of the country according to the circumstances of the housing market in those areas.
Baroness Turner of Camden
My Lords, I, too, thank my noble friend for introducing this debate and the manner in which he did so. This is an important issue for all of us. I speak as a Londoner, from where the problem of housing families is particularly acute. In my area of Camden, the local council has exceptional difficulty and priority is given to housing families with children. That priority is often criticised, although not by me—we cannot have children homeless and on the streets.
When I first moved into the area in which I live, over 40 years ago, West Hampstead was not regarded as particularly posh. It is adjacent to Kilburn, which was long recognised as a working-class area. However, there has been an enormous change. The large houses have all been transformed into flats, with many let at very high prices—£500 a week is quite normal for a one-bedroom flat. Ordinary working families simply cannot afford rents at this level. If the family is on housing benefit, the cost to the taxpayer is quite substantial, although that is not the fault of the family, as the money just goes straight to the greedy landlord. There are now new rules about benefits and strictures about underoccupancy have been issued by the Minister. Extra rooms are restricted, except for a carer who actually lives in, and the number of bedrooms is limited in line with what is felt to be appropriate for the family size. This has all made families feel very unsettled, particularly if the benefit is related to the market rent for the accommodation. They may think that they have no alternative but to move to somewhere cheaper. In fact, that attitude is encouraged by some councils.
People often do not want to move to a different area, particularly if it would no longer be possible for children to attend their school. People with a disability may have problems about moving as well. Often they will need support facilities where they currently live and it may not be easy to move to an entirely different area. Poorer people moving out of areas and then leaving them to be accommodated purely by the better-off has social consequences that we should be careful of. The well informed charity Shelter does not think that underoccupancy is a problem. It is more concerned that, in many poorer homes, the families are too crowded and often children have difficulty doing homework and other work in such situations.
All these problems arise because there has been too little social housing built over the past 30 or 40 years. It is true that this is now recognised belatedly. The Mayor of London recently announced a programme of social housing for London, but how long will all that take and how much will it all cost? In the mean time many families are worried and distressed, and contemplating possibly moving or trying to get by on much lower benefits. Just after the last war, there was of course a terrible problem of housing shortage because of the bombing. Rents, however, were set by a local tribunal. The then Government took a very bold step and introduced a system of rent control. If tenants thought that the rent was too high they could get a ruling from the tribunal. Had this set-up not existed, most of the population would have been forced to sleep on the street. As it was, poorer people managed to get by because the rents had some relationship to the wages that they were then earning. There is a case for something rather similar to be done now. Indeed my noble friend, in introducing the debate, hinted as much and outlined a system.
There are really two problems for which the taxpayer is paying: rents are too high; and wages are too low. Something could be done about the first. On the second, as a former trade union official, it is a matter of regret to me that trade unionism in the private sector has declined. I would like to see that reversed and people in London paid at least a living wage, which most of them do not get. Benefits, incidentally, are mostly paid to people in employment but who are badly paid, so the taxpayer subsidises low-paying employers. That could be improved by introducing the living wage and inspectors to ensure that it is enforced. In my view something should be done and I am grateful to my noble friend and others who have spoken in the debate this afternoon. We have all agreed that something has to be done and that there are things that we could do immediately, which I hope the Minister will take seriously.
Lord Sawyer
My Lords, I thank the noble Baroness, Lady Rendell, for initiating the debate. We all know her lifelong commitment to the problem of housing, particularly her work with Shelter. It is very important that we give our time and energy to debating this important issue.
I have an interest to declare. I am not the chairman of anything or a councillor, but I am a member of the angry brigade. I feel quite angry about this, as do lots of people of our generation, although it is hard to be angry in your Lordships’ House at quarter past four on a Thursday afternoon when it is not very heavily populated. Some of the speeches, to which I have listened very carefully, have reinforced my disposition. Although they might not be described as angry speeches, they have been passionate about a commitment to doing something about the hugely serious problem that we have with young people in almost every sense of the word.
When I was a young trade unionist, which was nearly 50 years ago, we used to march with our banners, which had two things on them: homes and jobs. Those were the two things that we had least and wanted most. We were never able to get them. I thought about that this week when I noticed the Shard building that has shot up near London Bridge and read that there will be £50 million flats available for people to rent. I do not suppose that many people in your Lordships’ House will be putting their name on that list. Looking down from the £50 million flat to the kind of problems that we have in London—and beyond, as apparently you can see beyond from the Shard—it occurred to me that nothing has really changed. For a lot of young people things are much worse than they were when I was young myself.
The average age in your Lordships’ House is, I think, 69. It is important that we, as the older generation, work hard to understand and sympathise with what it is like to be young—and there has been a really strong display of this in the House this afternoon—and do everything that we can in whatever way we can to help young people with both jobs and housing, because that help is welcome and very much needed. It is one of those days—they occur to me sometimes—when I wish we could get young people on these Benches debating the issues; let us hear what they have to say. If this happened, the House would probably be fuller than it is today. I might be joined by some other members of the angry brigade if we were able to do that. We recognise the very tough time that young people are having.
The old deal that we were all used to was this: work hard at school, get a job, save a deposit for a mortgage, pay your pension and, at the end, you will probably be okay and, if not, there will be a welfare state that will support you. I am afraid that this paradigm has gone. The new deal is this: work even harder at school and borrow a lot of money—£30,000 to go to university, which you pay back when you get a job, if you get a job, which many cannot do. Pensions are even more elusive, as are mortgages without a wealthy or generous parent, which is probably not available to the majority of people. This is a very different paradigm to the one that we experienced.
What happens at the end of this? What will it be like for these young people in 30 years, with no mortgages, not-so-good jobs and no pensions? Where will they get £100,000 to pay for their care? What will they have to sell? They will not have any equity or pensions. It will be a huge burden on the state. This is obviously not a subject for today; it is for another debate but it is very important. Fast-forward the problems that we are talking about today 30 years and what sort of consequences will we see?
This is what our generation of young people are faced with. I do not think that any of us have a strategy to deal with it. We have piecemeal initiatives and schemes, which have often failed. As people have said this afternoon, sometimes they are flawed but the model itself of actually helping young people either to buy or to rent is broken. It cannot deliver the kind of decent homes for future generations that we need. I have looked carefully at the Department for Communities and Local Government housing strategy to find a big picture. Is there a five-year strategy, as the right reverend Prelate indicated would be very helpful in these circumstances? My conclusion was that there was not. It was cloaked in the language of choice, flexibility and community. A lot of initiatives do not add up to what we want. I do not say that they are not worthy or not worth trying, but they are not adequate to meet the situation and the problems that we face.
The basic problem is that young people between 20 and 35 cannot any longer afford to buy a home in lots of parts of this country. Why is that? It is because there are not enough homes being built for people to live in. The noble Baroness, Lady Scott, has made this point very eloquently. Will the prices, therefore, of renting existing limited supply be higher or lower? It will be higher because it will mean high rents in some places, particularly London, where the amount of money that young people have to pay to live is disgustingly high. If we were to build more homes and bring down prices, the savings that young people had would make adequate deposits. However, with the present price of private homes, most young people have no chance of ever climbing the housing ladder. They have no choice: they have to go to the private rented sector.
There has been an eloquent debate today about what that sector is like. It is a mixed bag. It is unregulated, by and large. Although councils have a role there, it is not regulated successfully. As to individual landlords, I know decent people who have buy- to-let properties. I do not agree with it but it is a matter for them. Decent people buy to let and we need people to provide rented accommodation. However, there are also the worse kind of rogue landlords, about whom we have heard today. Whether they are decent people or rogues, they are all there for a reason: they are all making very good returns in one of the few growth areas of the British economy.
How are rental levels determined? They are determined by the market, which in a country which fails to build anything like the number of homes needed to house its population is going to be fairly buoyant. It will be a good market for sellers of accommodation but not such a good market for buyers. Landlords can charge what the market will take. Tenancies are normally short term, six to 12 months being the average.
Rent levels next to earnings are cripplingly high. In London, a small two-bedroom flat in zone 1 and 2 can cost £15,000 to £18,000 a year, not in the high-quality areas but in the poorer areas. Outside London, in major cities you would be lucky to find a two-bedroom flat under £5,000 a year. That is a lot of money for people working in the kind of jobs that are very important to us. How does a nurse, a postman or a teacher on a salary of between £15,000 and £30,000 afford this kind of rent? It is impossible to do so. We have to wake up to that fact and do something about it.
In London, in the main, unless young people share or live in one room, as many do, they move back to the suburbs and join those families affected by housing benefit. They pack their bags and they have got to go. What does that mean for the nurses that I was talking to when I was a patient recently in Guy’s Hospital? It means that they have unaffordable travel costs and it is difficult for them to go to work and meet the shift patterns. The nurses come crashing in, worn out by the travel before they even start to look after their patients. That is an anecdote, of course, but it is part of the reality of why we have not got nurses living in London: they cannot afford to rent accommodation.
All these problems arise before we examine the space and quality of accommodation, for which we have no standards. We know that standards are certainly very poor at the bottom end of the market. Some landlords seriously overcrowd their properties and only a few good local councils have the money or the political initiative to do anything about it. The quality of the space in which you live is as important as the street in which you live, and I get angry about young people being shuffled into small, inadequate accommodation without proper facilities and having to grow up in that kind of environment. It never happened to me and I do not see why it should happen to this generation.
Rightmove has said that in a double-dip economy there is a rent rise bubble as landlords push through even higher rents, God forbid. One in three tenants now spends more than a half of their take-home pay on rent. Can you believe that? Rightmove, which wrote the survey, says that there is,
“unique evidence of a rental squeeze that may be leaving some tenants with little or no headroom”.
Few are renting because they want to. The noble Baroness, Lady Scott, put forward different figures, although we can all look at different reports. However, according to the Rightmove report, 56% of people are trapped as renters and forced to pay landlords because they cannot access a mortgage. It is really serious if that is the case. If 40% or 50% of tenants do not want to be in rented accommodation but want their own home, should we not tackle that situation as a society?
It is now said that housing benefit may be removed from the under-25s. If that happens, it will hit about 300,000 young people, remove a vital safety net and push more young people into the ranks of the homeless.
What will happen to this problem? It will get worse, I am sad to say. The Joseph Rowntree Foundation forecasts that the number of new home owners will fall from 2.4 million to 1.3 million in eight years. This will mean a need for 1 million more private landlords because the public sector is not going to house people, and 1 million more young people looking for private rents, which will probably be unaffordable.
What are we to do? With respect, it is probably too late for this Government—I am not saying that the previous Government were brilliant, either—to have a major housebuilding plan of the kind called for by the right reverend Prelate. I am confident that a new Labour Government would at least have a chance of putting tenants in private rented accommodation which would include longer-term leases, registration of landlords and decent space and accommodation standards, among other things. I address my remarks to my noble friend on the Front Bench, with whom I am glad to say that I have been friends for many years, almost since I was marching with my banners—not quite but not far off. We really need to accept that the present model does not work. In opposition, it is time to think about the bigger picture and to ask the questions.
What would we need to do to provide a home for all those who wanted to own one? What would we need to do to give those who did not want to own a home a choice of high-quality options at affordable rents? Those are two really simple but very important questions. I hope that the Labour Party in opposition will work on this and that we will not go round the same paradigm, doing the same things and trying to patch things up when, in reality, nothing much really changes and for many people things get worse. I honestly believe that this debate is more important than bank reform. It is more important than the Leveson inquiry. It is even more important than House of Lords reform.
Baroness Royall of Blaisdon
My Lords, I declare an interest as the owner of one flat that is rented but also as the mother of three members of the very angry brigade. I, too, am grateful to my noble friend Lady Rendell for initiating our debate today with her customary passion and insight. The debate is important for individuals and families but also for our urban and rural communities, and our society as a whole. My noble friend raised fundamentally disturbing issues affecting thousands of people up and down the country. A house or flat is not just a matter of bricks and mortar; it is a home. It provides shelter, sanctuary and safety, and has a profound effect on physical and mental well-being. It is a place that should give an individual and families security, and a nest from which to thrive.
As we have heard, exorbitant house prices and a scarcity of good-quality social housing have forced many families to rely on the private rented sector, where many fall prey to unscrupulous landlords and are compelled to reside in abysmal living conditions that fail to meet even the Government’s decent home standard—based on the statutory minimum standard for housing. The fact that this basic standard is all too often not met is a national disgrace. Shelter warns that even satisfactory-quality homes are too expensive for many, particularly now in the era of the double-dip recession. I recently met a family with two children living in an ex-council flat in Paddington for which the private landlord charged £2,100 a month. That cannot be a fair rent. They relied on the help of housing benefit but of course it was the landlord who derived the greatest benefit. Just over two in five homes in the private rented sector in England, or 44%, fail to meet even the decent home standard. This represents a major housing issue, which is undoubtedly contributing to the deterioration of quality of life for many families and individuals in this country.
Poor living conditions create a plethora of social problems that affect all members of society and strike at the cohesiveness of the family unit. Substandard accommodation leads to an increased risk of ill-health and chronic health conditions, and can lead to poor school performance, particularly for those struggling on the lowest incomes. These are the people least able to escape from poor living conditions as they have fewer, and in most cases absolutely no alternative, housing options. Earlier this year, I met a woman who had been moved into privately rented rooms which she had to hoover three times a day because of the cockroaches that covered the floors and other surfaces.
It is reported that the private rented sector is home to approximately 1 million families with children—twice the number of a decade ago. Save the Children warns us that almost 2 million children in the UK are growing up in cold, damp, temporary or overcrowded housing. That is the latest official estimate from the DCLG. Bad housing has potentially irreversible effects on children’s health, well-being and educational achievement, restricting their life chances indefinitely. A child’s future health and life prospects are built upon the foundations of the quality of care it receives as a young child and the quality of the housing in which it lives. The problems faced by families will undoubtedly increase because of rising levels of families and individuals forced to rent in the private rented sector and declining owner- occupation. Of particular concern is the fact that the private rented sector remains subject to inadequate regulation.
In order to strengthen the rights of tenants, Shelter has called on the Government to make a number of crucial changes to housing policy, including working more closely with local authorities to prioritise the prosecution of rogue landlords, and strengthening the law to permit the banning of people from being landlords if they have unspent convictions relating to previous landlord offences. Indeed, should not unscrupulous landlords who force families to live in squalid conditions be permanently banned? Save the Children reminds us of the 2008 Rugg review by the Centre for Housing Policy at the University of York, which proposed PRS regulation, including a national register of landlords, mandatory licensing for letting agents and written tenancy agreements.
It is imperative that the quality of private rented sector housing is better regulated, particularly as the significance of the sector continues to rise. Home ownership levels fell from approximately 70% of households in 2001 to 65.2% by 2010, while private renting grew from 10.1% to 17.4%, and social renting decreased from 20% to 17.5%. The exponential rise of the private rented sector, combined with the poor regulation of landlords and the substandard condition of many properties, has created abysmal living conditions for many families and individuals.
I draw noble Lords’ attention to what I regard as very good practice in the Labour council of Newham, led by the excellent Sir Robin Wales. On the basis of a successful pilot of a neighbourhood improvement zone, Newham is now expanding a licensing scheme to include all private landlords in the borough. This is the first ever borough-wide licensing scheme and will give an unprecedented ability to drive up standards across the borough. The licence carries conditions which the landlord or managing agent must abide by, mostly around the management of the property. The system is financially fair to landlords. A scaled fee structure is being introduced so that compliant—that is to say, good—landlords do not have to carry the costs of licensing “rogue” landlords. The licensing scheme will allow the council to identify and engage the non co-operative landlords, which simply is not possible with voluntary schemes. It will enforce on a “worse first” basis, focusing activity on non-compliant landlords. Landlords who abide by the conditions of the licence will be able to get on with their business without intervention.
That is exactly the sort of scheme that, as a Labour Government, I hope we would introduce across the whole of this country. We would all agree that the need for security of housing tenure is pivotal to a stable home environment. Private tenants are typically provided with negligible security, due in part to the prevalent assured shorthold tenancy, which is widely used by landlords. Many examples have been given this afternoon of families having to move on many occasions because of the whims or greed of private landlords, who refuse to make the appropriate repairs to their properties. Such instability is a nightmare for families and can contribute to both insecurity and chaotic lifestyles. How can children thrive academically who have to move four or five times within a couple of years? How can they thrive in a stable condition in schools if they have to move time after time?
The Localism Act opened up the prospect of reducing security of tenure for social housing, yet security of tenure in the private rented sector is very weak; it is essentially six months. Dreading eviction, families often do not feel that they are able to report instances of disrepair or problems with damp, for example. In the event that they do complain, these requests are frequently ignored, and there is very little recourse for these families.
Recent changes to the housing benefit system—now setting the limit at the 30th percentile—is causing those reliant on benefit to be restricted to the cheaper end of the market. These are the very properties that typically do not meet even the minimum decent homes standard. The underoccupation rules for social housing will force some families out of existing accommodation and into the private rented sector, adding yet greater pressure. Research by Shelter and other housing organisations indicates that a large proportion of private rented properties bar housing benefit claimants from private tenancies. That is especially a problem in London.
The policy mooted by the Prime Minister, that housing benefit should be denied to young people under 25, shows a profound lack of understanding of the lives of real people. Many young people who receive housing benefit are on low wages. They are working and trying to contribute to the economy, but they simply do not have enough money to pay the rent. My noble friend referred to food banks; sometimes it is precisely these young people who now have to resort to food banks. Just last week, I heard of a food bank in Salisbury that focuses on people who are in work but receive such low wages that they cannot afford to buy the food that is necessary to provide for their families.
We hear whispers that a government-commissioned review of the private rented sector by Sir Adrian Montague is likely to recommend sweeping changes to planning and funding rules. It will favour the private rented sector over building new affordable homes, which will further exacerbate the limited opportunities for home ownership. It is also suggested that this may extend to recommendations to the Government to offer loans, in place of grants, to support large-scale new build private rented sector schemes. This could have devastating consequences for the nurturing and development of the affordable housing sector. I would be grateful if the Minister could give me an assurance that the Government are not abandoning an affordable housing strategy, nor seeking to replace social housing with wide-scale private rented housing, and a promise that they will not be distorting housing policy towards private rented housing at the expense of the protection of social housing.
The degree of housing need in our country, driven by longer life expectancy and an increasing tendency for people to live in single households, must be addressed. At least 240,000 new homes need to be delivered per year to meet the formation of new households. In 2008, a National Housing and Planning Advice Unit assessment showed that a minimum of 240,000 homes would be needed annually to keep pace with demand. Just 102,730 new homes were built in 2010, which represents more than 15,000 fewer homes than the previous year. It is certainly fewer than were built in the last year of the Labour Government. Government initiatives are simply not delivering.
Labour made some significant progress when it was in government; our decent homes programme made a significant difference to the quality of council housing. We also planned to improve regulation of the private rented sector, but these plans have since been abandoned by the coalition. However, I readily admit that in government we did not do enough to provide housing for people. Housing must and will be a priority for the next Labour Government, and I assure my noble friend Lord Sawyer that we are indeed working on that issue now.
The quality of living standards for families and individuals must be addressed, as must the plight of those living in substandard accommodation. Poor housing and living conditions create a plethora of social problems that will touch and be detrimental to all parts of society. Sadly, poor housing and anti-social behaviour are often linked. This affects individuals and families, but also the wider community. The growing housing crisis will not abate without action. Steps need to be taken now to address that crisis, including the dismal and sometimes desperate problems suffered by those who live in expensive—and too often substandard—private rented accommodation. It could be said that all noble Lords who have spoken this afternoon belong to the ageing angry brigade, and we look forward to the response from the Minister.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I, too, thank the noble Baroness, Lady Rendell, very much for having initiated this debate. I am sure that she did not sound like somebody from the angry brigade, but she spoke very forcefully and with her usual cogence. I thank her for that and I thank other noble Lords who have taken part. As one might have expected with this debate, it has wandered widely around the subject of housing but, as noble Lords have said, you cannot really think about a house without people or about those people without their conditions. It is perfectly understandable that that is how it should have developed.
We have had some particularly moving examples of bad practice and things going wrong. I do not think any of us would sit here and pretend that everything in the private rented sector was glorious. It is not possible to believe that. I have read the recent report by Shelter with great interest. The key points in it are about the difficulties that some families have in managing within the private rented sector—the insecurity of short tenancies and a general feeling of difficulty over the renewals of rent—have been touched on by noble Lords today.
For a number of reasons that have been raised, many more people are now accessing the private rented sector. There is increased pressure on affordable housing. There are those who could possibly afford a mortgage, but who cannot raise enough for a deposit on a house. That slows down home ownership. Those people enter the private rented market as well and are increasing the need for it.
Many people can not only afford private renting but find it a useful short-term or long-term way of living because of its flexibility. I recognise that those are probably not the people we are talking about this afternoon. We are talking about those on low or medium incomes, many of whom access housing through assured shorthold tenancies. These give initial terms of six months and in general these terms are renewable after the six months expire. At the outset, tenants and landlords can offer initial fixed periods. Shorthold tenancies play an important role in the housing market. There is sufficient flexibility in them, but I would not say that everything was perfect.
The constraints of renting are understood and some of them have been mentioned. However, only 8.2% of tenancies are stopped by tenants by mutual agreement. While it is true that families with children are having to rent, this has not in most cases meant constant upheaval and disruption. However, I accept that there are times when it does, and the 8.2% refers to the people who are giving up tenancies.
We have not heard a lot about the English Housing Survey report today, though the noble Lord, Lord Morris, did mention it. We can all extrapolate and take out the little bits which interest us most, but that is what surveys are about and is one of the advantages of having them. The report shows that most tenants are reasonably satisfied with their accommodation. Where they are not there are regulatory ways by which problems can be dealt with. I will briefly go through some of these.
For example, where there are concerns about the level of rent, people have access even in affordable short-term tenancies to rent assessment committees. People should not therefore feel pressured about increases in rent as there is a perfectly reasonable route to have the rent reassessed. Once it is fixed by the committee, that is the legal maximum that people can be charged. A number of noble Lords referred to the standard of property. If a tenant feels that the landlord is not maintaining it and is failing to carry out repairs, the local authority has powers to deal with that. It can deal with it not only under its own enforcement powers but under the health and safety rating system which could result in the landlord being required to carry out repairs if he will not do them voluntarily.
We have heard quite a bit today about rogue landlords. We recognise that in some places they are a significant problem. Rogue landlords include those who are doing the beds-in-sheds renting that we believe to be completely unacceptable. The Government have been working with local authorities, Shelter and other organisations to deal with the problem, which we recognise. As I think was mentioned, we are shortly going to publish guidance for all local authorities to provide them with advice on how to take action against these rogue landlords, including prosecuting them. Local authorities can deal with rogue landlords, and we have to be really clear about that. They have legal powers to do so, and that will be in the guidance. My department has provided more than £1 million to nine local authorities where beds in sheds is a particular problem to help increase their enforcement activities. Action can therefore be taken.
The private rented sector is a major source of housing and will continue to be so and to have an essential role in the housing market as this Government continue to work to increase the supply of affordable housing, which I confirm we are doing, and to find ways of making land available for development of all kinds. Making land available includes getting every government department to identify its surplus land and make it available for the housing initiatives that are coming up and are in the housing strategy to ensure that there is extra housing. We will not take lessons from the previous Government about the amount of housing that has been provided. One of the reasons why we have less housing than we should have is because there was not quite enough built previously. Of course, houses finished in 2010 were started previously. We are working very hard indeed on increasing the amount of property, and at the moment there is provision for more than 170,000 homes between now and 2015.
I shall develop what the Government are doing at the moment because it has been suggested that we are not doing very much. There is the new homes bonus, which will encourage and help pay for affordable housing and more private housing. We are also marketing new build-to-rent pilot sites through the Homes and Communities Agency. There are the First Buy and NewBuy policies to help with mortgages, and there are mortgage incentives with the banks to help with deposits. We are also putting in place an independent review of barriers to investment in private homes to rent. There is a lot going on. The housing strategy that was published last year goes into much more detail than I can, but if noble Lords go through it, they will realise that the Government expect that with either the public sector, the New Homes Bonus, the private sector or with institutions, we will provide or start to provide the housing that is necessary.
We are working with the industry to build up standards and, as I have already said, we are encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes. I was asked about the decent homes standard. We continue to support it to ensure that those properties that fall outside the decent homes bracket are brought up to standard.
It was also mentioned that we have commissioned a report by Sir Adrian Montague on encouraging institutional investment. It is due to be published very shortly and either will or will not include the points raised by the noble Baroness, Lady Royall. However, it will be an influential report that will help us to get institutional investment into housing.
With the limited availability of mortgage finance, there must be an important role for new homes that are built to rent. More homes mean better conditions and less pressure on people to have to live in unsatisfactory and overpriced housing. The point was made today that one of the reasons we have high rents and inadequate housing is the shortage of housing in terms of the size of the population. There are several reasons why demand for housing is increasing, not least of which is the larger number of single-occupant homes while the population is increasing. We also need better homes for older people. There is a lot of demand on housing supply but, along with everybody else here, I accept that that housing supply must be of a decent standard.
I am very sympathetic to the issues that have been raised today. A number of points were made. The noble Baroness, Lady Rendell, mentioned tenants’ deposits and of course they are protected. There is now a requirement for all landlords to ensure that deposits are put into two schemes and that they are returned at the end of a tenancy.
Those on housing benefit account for around 30% of rented housing. While I understand the concern about the cap having come down, housing benefit will be available to most of that 30%. It is mostly in London, if at all, that that has to be reassessed. The right reverend Prelate the Bishop of Chester raised the point that most people on housing benefit are in work. I cannot dispute that but, again, housing benefit is available up to the cap.
I thank the right reverend Prelate for acknowledging that the housing strategy is in place. I should add that the housing associations that he mentioned access money and have their own ways of doing so. However, we are also trying to open up institutional investment again to try to increase the number of properties.
The noble Lord, Lord Morris, referred to the difficulties of young people, particularly those aged 18 to 20. Yes, I absolutely accept that many young people now have to live with their parents for a lot longer than they might like to have done. I had my children living with me for quite a long time, and I am glad to say that they have now moved on. In most families, children do not now find it easy to move out. I hope that I have covered most of the points that have been raised.
Baroness Royall of Blaisdon
May I make one comment? I am sure that the noble Baroness is delighted that her children have now flown the nest but I am equally sure that, when her children lived at home, they had a bedroom each. The problem for so many families is that those of their children who have to live with them are probably sofa-surfing because they have their other children living in the house. The tensions that are placed on these families can be immense. That is why we on this side of the House are extremely concerned about the proposals to cap housing benefit for those aged under 25. The tensions that could be exacerbated in those families could break them.
Baroness Hanham
I thank the noble Baroness for that contribution. Before I finish, I want to state that the Government are investing £4.5 billion in funding new affordable homes over the next spending review period—not an insignificant sum—and that the private sector funding contributed by providers to deliver these properties is some £15 billion. So there is huge monetary investment in housing, which I am sure noble Lords will recognise.
Again, I thank the noble Baroness for her debate and I thank all those who have taken part. If there are any points that I have not answered satisfactorily, I will write to noble Lords.
Baroness Rendell of Babergh
My Lords, I am grateful to the Minister for her response, which shows an intention to build more houses so that there are more homes by 2015 and to improve existing homes and bring them to a decent standard. I thank all noble Lords who took part in the debate, giving thoughtful and well researched speeches. My noble friends Lord Morris of Handsworth and Lord Sawyer showed justified anger at instances of injustice and unfairness, and my noble friend Lady Turner spoke from her personal experience of her own area of London.
Again, I thank all noble Lords who took part in this debate.
Coastal Access in England
(12 years, 5 months ago)
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Lord Greaves
To ask Her Majesty’s Government what progress they are making on coastal access in England.
Lord Greaves
My Lords, I am not sure whether I am an ageing member of the Angry Brigade but, unfortunately, in about a fortnight’s time I will pass the average age of Members of this House. That must be a step too far, I think. I am probably not at the median yet.
I remind the House of my interests in the Open Spaces Society and the British Mountaineering Council. I thank the small group of noble Lords who have agreed to come to take part in the debate; the end of a Thursday afternoon is never the best time to get a full House. I particularly thank the noble Lord, Lord Hunt of King’s Heath, who has come in at the last minute as a “gap man”, for which I am very grateful.
The proposals for coastal access in England are derived from Part 9 of the Marine and Coastal Access Act 2009, which some of us have fond memories of dealing with at some length in this House. It is unexpectedly timely that I am asking this Question today—although I tabled it some time ago—because the first stretch of the coastal path was opened for access on 29 June in the Weymouth area of Dorset. I will not say any more about that; the noble Lord, Lord Knight of Weymouth, may fill us in on some local details. It is very nice to see him here this afternoon.
The press release issued by Natural England referred to,
“the first stretch of the new national Coast Path around the entire English coast”.
That is a matter for rejoicing for those of us who have championed this scheme from the start. It was very nice indeed to see the Minister, Richard Benyon, being so effusive in his congratulatory comments on it, and I congratulate the coalition Government on continuing to promote and carry out the work on coastal access in England. Indeed, Section 296 places a duty on both Natural England and the Secretary of State to do that. Five further projects under way at the moment were initiated under the previous Government but are being continued by the present Government, and we can look forward to Cumbria and Durham probably being the next two to be rolled out, as they say, and to the five that are under way being completed by the end of 2025. Concern was expressed in a lot of quarters that the new Government would drag their feet on this, and I congratulate them on the fact that they are keeping going—right on to the end of the road, one hopes, or at least to the end of the coastal path.
My first question is: what is now the target for completion around England? Originally, it was going to be done in 10 years, although I must say that I always thought that that was ambitious due to the complexity of the scheme. It would be interesting if the Government could give us a target. Wales has completed a path—but it is only one path, and I feel that a lot of people in Wales feel that Wales will have to go back to revisit the whole question of coastal access, as opposed to a path around the coast, and particularly access to the foreshore.
Natural England issued a very welcome proposal in May this year, which was headed England Coast Path Programme Vision—I was not sure about that as a nominal clause, but never mind—Next Stretches and Future Direction. There is a very interesting map on the Natural England website, setting out proposals for another five stretches of coast to be started very soon and then some longer-term ones to be started by 2017. Again, that is very welcome, and the areas that they are choosing are very sensible ones. They are the ones that will be most in demand and where there is most need for the path. That is all very encouraging.
My second question is whether the programme vision of Natural England has the full-hearted support of the Government. The work is directed by the coastal access scheme, which was published in March 2010. Under Section 299 of the Act, the first review has to be completed within three years, and that is due to take place this September. Will the Government confirm that the review will be used to improve and clarify the scheme and not to scale back the proposals? I hope that that is an easy question for them to answer.
After the work on the Dorset stretch, Defra carried out a limited “lessons learnt” exercise, which was a sensible thing to do. The main result is a change in guidance on the so-called spreading room—the access land on the landward side of the path. The whole scheme is based on the designation of new access land under amended provisions of Part 1 of the CROW Act 2000. The path itself is access land, as is the land between the path and the sea, apart from some excepted land, and some land on the landward side of the path where sensible, due to the nature of the land or a sensible boundary.
On the effects of the changes, which involve a more restricted view to declaring the access land the spreading land on the landward side, the Government’s communication to Natural England states:
“The general approach should be that the interests of the public in having access to such landward spreading room are likely to outweigh the interests of the landowner only in exceptional circumstances”—
important words—
“or where in the absence of any more restrictive clear and natural boundaries of the spreading room it is justified by strong convenience in establishing a clear and natural boundary”.
That is a different system from the one that we have had so far; it is not clear what difference it is going to make in practice, in a lot of places, but there are some particular concerns that it will not be used to undermine the status of any existing access land under Section 1 of the CROW Act, which adjoins the path on the landward side; that it will not result in new barriers, such as fences, along the landward side of the path where they do not exist at the moment, so resulting in a deterioration of the local amenity; and that access to crags used for climbing which are on the landward side of the path should not be restricted.
In other words, if there are clear crags used for recreational climbing, they should not be blocked off and that should be regarded as being a matter of convenience. A crag is often a natural boundary, which can sensibly be used, particularly if the boundary is at the top of the crag so that the cliff face itself is within the access. The British Mountaineering Council has produced a list of more than 50 such crags. Will the Minister confirm that serious consideration will be given to such evidence from climbers when making decisions on exceptional circumstances and strong convenience in establishing a clear and natural boundary?
I ask the Minister briefly about the Isle of Wight. Under Section 300 of the Act, the Secretary of State has the ability to specify that an island should be part of the coastal access provision. The Minister will remember that we discussed the Isle of Wight at some length when we were going through the Marine and Coastal Access Act. When will the consultation due on the Isle of Wight start? Do the Government agree with the statement in the frequently asked questions on Natural England’s website that,
“the Isle of Wight is expected to be included”,
or are they completely neutral about it?
My final question is about the recent year-long review of the management of national trails and the recent consultation by Natural England on the review. National trails—I am not talking about coastal trails now, I am talking about all the rest, such as the Pennine Way and the Cleveland Way—consist of 2,500 miles of walking with lots of opportunities for horse-riding and cycling in many places. The review of national trails raises a lot of questions which are not directly relevant to the question of coastal access, but how will the English coastal path be integrated into the plans for national trails, given that the English coastal path will, when complete, double the total length of England’s national trails—a mind-boggling statistic in itself. How will the coastal path be integrated into future systems for management of national trails generally?
I should be grateful to hear the Minister’s answers to these questions. I am sure he will have them all at his fingertips. I repeat that, taken as a whole, this is not a critical Question. I am delighted, as are a lot of people in the country, by the way in which the new Government have come round to support for this extremely important and exciting project.
Lord Hunt of Kings Heath
My Lords, after that extensive debate on the noble Lord’s Question, it is my great pleasure to speak briefly in the gap. I congratulate the noble Lord, Lord Greaves, because, in the many months that we spent debating this Act, he was an assiduous attendee and mover of amendments, for which we were all grateful. My only regret was that for part of the time the noble Lord, Lord Greaves, was involved with a local government Bill in Grand Committee and was not, alas, able to join us. However, when he did he certainly made his presence felt and I thought he made a very persuasive argument today about the benefits of that legislation. He did so in a supporting vein, encouraging the Government to get on with it a little more than they have done previously.
I also recall fondly the presence of the noble Lord, Lord Taylor, on the then opposition Front Benches. We always liked to see him on the opposition Front Benches and look forward to that again in the near future. The noble Lord, Lord Taylor, made an extremely important contribution to our debates and, if I recollect rightly, he was always suggesting that the Government were not getting a move on and were not making as much progress as possible. I am glad that he is now able to account for his own stewardship in that regard.
I also pay tribute to the support given by the officials at Defra and to the agencies that come under it. I remember the extraordinary experience of having an introductory meeting with the stakeholders in that glorious conference room at Defra. About 70 people turned up and I realised that I was in for a very considerable challenge. I do not think I have ever come across a piece of legislation where so many stakeholders had taken so much interest and worked together to cause considerable challenge to the Government. At the end of the day, I believe that collectively a very good piece of legislation was produced. What is happening in Weymouth is great news, and I hope that my noble friend will give us a little more information.
I wanted to ask three questions of the noble Lord, Lord Taylor. He will know that there is some disappointment. First, we are glad that progress is being made, but my understanding is that there has been some delay in the original timetable for the completion of a coastal path around England. Can the noble Lord now give us an indication of when they think the whole of the English coastal path will be completed? Perhaps he will take from this debate encouragement for the Government to look at that timetable and make sure that it is completed as quickly as possible.
Secondly, can the noble Lord tell me whether the economic benefit of the new pathways, as they are opened, is going to be monitored and recorded, because that would give great encouragement in terms of the economic value of the pathway?
Thirdly, I should like to come back to an issue that we discussed extensively in relation to public transport access. We all had in mind the Cornish pathway and its brilliance, as well as, certainly in the summer months, access to a bus service that meant that people could walk along the pathway, catch a bus back to where they were staying, and then resume their walk later on. Clearly, there is a big issue about public transport in rural areas. It would be very helpful if the noble Lord said a little more about what the Government are going to do to encourage rural public transport to work in conjunction with the pathway.
Lord Knight of Weymouth
My Lords, I very much welcome the debate and I thank the noble Lord, Lord Greaves, for initiating it. It is a subject dear to my heart and I am glad to have the opportunity to talk about it for up to 10 minutes.
As has been trailed, I should like to start on the Jurassic coast. For those who do not know it, it is a one of the very few natural world heritage sites in this country. It covers 95 miles of truly stunning coastline from east Devon to Old Harry Rocks near Swanage in my former constituency in Dorset, with rocks recording 185 million years of the earth’s history. That means that with every mile that you walk westwards, the land you are walking on ages by 2 million years. Just on the section from Lulworth to Portland you can enjoy dinosaur footprints, fossil forest, the extraordinary natural coastal arch of Durdle Door, a pint of Badger ale—if it has not been got rid of by the Government—at the Smugglers Inn, and, from there, with a view across Weymouth Bay, you can proceed to and enjoy Weymouth beach and the historic Georgian seafront where seaside holidays were more or less invented by King George, and from where, in a matter of a few weeks, you will be able to watch Olympic sailing on large screens for free. There is also Nothe Fort, from where you can enjoy watching the Olympic sailing, if you have a ticket. Then there is Chesil beach and the unique natural feature of the lagoon, Portland Castle and what is arguably the best view in the world from the Portland Heights Hotel down over Chesil beach and Weymouth Bay. It is an extraordinary natural jewel and I would recommend that the many Members of your Lordships’ House who are present today go and enjoy it.
We have new rights for people to enjoy these 32 kilometres of coastline around Weymouth Bay, which came into force last month, as the first stretch of the new national coastal path. It is an initiative that I am proud to say I began when I was a Minister. At the first meeting I had with the access officials, they said, “What about a coastal path for England?”. I said, “That sounds like a good idea; why don’t we get on with it?”. They certainly did so.
Natural England in partnership with Dorset County Council has moved the existing south-west coast path from Rufus Castle on Portland to Lulworth Cove closer to the sea in several places. It is important for noble Lords to understand that there is a difference between the coastal path for England and the existing south-west coastal path. For the first time, there are also access rights over beaches, cliffs and other suitable land beside the route, where walkers can leave the path to rest, picnic and admire the view. Crucially, the path will now be able to roll back as the cliffs erode or slip, solving longstanding difficulties which are particularly pronounced as you go along the Jurassic coast towards Devon, closer to Lyme Regis. Cliffs erode and there are landslips, and if a continuous route is to be maintained along the slumping cliffs on this stretch of coast, we need the powers in the Act for the coastal path.
The route opens in time for walkers to enjoy stunning views of the 2012 Olympic and Paralympic Games sailing events. Today, indeed, I am afraid that I am missing the torch relay coming to Weymouth in order to attend to my duties here. I am sure it will be a great celebration and a prelude to a wonderful summer. I hope there will be some decent weather. My house got flooded this weekend, and I certainly hope that that sort of weather desists. It is worth noting that it is not too late to book accommodation and enjoy the free screens on Weymouth beach for one of our most successful Olympic sports, where we are contenders for medals in every category.
I am passionate about my stretch of coast—or rather, the stretch of coast on which I live, as I do not actually own it—as are the general public. Access to our natural heritage for walking, riding, relaxation and inspiration is fundamental for us. However, as the Ramblers say in their briefing, despite this the extent and quality of public access to the coast in England is patchy. Good quality access exists in some areas, but in others is confined to narrow cliff tops, or paths and roads that take visitors far inland, away from the sea. Some areas are simply off limits.
Contrast this with Wales. Its path was officially opened on the 5 May and fulfils a long held ambition of our party in Wales to ensure public access to the whole coastline. The New York Times listed the Welsh path as one of the 45 places to visit in the world in 2012, and it will bring visitors, jobs and a much-needed boost to the rural economy in Wales, in a country where unemployment stands at 9%. The Welsh path was praised by an editorial in the Observer as having
“set a standard in coastal path designation”.
In times of recession, tourism and leisure can bring economic benefits to rural communities facing unemployment, as well as providing a healthy, cheap day out for families.
I would suggest that Wales stands in some contrast to the lack of progress being made on England’s coastal path. The dream of a coastal path around our island has been the dream of ramblers and walkers for generations. In April we marked the 80th anniversary of the mass trespass of Kinder Scout in the Peak District, which in 1932 sparked the movement to open up our countryside for all to enjoy. The Labour Government legislated for the right to roam as part of the Countryside and Rights of Way Act 2000. We also passed the Marine and Coastal Access Act 2009, as we heard from my noble friend Lord Hunt. I pay tribute to the noble Lords who were a part of the debate in improving that legislation, and laid the foundations for a coastal path around our shores. In doing that we were happy to have the support of the Conservative Party in opposition, and the noble Lord, Lord Taylor.
A coastal path would provide a much needed tourism boost to many rural and coastal areas struggling with recession. As the Ramblers say, the south-west coastal path is often taken as the blueprint for the English coastal path, and is estimated to generate £307 million a year for the regional economy. If only half of these benefits were to be gained elsewhere, it could completely rejuvenate the social and economic life of our coastal towns. Yet, the cost of developing the path is put at £4.5 million, plus staff costs for Natural England.
Is this not the sort of investment in growth that we all want to see? Yet progress on the next step for the coastal network is proceeding too slowly. On 10 May the Government finally launched the public consultations for Durham and Cumbria, but there is an insufficient sense of momentum. Work was planned to start on the five new adjoining stretches of coast during this year and next in Cumbria, Dorset, Kent, Norfolk and Hartlepool. These are expected to be open to the public for use by the end of 2016. Natural England has also set out a vision for implementing the path up until 2017.
Therefore, by 2017—in five years’ time—it should be possible to walk from Hull to Dorset as long as you go anti-clockwise and via Wales. However, as Ramblers say:
“It is now clear that implementation will take longer than the initial estimate of ten years … and we still do not know when the entire path will be completed”.
This is reinforced by the fact that Natural England’s budget was cut by 21.5% in the comprehensive spending review, leaving it struggling to promote public access or leisure opportunities. The current Defra consultation on the future management of national trails, which we heard about from the noble Lord, Lord Greaves—for example, the Pennine Way or the Norfolk coastal path—shows a Government who, I would say, would like to offload them on to the big society. I worry that that is how we will end up.
This is part of a pattern which has become worryingly familiar. Last year, the Government tried to raise £100 million by selling off England’s forests but were forced to back down by the huge weight of public outrage. Their plans to sell off the national nature reserve were quietly shelved after that. Next, they began unpicking planning laws that have protected our countryside, casting aside carefully calibrated pages of guidance with a one-size-fits-all document. After more public protests—most notably from the National Trust—plans to place a duty on the national parks to promote sustainable development have also been quietly shelved. Conservationists and campaigners are punch drunk from the constant assault on nature and wildlife, and they wait in fear to see how far the Government will go to divest any strategic vision for the countryside.
Therefore, I look forward to the Minister reassuring me. I look forward to him telling me that I am just an old political cynic and that everything will be okay. As the noble Lord, Lord Greaves, and my noble friend Lord Hunt asked: when will we see a timetable for the whole thing? When will it be finished, and what are his plans for other users? The noble Lord, Lord Greaves, talked about climbers. Last summer, I had a stunning day climbing on the cliffs of Portland. What about horse and bike riders? The last time I rode a horse was to gallop along the sands at Lindisfarne—a stunning experience, the like of which should be available to more people. I also repeat the question put by my noble friend Lord Hunt regarding transport. On the Jurassic coast we have the brilliant X53 service that runs along the whole coast and is actively used not just by pensioners with their bus passes but by walkers with their dogs. More services like the X53 would be most welcome.
Lord Winston
I thank my noble friend for stopping for a moment. We in this part of the Chamber are really intrigued to know how big the horse was that he rode.
Lord Knight of Weymouth
Many hands make light work, and that is about as much detail as I shall give.
The Government’s lack of realistic ambition to realise an accessible path around England’s coast speaks volumes about their approach to nature and their understanding of the economic, social, environmental and health benefits of opening up the countryside for the public to enjoy. Ministers would do well to heed the lessons from Wales: green infrastructure could be just the boost that England’s rural economy needs. I look forward to the noble Lord’s response.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)
My Lords, when I saw the speakers list, I recognised the quality but was rather disappointed by the number of contributors. I suggested to the usual channels that, rather than have this debate, perhaps the three of us could go down to Weymouth and enjoy the torch and indeed have a walk along the new coastal path. Unfortunately, the procedures of the House demand that we are here, but that has encouraged the introducer of the legislation into Parliament, the noble Lord, Lord Hunt of Kings Heath, to be here with us. We were a very happy band of brothers dealing with that Bill, now the Act on which this debate is founded. We worked together to improve the Bill and there was no lack of enthusiasm from either government or opposition. Indeed, although the discussion was lengthy, it was a good experience for us all.
We have good news to tell on this story. Had the noble Lord, Lord Knight, and I been walking along the coast, he could have vented all this frustration of being in opposition and not engaged in this. I can tell him from our point of view that this is an energising project for the Government. The prospect of a coastal route linking communities, encouraging tourism and drawing people to one of the finest coastlines in the world—wherever you are in this country, it is magnificent—is something that I hope all can agree with and aspire to achieve. Opening up many miles of coastline for the enjoyment of all will help to support local economies. We already make over 70 million trips to the coast each year, spending over £1.4 billion, which helps support myriad small businesses on the coast and, indeed, in many seaside towns. As the noble Lord, Lord Knight, said, all this started with George III going down to Weymouth.
As my noble friend pointed out at the very beginning of his speech, the new right of access was implemented for the first time on 29 June on the lovely stretch of coast between Rufus Castle on the eastern side of Portland and Lulworth Cove. There has been real enthusiasm locally for what has been achieved. It is not surprising that celebratory events have been held by the local authority and the Ramblers to mark the opening of the Weymouth route. The new coastal route will bring a number of key improvements to the existing arrangements for coastal access at Weymouth Bay. The existing south-west coast path will, as the noble Lord, Lord Knight, mentioned, move closer to the sea in several places and away from a road in two places. For the first time, there will be secure statutory rights of public access to world-famous areas of beach, cliff and other coastal land on this magnificent part of the Dorset coast.
It has been a delight to listen to the local knowledge of the noble Lord, Lord Knight of Weymouth. He knows and loves that coast—and, indeed, owns it, in the sense that we all own, through public access, the opportunity of sharing in it. Crucially, as the noble Lord pointed out, the new coastal path will be able to roll back as the cliffs erode or slip. This will help to solve long-standing difficulties with maintaining a continuous route around the slumping cliffs between Weymouth and Lulworth Cove. The coastal route will make a huge difference, even in this area, which is served by an existing coastal national trail.
Weymouth is, of course, just the start of an opportunity that we have seized, which I want to emphasise. Natural England is progressing its proposals for the coastal route on a further five stretches of coast, totalling another 190 miles. It has recently issued draft reports with proposals for two new stretches of coast in Cumbria and at Durham, Hartlepool and Sunderland. These draft reports, which are not required by legislation, none the less demonstrate the highly consultative style in which improved coastal access is being delivered. That is a theme of the Government’s approach to their responsibilities under the Act, which will be found throughout this speech.
Next month, draft reports will also be issued by Natural England for the lead stretches of coast in Kent and Norfolk. The draft report for part of the Somerset coast will follow in spring 2013. Natural England has already started preparations, along with local authorities, on a further 190 miles of English coast, building on the existing stretches in Cumbria, Dorset, Kent, Norfolk and Hartlepool.
Over the next five to seven years, Natural England will continue to roll out the implementation programme in a planned and sequential way, providing improved coastal access and linking to some of the existing national trail network—I can reassure my noble friend Lord Greaves on that—and to the Welsh coastal path. By 2016, for example, even if noble Lords have to walk in an anti-clockwise direction, we expect it to be possible to walk on the national trails from the start of the south-west coast path at Poole to the first Severn Bridge, and there join up with the Welsh coast path and the southern end of the Offa’s Dyke path. We congratulate the Welsh Government on what they have achieved in opening that path and we seek to emulate them.
There is no lack of government will to implement the coastal access programme. Clearly, we need to be realistic as to the speed of implementation, alongside available resources. Noble Lords would expect that. Implementation activity must be cost-effective and proportionate to local need and operationally efficient. I am not in a position to give a deadline. Indeed, when the noble Lord, Lord Hunt, was taking the Bill through he was reluctant to give a deadline for this project. But we will achieve our objective to have a coastal path around the coast of England. I believe that our approach needs these requirements, as it must do at a time of scarce resources.
I want to address the concerns that some landowners, coastal businesses and residents have raised about the possible impact on coastal access. It is in our interests to ensure that coastal access proceeds sensitively with care and does not damage livelihoods or businesses. Just as importantly, it should not put at risk or damage nature conservation or heritage interests. Noble Lords have asked a number of points. My noble friend Lord Greaves asked about the cliffs. The British Mountaineering Council, of which he is an active member, has provided quite a lot of information about access to cliffs along the route, and I am sure that it will continue to do so. It is seen as a body that Natural England will consult. My noble friend also asked about the existence of a path on the Isle of Wight. We will be consulting in the next four weeks on the possibility of bringing the Isle of Wight into the scope, so there is an opportunity for it to be equally served by a path.
My noble friend asked if we would review the scheme. I can reassure him that Natural England has written today to key national stakeholders outlining its plan for the review, which will start on 5 September and last for eight weeks. It will look at the implementation that has developed at Weymouth and the stretches that are currently under protection, and it will learn the lessons that there are to be learnt. Indeed, it will be looking at the economic benefits and the issue of transport access. I am sure that because of the involvement of local authorities, transport access will be encouraged so that walkers can make the most of these situations. My noble friend also asked about the linkage with National Trails. I think that I have indicated that they are designed to be incorporated into this great facility.
In many ways consultation is a key element of the process in completing the national route. It is crucial to get the balance right between the new right of coastal access and the needs of those who live or work on coastal land. In the future rollout of the coastal access programme, we will take forward the lessons that we have learnt from our experience at Weymouth. Natural England will look to work even more closely with landowners and occupiers in the future rollout of the programme, recognising the significant knowledge and expertise that they have to offer.
I hope that I have been able to demonstrate the enthusiasm of the Government for this coastal path. We see it as a great asset and amenity for all the citizens of this country. It will improve the nation’s sense of ownership of its beautiful landscape and will provide for the well-being of the citizens of this land. In particular, as we know, the coastal route around the whole English coast is a huge challenge, and we all have to acknowledge that. We intend to show that it is achievable and I assure noble Lords that there will be no dragging of feet.