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Oral Answers to Questions
(12 years, 5 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
1. What recent assessment he has made of the effects of the 2012 Budget on the pay of all ranks of armed forces personnel.
The Secretary of State for Defence (Mr Philip Hammond)
The Chancellor announced extensions to public sector pay restraint in the autumn statement 2011. That will impact on armed forces pay. However, my right hon. Friend announced no further changes in relation to pay in the 2012 Budget, but he did announce the doubling of council tax relief for personnel on operations; the doubling of the families welfare fund to support the families of those deployed; and an additional £100 million of spending to improve accommodation for service personnel and their families. In addition, the lower-paid members of the armed forces are benefiting from the changes to taxation announced in the Budget.
Diana Johnson
Before the 2010 election, in full knowledge of the deficit, Hull Liberal Democrats promised to “raise the pay of our lowest-paid soldiers by as much as £6,000”. Lib Dems now back the pay freeze and the 20,000 redundancies while expecting our troops to sort out the Olympic shambles. Why should our armed forces trust Liberal Democrat promises ever again?
Mr Hammond
The hon. Lady supported the Government who got us into the deficit that this Government are currently digging our way out of. We are setting out plans for sustainable, affordable armed forces who will be properly equipped for the task we ask them to do in future. They understand that.
Mark Lancaster (Milton Keynes North) (Con)
Part of the remuneration package for reservists is the option for them to earn a bounty if they are deemed to be efficient. Territorial Army regulations allow the linking of a compulsion to train on certain days with the award of that bounty. Although that is not currently done, are there any plans to do it in future?
Mr Hammond
As my hon. Friend knows, we are committed to publishing a consultation document in the autumn that will look at employer engagement and terms and conditions for reservists. We will set out clearly our proposals for the new deal for reserves under the new arrangements I announced last week.
Mr Jim Murphy (East Renfrewshire) (Lab)
There is all-party concern about forces’ pay during the Olympic games. The Secretary of State is right that there is no exact comparison with other workers, but the country has noticed that London bus and train drivers are getting Olympic bonus payments and that our forces are not. What contact has he had with G4S about it paying bonuses to troops who are called up at the last minute? I do not begrudge the transport workers their bonus, but just because troops rightly cannot go on strike, they should not be ignored by the Government.
Mr Hammond
Clearly the union got to the right hon. Gentleman and made sure he included that last bit. We are determined to ensure that the welfare of our troops who are engaged in the Olympic project is properly looked after while they are deployed on that operation and that they are properly recognised. I am in discussion with senior members of the armed forces about how best to do that.
The Government do not have a direct contractual relationship with G4S—the London Organising Committee of the Olympic Games and Paralympic Games holds that relationship—but I can assure the right hon. Gentleman that whatever resources we need to ensure we offer an appropriate package to our armed forces will be made available.
David T. C. Davies (Monmouth) (Con)
22. Does my right hon. Friend share my concern that battalions made up largely of British personnel, such as the Royal Welsh, are now facing the axe, whereas battalions made up largely of non-British personnel, such as the Gurkhas, are not?
Mr Hammond
This strays slightly wide of the original question. I explained the week before last, I believe, the reason why the decision was taken not to look at removing a Gurkha Rifles battalion—the arrangements we have with the Sultanate of Brunei for the rotation of battalions would have broken down and been inoperable had we removed one of the two battalions.
Robert Halfon (Harlow) (Con)
2. What recent assessment he has made of the defence situation in the middle east; and if he will make a statement.
The Minister for the Armed Forces (Nick Harvey)
Demands for greater political, social and economic participation continue in the middle east and north Africa. The situation in Syria continues to deteriorate and we are supporting efforts to deliver a political solution to the conflict. The UK also remains concerned over Iran’s nuclear programme and continues to work with other countries to achieve a diplomatic solution to Iran’s nuclear ambitions. On that basis, we assess that the regional security situation will remain fragile.
Robert Halfon
As the security situation in the Sinai peninsula deteriorates, weapons bound for Gaza’s terrorists are being freely smuggled, and two cross-border terror attacks have left nine Israelis dead. What assessment have the Government made of the Egyptian authorities’ efforts to tackle the security threat emanating from this no man’s land?
Nick Harvey
The Government remain concerned about the security situation in Sinai and we regularly raise it with the Egyptian authorities. There continue to be credible reports of significant quantities of weapons—particularly rockets—being smuggled into Gaza. The UK recognises that Israel has legitimate security concerns and that the people of Gaza are suffering at the moment, which does not serve Israel’s long-term security interests.
Jeremy Corbyn (Islington North) (Lab)
The Minister will be aware that the last nuclear non-proliferation review conference agreed on a strategy of a nuclear weapons-free middle east and that, because Israel is not a signatory to the non-proliferation treaty, a special conference, hosted by the Finnish Government, will be held in Helsinki at the end of this year. Will he assure the House that the British Government remain fully behind the process, will be represented at that conference and will do their best to ensure that both Israel and Iran are also present, to bring about a nuclear weapons-free region?
Nick Harvey
We continue to support that initiative, and I assure the hon. Gentleman that we will be represented at that conference. We would like it to make progress, but we do not underestimate the inherent challenge.
Sir Menzies Campbell (North East Fife) (LD)
My hon. Friend has already indicated by his answers that there is an inextricable link between the military and political situations in the middle east. It is also the case that there is still consideration—the possibility—of a strike by Israel against Iran. Have my hon. Friend and the Government made any assessment of the political fallout of such a strike?
Nick Harvey
The Government remain committed to finding a diplomatic solution to the problem of Iran’s nuclear ambitions, and we continue to work with international allies and others around the world to try to bring it about. We stand ready to help the international community in the event of any general security deterioration in the region, but it is important above all else that we find an international solution to what is a very tricky problem.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Within the last 24 hours, the International Committee of the Red Cross has stated that the situation in Syria has now developed into a civil war. What are the implications for us of such a statement, and has the Secretary of State spoken with his US or any other NATO counterparts about what practical measures need to be taken to alleviate the pain and suffering of the Syrian people?
Nick Harvey
The Foreign Office is in constant dialogue with international communities and our allies about the grave situation in Syria. Nobody underestimates the difficulty that will be involved in trying to secure any international consensus in favour of action there. The recent events that we have seen are deeply shocking. The Government want to see an end to violence and an orderly transition to a more representative form of government, but the efforts being made so far are certainly hitting a lot of obstacles.
Elizabeth Truss (South West Norfolk) (Con)
3. What progress his Department has made on selecting the future base for the joint strike fighter.
The Minister for the Armed Forces (Nick Harvey)
Although an initial decision had been made by the previous Government on the basing for the joint strike fighter, it is being reviewed in the light of the strategic defence and security review, as part of the work on the footprint strategy for the defence estate. The military requirement for the joint strike fighter has gone forward to the Defence Infrastructure Organisation, which is leading the work to deliver a defence estate of a sustainable size and shape, and one that delivers the most cost-effective approach to Future Force 2020 basing.
Elizabeth Truss
Three weeks ago, the Secretary of State for Defence is reported to have said that RAF Marham would be the logical base for the joint strike fighter. Can the Minister tell me when a decision on basing will be made to help to secure the base’s long-term future, as well as boost confidence for local businesses in west Norfolk?
Nick Harvey
This Thursday, the Defence Secretary will take delivery of the first of our joint strike fighter aircraft. A decision will be made on where it will be based in good time for the introduction of the strike fighter into service. Detailed work is taking place at the moment to look at the basing requirements, and we will make a decision as soon as is practically possible.
Angus Robertson (Moray) (SNP)
The Minister will no doubt recall that the Ministry of Defence has already concluded that the optimal base for the next generation of fast jets is RAF Lossiemouth, but I am sure that he will also appreciate that, in relation to RAF Lossiemouth, the thoughts of everyone at the moment will be with the personnel and with the families of the crew members who died on board the two Tornadoes that were lost. Will he take this opportunity to update the House on the recovery operation, and on the medical condition of the fourth crewman, who was recovered?
Nick Harvey
The investigation into what went wrong is continuing, and I must be careful not to say anything that could prejudice it. Our thoughts are with the community and, in particular, with the relatives of those who perished. As soon as we can, we will make it clear to everyone what contributed to that disastrous incident.
On the future of Lossiemouth, the hon. Gentleman will be aware that since that announcement, it has been announced that Typhoon is moving into Lossiemouth. With the best will in the world, it would not be practical to have both fleets situated at one base.
Alison Seabeck (Plymouth, Moor View) (Lab)
The Minister talked about the bases for the joint strike fighter. The Government have already carried out two U-turns on the joint strike fighter programme and sold the Harrier fleet to the USA. Given that the USA is now in the throes of major budget problems and, if the story in The Sun today is to be believed, might well pull the plug on the whole programme, will the Minister reconfirm the confidence expressed by the Secretary of State a few weeks ago not only in the joint strike fighter programme but in the carrier programme? Will he also confirm that there will be no further budget increases as a result of what is happening in the USA?
Nick Harvey
I am sure that the hon. Lady does not believe everything she reads in The Sun, or indeed in any other newspaper. There are stories almost every week about the alleged state of that programme in the US. On Wednesday this week, the Secretary of State will be visiting the US Marine Corps to see the short take-off and vertical landing—STOVL—version of the joint strike fighter flying. It has already done 1,000 hours of flying time with the US Marine Corps, and we have every confidence that it will come into service as planned.
Patrick Mercer (Newark) (Con)
4. What plans he has for Army recruiting policy in the next five years; and if he will make a statement.
The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
Recruiting remains one of the Army’s highest priorities. Given that it is an organisation that promotes from within, there is an enduring need to ensure that the Army has the capacity to take on an appropriate number of new recruits. Our recruiting targets are already reflecting those required for a regular Army of 82,000, with current planned annual recruitment figures of approximately 600 officers and 7,400 soldiers.
Patrick Mercer
I am interested in the Minister’s reply, especially in the light of the Secretary of State’s statement on recruitment the week before last. The trouble is that recruiting takes a long time, and if we need troops to be instantly available—as we have done for the Olympic games—we surely need to rethink the cuts to major units, particularly the five infantry battalions.
Mr Robathan
I know that my hon. Friend was responsible for recruiting in his last job in the Army; he was director of Army recruiting, and I pay tribute to him for that. He will know that making these cuts to the Army is not something that we would have wished to do; they were forced upon us by the appalling financial position that was left behind—
Mr Robathan
Groundhog day it may be, but it is also true. I appreciate what my hon. Friend the Member for Newark (Patrick Mercer) says about recruiting taking a long time, and I know that my right hon. Friend the Secretary of State understands the difficulty of raising extra troops at short notice.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Some of the brightest and bravest soldiers have traditionally been recruited in Yorkshire, but the people of Yorkshire are pretty savvy, and they know that the critical mass of our armed forces is such that joining up has a declining attraction for young men and women in the present situation.
Mr Robathan
I pay tribute to the soldiers from Yorkshire. They join not only the Yorkshire regiments but the Coldstream Guards, with whom I served, and other corps throughout the British Army. Joining the Army remains an attractive option, and I would recommend it to anyone. It is sad that fewer people are joining at the moment.
Sir Bob Russell (Colchester) (LD)
I am sure that the Minister will be pleased that the Secretary of State gave an assurance to the Defence Select Committee last week that the decisions to cut the Army would be revisited in 2015. Alongside welcoming that, will the Minister give me an assurance that recruiting policy will look again at the Pay As You Dine arrangements?
Mr Robathan
I am not entirely sure that my right hon. Friend did give that assurance, but no doubt the hon. Gentleman can discuss that with him. The decisions were made by the Army itself—by generals looking carefully at future recruiting patterns—and I am sure that they will keep the matter under constant review as well.
I understand that Pay As You Dine was introduced at the request of members of the armed forces under the last Administration. Although not universally popular, it does mean that people pay less for food that they often did not eat under the old system.
Mrs Madeleine Moon (Bridgend) (Lab)
Wales has an excellent reputation for recruiting into the Army, and the loss of the 2nd Battalion The Royal Welsh has come as a huge blow there. What steps will the Minister take to ensure that Welsh men and women who wish to join Welsh regiments will continue to do so following the loss of the 2nd Battalion?
Mr Robathan
As I have said, I think that everyone regrets the loss of the 2nd Battalion The Royal Regiment of Wales, but Welsh men and women do join the armed forces. Welsh men join the Welsh Guards; they join all the corps, and so forth. I spent 15 years in the Army until I was kicked out, and I think that it still provides a very attractive career for any young man or woman.
Jason McCartney (Colne Valley) (Con)
5. What steps his Department has taken to promote defence exports at the Farnborough air show.
Dr Phillip Lee (Bracknell) (Con)
15. What steps his Department has taken to promote defence exports at the Farnborough air show.
The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)
The Farnborough international air show, which takes place in my constituency, was opened last Monday by my right hon. Friend the Prime Minister, who emphasised the high importance that the Government attach to supporting defence and security exports. My right hon. Friend the Secretary of State for Defence attended with his ministerial team, and we were extremely well supported throughout by the team from the UK Trade and Investment Defence and Security Organisation. RAF air and ground crews, accompanied by Italian air force personnel, were on hand to provide briefings on the outstanding role played by the Typhoon on operations over Libya last year. In addition, 150 air cadets were out in force helping the show organisers.
Jason McCartney
I visited the Farnborough air show last week and was able to see the best of the British aerospace industry, which employs 100,000 people, is worth £20 billion, and holds a 17% share of the global market. Will the Minister join me in recognising the importance of the role played by small and medium-sized enterprises in the supply chain, particularly those in my constituency which are driving growth and employing apprentices?
Mr Howarth
I am grateful to my hon. Friend for setting out so clearly the merits of the Farnborough air show. He is absolutely right: SMEs play a hugely important part. It is not just about the big boys. Without the SMEs, which are a repository of a huge amount of highly specialised technical knowledge, we would not have the industries that we do have. I am pleased to say that orders worth $72,000 million were signed as a result of last week’s show.
Dr Lee
I too had the privilege of attending the air show last week, in my capacity as vice-chairman of the Parliamentary Space Committee. The UK’s space industry has grown by 10% year on year for most of the last decade. Will the Minister tell me how the Ministry of Defence is supporting UK business in exporting in the defence sector?
Mr Howarth
I am pleased to say that the space industry is making a hugely important contribution in the United Kingdom. We have a number of very well-qualified companies. Two names that spring to mind are EADS Astrium and Surrey Satellite Technology, both of which are making huge contributions. I must tell my hon. Friend, however, that this is quite sensitive territory, and I cannot go into too much detail.
Mr Denis MacShane (Rotherham) (Lab)
We are still exporting arms to Bahrain, where the death toll mounts, the numbers in prison grow and the torture continues. I am curious to know whether the Minister has any moral qualms about that.
Mr Howarth
As the right hon. Gentleman knows perfectly well from his experience in the Foreign Office, we have one of the most stringent arms export control arrangements in the world, and we look very carefully at these matters. I should add that Bahrain has been an extremely important friend and ally to both the United Kingdom and the United States.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
Many Scottish firms get assistance from UK Trade and Investment and benefit from the fact that the British forces use Scottish equipment. Are Scottish firms likely to be helped or hindered by any breakaway of Scotland from the rest of the United Kingdom?
Mr Speaker
Order. Please will the Minister answer that question with reference purely, and very narrowly and briefly, to the Farnborough air show?
Mr Howarth
First, let me say that the Typhoon air display was given by a Scot—Scott Loughran. He gave an absolutely stunning display of the Typhoon. The UKTI Defence and Security Organisation represents the whole United Kingdom, and it does a great job for Scotland. If we were to bust up the UK, that would be bad news for Scotland, bad news for the UK and bad news for all businesses in this country.
Mr James Arbuthnot (North East Hampshire) (Con)
The fact that last week some 16 Ministers attended the Farnborough air show, all of whom showed a great degree of knowledge and interest, and the fact that the Prime Minister opened it with an outstanding speech, went down extremely well with the defence industry. Is my hon. Friend able to say whether exactly the same will happen in two years’ time?
Mr Howarth
I am grateful to my right hon. Friend, and constituency neighbour, for pointing out that—as the trade association, the ADS, also observed—the event had unprecedented support from Ministers, including the Prime Minister and the Foreign Secretary, and from the Opposition as well. The support given to the show has been extremely valuable. I myself had 15 meetings with overseas delegations, and I can tell my right hon. Friend that I fully expect the same to apply in 2014.
David Rutley (Macclesfield) (Con)
6. What his most recent estimate is of the proportion of defence equipment and support contracts let to small and medium-sized enterprises.
Priti Patel (Witham) (Con)
9. What his most recent estimate is of the proportion of defence equipment and support contracts let to small and medium-sized enterprises.
The Parliamentary Under-Secretary of State for Defence (Peter Luff)
During the financial year 2011-12, approximately 41% of new contracts were awarded to small and medium-sized enterprises. That represented approximately 13% of the value of all new contracts placed in the year. A significant proportion of our other business also reaches SMEs from the prime contractors through the supply chain.
David Rutley
I welcome the recent announcement that 41% of contracts were awarded to SMEs. They are vital not only to our security, but to the economy. What steps is my hon. Friend taking to fulfil their potential abroad as well as at home?
Peter Luff
I am glad to say that I find that SMEs are often particularly energetic in pursuing overseas opportunities. Indeed, many British small defence contractors begin their commercial lives exporting, rather than selling to the domestic market, which is a great tribute to the enterprise they show. UKTI DSO takes enormous steps to help SMEs. It participates in many trade delegations with my hon. Friend the Member for Aldershot (Mr Howarth), the Minister with responsibility for international security strategy. I pay tribute to DSO and to SMEs, which make a great contribution to our economy and to defence.
Priti Patel
There are 3,000 SMEs in the UK defence industry, and they are doing great things for our economy and vital work for our defence sector. What is the MOD doing to make Government business more accessible to these SMEs?
Peter Luff
My hon. Friend might apply for an Adjournment debate on that topic, because it would test your patience, Mr Speaker, if I were to list all the things we are doing to help SMEs, which include producing simplified standard contracts, making SMEs aware of tendering opportunities, and ensuring they are paid quickly. However, I attach the greatest importance to the establishment of the suppliers’ forum for SMEs, which I chair, and which enables us to pursue in detail both the concerns of SMEs and the issues we have in dealing with them. That is a very fruitful discussion, which is leading to a radical simplification of the way in which we do business with SMEs, and in due course it will create many more opportunities for them.
Mr Speaker
I always have patience for orderly answers, but not for speeches masquerading as answers. I know the Minister will readily accept that point.
Kevin Brennan (Cardiff West) (Lab)
On defence contracts, will the MOD’s current plans inevitably result in more contracts for companies such as G4S?
Peter Luff
That is not my responsibility. I was talking about defence equipment and support contracts, and as far as I am aware—I stand ready to be corrected—G4S has no role in such contracts.
Jim Shannon (Strangford) (DUP)
Many SMEs in Northern Ireland are involved merely on the periphery of large MOD contracts. What steps are the Government taking to ensure that there is a fair distribution of defence contracts and fair business opportunities for SMEs in Northern Ireland?
Peter Luff
It is one of the sadnesses of the structure of the UK defence industry that defence industries are relatively few and far between in Northern Ireland. Of course, Thales is the prime example of an excellent company doing first-rate work in Northern Ireland; I visited it earlier this year, seeing for myself just how good that company is, and it makes a huge contribution through the supply chain. The small and medium-sized businesses of Northern Ireland can also contribute to other contracts throughout the United Kingdom, and I am sure they are doing so in a realistic and strong way.
Kerry McCarthy (Bristol East) (Lab)
7. What plans he has for the future of Defence Equipment and Support; and if he will make a statement.
The Secretary of State for Defence (Mr Philip Hammond)
I expect to be able to make a written ministerial statement about this issue tomorrow that will give further detail. However, in headline terms, the analysis conducted by the Chief of Defence Matériel on the comparative benefits of changing Defence Equipment and Support into either an Executive non-departmental public body with a strategic partner from the private sector or a Government-owned contractor-operated entity suggests that the strategic case for the GoCo option is stronger. More value-for-money analysis is required to confirm that assessment, and the Ministry of Defence will focus effort over the summer on developing and testing the GoCo option further.
Kerry McCarthy
I thank the Secretary of State for that reply. Was it not the case that the Government were always in favour of privatising Defence Equipment and Support but found it difficult to find the evidence to show that that provided value for money for the taxpayer? Were the other options under active consideration and in development?
Mr Hammond
We have looked at all the options, including what we call “DE and S-plus”: keeping an on-vote solution with enhanced capabilities. At the moment, it is clear that the work being done is pointing in the direction of a Government-owned contractor-operated entity, but I will publish further details tomorrow, and further details still as they become available later in the summer and in the autumn.
Mr Julian Brazier (Canterbury) (Con)
While welcoming my right hon. Friend’s willingness to be bold in this area, may I suggest to him that one of the key factors to take into account in deciding just how bold to be—the GoCo is the boldest option—will be how many years Mr Gray is willing to stay in the job? I speak as one of his great admirers.
Mr Hammond
We are extremely grateful for the contribution that Bernard Gray is making as Chief of Defence Matériel. He is looking at bold and radical solutions that will allow us to deliver the equipment programme within the budget envelope we have set, and thus ensure that the whole of our programme for the armed forces is sustainable, in marked contrast to what the previous Government managed to deliver.
Huw Irranca-Davies (Ogmore) (Lab)
8. What steps his Department is taking to improve the employment opportunities of veterans.
The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
Prior to leaving, all service personnel are entitled to some form of resettlement assistance consisting of time, money and training, according to their length of service. Those who have served for six years or more, and all those medically discharged, regardless of how long they served for, are entitled to the full resettlement programme, which includes a three-day career transition workshop, the use of a career consultant, a job-finding service, and retraining time and a retraining grant. Those who have served for four years or more are entitled to employment support in the form of a bespoke job-finding service and career interview.
Huw Irranca-Davies
May I invite the Minister to borrow or even steal an excellent idea from the Labour Front-Bench team—the Labour veterans interview programme, where leading companies guarantee veterans interviews for appropriate vacancies—and include that as part of the official resettlement programme? Will he support the calls to roll that programme out through Jobcentre Plus, as it would be a great boon for our armed services?
Mr Robathan
Having previously extolled the merits of a career in the armed forces, may I recommend to all employers the merits of employing ex-service personnel, who, in general, bring with them a better work ethic and better values, and often better skills, than people from outside the armed forces? So I think that we would agree on that matter. We welcome the guaranteed interview scheme and would welcome all assistance.
Dr Andrew Murrison (South West Wiltshire) (Con)
Most veterans do extremely well in civilian life, not least because of the skills they have acquired while they have been in uniform. However, those who do less well, especially in employment terms, tend to be those who have spent relatively few years in the armed forces, and that is where resources are not focused. What can be done for that particular group of people?
Mr Robathan
My hon. Friend is right about that, and I know that he takes a particular interest in these things. Of course various factors are at work here, one of which is that some people leave after less than a week and do not stay in touch, in any way, with the armed forces. We are looking at improving the career resettlement advice. Indeed, we are ensuring that everybody now gets a resettlement interview and gets some financial and employment advice when they leave.
Nic Dakin (Scunthorpe) (Lab)
21. How many veterans have lost the opportunity of a job as a result of the G4S Olympics fiasco?
Dr Julian Lewis (New Forest East) (Con)
On that same theme, does the Minister agree that it would have been good if G4S had recruited more veterans to police the Olympics and ensure security? Will he confirm that what has happened will not result in a single serving soldier in Afghanistan having to stay on the front line for one day longer than would otherwise have been the case?
Mr Robathan
First, I can confirm that nobody will remain longer on operations in Afghanistan because of this debacle over the G4S contract. I will say to my hon. Friend, as he would expect me to, that I absolutely agree that former service personnel would do that job particularly well, but I have no responsibility for the recruitment practices of G4S. However, it appears that it was not recruiting that was the problem but the organisation of the Olympics in general in terms of security.
John Mann (Bassetlaw) (Lab)
10. What additional support he plans to provide for mental health conditions experienced by current and former soldiers.
The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
The Ministry of Defence is committed to offering a high standard of mental health care to those who need it. In his “Fighting Fit” report, my hon. Friend the Member for South West Wiltshire (Dr Murrison) made a wide range of recommendations for improvements to mental health care for both serving and former armed forces personnel. The MOD is working with the Department of Health to implement the recommendations, and I am pleased to report that excellent progress is being made.
John Mann
With the stigma of mental health increasingly being lifted in our society, not least in the armed services, will the Minister take it on himself to ensure that every mental health trust across the country is required, in partnership with his Department, to have an effective strategy for dealing with current and former members of the armed services?
Mr Robathan
The hon. Gentleman is quite right that the stigma is being lifted. Indeed, there is a programme in the Army called trauma risk management, or TRiM, which means that if somebody appears to have some mental problems, his comrades in arms will go to the chain of command and say that they think that so-and-so is having trouble and should be looked at carefully. We are already deploying extra mental health nurses across the Department of Health as a result of the “Fighting Fit” report. If the hon. Gentleman has not read it, I strongly recommend that he does because it is an extremely good piece of work.
Bob Stewart (Beckenham) (Con)
Does the Minister agree that it should be a key objective of any Government, whether led by those on the Government Benches or by the Opposition, to look after people who have been mentally or physically hurt in the service of our country for the rest of their lives?
Mr Robathan
I do agree and I think that those who have been injured mentally or physically in the service of our country and of us all deserve due consideration. That is certainly what we look to give them. In the spirit of co-operation, let me say that I thought the armed forces compensation scheme, which was put in place by the previous Government, was a very good scheme.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
Reports show that there is a higher incidence of mental ill health among reservists who have served in Iraq or Afghanistan than among those from the regular forces. Recent announcements make it clear that the Government intend to rely more heavily on reservists in the coming years. Will the Minister say whether the MOD intends to give greater importance to reservists’ mental health, and what measures he will put in place to analyse the reasons for the disparity and to improve their mental health?
Mr Robathan
The hon. Lady is correct, in that it is more difficult to keep tabs on reservists because they go out of the military environment back to their homes and jobs and so on. They also do not have the cocoon, dare I say it, of having their comrades around them. We are taking action, and I want to mention two things in particular. First, the medical assessment programme and the reserves’ mental health programme are currently based in St Thomas’s hospital. We are moving the medical assessment programme to Chilwell in the very near future—
Mr Robathan
No, we are certainly not downgrading it. Indeed, I went there only about a month ago to talk about it to those involved, and they think that it is the right way forward.
Secondly, Professor Simon Wessely at the King’s Centre for Military Health Research is carrying out an in-depth study into the mental health problems that people encounter, particularly focusing on reservists.
Mrs Helen Grant (Maidstone and The Weald) (Con)
What advice is available to armed forces families on the after-effects of operational deployment?
Mr Robathan
Not all people suffer after-effects. I believe that my hon. Friend’s son has served or is serving in Afghanistan: is that correct?
Mr Robathan
He is. Not all people who return from Afghanistan have mental health after-effects, but it is obviously a concern that some people do. Within units in particular, there are various options, including the programme I have mentioned, TRiM, and a programme called the Big White Wall. It is an online programme and people can put their feelings anonymously on a big white wall. There is a huge amount of support, but it is not always easy to access. We want to make it easier for families and others to access that mental health provision—
Mr Speaker
Order. We are extremely grateful to the Minister, but I think that the Minister and the hon. Lady should have a cup of tea together and discuss the matter further.
Graham Jones (Hyndburn) (Lab)
11. What steps his Department is taking to maintain skills levels in the defence manufacturing industry.
The Parliamentary Under-Secretary of State for Defence (Peter Luff)
The “National Security Through Technology” White Paper published in February emphasised the need for a strong skills base in the UK to ensure that the armed forces and national security agencies have access to the technology, equipment and support they need. That is why we are creating the right conditions for companies to invest in the UK, encouraging innovative small and medium-sized enterprises, investing in defence science and technology, and strongly supporting responsible defence and security exports. We are also working closely with the Department for Business, Innovation and Skills on a range of initiatives to maintain and develop engineering and scientific skills, including initiating a dialogue with the defence industries similar to that taking place through the successful aerospace growth partnership.
Graham Jones
There are reports today in the newspapers that the F-35B programme is to face substantial cuts in the US. Has the Minister had any indication from his counterparts in the US of a reduction in the number that will be procured, which may affect defence jobs in east Lancashire?
Peter Luff
I remember a good friend of mine, a general, who retired recently from the British armed services, who said he would know that he had retired when he started believing what he read in newspapers. I would strongly recommend to the hon. Gentleman not to believe what he reads in newspapers. The United States remains strongly committed to the programme. The F-35B is an outstanding aircraft, it is flying extensively, and my right hon. Friend the Secretary of State will receive our first two aircraft on Thursday. The hon. Gentleman should be a little sceptical.
Mr John Baron (Basildon and Billericay) (Con)
12. What account he took of recruitment capability in determining regimental disbandment.
The Secretary of State for Defence (Mr Philip Hammond)
In selecting infantry battalions for withdrawal, the Army has focused on the major long-term recruiting challenges that it faces in this area. It has looked carefully at historic recruiting performance over a decade, and at demographic projections for the age cohort from which infantry recruits are drawn in the recruiting catchment areas of different regiments. It has also considered regional and national affiliations, the merger and disbandment history of individual battalions, and existing commitments of battalions to future operations. The overriding objective has been to arrive at a solution that delivers a balanced and effective military force and is seen as fair and equitable by those currently serving in the Army.
Mr Baron
Although the MOD has not been able to supply the five and 10-year recruitment figures, despite a named-day written parliamentary question tabled the week before last, the three-year figures clearly show that better recruited English battalions, including the 2nd Battalion the Royal Regiment of Fusiliers, are being axed in order to save the more poorly recruited Scottish ones. Will the Secretary of State deny that petty politics in relation to the Scottish referendum has influenced decisions?
Mr Hammond
My hon. Friend is repeating an assertion that he made when I made the statement. I sat down afterwards with the Chief of the General Staff and went through his process again to reassure myself that I could say with confidence to my hon. Friend that the assertion he is making is simply not correct. Looked at over a decade, the recruitment figures for the Royal Regiment of Fusiliers speak for themselves. I am happy to have a meeting with him and go through the numbers, if he would like to do so.
Mr Kevan Jones (North Durham) (Lab)
Three former senior figures from all three services wrote in The Daily Telegraph this morning of “cynical” cuts to our armed forces and described the plans for Army 2020 as “unbelievable”. Does the Secretary of State not think that with a collapse in confidence at such a high level and morale among the ranks in free-fall, along with his risky strategy on the use of reservists, his decision on 2020 should be another candidate for a possible Government U-turn?
Mr Hammond
As usual, plenty of criticism and no constructive suggestions from the Opposition. In relation to the letter this morning, the key word is “former” senior officers. I take my advice from senior serving officers in the military. This is a plan designed by the Army to secure the future of the Army. They are confident that they can deliver it and I have confidence in their ability to do so.
Philip Davies (Shipley) (Con)
13. What assessment he has made of the effectiveness of the unification of the new regiments created in 2006-07 where battalions were created from previous historical regiments; and if he will make a statement.
The Secretary of State for Defence (Mr Philip Hammond)
The Royal Regiment of Scotland, the Duke of Lancaster’s Regiment, the Yorkshire Regiment, the Mercian Regiment, the Royal Welsh and the Rifles were all created in 2006-07. All these regiments have provided battalions for operations in Afghanistan which have been well prepared and which have delivered significant success, as well as all taking significant casualties.
Philip Davies
My right hon. Friend will understand the disappointment in Yorkshire at the disappearance of 2nd Battalion the Yorkshire Regiment—the Green Howards—but can he confirm whether his intention is to have a completely merged Yorkshire regiment in its entirety with the two remaining battalions, which I understand is what the majority of those serving would like to see, or to have the two remaining battalions based on their previous regimental backgrounds, which it seems the majority of retired personnel would like to see?
Mr Hammond
My hon. Friend draws an interesting distinction—not the only one that has been brought to my attention—between the desires of people serving in the Army now and those of former members of the armed forces, because they are not necessarily aligned. I can only repeat what I told the House on 5 July: having announced the changes, we expect regiments to come forward with proposals for restructuring within the boundaries we have announced. We will support decisions made within the regimental families to do that, whichever way they propose going.
Mr David Evennett (Bexleyheath and Crayford) (Con)
14. What plans he has to improve the helicopter capability of the armed forces.
The Parliamentary Under-Secretary of State for Defence (Peter Luff)
The Ministry of Defence is making significant investment in helicopter capability, including: buying an additional 14 Chinook helicopters and modernising the existing fleet; completing the life extension programme for Puma; upgrading the Merlin helicopters and our attack helicopter capability; and replacing the current Lynx fleet with new Wildcat helicopters, the first of which was formally handed over to the MOD at the Farnborough international air show last week. My right hon. Friend the Secretary of State also announced a £250 million support contract to sustain these in service. That is a substantial programme of investment that will ensure a strong and credible helicopter capability.
Mr Evennett
I welcome my hon. Friend’s reply. Will he update the House on plans to marinise the Merlin and upgrade Apache?
Peter Luff
The Department is currently exploring options for upgrading the mark 3 and 3A helicopters as part of an assessment phase for the Merlin life sustainment programme. It will look at obsolescence issues and the ship optimisation upgrades needed for routine operation at sea. All options are still being considered, so I cannot tell my hon. Friend what he wants to know until the conclusions are available. The decision on exactly how many Apache helicopters will be upgraded will be taken at a later date, but we plan to sustain their capability until their out-of-service date, which is 2040.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
The Minister will know of my sincere wish to see air-sea rescue remain within the Department. What contingency plans, if any, does he have on helicopters as far as air-sea rescue is concerned?
Peter Luff
I have every confidence that my hon. Friends in the Department for Transport will secure that facility very successfully during the competition they are running.
Andrew Selous (South West Bedfordshire) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Defence (Mr Philip Hammond)
My departmental responsibilities are to ensure: that our country is properly defended now and in the future through delivery of the military tasks for which the MOD is mandated; that our service personnel have the right equipment and training to allow them to succeed in the military tasks; and that we honour our armed forces covenant. My first priority is the success of the operation in Afghanistan, followed by the provision of support to the Olympics security plan. The Ministry of Defence has also embarked on a major project of transformation to ensure the behavioural change needed to maintain the budget in balance and deliver the equipment programme.
Andrew Selous
As a former Territorial soldier, I have every confidence that our reserve forces will rise to the challenge set by the Secretary of State, as they always have done, but when does he expect the order of battle for the Territorial Army to be announced?
Mr Hammond
As I said, we will publish a consultation paper in the autumn. The consultation period will take us through into the new year and we expect to be able to publish full details of our plans for the Army reserve in the spring, including the order of battle.
Mr Jim Murphy (East Renfrewshire) (Lab)
How many contracts does the Ministry of Defence have with G4S? Will the Secretary of State commit to reviewing them in the light of recent events, and will there be a moratorium on the MOD signing any future contracts with that company until the findings of those reviews have been reported in full to Parliament?
Mr Hammond
I cannot given the right hon. Gentleman a simple answer on contracts we have in place with G4S—
Mr Hammond
I am quite happy to look into the matter and write to him. Depending on the type of contract being let, the MOD is bound by the regulations binding all Departments—European procurement directive regulations—unless it is a contract for war-like supplies, and must conduct its procurement in accordance with them.
Julian Smith (Skipton and Ripon) (Con)
T2. Can the Minister update the House on the range of protected vehicles available to our troops in Afghanistan?
The Parliamentary Under-Secretary of State for Defence (Peter Luff)
Yes I can, and I have heard very moving testimony from those who have returned from Afghanistan, and from the families of those in Afghanistan, about the effectiveness of such vehicles. We have a range of options that balance firepower, mobility and protection, including Huskey, Mastiff, Warthog, Warrior, CVR(T)—combat reconnaissance vehicle (tracked)—Coyote and Jackal; and the latest protected mobility vehicle, Foxhound, which is being deployed to Afghanistan now, will reinforce our commitment to provide force protection and proper protection against the improvised explosive device threat, while providing maximum utility. It is a good package.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T4. The armed forces careers advice centre in Hanley in my constituency is the second busiest in the country, but, under the Defence Secretary’s ill-thought- out plans, its recruits will not be able to join their local battalion, the Staffords. On recruitment, his numbers are not wrong, but, rather than acting like a desiccated calculating machine, will he support the campaign to keep the Staffords’ name in the Mercian Regiment by merging it with 1st Battalion the Cheshires?
Mr Philip Hammond
On the first point, I take advice from the Army, and that is the correct way for the Defence Secretary to behave in these matters. On the preservation of the name of the Staffords, I am well aware of the concerns expressed by Staffordshire Members of Parliament, and as I said in relation to the Yorkshire Regiment, this is a matter for the regiment. If the regiment comes forward with a proposal to merge the antecedent name into the antecedent names of the 1st Battalion the Cheshires, we will be quite happy to support that arrangement.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
T3. Does the Defence Secretary agree that the Royal Regiment of Fusiliers has done everything that was asked of it in conflict, in peacekeeping, in recruitment and in coping with reorganisation? Why, then, has it been reduced to a single battalion, when its recruitment record is so much better than battalions unaffected by the infantry cuts?
Mr Hammond
I am afraid that the right hon. Gentleman repeats the comments that my hon. Friend the Member for Basildon and Billericay (Mr Baron) made earlier, and that is simply not the case. Looked at over a 10-year horizon, the recruiting figures speak for themselves, and the Army has conducted a rigorous process that resulted in the withdrawal of the 2nd Battalion the Royal Regiment of Fusiliers. I can say no more than that to the right hon. Gentleman.
Dan Jarvis (Barnsley Central) (Lab)
T5. Significant cuts to the armed forces carry real risk; increased reliance on the reservists carries real risk; and greater emphasis on the private sector for logistical support, again, carries real risk. Will the Secretary of State therefore respond to my concern that the potential cost-saving benefits of the cuts to capability that the Government have announced do not outweigh the risks that they pose to our ability to leverage force in an uncertain and changing world?
Mr Hammond
As usual, there is no alternative constructive suggestion. We have a £38 billion black hole in the defence budget, and we have to resolve that problem to make our armed forces sustainable in future and to ensure that we can properly equip them when we ask them to put themselves in danger. What we have done is to set out a coherent plan that will deliver smaller but better equipped armed forces that are sustainable in the medium and long term, and I suggest to the hon. Gentleman that that is the best way forward for them.
Bob Blackman (Harrow East) (Con)
T7. I warmly welcome the involvement of the armed forces in ensuring that the Olympic games are safe and secure. Will my right hon. Friend explain the role that they will play during the Olympics and, in particular, the various consultations and engagements that have taken place with the community over the use of ground-based air defence systems?
Mr Hammond
Yes. The armed forces will support the police in the security operations for the Olympics. We will provide the air policing regime, including the ground-based air defence missiles, to enforce the prohibited and restricted zones around London. There will also be Royal Marine activity on the River Thames in support of the police, and of course 11,000 people will be deployed in support of the venue security operation. There has been extensive consultation with local authorities, landlords and Members of Parliament on the proposed location of the ground-based air defences.
Graham Jones (Hyndburn) (Lab)
T6. Will the Secretary of State update the House on the MOD’s current position in Libya?
Mr Hammond
I am very happy to double-check and write to the hon. Gentleman, but I believe that the position is that we have two MOD personnel on secondment in Libya. [Interruption.] The Minister for the Armed Forces is confirming that.
Mr David Evennett (Bexleyheath and Crayford) (Con)
T8. Will the Secretary of State join me in paying tribute to our armed forces, who do such a tremendous job? Does he believe that their professionalism will be an asset at the Olympic games?
Mr Hammond
My hon. Friend is absolutely right. Contrary to a lot of the noises off that we have been hearing, most people visiting the Olympic games and most people living in London will be hugely reassured by the presence of our armed forces. They bring resilience and reliability to the security arrangements. When a soldier is scheduled to be at place A at time B, you can bet your bottom dollar that he will be there.
Mr Bob Ainsworth (Coventry North East) (Lab)
What will be the effect of the ludicrously last-minute commitment for our armed forces on post-operative leave entitlement for those returning from Afghanistan?
Mr Hammond
I have answered that question in the House before. People who came back from Afghanistan in April will have had their post-operational leave scheduled. It is possible that some people who have post-operational leave scheduled for the period of July and August will be asked to reschedule it. However, I can confirm to the right hon. Gentleman that everyone will receive their full entitlement of post-operational leave, or any other kind of leave, and that people who have to change their personal arrangements and incur any financial loss as a consequence will be fully reimbursed for that loss.
Amber Rudd (Hastings and Rye) (Con)
Will the Secretary of State confirm that the Scout specialist vehicle will go ahead, giving much needed certainty both to the armed forces and the supplier, General Dynamics, a valued employer in my constituency?
Peter Luff
I can confirm that. The Scout specialist vehicle programme is currently in the demonstration phase. The first vehicle platform test rig was rolled out on 6 June this year and pre-production vehicle prototypes are due to begin delivery from 2013. The successful completion of the demonstration phase will lead to a main investment decision at main gate, currently planned for 2016. That is good news for my hon. Friend’s constituents, and I thank them, through her, for what they are doing to create that important capability for the Army.
Jim McGovern (Dundee West) (Lab)
Constable Colin MacColl of Tayside police came to my surgery last Friday in his capacity as a constituent and someone who works in my constituency. He outlined how distressed and distraught his family are at the fact that his nephew, Leading Seaman Timmy MacColl, was last seen on 27 May in Dubai on shore leave from HMS Westminster. Can the Minister outline what has been done to try to locate Leading Seaman MacColl and what will be done in future to alleviate my constituent’s concerns?
The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
I am grateful to the hon. Gentleman for that question, and I should say that the right hon. Member for Stirling (Mrs McGuire) has been in touch on behalf of the family as well.
This is a sad case. Leading Seaman MacColl has disappeared. The Royal Navy police made all efforts to find him in Dubai, but unfortunately the ship then sailed, as ships do. We have no particular police presence in the country. We are liaising with the Dubai police, who are leading on the case. The Foreign Office is absolutely on the side of the Dubai police.
Mr Edward Leigh (Gainsborough) (Con)
Would any further cuts in the armed forces be unsustainable?
Mr Philip Hammond
We have announced all the reductions in armed forces manpower required to deliver the outcome of the strategic defence and security review. The changes announced will allow us to deliver the Future Force 2020 structure in 2020.
Mr Jim Cunningham (Coventry South) (Lab)
Will the Secretary of State look again at the cuts to the Royal Regiment of Fusiliers, particularly the impact on Coventry and Warwickshire and the local impact? Can we have an answer without the right hon. Gentleman blaming everybody else? He is responsible for the double-dip situation that we have got.
Mr Hammond
I am responsible. I take advice from the Army, which is the only responsible way to decide on a restructuring package for the Army. As I said, I have reassured myself since I made the announcement that all of its elements are sound and based on proper evidence provided by the Army.
Michael Ellis (Northampton North) (Con)
There is an excellent proposal for 10,000 tickets for the Olympic games to be given to Her Majesty’s armed forces personnel. What procedures are being undertaken for the proper allocation of those 10,000 tickets? Can my right hon. Friend say something about whether, if other tickets remain unsold, it might be possible to give those tickets to armed forces personnel?
Mr Hammond
We are extremely grateful to the London Organising Committee of the Olympic Games for the help that it has provided in making tickets available through Tickets for Troops and directly to the armed forces. We now have a substantial number of tickets available and we hope there may be still more to come. The detailed arrangements for distributing those tickets will be determined by the commander-in-chief, land forces.
Mr William Bain (Glasgow North East) (Lab)
I am sure that the thoughts of all right hon. and hon. Members will be with the families of those who lost their lives in Afghanistan in recent days. What assessment has the Secretary of State made of recent reports that the Taliban believe that the insurgency can no longer be won? Is not this the perfect opportunity to convene all-party talks to bring about a secure peace in Afghanistan?
Mr Hammond
Indeed. The Government’s policy is to maintain the pressure through the military campaign, while encouraging both sides to come together and explore their tentative early contacts, and also to encourage Pakistan to play a constructive role in this process, because, in many ways, Pakistan holds the key.
Richard Drax (South Dorset) (Con)
A senior military source has told me that many soldiers have been taken off promotional courses as a consequence of the G4S shambles. Will the Secretary of State assure me that they will get back on to those courses and will be fully compensated if their course is delayed by, say, a year?
Mr Hammond
I am not aware of any such cases, but I am happy to talk to my hon. Friend outside the Chamber and to write to him.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Further to the previous unclear answer, is the Secretary of State categorically ruling out revisiting the “cat and trap” system for the aircraft carriers?
Mr Hammond
I do not think that there was a previous unclear answer. We have made a decision to revert to the STOVL––short take-off and vertical landing—solution. We are highly confident of the delivery of the F-35B STOVL variant, which the US Marine Corps depends on. We have had the highest level discussions with the US Administration, who strongly support the programme. I am looking forward to seeing US Marine Corps aircraft flying at Pax River on Wednesday.
Mr Speaker
Before I call the shadow Home Secretary to ask the urgent question that I have allowed, I must tell the House that I intend to bring proceedings on it to an end after half an hour. In view of the proceedings on Thursday, I ask Members not merely to repeat questions already posed and answered then, but to explore new territory that has since arisen.
Policing (Winsor Reforms)
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am pleased to have chosen this evening to present this petition from residents of my constituency and the neighbouring areas, prompted by a meeting that I held with local police officers.
The petition states:
The Petition of residents of Stalybridge and Hyde and the Greater Manchester area,
Declares that the proposals made in the second part of the Winsor Review will have a devastating effect on the morale of frontline officers, and risk a detrimental effect on the quality of service the Police provide to the public.
The Petitioners therefore request that the House of Commons urges the Home Secretary to reject the recommendations contained within the Winsor Review.
And the Petitioners remain, etc.
[P001103]
Rushden Ambulance Station (Northamptonshire)
Mr Peter Bone (Wellingborough) (Con)
I have a petition with 3,673 names on it, organised by a very nice lady in my constituency called Mrs Dorothy Maxwell. The problem that we have in Rushden is that the East Midlands Ambulance Service is rather poor and is getting worse. The way that the ambulance service has decided to solve that problem is to close the ambulance station. That, as might be expected, has not been universally welcomed.
The petition reads:
The Humble Petition of residents of Rushden, Higham Ferrers, East Northamptonshire, and surrounding areas
Sheweth,
That the proposed closure of Rushden Ambulance station will detrimentally affect the 97,500 people that live in the local area, reducing response time and providing an inferior service.
Wherefore your Petitioners pray that your Honourable House requests the Secretary of State for Health to urge the Northamptonshire County Council, the District Council of East Northamptonshire and East Midlands Ambulance Service to work together to find a solution that will allow the Rushden Ambulance station to remain open.
And your Petitioners, as in duty bound, will ever pray, etc.
[P001110]
Independent Pharmacy Provision (Brierley Hill, Dudley)
Chris Kelly (Dudley South) (Con)
It is my pleasure to present this petition when the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), is on the Front Bench. I was recently contacted by Vijaykumar Lad of Kingswinford, the proprietor of Ian McArdle’s, the independent pharmacy in Brierley Hill, which has been trading for more than 40 years. Mr Lad is concerned about the number of applications for 100-hour pharmacies in Brierley Hill, which he and his customers feel will threaten the survival of existing pharmacy provision there.
Upon visiting McArdle’s pharmacy to meet Mr Lad and several of his customers, I was presented with a petition signed by more than 1,000 residents who wished to see McArdle’s of Brierley Hill saved. I therefore present this petition to the House.
The petition states:
The Petition of users of McArdles Pharmacy, Brierley Hill and others,
Declares that the Petitioners are concerned about proposals to allow three further pharmacies to open in Brierley Hill town centre that will each trade for more than 100 hours per week, as the Petitioners believe that adequate pharmaceutical services are already provided by the network of three well established pharmacies and that these unnecessary and undesirable new pharmacies will jeopardise the existing businesses that have provided personal care to customers for more than 40 years. The Petitioners therefore request that the House of Commons urges the Government to ask Dudley Primary Care Trust to reject any application for the opening of further pharmacies in Brierley Hill town centre.
And the Petitioners remain, etc.
[P001111]
Olympics (Security)
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
(Urgent Question): To ask the Home Secretary to make a statement on Olympic security.
The Secretary of State for the Home Department (Mrs Theresa May)
Since I updated the House on Olympic security last week, there have been several allegations in the media, and I want to deal with each of them.
First, it was reported that Ministers knew there would be a shortfall in security staff last year. This is untrue. Last September, Her Majesty’s inspectorate of constabulary reported, at my request, on the security preparations by the London Organising Committee of the Olympic Games, and it recommended several measures. HMIC reported again in February and concluded that LOCOG had plans in place to deliver the required number of security personnel. Neither HMIC report identified specific problems with G4S scheduling.
Secondly, it was reported that the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), who is the Minister for crime and security, had attended meetings in which he was told there was a security staff shortage. In fact, G4S repeatedly assured us that it would overshoot its targets. As I told the House on Thursday, G4S told the Government that it would be unable to meet its contractual obligations only last Wednesday, and we took immediate action.
Thirdly, it was reported that we must have known about the shortfall because the military was put on standby in April. This is also not the case. In fact, 7,500 troops have been part of the security plans since December, a further 1,000 were on standby in the event of flooding or other such civil emergencies, and we placed a further 2,000 on standby as a precaution in case the threat level increased. The 3,500 troops whose deployment I announced last Thursday are a direct response to the failure of G4S to meet its contractual obligations. A further contingency will remain.
The Government have strengthened the oversight of the security planning operation since we came into office. I will go through briefly what has happened since the bid for the games in 2005. From the beginning, the organisers planned to use private sector personnel for venue security. LOCOG confirmed that it would be using private sector security personnel well before the 2008 Beijing Olympics. It started the procurement process for security personnel in April 2010.
When we entered government in May 2010, we instigated a comprehensive review of Olympics safety and security planning, overseen by the then Security Minister, Baroness Neville-Jones. That audit and review identified a shortfall in LOCOG’s venue security budget, which we addressed in the comprehensive spending review.
We recognised that, with a project of this size and scale, even that additional funding might not ensure the level of security that we needed, so I asked for outside assurance of LOCOG’s venue security planning. In September 2011, I commissioned HMIC to carry out an inspection of LOCOG’s venue security plans. As I have said, that led to several recommendations that were acted on by the Home Office, the police and LOCOG.
LOCOG and the Home Office monitored delivery throughout the following months. G4S assured LOCOG and the Government continually that it would be able to deliver its contractual obligations. However, on Wednesday 11 July, following the difficulties with scheduling that the company has acknowledged, G4S notified LOCOG and the Government that it would not be able to provide the numbers of security personnel specified in its contract. I want to be clear that that was the first time that G4S admitted to any Minister that it would not be able to deliver the numbers of security personnel that it had promised.
We acted immediately to make further contingency arrangements by agreeing the deployment of 3,500 further troops. That brings the total military contribution to the games to 17,000, including personnel from all three services.
G4S has failed to deliver its contractual obligations, but we have the finest military personnel in the world—troops who are willing, ready and able to step in when their country calls—and we can be sure of their professionalism in helping to deliver a secure and safe Olympic games.
Yvette Cooper
Everyone wants the games to be an outstanding success. After the G4S shambles, we need things to be back on track and the Home Secretary needs to show that she is sorting it out.
First, will the Home Secretary tell us precisely how many people she now expects G4S to provide? It was contracted to provide 17,000, it now says that it will be 13,000, but it has admitted that the vast majority of those are still in process. Today, we learned that only a third of the expected G4S staff turned up to lock down a venue in Manchester and that the police had to do it instead. The monitoring has failed once spectacularly and the Home Secretary has failed to assess the numbers once before. Will she now tell us how many staff she believes G4S will provide?
Secondly, the Home Secretary told us on Thursday that 3,500 extra troops would be sufficient to fill the gap. If G4S fails to deliver the full 13,000 people it now promises, will those troops be enough? If more troops and police will be needed, she should say so now and not let this drift. The troops and the police will do an excellent job, but they need to be able to prepare.
Thirdly, the London Mayor said this morning:
“Everybody that was organising the Olympics knew this was coming up…ages ago.”
The deputy mayor said:
“This issue was flagged up repeatedly by both the Metropolitan Police Authority and subsequently the Mayor’s Office…for more than a year to G4S directly, the Olympic Security Board, and the Home Office.”
Even G4S says that it has been discussing the detailed shortfall for “eight or nine days”. And yet, last Monday, the Home Secretary told the House that she was
“confident that our partners will deliver”.—[Official Report, 9 July 2012; Vol. 548, c. 9.]
It is incomprehensible that the monitoring was that poor that no one told her until Wednesday. How on earth could the Minister responsible for delivering Olympics security be the only person who did not know? When was she first told that there was a problem with G4S?
We need to know why the Home Secretary has failed on this, because we need to have the confidence that she understands what went wrong and is competent to sort the problem out now, so that everyone can get on and make the Olympics a great success.
Mrs May
I will respond to the various points that the shadow Home Secretary has raised. She asked what the numbers look like. The revised solution of more than 23,000 personnel that was decided on at the end of last year was made up of 10,400 G4S guards, 7,500 military at peak, up to 3,000 Bridging the Gap, up to 3,000 volunteers and up to 2,000 incumbents that—
Mrs May
The very first figures that I gave were 10,400 G4S guards, 7,500 military, 3,000 Bridging the Gap, up to 3,000 volunteers and up to 2,000 incumbent security suppliers at existing venues. [Interruption.] The hon. Member for North Durham (Mr Jones) asks, “Bridging what gap?” Bridging the Gap is the name of a programme under which students and others can get employment.
The shadow Home Secretary says that we need to get a grip, but that is precisely what we have been doing. When we came to office, we made an immediate security audit, increased the budget and revised the plans. I have commissioned several reports on Olympic preparedness, each of which has led to a refinement of the plans. When G4S told us last Wednesday that it would be unable to deliver its contractual obligations, we decided to deploy extra military personnel to fill the gap.
The right hon. Lady asked why the situation was not known about earlier. I have explained that we commissioned reports on G4S’s preparedness, which contained recommendations on which LOCOG, the Home Office and the police acted, but those reports all made it clear that subject to acting on those recommendations, LOCOG was on track to deliver the necessary security personnel. Last Wednesday, G4S told us that it would be unable to deliver its obligations.
The shadow Home Secretary asked about timing. On Friday 6 July the managing director of G4S Global Events told Reuters:
“We are delivering a London Olympics now. If there was a similar event going on in Australia, I would be bullish that we could deliver that at the same time.”
I suggest that the right hon. Lady listens to the comments of some of her colleagues. Lord West has said:
“I don’t think it will affect the security of the games. That’s been taken care of. The Government have sorted that out, because the military are in there.”
The shadow Olympics spokesman has said:
“The important thing now is to focus on the solutions.”
I suggest that the shadow Home Secretary listens to her colleagues.
Nigel Adams (Selby and Ainsty) (Con)
Can the Home Secretary confirm that any costs associated with the additional measures will be met by G4S, not the taxpayer?
Keith Vaz (Leicester East) (Lab)
I thank the Home Secretary for agreeing to appear before the Home Affairs Committee as soon as the Olympic and Paralympic games are over.
May I take the Home Secretary back to the HMIC report? Is she telling the House that G4S was made aware of the contents of the report prepared by Sir Denis O’Connor? There were four copies of that report, and one went to Charles Farr, who chaired the Olympic security board. If G4S was aware that there were shortcomings, it ought really to have put them right before last Wednesday.
Mrs May
The HMIC report was on LOCOG’s security planning capabilities. It was a not a review of G4S. It outlined a number of steps that LOCOG needed to take to plan and manage the delivery of the venue security responsibilities. That predated the decision to increase the number of venue security personnel. A further report was commissioned from HMIC in February, and it said that it was reassured that LOCOG had plans in place to resolve any issue expeditiously. Issues were raised in those reports, but all those who were required to act on them did so.
Mr John Leech (Manchester, Withington) (LD)
Will the Home Secretary investigate claims that existing G4S staff in other parts of the country have been given the opportunity to fill Olympic security posts only if they take annual leave, despite the massive shortage?
Mrs May
My hon. Friend raises an issue that has not previously been raised with me. I will look into it, but it is of course for G4S to decide how it will provide the numbers. It has had significant difficulties in scheduling both existing staff and the new staff that it is bringing in, but I have noted his point.
Mr Jack Straw (Blackburn) (Lab)
Given the scale of the shortfall between what G4S contracted to provide and what it is now providing, which must have been obvious upon inquiry, is the Home Secretary saying that G4S was guilty of wilful deception of HMIC, or was there some failure in the monitoring of what G4S was doing?
Mrs May
I suggest that the right hon. Gentleman looks at some of the comments that G4S has made about its situation. It may be of interest to the House to know that the accreditation process has accredited more than 20,000 G4S personnel. The problem for G4S has been allocating personnel to particular venue security tasks through its scheduling programme. It was when it examined that situation and saw the difficulties it was having that it came to the Government last Wednesday and said that it could not meet its full contractual obligation.
Andrew Bingham (High Peak) (Con)
Will my right hon. Friend confirm that no members of the armed forces involved in the deployment will lose their annual entitlement to leave or be left out of pocket?
Mr Bob Ainsworth (Coventry North East) (Lab)
We have the finest armed forces in the world, and they will step into the breach most admirably. The lateness of the decision, however, will add considerably to their discomfort and the burden that is placed on them. Given the size of the gap, there must have been a failure of monitoring or deliberate deceit—one or the other—for such a gap to exist so late in the process.
Mrs May
The right hon. Gentleman fails to appreciate the fact that it was at a stage fairly close to the beginning of the Olympic games that G4S began to schedule staff to particular venue security duties. It was when it began doing so that it discovered that it had a problem with the numbers. That is what G4S has absolutely made clear. I repeat to the right hon. Gentleman what I have just said: in fact, we have accredited over 20,000 G4S personnel. The issue was getting staff to the venue security task, and it was right that G4S came to us at the point that it did and said that it was not going to be able to fulfil the personnel numbers, which is why we have asked for the contingency from the military.
Mr James Clappison (Hertsmere) (Con)
So that we can see the full picture, will my right hon. Friend tell us exactly when in the preparations for the games that it was decided that the contract for security would be between LOCOG and G4S, and what was the ministerial input at the time into that decision?
Ian Lavery (Wansbeck) (Lab)
The Secretary of State has said on more than one occasion that G4S deliberately deceived the Government. If that is the case in a £300 million contract, will it be allowed to tender for any further private contracts with the Government in future?
Mrs May
Well, there is a very great difference, and I am sure that the hon. Gentleman understands that difference. When G4S recognised that it was having difficulty scheduling and getting sufficient staff numbers to the posts for which they were required it came to the Government and said that it could not deliver the numbers that it thought it could.
Mr Ben Wallace (Wyre and Preston North) (Con)
As we speak and as the House meets, athletes from all over the world are arriving at Heathrow to take part in one of the world’s greatest athletic gatherings. Does my right hon. Friend agree that one of the things that undermines national security is petty point scoring and hysterical opposition, talking the games down?
Mrs May
I absolutely agree with my hon. Friend. The Government are on course to deliver a safe and secure games that everyone will enjoy. We have had good cross-party support until now for the delivery of the Olympic games, and it is a pity that that has not continued under the shadow Home Secretary.
Mr George Howarth (Knowsley) (Lab)
In view of the discrepancy between the account that the Home Secretary has given the House this afternoon and reports from HMIC, the Mayor of London’s office and G4S, will she publish all the relevant contacts that she had with all those bodies so that we can judge for ourselves?
Mrs May
The right hon. Gentleman has made an assumption about differences in statements that have been made. I have explained: if he looks at what G4S has been saying, it made it clear that it realised only recently that it was not going to be able to deliver. It rightly, as a company, put its hand up and said, “We did have problems; it was our mistake.” As I said in response to my hon. Friend the Member for Selby and Ainsty (Nigel Adams), it is willing to provide funding to cover the extra costs that will be incurred. The right hon. Gentleman referred to other comments that have been made. I dealt with some of those in my statement.
Mr Don Foster (Bath) (LD)
Notwithstanding the abysmal failure of G4S to date, is it the intention once the games have begun that G4S will continue to recruit, train and schedule its security staff to Olympic venues, enabling some of our troops to go home early?
Mrs May
It is certainly the case that G4S will continue to provide staff at Olympic venues. Crucially, of course, it will also provide staff for the Paralympics. It will still make a significant contribution to venue security at the Olympic and Paralympic games. There will be more military personnel, and as the hon. Gentleman knows, they have already been informed that they will undertake these duties.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
Can the Home Secretary tell us anything about the incident on Tyneside last Saturday, when 58 employees of G4S were supposed to turn up for work, but 10 actually turned up and the shortfall was made up by the Northumbria police? Will she confirm that Northumbria police will be fully compensated for its costs, and if she cannot tell us anything now, will she investigate the incident further and report back to us?
Mrs May
The example that the right hon. Gentleman has quoted—another example is going across the broadcasts today about the Manchester area—is an exact example of the problem that G4S encountered. In encountering that problem, it identified the fact that it would not be able to provide the security personnel. As to the costs to the police, G4S has stated that it will ensure that it covers the costs for the police and the military, but if the right hon. Gentleman would like me to write to him with more detail, I would be happy to do so.
Mrs Eleanor Laing (Epping Forest) (Con)
Will the Home Secretary reassure the House and people who live in areas such as my Epping Forest constituency, which is close to the Olympic park, hosts an Olympic venue and, indeed, a Ministry of Defence security site, that the normal levels of policing and security that are necessary at this time will not be adversely affected by the current situation?
Mrs May
Of course all parties involved have been working to ensure that the security that is provided is the security that is needed for the Olympic games. That is what is being put in place, and that is why we took the contingency arrangements we did in immediately calling in those 3,500 troops to ensure that we could maintain the levels of security we require.
Mr Dennis Skinner (Bolsover) (Lab)
It is inconceivable that the Cabinet Committee that was overlooking this matter did not spot this—or was it that it believed its own mantra: “public sector bad; private sector good”? Who is on this Committee?
Stephen Hammond (Wimbledon) (Con)
Will my right hon. Friend confirm that the failings of G4S will not cost any extra to the public purse in the running of the games?
Mrs May
Obviously, there is a contract between the London Organising Committee of the Olympic Games and Paralympic Games and G4S. There are penalties in it, and it is for LOCOG to deal with, but G4S is on record as saying that it will cover the extra costs of the military and the police.
Mr David Winnick (Walsall North) (Lab)
Could it be the unanimous wish of this House that the British participants in the games do far, far better than the shambles we are now discussing?
Mrs May
I am sure it is the unanimous wish of this House that British participants in the games are going to do extremely well, that we will have a good medal haul and that Members like myself will have constituents who are medal hopefuls—and I wish them every good luck in their competitive events.
David Tredinnick (Bosworth) (Con)
My right hon. Friend has outlined the checks and inspections that she rightly had in place, but does she not suspect that G4S is, perhaps at the very least, hiding the scale of the problem and has been doing so for some time?
Mrs May
No, I would say that G4S came forward and made a statement to the Government that it would not be able to provide the numbers required. It would have been easy for G4S to carry on saying, “We will provide the required numbers”—but it did not; it recognised that it could not and at that point it came to the Government and we took the necessary action.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
On 14 December, the chief civil servant in the Home Office gave evidence to the Public Accounts Committee, assuring us that everything was fine with the G4S contract. We now hear from G4S that 9,000 people are still being processed. Does the Home Secretary share her senior civil servant’s confidence now?
Mrs May
I explained this on a number of occasions last Thursday and this afternoon. There was a rolling programme for G4S for recruiting individuals and taking them through the training and accreditation process. G4S repeatedly assured us that it was going to overshoot rather than undershoot its target. It came forward and said it could not meet its contractual obligations only last Wednesday.
Ian Swales (Redcar) (LD)
The contract is between LOCOG and G4S. What does this situation tell us about LOCOG and its effectiveness in monitoring what is happening?
Mrs May
The contract is obviously between LOCOG and G4S, but LOCOG has been party to discussions over time as we have been revising the numbers required, as all hon. Members know. The HMIC report that I commissioned last year was into LOCOG’s arrangements. LOCOG responded to that and made changes as necessary.
Jack Dromey (Birmingham, Erdington) (Lab)
Hundreds of West Midlands police officers have been asked to stand in for G4S because its security guards have simply not turned up. The public have confidence in our police service but no confidence in G4S, yet the Home Secretary has spent £4 million promoting privatisation of essential police services, the principal beneficiary of which would be G4S. In the light of the Olympics debacle, will she now abandon her reckless plans?
Mr Peter Bone (Wellingborough) (Con)
The Home Secretary should have a gold medal for the speed at which she has corrected this problem. Why exactly cannot the 20,000 people whom G4S has recruited be employed? Are people just saying that they are not going to go to work?
Mrs May
There are a number of things, the first of which is the scheduling problems that G4S has had. Some individuals will now say, for a number of reasons, that they do not wish to take up the work. However, the problem was identified only in the past few days, leading to the decision by G4S last Wednesday, when it told us it could not meet its requirements.
Barbara Keeley (Worsley and Eccles South) (Lab)
There is a similar problem in Salford—not Manchester—to the ones described by my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). Athletes in a hotel in Salford are now being protected by our local police force rather than by G4S. Will our police continue to be overstretched in that way on an ongoing basis? When will they be helped? When will the Home Secretary accept that G4S is clearly not fit for purpose?
Mrs May
Some police forces have put extra personnel on certain venues as a result of what has happened. Hon. Members have made a number of comments about our wonderful military personnel, but we should also recognise that we have the best police force in the world. There are meticulous plans for the policing of the Olympic games and I have every confidence that our police will do an excellent job.
Penny Mordaunt (Portsmouth North) (Con)
I understand the political difficulty of issuing a warning order earlier in the year, putting troops on standby for an increase in the threat or for a situation such as this. However, surely it was the right thing to do, not just for the safety of our citizens, but also to enable our armed forces better to plan their R and R and training obligations.
Mrs May
My hon. Friend, with her knowledge of the armed forces, makes a very important point. It is in the interest of our armed forces for us to give them sufficient notice of contingency arrangements. We have had to move on the 3,500 extra troops because of the lateness of the point at which G4S admitted to us that it was unable to meet its personnel needs. On the various other requirements, we have been able to give the notice to which she refers.
Nick Smith (Blaenau Gwent) (Lab)
What is the precise number of security personnel that G4S will now deliver for the Olympics?
Mrs May
We are continuing to accredit personnel for G4S and it continues to schedule personnel for the Olympic games. The precise balance of the numbers it will provide will become clear over the next few days—[Interruption.] I suggest that Opposition Members should actually look at G4S’s statements on how it is dealing with the issue and on what the problem is. The suggestion that this is a problem for the Government is not the case.
Dr Julian Huppert (Cambridge) (LD)
When G4S makes a colossal error such as this, the Army and the police step in to provide cover, which is effectively a form of insurance on the contract. What steps were taken when the contract was issued to ensure a level playing field between G4S and other private or public sector providers, and what steps will the Home Secretary take to ensure a level playing field in future?
Mrs May
LOCOG undertook a process of inviting bids for the contract, as a result of which it decided that G4S was the contractor it wished to employ and there is a contract between LOCOG and G4S. We have asked the military to increase the numbers it is making available so that we can provide for the security of the Olympic games and reassure people that our plans for a safe and secure games are in place and that the gap that has opened up will be covered by those military personnel.
Mr John Spellar (Warley) (Lab)
The shadow Home Secretary clearly asked the Home Secretary to respond to comments in tonight’s Evening Standard from the Mayor of London and his deputy for policing that everyone knew about this ages ago. The Home Secretary declined to do so. Will she now say why, if the Greater London authority and the police authority knew about the problems, she did not?
Mrs May
I can reassure the right hon. Gentleman that all parties who were involved in preparations for the Olympic games have been working to monitor the arrangements for security and to monitor G4S, and last Wednesday—[Interruption.] On 6 July, G4S made clear its confidence in its plan, and last Wednesday, on 11 July, it said that it could not meet the numbers that it was required to provide. We have taken action to ensure that we provide the safe and secure games that I hope everybody in this House wants this country to have.
Mr Julian Brazier (Canterbury) (Con)
Will my right hon. Friend confirm that one group that has met its target is the reserve forces, more than 2,100 of whom have volunteered?
Mrs May
I am very pleased to confirm that. We have not just the finest regular military forces in the world, but wonderful reservists, who are willing to step up to the plate—including, of course, some in this House as well. I gather that 2,100 reservists have volunteered for the Olympic games. I pay tribute to them and to the work they will be doing.
Joan Walley (Stoke-on-Trent North) (Lab)
Given that the police, as well as the troops, are having to step in and bridge the gap, will the Home Secretary provide us, as Parliament goes into recess, with the numbers of policemen and women in forces around the country who are having to be moved to guard Olympic venues and hotels? It is selling the police short.
Mrs May
The hon. Lady talks as though there was never any suggestion that the police would be involved in security provision for the Olympics. That is not the case: the police have always been part of the security for the Olympics, as has the military. Yes, the police are taking on some extra requirements, as is the military. We all have one aim, and that is to provide a safe and secure games that everybody can enjoy.
Dr Andrew Murrison (South West Wiltshire) (Con)
Does the Home Secretary agree that a degree of humility on the part of the Opposition is appropriate, as it was Labour’s plans that deliberately downplayed the involvement of the armed forces in the first place? Our armed forces were required then and they are required now. They are among our very best ambassadors and will add materially to the quality of our Olympic games.
Mrs May
As I noted earlier, the decision that LOCOG would have a contract with a private sector contractor was taken under the last Government. My hon. Friend is absolutely right to pay tribute to the quality of our armed forces. I have every confidence that they will not only do a good job, but do so in a spirit that ensures that everybody coming to the games can enjoy them as a sporting event.
Mr Speaker
Order. I thank the Home Secretary and colleagues, whose succinctness enabled 29 Back Benchers to question the Home Secretary in the 22 minutes of exclusively Back-Bench time available. It shows what we can do when we put our minds to it.
Rail Investment
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Justine Greening)
With permission, Mr Speaker, I would like to make a statement on rail investment. This Government have always been clear that our overwhelming priority is rebuilding our economy and restoring economic growth, to enable this country to compete in the global marketplace in the years and decades ahead. Just as we are dealing with the budget deficit, so we are determined to deal with the massive infrastructure deficit that we inherited. That is why we have taken the deliberate decision to prioritise significant investment in our transport infrastructure—not only in Thameslink, Crossrail, High Speed 2 and hard-shoulder running on motorways, but in relatively small interventions that make a big difference, such as tackling pinch points on our motorway network.
The huge growth in passenger numbers over the last decade or more demonstrates how much people and businesses value and rely on our railway system. The numbers speak for themselves. Last year, passengers made 1.5 billion journeys, and the number of passenger miles travelled was almost 50% higher than in 2000. Rail freight operators carried 100 million tonnes of goods last year, with freight moved up by more than 15% over the same period. To help to meet that rapidly rising demand, we have already committed to the biggest rail modernisation programme since the Victorian age, with more than £18 billion of rail investment in this spending review period alone, including in High Speed 2 and Crossrail.
Today, I can announce that we are increasing that commitment, with a further £16 billion of public support for the classic rail network between 2014 and 2019, which will support more than £9 billion of enhancement in line upgrades, greater capacity and more electrification. The high-level output specification that I am publishing today sets out my vision for the railway in 2019, and I would like to take this opportunity to thank the Department for Transport officials and the rail team who have worked with me on that project.
My vision is for a railway that is cheaper, greener and more reliable to run, that supports economic growth and that delivers for its passengers and freight customers. Passengers are at the heart of that vision, which is about delivering the capacity so that passengers can get to work; helping people and business to get between our cities faster; getting more freight off our roads and on to our railways; and improving access to our ports and airports. I would also like to take the opportunity to thank the many MPs who have represented their community needs to me as I have developed the package.
At the heart of the high-level output specification is a rolling programme of electrification to deliver more powerful, more sustainable and more efficient trains for passengers and to allow freight operators to use electric trains to haul longer loads at lower cost. Today, I am asking the rail industry to create a new electric spine for freight and passenger services from the south coast to the east and west midlands and south Yorkshire. That electric spine will include the electrification of the midland main line to Sheffield, which will dramatically improve passenger services between London, the midlands and Yorkshire. It could cut journey times by up to 13 minutes. It will include overhead electrification between Southampton and Basingstoke, which will be a pilot for possible wider replacement of the less efficient third rail system in the wider south-east.
I am also delighted to announce that my Department and the Welsh Government have agreed on a proposal for the electrification of the valleys lines into Cardiff and for the completion of the electrification of the Great Western main line to Swansea. That is fantastic news for people in south Wales. I have worked closely with the Welsh Government and the Secretary of State for Wales, who has tirelessly made the case for investment in Wales, and I expect that investment to help to unlock significant economic and employment opportunities in some of the most deprived parts of Wales.
This is the largest programme of rail electrification that this country has ever seen. The previous Government electrified just 10 miles of railway, but we have now set out plans for more than 850 more miles of electrified railway. By the time that is completed at the turn of the decade, on current estimates, three quarters of all rail journeys in England and Wales will be made on cheaper, greener and more reliable electric trains. With the number of rail passenger journeys expected to increase by 16% over the period, I am also asking the rail industry to provide capacity for 120,000 more commuters into London and over 20,000 more into regional cities.
Inter-city rail travellers will also benefit from new investments. Those benefits will include the completion of the northern hub project in Manchester; a £240 million investment in capacity and connectivity improvements for the east coast main line, benefiting communities from the home counties to the north-east; and a further £300 million for high-value, small-scale schemes in other parts of the country. That is on top of the improvements to which we have already committed ourselves, including faster journeys from London to Scotland and Wales through the intercity express programme, and across northern England from Liverpool to Newcastle through electrification of the north trans-Pennine line.
Passengers also want better transport access to international gateways. As I told the House on Thursday, I am asking Network Rail to develop a new western access rail link to our hub airport at Heathrow. I am also asking for improvements in the vital freight route to Felixstowe port through line and junction upgrades at Leicester, Peterborough and Ely. That will give a significant boost to the rail freight industry, which forecasts a 23% increase in demand by 2019. I am providing £200 million of new funds to support the development of the freight network in order to meet that increased demand.
I know that, for passengers, railways are often more about stations than about carriages and track. The HLOS programme that I am announcing today will benefit stations at Bristol, Huddersfield and Oxford, and will recognise the value of smaller-scale station schemes by providing further funds for the Access for All and national stations improvement programmes, both of which have delivered excellent results for rail users in recent years. I also know that not everyone can get to a station easily, and that a number of local communities have long wanted to see a new station in their area. I am making £20 million available initially, and asking Network Rail to launch a competition inviting bids for new stations now.
Vital though that massive programme of investment is, there is another equally important programme that we must deliver to ensure that our railway remains affordable. Sir Roy McNulty’s review identified inefficiencies in our rail industry worth up to £3.5 billion a year. I assure the House that I remain committed to eradicating those inefficiencies, and to sharing the benefits with passengers and taxpayers. Alongside HLOS, I am publishing the funding that I will make available to enable the railway to operate over the period. The settlement is necessarily challenging: it assumes that the industry will deliver the important reforms set out in my March Command Paper and that the benefit will be returned to us all, whether we are passengers or taxpayers.
That builds on the reforms that we are already making to rail franchises, with longer contracts and more flexibility for operators to innovate in the interests of passengers. We recently published the invitation to tender for Essex Thameside, and I expect to announce the Great Western ITT shortly. I also expect to announce the award of the next west coast franchise over the summer. Today I am publishing revised guidance for the Office of Rail Regulation, which has statutory responsibility for Network Rail’s efficiency, stressing the importance that I—along with passengers and taxpayers—attach to efficiency and value for money.
Today’s announcement represents another historic landmark in the regeneration and modernisation of Britain’s railways. It represents a recognition that investment in HS2 must not be at the expense of investment in the existing network, and it shows that the Government’s vision for the railways is clear: a railway system that is faster, more reliable, less crowded and more green. Today we are taking real steps to make that happen by delivering on our commitment to deficit reduction through a more efficient railway, recognising our commitment to High Speed 2 by developing the railway and preparing it for integration with the new line, and supporting our economy by bringing people and jobs closer together. That is our vision, that is our priority, and I commend it to the House.
Maria Eagle (Garston and Halewood) (Lab)
I thank the Secretary of State for early sight of her statement, most of which, of course, we read in the newspapers over the weekend and this morning.
What we have just heard is a list of rail investment projects that were announced by the last Government—[Interruption.] It is true. They were announced by the last Government, but they will have to be delivered by the next one. We were promised £9 billion of new investment, but, as we have heard today, the reality is a plan for just £4.2 billion of new rail schemes over five years—less than half the amount that was spun to the media in advance of today’s statement to the House. Of the rest—the other £5.2 billion—more than half is simply confirmation that schemes already under way will not be cancelled halfway through, including Crossrail, Thameslink, the electrification of the Great Western main line, and the electrification in the north-west and across the Pennines, all schemes announced by my noble Friend Lord Adonis as Secretary of State for Transport in 2009.
Even many of the supposedly new projects which make up the remaining £4.2 billion are not so new after all, such as electrification of the midland main line, for which development of the economic case was announced by Lord Adonis, and to which we committed at the last election. Today’s U-turn on the Great Western main line is an acceptance that we were right to commit to completing electrification all the way to Swansea, a decision the Secretary of State and her predecessor have spent two years saying had no business case or economic benefit, when it plainly did. I welcome that U-turn; it is a victory for the Labour Government in Wales.
It is right for the Government to commit to completing the northern hub. That is vital to improve connectivity and capacity between our northern cities. However, instead of that being promised for after the next election, we could have made further progress with the scheme in this Parliament. However, the Government chose to cut investment in this spending period by £1.2 billion, according to Network Rail’s latest delivery plan update for the current control period, CP 4. It says that that has led to deferrals to CP 5, the period covered by today’s announcement. So we have cuts in this Parliament replaced by promises for the next. As the Select Committee on Transport has discovered, the entire northern hub could have been funded this year just from the Department’s underspend, but the Secretary of State instead chose to hand that money back to the Treasury.
We have also had confirmation today that the Government are determined to press ahead with hiking rail fares by up to 11% in each of the next two years, on top of January’s fare rises of up to 13%. The misery for passengers is not to stop there: we discover from the tender documents for the new franchises that bidders are being assured they can then go on imposing eye-watering fare rises of up to 8% every year. That means more than a decade to come of investment-busting fare rises.
Will the Secretary of State confirm how much lower investment in enhancement schemes, greater capacity and electrification will be in control period 5 than in control period 4? Can she confirm when work will begin on the ground, actually delivering jobs from each of the schemes that have yet to get under way? Will she update the House on the significant delays in completing the contractual negotiations for Thameslink rolling stock and the intercity express programme? Will she confirm that she has approved a cut in the planned order of new intercity trains from 1,400, as planned by Labour, to fewer than 600?
When will we see the results of the review into train procurement that was promised following the fiasco of awarding the Thameslink contract to a company that will build the trains in Germany? With long-term youth unemployment having trebled in the last year, what steps are the Government taking to ensure that young people benefit from the investment through apprenticeships and jobs? Will the Secretary of State confirm that Network Rail’s debt, now standing at £27 billion, is set to increase to £33 billion by the end of this control period? How much will that have risen to by the end of 2019, as a result of today’s announcement?
On Network Rail, will the Secretary of State join me in condemning the decision to again propose a bonus scheme that will see senior managers handed £300,000 each, apparently because they have said they will walk away if they do not get it, and then a wider bonus scheme that could cost taxpayers £11.7 million? Can she confirm that, as she threatened last time, she will turn up to this Thursday’s annual general meeting and vote against that package, and if not, why not?
In the light of the commitments made to improve rail links to Heathrow, when will the aviation industry actually be allowed to submit evidence to the Department on the country’s medium-term and long-term aviation capacity needs, or do we have this lack of joined-up policy making because we are awaiting the next Government reshuffle?
Finally—
Mr Speaker
Order. We are extremely grateful to the hon. Lady, but she has now well and truly had her time. I have been watching the clock very closely, the Secretary of State was within time and we must now move on. The Secretary of State will respond and then we will take Back Benchers.
Justine Greening
I have to say that many people watching this will be amazed at the hon. Lady—rather than looking at the glass 95% full, she seems to be looking at it 5% empty. The bottom line is that the Labour Government had 13 years to crack on with this, so if they did not get to do it, they have only themselves to blame. We are in government and we are taking our opportunity to improve our railway system for our people.
I am delighted that it is a coalition Government who have finally delivered on that programme of transformation for the Welsh railways. It will make a huge difference to the Welsh economy, and I am delighted that we have been able to announce it today. I can assure the hon. Lady that we are looking at whether we can advance some elements of the investment earlier—of course we are. In fact, that comes on the back of a huge amount of work already under way across the industry, be it the work happening at Reading station, Peterborough station and Birmingham station, which is having a huge refit; the work on Crossrail and Thameslink; or the work we have just finished at St Pancras.
The hon. Lady talked about the intercity express programme, and we are making good progress in those negotiations. She will be aware that, as and when Hitachi is able to start building those trains, it will open a brand new depot in the north-east, which will create several hundred jobs. I very much hope that it will be the beginning of a story for that region in the coming years that mirrors the one people have seen in the automobile industry.
The hon. Lady asked about apprenticeships and jobs. Network Rail is playing its role in developing a skilled British work force through recruitment and development. It is taking on 200 new apprentices annually on a three-year programme, and there is now a graduate programme in place, which took about 150 people in 2011. It is also funding an industry-wide track and train programme to give opportunities to unemployed graduates, offering three six-month placements with different organisations. I got to meet some of those graduates earlier this year, and it was outstanding to see them and the opportunities they have been presented with. So a huge amount of effort is already going on in the industry. Today’s announcement will complement that and give the industry the pipeline for the future which will allow it to invest not only in its own companies, but in the supply chain that we so badly need to make sure that that work can be supported.
The hon. Lady asked about Network Rail bonuses. Well, you know what, I am the first Secretary of State for Transport who has ever expressed an opinion on them, so I do not need to take any lectures from the ex-Government, who set up Network Rail and then proceeded to spend the whole time complaining about how it ran itself. It is putting in place its new governance structure, which will be a more responsible one than that set up for it by the Labour Government. It beggars belief that, on a day when we announced such an historic investment, all the Opposition can do is carp from the sidelines. However, I suspect that while that is their strategy they will remain exactly where they are now: on the sidelines.
Mr Speaker
Order. I remind the House that, in accordance with convention, Members who entered the Chamber after the Secretary of State began her statement should not be seeking to catch my eye. It is also obvious that there is very widespread interest in this subject—understandably so—which I am keen to accommodate, but Members will also be aware that there are two Opposition-day debates to follow. Therefore, there is a premium on brevity from Back Benchers and Front Benchers alike.
Mr John Redwood (Wokingham) (Con)
Over the past two years Network Rail has announced losses of £344 million on its very large derivatives book, so would not a better way of spending that money be to have a national programme to replace dangerous level crossings with bridges and underpasses—and could that start in Wokingham, please?
Justine Greening
My right hon. Friend raises an important point about passenger safety. In fact, the railways are one of the safest modes of travel we have. We have announced £65 million today to see continued improvement in level crossings. I would be very happy to meet him to hear his concerns about his local station, and I am sure that Network Rail, which takes the decisions, will also be interested to hear those concerns.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
This is a welcome investment announcement, but it appears to be based on the industry finding an as yet unidentified £3.5 billion of savings. If those savings are not found or if the cuts involved are not acceptable, which of today’s announcements will not take place?
Justine Greening
I believe that the savings will be found. We have a work programme in place and for the first time the industry has come together. Sir David Higgins, when he appeared at the hon. Lady’s Committee recently, committed to reducing his costs base by 20% and said that he was keen to go further. I believe that we have a plan in place to work with the industry. Critical to that is not constantly reorganising it, as it is time for it to stay where it is and work together better.
Mr Philip Hollobone (Kettering) (Con)
I commend the Secretary of State for her statement. The upgrade and electrification of the midland main line will be hugely welcome in Kettering. Will she announce the details of the upgrades that will take place along the midland main line, because that is a crucial part of the investment that she has just announced?
Justine Greening
There will be a variety of upgrades of junctions, tracks and capacity. One key aspect of today’s announcement is the removal of some of the bottlenecks that often stop passenger trains going as fast as they can. Many of us will have been on a passenger train while it travelled at what seemed to be quite a slow pace. That is often because it is stuck behind a freight train. A number of the smaller improvements we are making today will mean that that happens less and that will be one of the things we can do to improve my hon. Friend’s line.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
It would be churlish not to welcome the fulfilment of a Labour pledge to electrify the midland main line and to make the associated improvements. Will the Secretary of State tell us exactly when those improvements and the electrification will begin?
Justine Greening
The improvements will take place over the 2014 to 2019 period, as the project is developed and rolled out. I have worked hard to ensure that Sheffield has a good transport package from the Department. Another thing that I managed to get sorted out, which the right hon. Gentleman’s Government never did, was £3 million for a footpath bridge over the railway line, which will mean that his community and others around that area can get into Sheffield from the other side of the railway track. I believe that that, alongside the midland main line scheme and the capacity changes, means that by 2019 he will see a much better service.
Mr John Leech (Manchester, Withington) (LD)
The Labour chairman of Transport for Greater Manchester said of today’s announcement:
“Taken together, these investments will change the face of rail services in the North of England in a manner that has not been seen for several generations.
The Northern Hub and electrification programmes will be a catalyst to help drive economic growth across the north”.
I could not agree more. Does that not prove the commitment of the coalition Government to rebalancing the economy and bringing investment and jobs to the north of England?
Justine Greening
Absolutely it does. It is this Government who have brought forward the investment plans for the northern hub and been prepared to finance them and it is this Government who have gone on with High Speed 2, which is critical in the longer term for improving connectivity across the whole country. It will particularly benefit the great northern cities, one of which the hon. Gentleman represents.
Mr Jack Straw (Blackburn) (Lab)
I assume from the welcome reference in the Secretary of State’s statement to high-value, small-scale schemes that she accepts that, to avoid a two-tier railway, lines such as the Blackburn to Bolton line are in urgent need of doubling and improvement. What progress is likely to be made on that?
Justine Greening
The good news is that our investment in the northern hub opens up more capacity on that stretch of the line. Of course, the decision about how the capacity is then used is a local and regional decision. For the first time, the opportunity will open up and I am sure that the right hon. Gentleman will want to make his case to his local passenger transport executive.
Mr Stephen Dorrell (Charnwood) (Con)
I welcome the whole of my right hon. Friend’s statement and, in particular, her decision to go ahead with the long-promised and often delayed electrification of the midland main line. Is that not a clear example of action by the coalition following years of broken promises from Labour?
Justine Greening
It absolutely is—my right hon. Friend has been a tireless campaigner to get that investment which communities such as his have so long needed. We are going to get on with the upgrade and the electrification of the midland main line. That will also, incidentally, release long-distance diesel trains, which we can potentially cascade on to other parts of the network, so it will have benefits that go far broader than just the midland main line.
Hugh Bayley (York Central) (Lab)
Will the Secretary of State make sure that the electrified midland main line connects to the first phase of High Speed 2, so that Yorkshire gets classic compatible trains running fast from London via Birmingham to Yorkshire just as quickly as Manchester? Will she reflect on her claim that only 10 miles of track was electrified under Labour? After all, High Speed 1 from the channel tunnel to London, a brand-new electric line, was built when Labour was in power.
Mr Speaker
I gently say to the hon. Gentleman, for whom I have the highest regard and affection, that if he is going to ask a question about High Speed, there is real merit in asking a high-speed question. From now on, we need short questions and short answers. I say that in the interests of colleagues whom we wish to accommodate.
Justine Greening
The hon. Gentleman raised the question with me only last week in a meeting that I had with him on High Speed 2. As I said to him then, there are some challenges in doing as he suggests, but one of the most important aspects of the High Speed 2 business case is to ensure that as many communities as possible are connected up with it, and that we do that as soon as possible. I have no doubt that we will continue to look at whether those options are available to us and we can progress them. In the meantime the great news for him is that we will see High Speed coming up to his part of the country and it will hugely benefit his community when it gets there.
Mr Rob Wilson (Reading East) (Con)
May I thank my right hon. Friend and the Chancellor for backing the campaign that I led for western access to Heathrow, which will connect Reading directly to the nation’s hub airport? Does she agree that the £500 million investment offers the opportunity for further private sector involvement and investment to ease pressure on the taxpayer and also on ticket prices?
Justine Greening
I think that it does. In the Department for Transport we are keen to look at how we can more efficiently and effectively leverage in private sector investment. We were able to do that recently on the local authorities’ major road schemes and we should look to do it also on rail schemes where we can. Interestingly, on the £500 million project that we are taking ahead for that western rail access to Heathrow, more than 90% of the benefits will go directly to businesses, so it is a real catalyst for growth in the Thames valley area.
Paul Flynn (Newport West) (Lab)
Does the Secretary of State’s announcement mean that the Ebbw Vale line will be modernised so that trains can run directly to the heart of Newport?
Justine Greening
That is a very good point. The electrification will open up a range of possibilities—[Interruption]—and it will massively improve journey times, as well as the quality of service. I can hear hon. Members on the Opposition Benches chuntering, as if somehow we have just made a bad announcement. It is a transformational one. It will drive growth and jobs in south Wales and we should all welcome it wholeheartedly.
Iain Stewart (Milton Keynes South) (Con)
As chairman of the all-party group on east-west rail, I thank my right hon. Friend for announcing that her new line is to be electrified. As a diesel route it was due to generate 12,000 new jobs in the region. Can my right hon. Friend set out what additional benefits she expects an electric route to deliver?
Justine Greening
I think it will mean a lower cost railway and lighter trains which are more efficient and reduce maintenance costs. They are more reliable trains and they open up better opportunities for scheduling than we have had in the past with diesel trains. It is a huge investment which will massively impact on my hon. Friend’s local community and it opens up the possibility of seeing whether we can extend that line further towards east Anglia in the coming years.
Kelvin Hopkins (Luton North) (Lab)
Will the Secretary of State give her backing in principle to rail freight infrastructure capable of carrying full-scale lorries and lorry trailers on trains between the channel tunnel and Britain’s major conurbations?
Justine Greening
I am not sure whether I can give the hon. Gentleman the categorical in-principle assurance that he wants, but I am sure he will welcome the fact that a huge chunk of the investment will help get more freight off the road and on to the railways, and of course the electric spine project is one of the key ways in which we can do that. There is also investment in Felixstowe so that we can continue to get containers by rail. Importantly, one of the other pieces of work in which we are engaged is improving the gauge so that it can take bigger containers than it is currently able to take. That will open up easier travel by rail for the container market.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I welcome with inexplicable joy the announcement on the northern hub, which I have waited to see for so many years. Will the Secretary of State confirm that the amount of investment in the north-west, Yorkshire and the north-east puts to bed any notion whatsoever that the north does not get its fair share of Government funding?
Justine Greening
I absolutely think that. As someone who was born and bred in Yorkshire, I think that the sort of investment now going up to the north of our country is absolutely critical. There is so much talent up there; we just need to make sure we invest to unlock it.
Derek Twigg (Halton) (Lab)
The Secretary of State mentioned small interventions that make a big difference. Do her plans include any proposal to look at the Halton curve in Cheshire, which is an important project for both Cheshire and Merseyside, and if they do not will she go away and look at it again?
Justine Greening
That is more of a local scheme, but I will certainly undertake to look at it and see whether I can get back to the hon. Gentleman with some more details.
Joseph Johnson (Orpington) (Con)
I welcome the announcement of a £700 million investment for reducing overcrowding and congestion in London and the south-east. Will my right hon. Friend kindly look at the causes of overcrowding on Southeastern’s routes to Orpington, which, extraordinarily for a station of its size, has no fast trains at all during peak hours?
Justine Greening
My hon. Friend is right to raise the issue of capacity in London, particularly on his line, which I know local MPs have had real concerns about. We are looking to work closely with operators such as Transport for London to see what we can do together to improve those services over time. As I said earlier, 120,000 more people are catered for in these plans, which we have worked up very carefully. I think that it is very good news for commuters in London.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I welcome the statement, if it is not in fact one about jam tomorrow. In those circumstances, can the Secretary of State give some indication of what additional resources will be put into the railway system this side of the general election and, in particular, how much extra will be paid to the Scottish Parliament?
Justine Greening
The hon. Member for Central Ayrshire (Mr Donohoe) will know that transport in Scotland is a devolved matter. He will also know that in the spending review we have committed £18 billion for the railway network, an outstanding amount of investment that can make a huge difference. Of course, today’s announcement adds further to that pipeline. I think that the certainty it will give the industry about the investment coming down the track will really help to ensure that we get the most out of the improvement not only for passengers and freight, but for jobs and growth, particularly in the railway industry.
Greg Mulholland
Thank you, Mr Deputy Speaker. That is probably the closest I will get to the Dispatch Box—[Hon. Members: “Hear, hear!”]—in this Parliament. In the last Parliament Labour’s contribution to tackling congestion in Leeds was cancelling the Leeds supertram and continuing to insist on a no-growth franchise for Northern Rail. Susie Cawood, from the Leeds, York and North Yorkshire chamber of commerce has said:
“The chamber welcomes government investment in the rail network…Continued investment is essential to ensure we remain competitive and continue to attract inward investment and grow our existing businesses—
Mr Deputy Speaker
Order. The hon. Gentleman should not take advantage of a situation. Many Members want to get in and this has to finish at five past 5. In fairness, we all have to get in.
Justine Greening
The hon. Gentleman is absolutely right that this investment will make a big difference to Leeds. It is not just on the back of the north trans-Pennine express electrification. He will also know that the £240 million investment in the east coast main line will also improve services for his constituents. Of course, he will be aware that in the longer term we are investing in High Speed 2, which will have a stop in Leeds.
Diana Johnson (Kingston upon Hull North) (Lab)
Despite my constituents paying ever higher fares to travel by train, Hull will be the largest city in this country without electrification. Why is that?
Justine Greening
We are working our way around the UK. In fact, by the end of this decade around three quarters of passenger miles will be on electrified railways. I can assure the hon. Lady that the Government absolutely want to progress electrification—it is better for the railways overall, it has a good business case, and it is good for the environment—but obviously we still have to cut our cloth to meet the public affordability needs, which is what we are trying to do. She will know that I have taken a real interest in her area, which is one of the reasons why, while I have been Secretary of State for Transport, we have halved the tolls on the Humber bridge.
Anna Soubry (Broxtowe) (Con)
This is a great day for Greater Nottingham, which has waited many years for the electrification of the midland main line. Can the Secretary of State, whom I thank from the bottom of my heart, confirm that it will give a real economic boost to Beeston in my constituency, to the enterprise zone, and to the business park which is bang opposite the station?
Justine Greening
I am absolutely sure that it will. We are developing a fantastic midland main line for what is a fantastic city.
Ian Lavery (Wansbeck) (Lab)
We have got the lines, we have got some stations; the only problem on the Ashington-Blyth-Tyne line is that we have not got any trains. Can the Transport Secretary explain how much of the £9 billion investment will go towards reopening the Ashington-Blyth-Tyne line?
Justine Greening
We are looking at whether there is any possibility of opening lines. Our main focus has been on whether we can improve stations, and in fact open new ones, but over time we may be able to unlock some of those local decisions through the Department’s decentralisation approach. We have just consulted on that, some very interesting responses have come through and I hope that we will make some announcements later. I take the hon. Gentleman’s point with real interest.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
May I say how delighted we are about the Ely North junction? It is great news for East Anglia and for unlocking freight from Felixstowe, and we commend the Secretary of State on it. What further junctions can we look forward to for unlocking freight?
Justine Greening
My hon. Friend has raised the issue tirelessly and recently had a Westminster Hall debate on the topic, and it is campaigners such as my hon. Friend who have really powerfully put the case to Ministers for looking at the issue and seeing what we can do to tackle it. The Ely junction will be done, and it matters massively, because it creates the potential for enhanced passenger services between Cambridge, King’s Lynn and Norwich, so it will have broader benefits, including freight, which, with Felixstowe nearby in her constituency, I know is close to her heart.
Huw Irranca-Davies (Ogmore) (Lab)
While indeed welcoming the news that an electrified train will be heading down the tracks to Swansea, and to Maesteg, at some point in the future, we note that there is a two-year delay, so when will the train be arriving in Swansea, and when in Maesteg?
Justine Greening
I assure the hon. Gentleman that we are cracking on with the programme now, and that is precisely why it has been announced today as part of our priority for the next control period. We will work on it with the Welsh Assembly Government, and I am sure that we will be able to release more details to him shortly.
Mr Andrew Turner (Isle of Wight) (Con)
Of every 100 people, a mere three travel by train. A huge subsidy is proposed for the £870 million loss that covers CrossCountry Trains and East Midlands Trains, and that does not even cover the infrastructure costs. How are we to justify such massive expenditure that will benefit so few?
Justine Greening
Our investment proposal today is about making sure that we have a railway network that can cope with the level of demand in coming years, and that is absolutely critical for our economy, but my hon. Friend is right that we have to ensure that the railways are efficient, and a railway system that every year costs us £3.5 billion more than it needs to is not acceptable. That is why in order to address efficiency we have some difficult challenges ahead of us, but we are going to work with the industry to do that, because the points that he makes are absolutely valid. We have to tackle inefficiency. Well-run organisations provide a better service to their customers, and I am determined to turn the railways into a well-run organisation.
Mr George Howarth (Knowsley) (Lab)
I welcome the Secretary of State’s statement, but can she assure me that the west coast main line franchise will not be determined on the basis of job cuts and a corresponding reduction in service to the travelling public?
Justine Greening
We have been very clear about wanting to see improvements in the west coast main line service, and we have actually seen passenger numbers on that franchise grow rapidly over recent years. We want to see those improvements continue and, at the same time, we want value for money for the taxpayer. I hope that some of the investment that we are putting in across the network today will help support all that, and the right hon. Gentleman will obviously be interested to see the outcome of the tender process later on.
David Rutley (Macclesfield) (Con)
Unlike Opposition Members, I welcome today’s statement. Will my right hon. Friend confirm that the northern hub electrification will lead to improved journey times, more frequent trains and much better connectivity between the great towns and cities in the north-west of England?
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
I, too, welcome the electrification of the midland main line. [Hon. Members: “Hooray!”] But a letter from the Minister of State, the right hon. Member for Chipping Barnet (Mrs Villiers), arrived in my inbox shortly before this statement. It says:
“Completion of Midland Mainline electrification is proposed for 2019.”
That is seven years away. Given the increasing north-south divide, I urge the Secretary of State to bring it forward so that we get the benefits more quickly.
Justine Greening
To reassure the hon. Lady, I should say that we are looking at whether we can commence some of the investment earlier. We have had to set out our basic proposals, of course, but let us be clear: today we are setting out a statement of output—what we want to get out of the railway system. It is now for the industry to go away and look at how it can achieve the outcomes that we are specifying. The midland main line electrification is one of the key, explicit schemes that we have said we want to bring forward. If the industry has a proposal to do it faster than the timeline that we have mentioned, I have no doubt that we will be very interested in looking at it.
Sir Bob Russell (Colchester) (LD)
The Secretary of State is fully aware of the east of England rail prospectus. I put it to her that for those of us served by the Greater Anglia line, her statement today is very disappointing. When might we expect the entire east of England rail prospectus to be implemented?
Justine Greening
The hon. Gentleman will see improvements in services and capacity over the coming years. Many of the improvements that we are announcing on the network today can improve his area, too—not least through the potential to improve stations and see Access for All stations brought to his area. There is also investment in safety at level crossings and the general pots that we put in place to improve passenger experience and the strategic freight network. There is a huge number of different aspects to the investment, and I am sure that many of them will relate to the hon. Gentleman’s community.
Sammy Wilson (East Antrim) (DUP)
Will today’s announcement have any budgetary implications for devolved Administrations through the Barnett formula? What practical measures has the Secretary of State put in the procurement provisions to ensure that her aspiration of jobs for British industry and the UK supply chain is realised by this investment?
Justine Greening
On the hon. Gentleman’s point about jobs and growth, I should say that absolutely I have looked not only at what we need on our network and the investment profile but at getting a really clear understanding of how the measures can help support jobs and growth, particularly in the railway industry.
The hon. Gentleman knows that I am keen to make sure that the money that we are spending as a Government benefits not just passengers but the industry, in creating more jobs. We will continue to look at how we can make sure that our procurement processes work effectively and I certainly hope that we can do more to support our industry than the last Government.
David Tredinnick (Bosworth) (Con)
Will my right hon. Friend confirm that the journey time from Leicester to London will now be under an hour, at 58 minutes, and that we will get new electric trains? Will she be straightening out the Harborough curves, which have long been an obstacle to electrification?
Justine Greening
I can confirm those journey-time improvements for my hon. Friend’s constituents, who will welcome that, as I do. On the particular aspect of the curves, I will make sure that I write to him so that I get my facts right, but I hope and believe that there will be a positive response on that, too.
Kevin Brennan (Cardiff West) (Lab)
I am glad that the Secretary of State was able to work positively with the Welsh Government over the electrification of the valley lines and the extension to Swansea. Has any financial contribution from the Welsh Government been involved?
Justine Greening
The hon. Gentleman is right to say that we worked closely not only with the Secretary of State for Wales but the Welsh Assembly Government. I met Carl Sergeant a few times to discuss these proposals. As regards how the financing will work, the basic scheme for the valleys is £300 million. That is funded through track access charges that franchise operators will pay. It pays them to do this, because they save money through electrification, which reduces their operating costs. Once the valleys electrification has been completed, that, in essence, will electrify the line to Bridgend, which means that the final piece to Swansea becomes worth doing. It also simplifies our rolling stock procurement. The final piece of the Bridgend to Swansea electrification is being funded by the UK Government to the tune of £50 million. All in all, it is a good deal for Wales.
Jessica Lee (Erewash) (Con)
I welcome the announcement that a fund will be made available to consider applications for railway stations to be opened. My right hon. Friend will recall a meeting earlier this year with me and representatives from Derbyshire county council regarding the Ilkeston train station project. There is a strong regeneration case for that important project, and it is well matched with the fund that has been announced today, so does she, too, hope that it can be delivered?
Justine Greening
Ultimately that will be a decision for Network Rail. Let me be clear, though, that it was the meetings I had with my hon. Friend and her local councillors that brought home to me the fact that money needed to be set aside to make sure that new stations can be opened for the communities that need them where growth is happening. I very much hope that her Ilkeston station plan will go forward to the competition bid, and I will look with real interest to see it come through.
Jeremy Corbyn (Islington North) (Lab)
Does the electrification programme include the electrification of the Barking to Gospel Oak section of London overground? I had a meeting with one of her colleagues about this some months ago. It would make freight transportation from the east of England easier, improve passenger services, save a lot of money, and be environmentally sensible. Will she go for it?
Justine Greening
I take the hon. Gentleman’s point. That is not part of the electrification plans that we have announced today. Ultimately it is for Transport for London to fund it if it wants to do so, but I am sure that it will take on board the points that the hon. Gentleman has made and, if the business case stacks up, might consider it.
Sir Tony Baldry (Banbury) (Con)
I thank my right hon. Friend for all that she is doing on the east-west rail link. It has been quite difficult keeping up with all the good news today. Will she therefore arrange to put in the Library a map of the national rail network as she envisages it in 2020 and in 2025 so that we can share it with our constituents?
Justine Greening
I will make sure that that is done. My hon. Friend will see huge swathes of the network being newly electrified and pockets of growth in our key cities where we are now meeting demand.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Secretary of State should be congratulated on any investment for our country, for the Yorkshire region, for the northern hub and for Huddersfield, but according to the classic economic theory of Keynes, this country is in a deep recession, and we need this investment now, not in two years’ time.
Justine Greening
To provide the hon. Gentleman with some reassurance, we are getting on with huge amounts of investment right now. Of course, if we want to be ready to get the next pipeline kicked off in 2014, we have to announce it today so that the industry can start to look at what we want and then come back with proposals on achieving it. He is absolutely right to say that projects such as the northern hub are crucial. I am very proud and pleased that we have been able to announce that investment, and I look forward to working with him as we develop these proposals.
Andrew George (St Ives) (LD)
Welcome as today’s announcement is, and although I hate to rain on the right hon. Lady’s parade, I fear that they will not be dancing in the streets of Penzance by the end of the week if the Government go ahead, as we suspect, with reducing the service by a third. Will she reassure my constituents that this welcome investment in and improvement of the rail service across the country as a whole is not built on the back of cuts to the service to Penzance?
Justine Greening
I am aware of the hon. Gentleman’s concerns, which he is going to talk through tomorrow with the Minister of State for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers). I assure him that no final decisions have been made. I emphasise that the HLOS investment that we are making will open up real opportunities for us to cascade rolling stock. For example, the high-speed diesel fleet that is currently on the midland main line—the Meridian stock—will be available, and we will see how we can use that effectively on other parts of the network.
Chris Bryant (Rhondda) (Lab)
The people of the Rhondda Fawr will doubtless want to get out the bunting and skip for joy—[Hon. Members: “Hear, hear!”] They will doubtless want to do so when the Treherbert to Cardiff line has been electrified. What date should I put in my diary for the opening of that electrified line? Will it happen before the review of constituency boundaries and before Lords reform, or perhaps after?
Justine Greening
It is nice to know that the hon. Gentleman looks at things through such a political lens, rather than from the perspective of his local community. This investment will take place from 2014 to 2019. It will make a huge difference to communities such as his. I only wish that he could support it wholeheartedly and without reservation.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
May I add my congratulations to my right hon. Friend on how much she is doing in the north-west to deal with the neglect of the previous Government? What will she do about towns such as Fleetwood in my constituency, which had 13 years of rusty railway lines and still have no trains on them?
Justine Greening
That is really a local matter for my hon. Friend’s regional passenger transport executive. As he will know, we are electrifying the Manchester to Blackpool railway line, which will provide real benefits. I am keen, as colleagues across the House know, to understand what people want next. If I know what they want next, I can set about seeing whether we can provide it.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am pleased that the northern hub is proceeding. It could give us six trains an hour between Manchester and Leeds, running through my constituency. Does the Secretary of State agree that it would be wrong to sacrifice local services, such as those connecting Mossley and Ashton, to make way for extra inter-city services, and that the train operating companies should use any extra capacity and infrastructure to improve services for everybody?
Justine Greening
We are careful to ensure that we understand the impacts of the northern hub. For example, today’s announcement includes increased capacity at Huddersfield station to maximise the benefits of the northern hub investment. We will continue to look at how we can do that across the whole of the network. I believe that this project will be hugely influential in unlocking economic growth across the Pennines—linking up the areas as they have always wanted.
Elizabeth Truss (South West Norfolk) (Con)
I thank my right hon. Friend for her commitment to upgrade the Ely North junction. May I ask that half-hourly services to King’s Lynn be specified in the Thameslink franchise agreement in 2013 and the Norwich to Cambridge franchise agreement in 2014 so that passengers can see the benefit of that upgrade?
Justine Greening
It is too early to say exactly what will be specified in the franchise contracts, but many of the investment proposals that we have put in place today, which the industry will come back to us with more detailed versions of, allow the potential for more frequent services. I know that that is exactly what communities such as my hon. Friend’s want. We are building headroom for growth into the railway network for the communities that need it.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I find myself in the strange position of congratulating the Government on their statement. It goes part of the way to making up for the historical underfunding of the Welsh railways. The north Wales coast line and the line west of Swansea are vital links between the mainland and Ireland, which is a major trading partner of the Welsh economy and the wider UK economy. What discussions are happening between the Department, the Welsh Government and European institutions about using Wales’s share of HS2—
Justine Greening
I understand the point that the hon. Gentleman is making. It is a relevant question. The Welsh Government have not raised that issue with me directly, but it is something that I am interested in considering. Perhaps he will forgive me if I reflect and get back to him as my thinking on HS2 develops.
Henry Smith (Crawley) (Con)
Does my right hon. Friend agree that the reported contention of the Opposition that this significant rail investment will not create jobs is completely absurd?
Justine Greening
It is totally absurd. Of the £9.4 billion of investment, up to half could benefit business directly. It will be massively important for local economies and for jobs and growth. Its effect will go well beyond the rail industry, for example by connecting up airports and ports. My hon. Friend’s local airport at Gatwick is receiving investment for its station. All those things are important in providing our country with a joined-up transport system that supports efficient end-to-end journeys for passengers and businesses.
Jonathan Ashworth (Leicester South) (Lab)
The Secretary of State will know that there has been a huge cross-party campaign for electrification of the midland main line, so I am delighted to welcome her announcement, including what she said about the upgrade of the Leicester junction. She will know that commuters want that work to start as quickly as possible, so will she undertake that it will start closer to 2014 than 2019?
Justine Greening
It depends on the industry’s response to the outputs that we have said today we want to achieve. I can assure the hon. Gentleman that I do not generally let the grass grow under my feet. I like to get on with things and get them sorted out, so we will get on with all these projects as fast as we can.
Duncan Hames (Chippenham) (LD)
What a tremendous statement! Lighter electric trains accelerate and decelerate faster, allowing for intermediary stops serving communities such as Corsham, in my constituency, as long as we are successful in winning a new station in the competition that the Secretary of State has announced today. Will any of that multi-million-pound fund be available before control period 5?
Justine Greening
I am looking at how the competition and the bids will work, and I believe we can get a lot of learnings from how individual communities and local authorities respond. We can see how the local authority major roads programme worked—it was an effective process in getting local authorities to work with local enterprise partnerships and say what their road network needed. I am interested to see how this pot of money can do the same thing for new stations in communities such as my hon. Friend’s. Once we have got those learnings, there is no reason why we cannot start to pull forward that investment.
Paul Blomfield (Sheffield Central) (Lab)
I welcome the Secretary of State’s statement, but may I ask her for further clarification of her earlier answers about track improvements? In particular, will the programme include track improvements at all three bottlenecks on the midland main line—Derby, Leicester and Market Harborough —without which we will not get the targeted improvements in journey times?
Justine Greening
I will need to confirm that specific point, but I am certainly aware that track improvements will happen at Leicester. I believe that they will also happen at Derby, but I will need to find out about Market Harborough and write to the hon. Gentleman.
Mr Peter Bone (Wellingborough) (Con)
Rail passengers in Wellingborough will warmly welcome the statement, but does the Secretary of State share my concern that the announcement was leaked to the press in advance of being given to Parliament? Would she express her surprise that the Deputy Prime Minister was on television promoting the statement, apparently in breach of the ministerial code?
Justine Greening
I was concerned. This is obviously an important announcement, and I can understand why people would be keen to make it. I e-mailed and wrote to all Departments to emphasise to them when the announcement was embargoed until, so of course it was disappointing to see some of it leak out earlier.
Nia Griffith (Llanelli) (Lab)
I thank the Secretary of State for her close working with the Welsh Government and for listening to the lobbying from south-west Wales, ably led by my hon. Friend the Member for Swansea West (Geraint Davies). I also thank her for the comments that she has just made about looking further west. Will she give special consideration to starting the project to Swansea in time for the Dylan Thomas centenary year in 2014?
Justine Greening
I believe that may be something of a stretch, but we will wait to see what the industry says about how quickly it can deliver the plan and develop the proposals. There is a lot of work to be done, but the most important thing is that we have signalled that it is going ahead. I appreciate the support of the hon. Lady and her colleagues, and I have to say that I have had a huge amount of lobbying by Government MPs from Wales as well. Together, they have made a real difference by getting across the case for investment.
Jason McCartney (Colne Valley) (Con)
I very much welcome the fully funded northern hub project, the investment in Huddersfield railway station and the new station fund, which my community of Milnsbridge may go for. Will the Secretary of State confirm the importance of connectivity and local stopping services, so that people in Slaithwaite, Marsden, Lockwood, Honley and Brockholes get full benefit from this transformational announcement?
Justine Greening
We want many communities to benefit from the announcement, and frankly, the more people we can get on the railways, the more successful they will be. That means connecting as many communities as possible, which is the approach that I am taking to High Speed 2 and to the current network. That is one reason why, for the first time, I have set aside some money for new stations.
Frank Dobson (Holborn and St Pancras) (Lab)
As the Member representing St Pancras, may I ask the Secretary of State whether she is really satisfied that it will be 2019 before the first electric train arrives from Sheffield at that magnificent station, which was so magnificently refurbished under the Labour Government to provide a connection for the channel tunnel link and fast trains to the Olympic games?
Justine Greening
The right hon. Gentleman looks forward, as I do, to a time when trains that arrive at St Pancras are not dirty diesel trains but clean electric ones. I think that that will have a positive impact on the environment in that station. St Pancras station is an amazing building. It is impossible to walk in without gasping at the wonderful architecture, and those of us who want more members of the next generation go into design, technology and engineering should take them to St Pancras, which will get them fired up.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We have only five more minutes—let us try to get through as many questions as possible.
Heather Wheeler (South Derbyshire) (Con)
I thank my right hon. Friend and all the Ministers and Parliamentary Private Secretaries who have worked hard with all the local MPs to make sure that this new electric spine is achieved. The point is we have a spine, and we waited 13 years for someone else to find one.
Justine Greening
I do not think I could put it better myself. My hon. Friend is absolutely right.
Geraint Davies (Swansea West) (Lab/Co-op)
In 2014, we celebrate the 100th anniversary of Dylan Thomas’s birth. May I thank the Secretary of State for ensuring that in that year we can herald a new beginning to electrification to Swansea bay city region, encouraging inward investment and growth? Will she assure me that a door will be opened for more investment in transport infrastructure, including ports and roads?
Justine Greening
I understand how important this investment is. I think that it was Admiral insurance that wrote to me saying what a difference the investment could make to jobs in the area. It was precisely those sorts of representations I reflected on, which is why I know that the investment will make a huge difference.
Dr Andrew Murrison (South West Wiltshire) (Con)
I warmly welcome the statement. What will the Transport Secretary do to dispel the impression that the south-west is the poor country cousin of the railway network, which will of course be underscored by HS2 and the north-south electric spine? She will want to address particularly the plight of residents west of Salisbury.
Justine Greening
I am always keen to look particularly at what we can do to improve transport infrastructure in the south-west. There is an issue of resilience for the railway and road network, but my hon. Friend will remember that we announced the electrification of the Great Western railway line, and we have announced an intercity express programme that will result in more capacity on that line and the potential for more frequent services. Perhaps less close to him, in Bristol, we have announced today substantial investment in Bristol Temple Meads station. All those things will begin to strengthen the south-west transport system, but I would like to see what we can do to go further and do better.
Nigel Adams (Selby and Ainsty) (Con)
My right hon. Friend the Minister of State, Department for Transport kindly met members of the Selby and district rail users group and me to discuss the electrification of the line from Micklefield to Selby. They will be delighted to hear that the scheme will go ahead. Will the Secretary of State confirm that that historic investment will contribute to the control of fare rises and will reduce overcrowding for my constituents in Selby?
Justine Greening
The Micklefield to Selby electrification opens up a second route to the north of Leeds, as my hon. Friend will be aware. It also means that potentially we can have three trains an hour serving London. He is right: electrification means that we have a lower-cost railway, which is the key to getting off the hook of having to pass on above-inflation rail-fare rises to passengers every year.
Andrew Bingham (High Peak) (Con)
I welcome the investment in line speed and capacity improvement on the links between Manchester and Sheffield. The Hope Valley line through my constituency provides a vital link for freight and passengers. Does my right hon. Friend agree that investment in that line will benefit not only the two great cities but many of my High Peak constituents?
Justine Greening
Yes it will. The more freight we can get off the road, the better. The more options we can give people to get off the road, the better.
Dr Julian Huppert (Cambridge) (LD)
I congratulate the Secretary of State and her team on this excellent announcement. In 13 years, the previous Government managed to electrify nine miles—a distance that a garden snail could cover in 15 days. They also allowed rail fares to go up by 66%. Does the Secretary of State agree that rail fares are too high, and that it is time to end above-inflation rail fare increases?
Justine Greening
I have to say that I did not know that snails were that fast, but I believe we need to try to get off this hook of above-inflation rail fare rises every year, which is one reason why we are looking at the efficiency savings programme that Roy McNulty first outlined. Today’s investment in electrification will be a key part of that as well.
Stephen Hammond (Wimbledon) (Con)
In my right hon. Friend’s time as Secretary of State, a new Victorian era of rail investment is not only being promised but delivered. Does she agree that removing some of the bottlenecks is key to capacity? Will she use some of the £700 million that is available so that users of the Wimbledon loop will gain the full benefits of Thameslink?
Justine Greening
I am sure that we will look closely at the case my hon. Friend has made. I know he has worked very hard, alongside other local MPs, to see local railway services improved. Wimbledon itself is a key railway hub for his local area. It plays a really important role, and I am keen to see what we can do to improve it.
Penny Mordaunt (Portsmouth North) (Con)
I congratulate the Secretary of State on this announcement, and particularly the investment in the Portsmouth to London line and longer rail franchise agreements. If she will forgive my greed, will she consider writing into those new agreements basic passenger comfort standards, such as seat design and toilet provision, so we can ensure the quality and accessibility of these services?
Justine Greening
I have met my hon. Friend to discuss some of her concerns about the rolling stock used by some of her constituents on local lines. I take those points very seriously. That is why one of the pots of money we have set aside is to improve the passenger experience. It may seem like a small thing to have adequate toilet provision on trains, but for many people, particularly for mothers with kids, it is really important. My hon. Friend is therefore right to raise this point.
Mr Robert Buckland (South Swindon) (Con)
Businesses and residents in Swindon will warmly welcome the Government’s commitment to a new rail western access to Heathrow. Connectivity is the key. Will my right hon. Friend assure me that with the extension of electrification through to south Wales and Swansea, we will see electric-only rolling stock on the cross-country Great Western line?
Justine Greening
We will move to electrify the rolling stock, too. It is one way of ensuring that we keep operating costs down. My hon. Friend’s constituents could see a 30-minute reduction in their journey time to Heathrow. That will benefit not just his area but the whole of the south-west.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Unfortunately, I am going to have to cut off debate on the statement now.
Points of Order
Mr Kevan Jones (North Durham) (Lab)
On a point of order, Mr Deputy Speaker. At Defence questions, the Secretary of State announced that he was going to lay a written ministerial statement tomorrow on the future of Defence Equipment and Support—the equipment arm of the Ministry of Defence. He said that a decision had been taken to run the organisation by a Government-owned, contractor-operated model. This decision has been the subject of debate, delay, review and speculation over the last two years. In the light of how important this matter is—not only to those working in the defence sector but to many Members—is it right for it to be announced through a written ministerial statement rather than an oral statement and on the last day before the House rises for the summer recess, as it denies us the opportunity to scrutinise this very important decision?
Mr Deputy Speaker (Mr Lindsay Hoyle)
The hon. Member has put his point on the record, and I am sure that the Secretary of State for Defence will be made aware of his comments.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
On 4 July, the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), who has responsibility for children and young families, told me in a written answer that he was not aware of any individuals recruited to civil service positions in his Department who had previously been employed or elected in political positions. I am aware of at least three such appointments to senior positions— Janet Grauberg, Alexandra Gowlland and Elena Narozanski—and there may be more. I am certain that the Minister would not knowingly have misled the House, so I can only assume that he had not confirmed the accuracy of the answer he was given, despite the fact it took over a month to provide it. Mr Deputy Speaker, will you advise whether it is still the case that Ministers are responsible to Parliament for the accuracy of the information they give to it? What steps can be taken to ensure that the Minister comes to Parliament to correct the record?
Mr Deputy Speaker
As the hon. Lady knows, the occupant of the Chair is not responsible for the answers that Ministers provide. She has nevertheless put her point on the record, and I am sure it will be taken up.
Opposition Day
National Health Service
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:30 - The House divided: - Ayes: 228 / Noes: 303 - Question accordingly negatived.
Andy Burnham (Leigh) (Lab)
I beg to move
That this House regrets the growing gap between Ministers’ statements and what is happening in the NHS; notes mounting evidence of rationing of treatments and services by cost, despite Ministers’ claims to have prevented it; further regrets the increasing number of cost-driven reconfigurations of hospital services, despite the Coalition Agreement’s promise of a moratorium on changes to hospital services; further notes growing private sector involvement in both the commissioning and provision of NHS services, contradicting Ministers’ claims that the NHS reorganisation would not increase levels of privatisation; recognises that, according to the Government’s Public Expenditure Statistical Analyses figures, actual Government spending on the NHS in 2011-12 fell by £26 million, the second successive real-terms reduction in NHS spending, following a reduction of £766 million in the Government’s first year in office, in breach of the commitment in the Coalition Agreement; believes the Government’s decision to reorganise the NHS has distracted its focus from the financial challenge, with seven out of 10 acute hospital trusts in England missing savings targets in the first half of 2011-12; calls on the Government to take action to prevent rationing by cost in the NHS, based on the evidence presented; and further calls on the Government to honour pledges on NHS spending in the Coalition Agreement, and the commitment that future savings will be reinvested into the NHS front line, and to return at least half of the underspend to the Department of Health budget.
The year 2011 was the first full year of the coalition Government and the year of the biggest ever fall in public satisfaction with the national health service. As I shall set out, those two facts are not unconnected. The NHS in England is reeling from the Government’s catastrophic decision to reorganise it at a time of huge financial pressure. Warnings by Opposition Members and others during the passage of the Health and Social Care Act 2012 of a postcode lottery, of destabilised hospitals and of increasing privatisation are, sadly, beginning to materialise.
For the coalition, attention has moved to other battles—more pressing priorities—but for the NHS the moment of greatest danger is now, as the unstoppable force of reorganisation hits the immovable object of the financial challenge. That is why the Opposition make no apology for introducing this debate, or for bringing the House’s attention back to where it should be: our country’s most important public service and the struggle it faces.
I am grateful for the Secretary of State’s letter—[Interruption.] I can hear him mumbling away on the Government Front Bench. I would have thought the debate would justify his attention, as it justifies that of the Minister of State, the right hon. Member for Chelmsford (Mr Burns). The Opposition have introduced this debate to support NHS staff. We thank them for what they do. They have a huge capacity to deal with whatever is thrown at them, but they have been set mission impossible by the Government. One can only wonder how they felt on hearing the news that the Deputy Prime Minister had the chance to stop this reorganisation but chose to prioritise House of Lords reform. A million hearts will have sunk.
It was not just the Government’s decision to reorganise that was wrong; the way they have gone about it was wrong as well.
Mr Graham Stuart (Beverley and Holderness) (Con)
The right hon. Gentleman will know that the Chair of the Public Accounts Committee said that productivity fell continuously for a decade under the previous Government. Does he regret that and recognise that radical change is required to get the productivity improvements this country desperately needs if we are to be able to afford the NHS we all want?
Andy Burnham
I am afraid the hon. Gentleman is out of date, because the figures cited by the Government are wrong. NHS productivity was improving by the time Labour left office. The independent and authoritative Commonwealth Fund pronounced the NHS the most efficient health care system in the world in June 2010. That was the legacy of the Labour Government, which the Conservative party is putting at risk.
As I have said, it was not just the decision to reorganise that was wrong; the way the Government have gone about it is also wrong. Before the ink was dry on their White Paper, Ministers set about dismantling existing NHS structures before the new ones were in place. That is a dangerous move at any time, but disastrous at a moment of financial crisis.
We have therefore had drift in the NHS: a loss of focus at local level and a loss of grip on the money just when it was most needed. At a stroke, the Government demoralised the very work force who would be crucial to managing the transition, with primary care trust managers dismissed as worthless. Experienced people left in droves. Those who stayed hoping for jobs in the new world were issued with scorched earth instructions: “Get on and do the unpopular stuff now—the rationing and the reconfiguration—so the new clinical commissioning groups don’t have to.”
We can now see the consequences across England: brutal, cost-driven plans for hospital reconfiguration being railroaded through on an impossible timetable without adequate consultation; walk-in centres being closed left, right and centre; and people left in pain and discomfort, or facing charges for treatment, as PCTs introduce restrictions on 125 separate treatments and services.
Mr Andy Slaughter (Hammersmith) (Lab)
On the subject of brutal closures, did my right hon. Friend have a chance to look at the authoritative report by David Rose in The Mail On Sunday yesterday about the “Beeching-style” closure of major casualty units? Four out of nine of the units to be closed are in west London, leaving my constituents and 2 million people in west London without adequate health cover.
Andy Burnham
I have no idea how Ministers expect west London to cope with service reductions on that scale, nor do I know how they square them with the moratorium on hospital closures and changes which they promised at the last election. Perhaps we will hear some justification later today, although I will turn to reconfigurations shortly.
Stephen Pound (Ealing North) (Lab)
Further to the previous question, the hon. Member for Ealing Central and Acton (Angie Bray) has said that this is all about finance, and she may well be right. However, bearing in mind the fact that Ealing hospital not only came in under budget but produced an operating surplus last year, what possible justification can there be for ripping this crucial and much-needed service from the heart of our community?
Andy Burnham
My hon. Friend makes his point powerfully. With some reconfigurations there is a clinical case supporting change, such as the changes I introduced in London before the last election to improve stroke services. We reduced the number of centres from 12 to eight. That was a difficult decision for many London Members at the time, but it was the right thing to do because lives are being saved. However, there is a world of difference between those changes and the crude, cost-driven reconfigurations in the NHS that those on the Government Benches said they would not allow.
I spent my weekend reading a very entertaining book entitled “Never Again? The story of the Health and Social Care Act 2012: A study in coalition government and policy making”. It is a very interesting book and offers a new, detailed account, by Nick Timmins, of the Government’s NHS reorganisation—or, as it says on the blurb, the inside story of a “car crash”. I particularly enjoyed the quotation from the Minister of State—I gather that he has not read it, but there he is, up in lights at the very beginning of the book. He made this comment about the then Bill, which the author thought worthy of special attention:
“You cannot encapsulate in one or two sentences the main thrust of this.”
He should know that better than anybody, as he toured more media studios than anybody, and used more sentences than anyone, in a vain attempt to sell the technocratic and dense plans that made sense to his boss and nobody else.
Mrs Anne Main (St Albans) (Con)
Given that the biggest strain on most health authorities is staff pay, does the right hon. Gentleman regret the fact that Labour doubled the remuneration of GPs, allowing them to opt out and thus putting huge stresses on many health care authorities, which then had to buy in additional services? Does Labour not regret allowing doctors to be paid more for doing less?
Andy Burnham
I am interested in the argument that the hon. Lady is beginning to develop, which is that she wants to deliver pay cuts to NHS staff across her constituency. Presumably she wants the same as people in the south-west are getting. Is that what she is calling for? It is an interesting argument, and I would be interested to hear her expand on it later.
Andy Burnham
In a moment.
What I found most useful about the book is that it answered a question that has been nagging away in my mind for some time. As a former Health Secretary, I remember clearly the warnings I received from senior civil servants about the sheer scale of the £20 billion efficiency challenge. “It would be a major undertaking,” they said. “The NHS would need to focus all its energy on that alone. To be negotiated safely, new policy initiatives would have to be put on hold.” Over the months that have followed, I have often had cause to recall those words, as I watch the Secretary of State add to the financial challenge with the biggest ever reorganisation in NHS history. Did the same civil servants issue the same apocalyptic warnings to the incoming Secretary of State as they did to me? Finally I have my answer, in a quotation in the book from an unnamed senior civil servant:
“The biggest challenge was trying to get the secretary of state to focus on the money—the £20 billion and the sheer scale of the financial challenge”.
According to that civil servant, however, the Secretary of State’s attitude was:
“I am going to do these reforms anyway, irrespective of whether there are any financial issues. I am not going to let the mere matter of the financial context stop me getting on with this”.
Another civil servant is quoted as saying:
“We did point out to him that his plans were written before the big financial challenge, and didn’t that change things? He completely did not see that at all. He completely ignored it”.
Then the question is asked: was the Secretary of State presented by the Department with alternatives to inflicting legislative upheaval on the NHS? A senior civil servant said that
“it was clear that having posed the question of did he want to see other options, that Andrew was not very interested at all in us presenting alternatives.”
A picture is emerging of a Secretary of State with an inability to listen, take advice or heed warnings, who is going to have his Bill regardless of the upheaval that it will cause to the national health service.
Barry Gardiner
I am grateful to my right hon. Friend for giving way, although I fear that the moment might have passed. I simply wanted to ask him to reflect on the challenges that the hon. Member for St Albans (Mrs Main) issued to him about doctors and pay. Does he agree that those doctors are now the very people who are in charge of commissioning the services of which they are also the providers? I wonder whether the hon. Lady thinks that that is a good thing or a bad thing.
Andy Burnham
At the heart of the defective legislation that the Government rammed through the House of Commons is an unresolved conflict of interest, in which commissioners can also be providers who can remove services from hospitals and then provide them themselves. Under pressure in the other place, the Government came up with a requirement for a statement of such interests, but without introducing any mechanism for enforcement to ensure that decisions in the NHS are being made for the right reasons. I fear that that conflict of interest will return to haunt the Government.
Andrew George (St Ives) (LD)
The right hon. Gentleman knows that I share his critique of the Health and Social Care Act 2012. He mentioned the fact that civil servants had given him warnings and cautioned him about the consequences of his decisions during his time in office. Was he warned about the changes in regulations that have resulted in the decision of the south-west consortium to suggest changes to the terms and conditions and pay of staff in that area? That was a direct result of regulations brought in by his Government.
Andy Burnham
No, it was not. Agenda for Change was one of the proudest achievements of our Government, and we always staunchly defended national pay arrangements. The hon. Gentleman talks about warnings, but I have just read out the explicit warning that was given to the current Secretary of State that this was the wrong time to reorganise the NHS. It was unforgivable to proceed in those circumstances. This was the single most reckless gamble ever taken with the NHS, and patients and staff are already proving to be the biggest losers.
Steve Brine (Winchester) (Con)
I was not reading the book that the right hon. Gentleman has mentioned at the weekend, but I was listening to Radio 4 last night while I was doing the washing up, as I do. I heard one of his colleagues, the hon. Member for Wigan (Lisa Nandy), say that Labour was committed to repealing the Health and Social Care Act in its entirety. Will the shadow Secretary of State tell me whether, when I am in Winchester over the summer recess, I should tell the clinical commissioning groups that are getting on with their work that all that work would be undone, and that the Hampshire primary care trust and the South Central strategic health authority would be recreated if Labour were to form the next Government?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are short of time, so may I request short interventions, please?
Andy Burnham
There is a simple answer: yes, we will repeal the Act. It is a defective, sub-optimal piece of legislation and it is saddling the NHS with a complicated mess. The hon. Gentleman should listen to the chair of the NHS Commissioning Board, whom his Secretary of State appointed. He has called the legislation “unintelligible”. In those circumstances, it would be irresponsible to leave it in place.
Mr Stephen Dorrell (Charnwood) (Con)
Will the right hon. Gentleman give way?
Andy Burnham
I will give way to the Chair of the Select Committee in a moment.
Wherever we look, we see warnings of an NHS in increasing financial distress, yet according to Ministers everything is fine. The gap between their complacent statements and people’s real experience of the NHS gets wider every week. They are in denial about the effects of their reorganisation on the real world. That dangerous complacency cannot be allowed to continue.
The Minister of State, Department of Health (Mr Simon Burns)
In the light of what the right hon. Gentleman has just said, will he clear up this confusion? His leader, the right hon. Member for Doncaster North (Edward Miliband), has said that he would keep clinical commissioning, yet the shadow Secretary of State has just said that he would repeal the Act in toto, which would include the provisions on clinical commissioning.
Andy Burnham
One of the great tragedies in this book is the Secretary of State’s admission, during a statement in the House in which he announced the “pause”, that he could have done most of what he wanted to do without legislation. The former Secretary of State, the right hon. Member for Charnwood (Mr Dorrell), is quoted as muttering to a colleague, “Why on earth are we doing it, then?” Well, why on earth did he do it? Because he wanted his Bill, regardless of other people.
Mr Dorrell
A moment ago, the right hon. Gentleman told my hon. Friend the Member for Winchester (Steve Brine) that Labour was committed to repealing the Act in its entirety. Does that not mean that an incoming Labour Government would be committed to precisely the kind of pre-cooked reorganisation of which he has just accused my right hon. Friend the Secretary of State?
Andy Burnham
No, it does not. This is what Government Members do not understand. It is not about the organisations, but about the services that they provide. The existing organisations can be asked to work differently, and I would ask them to work differently. I do not want NHS organisations to be in outright competition, hospital versus hospital; I want them to work collaboratively. So yes, we will repeal the Act, but no, there will not be a pointless top-down reorganisation of the kind that we have seen the Secretary of State inflict on the NHS.
This complacency is dangerous, and it cannot be allowed to continue. We had two clear purposes in initiating today’s debate. First, although we cannot stop the Government’s reorganisation, we can hold them to account for promises that they made to get their Bill through. I shall shortly identify five such promises in respect of which we are asking Ministers to live up to their words. Secondly, we wanted to give the House a chance to help the NHS by voting to hold the Government to account and enforcing the coalition agreement’s commitments on NHS spending.
Let me first deal with Ministers’ claim that there is no evidence of rationing of treatments by cost. They have promised to act if any evidence is presented. In fact the evidence is plentiful, and it is simply not credible for Ministers to deny it. The postcode lottery of which we warned is now running riot through the NHS. We have identified 125 separate treatments that have been stopped or restricted in the past two years, in some cases in direct contradiction of guidance from the National Institute for Health and Clinical Excellence.
Mr George Howarth (Knowsley) (Lab)
Last week I was at Whiston hospital, which, as my right hon. Friend will know, covers Knowsley and St Helens. The net effect of all the changes is that its staff, particularly the nursing staff, are thoroughly demoralised. Does my right hon. Friend accept that any commitment that he makes to changing the system will be welcomed by NHS staff?
Andy Burnham
I have heard the same from staff throughout the system. Morale has never been lower. People have been badly let down by a Government who promised them no top-down reorganisation, a moratorium on hospital changes, and real-terms increases. None of those things has been delivered. During the run-up to the general election the Conservatives cynically used the NHS to try to gain votes, and they will pay a heavy price for breaking the promises that they made then.
Andy Burnham
I will give way to the Minister one more time, and then to my hon. Friend the Member for Eltham (Clive Efford), but after that I must make some progress.
Mr Burns
I am grateful to the right hon. Gentleman. Although he did not answer the question that I asked him earlier, he did spread more confusion. If he were ever in a position to repeal the entire Act and did so, given that the strategic health authorities and the primary care trusts will have long since gone, how does he envisage care being commissioned for patients?
Andy Burnham
The Minister seems to equate removal of the Act with bringing back PCTs and SHAs. I do not have a problem with clinical commissioning, and I said as much during the Bill’s passage. I introduced it myself. I do not have a problem with clinical commissioning groups; my problem is with the job that they are asked to do, and the legal context in which they are asked to operate. We reject the Secretary of State’s market, and that is why we will repeal his Act.
Clive Efford
Clinicians in south-east London presented proposals for the reorganisation of our health care provision in “A picture of health”. It was all agreed by local commissioners, but when the Tories took office, they imposed a two-year delay that cost our health care trust £16 million a year—and that is the same trust that the Secretary of State has just put into administration.
Andy Burnham
This is what happened: when they came into government, they had a cynical policy of a moratorium, and they went up to Chase Farm hospital to announce it, saying, “There will be no cuts and no closures at this hospital.” They traded and touted for votes in that constituency for years on the back of that issue, and now that hospital is going to close. They delayed the reconfiguration and then they delayed the savings that came to the NHS. It was disgraceful, and people will have seen through it.
Mr Dave Watts (St Helens North) (Lab)
I wish my right hon. Friend well in trying to hold this Government to account. The NHS is paying consultancy fees all around the country: hundreds of thousands of pounds are being wasted, and the Government are refusing to publish the information. They are also bullying many of the trusts. How are we going to get the information out when the Government are doing this?
Andy Burnham
My hon. Friend is absolutely right about the waste of money the Government have brought into the NHS through this reorganisation. The total is over £3 billion. That is simply unjustifiable at this time. Staff who had been working in primary care trusts are either being re-employed as consultants or are going into clinical commissioning groups. This is such a waste of money at a time when the NHS needed every penny to maintain standards of patient care.
I was talking about rationing, and let me focus on cataract surgery. GP magazine has found limits on cataract surgery in 66% of PCTs. The Royal National Institute of Blind People found that 58% of PCTs are using visual acuity thresholds to restrict surgery. This is the evidence, so the Secretary of State had better start listening. What has happened since those restrictions on cataract operations have been introduced? Unsurprisingly, the number of cataract operations in England fell by over 12,000 between 2010 and 2011. That is a direct result of the new restrictions. There is no less need, however. Thousands of older people need such procedures, but they are now being forced to live with very poor sight.
This is truly a false economy. Cataract surgery is one of the most cost-effective procedures carried out by the NHS. It helps people live independently and have a quality of life, and research has shown that in the last two years poor vision has been a factor in 270,000 falls by people aged 60 or over. This is the rationing by cost that Ministers have repeatedly denied is happening. So let me ask the Secretary of State again: does he agree with these restrictions on cataract surgery? If he does not, will he take immediate action to lift them?
Frank Dobson (Holborn and St Pancras) (Lab)
Will my right hon. Friend confirm that under the last Labour Government the number of cataract operations carried out by the NHS rose from 160,000 a year to 310,000 a year, as a result of the commitment of the staff? What will the staff in the south-west think about all this if they have their pay cut?
Andy Burnham
For staff who are trying to hold things together through the chaos the Government have brought about, what a kick in the teeth it must have been to read in the Sunday newspapers that unless they accept pay cuts, they will be made redundant. My right hon. Friend says the staff made those improvements, but so did he. As the incoming Secretary of State, he made improvements to waiting times for cataract surgery, which, if I remember rightly, were commonly about a year in the late-1990s. We brought those waiting times right down. Now what do we hear? We hear that under this crowd people with two cataracts are being told, “You can have one done, but not both.” That is what the NHS has been reduced to under this Government. The Secretary of State has promised action, and I have given him the evidence. He now must take action.
The second area on which the Government need to be challenged is privatisation. As the debate on the Bill drew to a close, the Secretary of State made this clear statement:
“The legislation is absolutely clear that it does not lead to privatisation, it does not promote privatisation, it does not permit privatisation and it does not allow any increase in charges in the NHS.”—[Official Report, 27 March 2012; Vol. 542, c. 1335.]
It is hard to know where to start, but how about the NHS walk-in centre in Sheffield, which is managed by a private company and has just started charging patients with whiplash injuries £25 for treatment, or the NHS hospitals now marketing private treatments for in vitro fertilisation, cancer screening or bone screening since the cap was lifted? How about the letter sent to all PCTs requiring them to identify three or more services for tendering under the “any qualified provider” measure in 2012-13? How about the 100 or so tenders for a range of services that have been offered to the private sector on this Secretary of State’s watch, with a total value of more than £4 billion? So let me ask the Minister and the Secretary of State today: will they now at least be honest about their true intentions for the level of private sector involvement in the NHS?
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Is my right hon. Friend as concerned as I am about the exponential rise in the number of private health care ads that we see on our television screens and in our newspapers every day? These ads had almost disappeared under the previous Government. Advertisers advertise only when they know that there is a market.
Andy Burnham
This is really important; it is where all of what the Government are doing comes together. They have put in place restrictions in treatments— 125 separate treatments, as I have just mentioned— and at the same time they have given a 49% cap to NHS hospitals to do more private work. So as the NHS decommissions services, hospitals are then free to start offering those services. That is why my hon. Friend is beginning to see the changes that she is noticing, and this is the clear agenda of the Conservative party.
Huw Irranca-Davies (Ogmore) (Lab)
Does not the fragmentation that my right hon. Friend is describing raise the crucial question about when the national health service ceases being a national health service under this Government?
Andy Burnham
The Bill that the Government brought through is an attack on the N in the NHS; that is what it was designed to do. It was designed to break national standards; to break national pay; to break waiting time standards; and to allow primary care trusts to introduce random rationing across the system. That was the intention of the Bill that they brought through; they wanted an unfettered market in the health service, and my hon. Friend is absolutely right. That is why we are saying that we will repeal this Act and restore the N in NHS at the earliest opportunity.
Andrew Percy (Brigg and Goole) (Con)
On 28 June, in response to misinformation put out by Labour councillors, the medical director of my local hospital trust, a doctor of 30 years, wrote an article in my local paper under the headline “NHS faces greatest challenge”. She talked about staff costs, treatment costs and the 2008 Nicholson challenge. She said that the trust’s problems date “back to 2008”, and she continued:
“Having been a doctor for nearly 30 years, the 2008 Nicholson challenge is, by far, the greatest challenge the NHS has ever faced”.
What should we believe: the picture being presented by the right hon. Gentleman or this article?
Andy Burnham
The hon. Gentleman is making my point; if he was listening to what I said at the start of my speech, he would have heard me say clearly that the £20 billion Nicholson challenge, which I set, was always going to be a mountain to climb for the NHS. Let us be clear that it was. What was unforgiveable was combining that Nicholson challenge with the biggest ever top-down reorganisation in history, when the whole thing was turned upside down, managers were being moved or made redundant and nobody was in charge of the money. That was what was so wrong, and that is what the hon. Gentleman should not be defending if he is defending staff in the NHS.
The third area where we need action from Ministers is on protection for staff. The Deputy Prime Minister said recently:
“There is going to be no regional pay system. That is not going to happen.”
But we heard yesterday that a breakaway group of 19 NHS trusts in the south-west has joined together to drive through regional pay, in open defiance of the Deputy Prime Minister. They are looking at changes to force staff to take a pay cut of 5%; to end overtime payments for working nights, weekends and bank holidays; to reduce holiday time; and to introduce longer shifts. We even hear that if staff will not accept this, they are going to be made redundant and re-employed on the new terms. So let us ask the Secretary of State and the Minister to answer this today: do the Government support regional pay in the NHS and the other moves planned by trusts in the south-west? If they do not, will they today send a clear message to NHS staff in the south-west that they are prepared to overrule NHS managers?
Fourthly, I shall deal with reconfigurations. The House will recall the promise of a moratorium on changes to hospitals and the Prime Minister’s threat of a “bare-knuckle fight” to resist closure plans. In 2010, the Secretary of State set out four tests that all proposed reconfigurations had to pass. They related to support from general practitioners, strengthened public and patient engagement, clear clinical evidence and support for patient choice. He said:
“Without all those elements, reconfigurations cannot proceed.”
So let me ask the Minister: does he think that the A and E units closing at Ealing, Hammersmith, Charing Cross and Central Middlesex pass that test? How about St Helier, King George, Newark and Rugby? Is it not clear to everyone that the Prime Minister’s bare-knuckle fight never materialised? Is it not also clear that no one told the Foreign Secretary, the Work and Pensions Secretary or even the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), who is responsible for care and older people and who has launched a campaign against his own Department? What clearer sign could there be of the chaos in the Department of Health and of the chaos engulfing the NHS? Will the Secretary of State now take action to stop reconfigurations on the grounds of cost alone?
That brings me to my fifth and final area for action, which is NHS spending. The coalition agreement said:
“We will guarantee that health spending increases in real terms in each year of the Parliament.”
That is health spending, not the health allocation. Official Government figures show that actual spending has fallen for two years running and the underspend has been clawed back by the Treasury. Of all the promises the coalition has broken, people will surely find that one the hardest to understand given that the Prime Minister appeared on every billboard in the land, on practically every street in the land, promising to do the opposite just two years ago.
Gordon Birtwistle (Burnley) (LD)
Will the right hon. Gentleman advise me who he consulted before he closed the A and E unit in Burnley?
Andy Burnham
I was prepared to make difficult decisions and be honest about them. I am not proposing the reversal of that decision and I note that clinicians in his area recently said how it had improved outcomes for his constituents. What I will not do—what I will never do—is go to marginal constituencies, as the Secretary of State did, and make false promises that I will reopen such units. The Secretary of State did that before the last election; no wonder he is looking shifty in his seat right now. He went to the hon. Gentleman’s constituency and said that he would reopen that unit. Has he done that? I do not believe that he has.
Clive Efford
On that very point about turning up in constituencies just before general elections promising to save A and E services, the Tories pledged to save 999 services at my local hospital, Queen Mary’s, Sidcup. They pledged to keep that A and E open—the Secretary of State did so himself. Where is the A and E?
Andy Burnham
I do not know how the Secretary of State justifies what has been done. Even in my own patch, Greater Manchester was going through a children’s and maternity services review and some constituencies were benefiting from the changes—Bolton, for example, was getting a bigger maternity unit—but some were not and this Secretary of State went both to Bury, where he said that he would defend the maternity unit, and to Bolton, for a photo call celebrating the new investment. If anything illustrates the sheer opportunism of the Secretary of State in opposition, surely that is the example that does.
Andy Burnham
I will give way to the hon. Member for Totnes (Dr Wollaston) before I conclude.
Dr Sarah Wollaston (Totnes) (Con)
I hope that in his conclusion, the right hon. Gentleman will address a point raised by the King’s Fund. It said that the greatest policy failure of the previous Administration was the failure to tackle health inequalities. He says that he wishes to appeal the whole of the Health and Social Care Act 2012, but does he accept that shifting public health back to local authorities gives us one of the greatest opportunities to tackle health inequalities? Will he seriously put public health back where it was before and, by so doing, continue to fail to address health inequalities?
Andy Burnham
The hon. Lady mentions the Act, and I seem to remember that she called the Bill a hand grenade thrown into the health service. She seems to have changed her tune since then. We made huge progress on tackling smoking and improving the public health of this country, progress of which we are very proud. We can always say that we could have done more, but I remember putting through measures on smoking towards the end of our time in government that were opposed by those on the Government Front Bench. I am not sure how she could justify that.
The budget cut combined with the distraction of reorganisation means that six out of 10 hospitals in England are now off target for their efficiency savings. That brings me back to where we started: this is the wrong time to reorganise the national health service. In conclusion, the House cannot reverse tonight the damage of the NHS reorganisation, but we are not powerless. There are things we can do to help the NHS at one of the most dangerous moments it has faced. Our constituents will expect us to hold Ministers to account for promises made on rationing and reconfigurations. They will want us to do the right thing by NHS staff facing pay cuts and redundancy. Our constituents have a right to expect that one of the central pledges in the coalition agreement—not to cut the NHS—will be honoured. That is the simple call of our motion this evening which, we hope, can unite all sides of the House. A vote tonight for the motion would be a positive vote for an NHS under siege and a message of appreciation for NHS staff facing uncertain times. I commend the motion to the House.
The Minister of State, Department of Health (Mr Simon Burns)
The motion that we are debating today is typical of the Opposition. Rather than praising the NHS in a year of change, they seek to denigrate it. Rather than commending the hard work and dedication of NHS staff, they undermine their efforts and belittle their results. Rather than supporting the parts of the NHS that are dealing with long-term financial challenges—challenges that were partly of the own making of the right hon. Member for Leigh (Andy Burnham)—they attempt to scaremonger.
In truth, this has been a year that has tested the NHS, which has dealt with significant financial pressures as well as the transition to the new system, but it is also a year in which the NHS has proven its mettle. Far from the meltdown that some gleefully predicted, we have seen a robust and resilient NHS delivering better care for patients.
Mr Burns
In a minute.
I know that waiting times mean a great deal to the right hon. Member for Leigh, so let us have a look at the numbers. Despite what he peddles around the country, waiting times remain low and stable—in fact, below where they were at the last general election. In May 2010 more than 18,000 people waited more than a year for treatment. Today that figure is just 4,317. Today 55,335 people wait more than six months for treatment—almost half the figure of 100,979 at the last general election. There are 149,912 people now waiting more than 18 weeks, compared with 209,411 in May 2010. The median wait for admitted patients has fallen in that time from 8.4 weeks to 8 weeks, and for non-admitted patients from 4.3 weeks to 4 weeks. Across the country, all NHS waiting time standards for diagnostic tests and cancer treatment have been met.
Mr Slaughter
The Minister talks about scaremongering. For seven years my constituents put up with scaremongering from his party that Charing Cross hospital was going to close. The services there expanded. After two years of his Government, the hospital, 500 beds, and the accident and emergency department are closing and being replaced by an urgent care centre, which will treat only minor injuries. What will that do to his statistics?
Mr Burns
I am slightly surprised that the hon. Gentleman made that intervention because it rather proves my point about scaremongering. He said that is going to happen. The truth is that the local NHS has determined locally what it believes is the best reconfiguration of services. That is going out to public consultation and so far no decisions have been taken because the consultation process has only just started. It will last for 14 weeks and then the results of that consultation will be considered.
Mr Burns
I will now make progress.
To return to waiting times and the record as a fact, rather than the fiction that Opposition politicians like to peddle, 96% of patients wait for fewer than four hours in accident and emergency, and every ambulance trust in England meets its core response times.
Andy Burnham
On accident and emergency waiting times, let us be clear. In the 2013 year to date, has the NHS met the 95% target or not?
Mr Burns
I shall make a little more progress.
Let us not stop at waiting times. The £600 million cancer drugs fund that has helped more than 12,500 patients to access the drugs previously denied to them, the screening programmes for breast and bowel cancer, potentially saving an extra 1,100 lives every year by 2015, the world-leading telehealth and telecare whole systems demonstrator programme, which saw a stunning 45% fall in mortality and is set to transform of 3 million people with long-term conditions over the next five years—
Henry Smith (Crawley) (Con)
Earlier this year I was delighted to be able to open a new digital mammography unit at Crawley hospital, a hospital which under the previous Government saw its accident and emergency unit closed down. Does my right hon. Friend find it odd that the Opposition refuse to match the spending commitments on the NHS that this Government are delivering?
Mr Burns
My hon. Friend is right. As he would probably expect, I shall deal with that issue later in my speech. While I am responding to his intervention, let me say that not only was his hospital fortunate in having that fantastic equipment to look after his constituents, but I had the pleasure last week to be in his constituency to visit Elekta and Varian, which are world leaders in making equipment to help with radiotherapy.
Valerie Vaz
The Minister is very fond of statistics. Can he say whether GP referrals have gone up, and whether A and E admissions have gone up or down?
Mr George Howarth
The Minister said in his opening remarks that Opposition Members are denigrating NHS staff and their achievements. Does he accept that if he has any conversations with NHS staff, he will find the reverse—they feel that they are being denigrated by this Government and their reforms?
Mr Burns
I do not like to contradict the right hon. Gentleman, but I will. What I said was slightly different from what he accused me of saying. What I said was that rather than praising the NHS in a year of change, the Opposition denigrate it. That is slightly different.
To pick up on a point that the right hon. Member for Leigh mentioned from a sedentary position, GP referrals for 2011-12 were 1% lower than in the previous year, but outpatient referrals were, as I said, slightly higher.
Mr Burns
If my hon. Friend will allow me, I would like to make some progress. If the opportunity arises, I will give way to him then.
I could stop after reporting all that good news, but I do not see why I should when there is so much more to praise the NHS for. It gets little praise for its performance from the Opposition. I want to praise the fact that patients are reporting better outcomes for hip and knee replacements and for hernias, and the fact that the latest GP patient survey showed that 88% of patients rated their GP practice as good or very good. MORI’s independent public perceptions of the NHS survey shows satisfaction with the NHS remaining high at 70%.
In the patient experience survey, 92% of patients who had used the NHS in the past year rated their care as good, very good or excellent. Mixed-sex accommodation breaches are down an incredible 96% since we came to power, although of course the Opposition often claimed to have eradicated that problem—not so, alas. MRSA infections are down 24% in the year, and C. difficile infections down 17%. More than a million more people have an NHS dentist. No reasonable person could look at the performance of the NHS over what has been a challenging year with anything but admiration and pride. I, too, would like to take this opportunity to praise NHS staff for their hard work and dedication and the excellent results they are delivering for patients.
Angie Bray (Ealing Central and Acton) (Con)
Will my right hon. Friend give way?
Andrew Percy
Will the Minister condemn Labour party representatives in Goole who, despite the fact that under Labour we saw ward closures and mental health in-patient beds go, recently gave the media incorrect waiting list times, and will he confirm that in North Lincolnshire 93% of patients are seen within 18 weeks, which is far ahead of the national target? The Labour party needs to stop talking down our local hospital.
Mr Burns
If hon. Gentlemen and Ladies will bear with me, I would like to make some progress, because this is a short debate and many hon. Members would like to participate, but I will give way later.
The motion, like the right hon. Member for Leigh, mentions a fall in spending on the NHS of £26 million in 2011-12. I will give him one statistic: £12.5 billion. There will be £12.5 billion extra for the NHS in this Parliament, £12.5 billion that would never have been made available had he had his way, as he said that to do so would be irresponsible. That is exactly what his party is doing in Wales, where it is in control of the NHS. It is cutting the NHS budget in Wales by 6.5% in real terms from 2011-12 to 2014-15. His motion talks about a £26 million underspend, but what he does not understand is that there has been a real-terms increase in funding for the NHS this year. Because we are no longer wasting hundreds of millions of pounds on a bloated bureaucracy and the national programme for IT, we have been able to save an extra £1.1 billion in real terms from the back office and put it into front-line care.
Andy Burnham
So that there is no confusion, because this is a very important matter, I will quote from a Department of Health press release of Friday 6 July:
“PESA figures released today show that in real terms NHS spending has reduced slightly by 0.02%.”
For the record, will the Minister say whether NHS spending rose or fell over the last financial year?
Mr Burns
Just wait. But, as he has said, and as I have said about the £26 million—[Interruption]—there was an underspend in the NHS and that money, as he will know, because of the financial arrangements his party put in place for the NHS in 2004, will be ploughed back into the NHS over the next three or four years as extra spending. We will put in more money for front-line clinical staff, including more than 4,000 doctors—more money for doctors and treatments and for improving patient outcomes. Spending on front-line NHS services has increased by £3.4 billion in cash terms, or 3.5%, compared with last year.
Mr Burns
Not at the moment.
The motion states that seven out of every 10 acute hospital trusts in England missed their savings targets for the first half of 2011-12, referring to their cost improvement plans. Not only did the right hon. Gentleman use out-of-date figures—figures for the whole year are now available—but he again misrepresented what they mean for the performance of the NHS. Across the NHS, acute NHS trusts plan to save £1.3 billion during 2011-12. In the end, they saved £1.2 billion. More than half—57%—of the shortfall was concentrated in just 10 NHS trusts in significant financial difficulties— 10 NHS trusts that he ignored when he was Health Secretary but that we are getting to grips with. I would point him instead to the £4.3 billion of efficiency savings made in 2010-11 and the further £5.8 billion of efficiency savings made in 2011-12. Primary care trusts and strategic health authorities have reported a surplus of £1.6 billion in 2011-12, money that is being carried forward and made available for 2012-13 and thereafter.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Will the Minister give way?
Angie Bray
As my right hon. Friend is aware, the proposal is to downgrade four accident and emergency departments across London that are all right beside my constituency. Does he agree with my constituents that losing four accident and emergency departments is disproportionate and will mean a significant loss of service for them locally?
Mr Burns
What I will say to my hon. Friend is similar to what I said to the hon. Member for Hammersmith (Mr Slaughter): that is a reconfiguration that is in progress and has been put together locally by the local NHS. It has just gone out to consultation and, obviously, when the process is complete the responses will be considered before any final decisions are made on the best way to provide care for her constituents and those of Opposition Members so that they can get the quality of care and the relevant care in their area. At the moment, when there is a consultation process going on, it would wrong of me to comment on a local decision, but I certainly urge my hon. Friend, her constituents and others to get involved in the consultation so that all views can be considered.
Mr Burns
I will now make some progress.
The motion seeks to give the impression that NHS care is being rationed. That is worse than inaccurate: it is scurrilous nonsense and scaremongering on a grand and somewhat desperate scale. [Interruption.] I will come to cataracts in a moment. We did some rudimentary checking of our own into the veracity of those claims, which were originally made as part of the Labour party’s NHS health check. It was not long before it became abundantly clear that that was not worth the press notice it was printed on. It claimed that there was a blanket ban by NHS Hull on the removal of risk ganglia. We spoke with NHS Hull and found that there is no such ban. It claimed that 11 out of 100 PCT clinical commissioning groups restrict laser revision surgery for scars, but such cosmetic surgery has never been routinely available on the NHS, under either this Government or the previous Government, when the right hon. Member for Leigh was Secretary of State. It claimed that weight-loss treatment is restricted, stating that
“patients generally have to be over 18 and have a BMI over a certain level to receive weight loss surgery”.
Amazing—people actually have to be overweight to be entitled to weight-loss surgery. I would have thought that that was startlingly obvious, but obviously the right hon. Gentleman does not think so.
Andy Burnham
Is the Minister aware that the National Institute for Health and Clinical Excellence guidance recommends that bariatric surgery should be offered only to people with a BMI of 40? Is he also aware that numerous PCTs all over the country are restricting access to that surgery by introducing their own arbitrary limits? That is evidence of the rationing I am talking about. He will know that the NHS constitution guarantees people access to NICE-approved treatments, so why does he not take action on those PCTs that are standing outwith the NICE guidance?
Mr Burns
What the right hon. Gentleman rather cunningly does not mention—[Interruption.] I am answering the question, if the hon. Member for Copeland (Mr Reed) can just keep quiet for a second. The right hon. Gentleman says that the NICE guideline refers to a BMI of 40, and that is absolutely correct, but I point him in the direction of one area in central London that does not go by that guideline, because it uses a BMI of 35, which is lower.
Mr Graham Stuart
Is my right hon. Friend as confused as I am by the Labour party’s policy? The right hon. Member for Leigh (Andy Burnham) could not explain where public health would go; he wants to repeal the Health and Social Care Act 2012, although he wants the services to be shaped as the Act says; and on funding he said in June 2010:
“It is irresponsible to increase NHS spending in real terms”.
That is the Labour party’s policy: it is chaotic and makes no sense. Can my right hon. Friend please tell us whether he sees more sense in it than I do?
Mr Burns
I am afraid that I cannot help my hon. Friend, because the policy is contradictory and does not make sense.
The right hon. Gentleman talks about repealing the 2012 Act, which includes the clinical commissioning groups, but if he abolishes them there will be no other mechanism from 1 April next year to commission care for patients, so there will be no one available to commission care for patients, which seems stunning.
The right hon. Gentleman talks about funding, and his quotations—my hon. Friend the Member for Beverley and Holderness (Mr Stuart) mentions one—are quite clear: he disapproves of giving real-terms increases in funding to the NHS. In Wales, the Welsh Labour Government have taken him at his word and are cutting spending, which we are not very enthralled by.
Mr Burns
I will now make progress.
Treatments available on the NHS are based on clinical need. There should never be any arbitrary rationing based on cost either locally or nationally—[Interruption.] The right hon. Member for Leigh shouts from a sedentary position, “There is”, and waves a piece of paper a little like Chamberlain on his way back from Munich, but if the piece of paper that the right hon. Gentleman is waving is his NHS health check, which officials in my Department have looked at, it is as worthless as the piece of paper that Chamberlain brought back from Munich.
If the right hon. Gentleman has any genuine evidence based on the cost of care, I and the Department of Health will certainly investigate it. Such practices are totally unacceptable, and we will take them very seriously indeed, but until then, although the motion talks about “the evidence presented”, the truth is that there is none.
The right hon. Gentleman claims that the number of cataract operations has fallen significantly since we came to power, but the reason for the fall is that clinicians have advised that the surgery is inappropriate in many cases—on clinical grounds. Surgery is available, however, for those patients who are clinically eligible, and they will receive it when there is a clinical reason.
Barbara Keeley (Worsley and Eccles South) (Lab)
Will the Minister give way?
Mr Burns
No, I am making progress.
The motion notes the growing involvement of the private sector, insisting that it represents evidence of growing privatisation. Not only is that unadulterated tosh, but I personally find it offensive to be accused of seeking to privatise the NHS, when in my political philosophy one of my core beliefs is in an NHS free at the point of use for all those eligible to use it.
Not only does the right hon. Gentleman have some difficulty understanding the meaning of “privatisation”, but he forgets his own record in government. The only plan to increase the private provision of NHS services came under the previous Government when he was Minister, when his hon. Friend the Member for Leicester West (Liz Kendall) was the special adviser and when Patricia Hewitt was Health Secretary. In May 2007, the right hon. Gentleman said:
“Now the private sector puts its capacity into the NHS for the benefit of NHS patients, which I think most people in this country would celebrate.”
Those are his words. It was his Government who saw private companies paid 11% more than NHS providers for doing the same work, and who wasted £297 million on operations that never happened at independent sector treatment centres. Given that he may have forgotten, I must tell him that the Labour party manifesto in 2010, when he was the Secretary of State for Health, stated:
“Foundation trusts will be given the freedom to expand their provision into primary and community care, and to increase their private services—where these are consistent with NHS values”.
That suggests that, as Secretary of State, he was prepared to have in his own party’s manifesto a policy allowing and encouraging foundation trusts to attract more work from the private sector.
This Government’s Health and Social Care Act 2012 specifically prohibits the Secretary of State, Monitor or the NHS Commissioning Board from favouring any type of provider, be they from the NHS, the charitable sector or the independent sector. It does so because this Government understand something that the right hon. Gentleman’s never did—it is not the nature of the provider, but the quality of the outcomes that matters most to patients.
Mr Burns
No, I will not.
The motion speaks of the
“increasing number of cost-driven reconfigurations of hospital services”.
The reconfiguration of NHS services must always be led by a desire to improve patient care and patient outcomes. As lifestyles change, as needs and expectations grow and as technology develops, the NHS must respond. This Government are very clear that the reconfiguration of services is a matter for the local NHS, and that the best decisions are those taken closest to the front line and tailored to the needs of the local population. But, when making those decisions, it is imperative that the NHS carries the support of local people, patients, carers and clinicians.
The principle is enshrined in the four tests that my right hon. Friend the Secretary of State set out in 2010: all local reconfiguration plans must demonstrate support from clinical commissioners, strengthened public and patient engagement, clear clinical evidence and support for patient choice.
Mr Burns
The right hon. Member for Leigh equates the coalition agreement’s promise of a temporary moratorium on changes to hospital services, with a commitment to hold the NHS in a permanent state of suspended animation. The moratorium was needed to put a stop to the arbitrary reconfigurations that his Government instigated—reconfigurations that lacked the support of local clinicians, lacked a clinical evidence base and lacked basic democratic legitimacy. This Government and the Secretary of State have put that right.
Now I turn to another issue that the right hon. Gentleman raised and which is of considerable importance, given what has—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Hon. Gentlemen, the Minister has given way quite a bit, and I am sure that if he wishes to give way he will let you know. You do not need to keep standing and hovering for so long.
Mr Burns
Thank you, Mr Deputy Speaker. Because I want to make progress so that other people can contribute, I will not accept any more interventions.
On the South West Pay Consortium—[Interruption]—an issue on which I hope the right hon. Member for Leigh will listen, given that during his speech he seemed keen to hear the Government’s response—the Government’s position is clear: it is for employers, not for the Government, to lead negotiations on the terms and conditions of their staff, and to do so with the agreement of staff.
This Government are committed to the principles of “Agenda for Change”, a national framework. The ongoing negotiations on “Agenda for Change” are about ensuring that patients and taxpayers get the maximum value for money from every penny spent on the NHS, and that it is spent efficiently and effectively. The negotiations are not about a pay cut, and we would not support one.
The Health Act 2006, brought in by the previous Government when the right hon. Gentleman was the Minister of State in the Department of Health, gives NHS trusts the power to set their own terms and conditions. Although they are free to opt out of the national pay framework, they cannot do so unilaterally; they must consult and seek agreement with their staff and representatives.
Almost all trusts have until now chosen to stay on national terms and conditions. I believe that most still want to, but that has to be fit for purpose and fit for the future. Only one trust—Southend—has opted out of “Agenda for Change”. [Interruption.] The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) may be a Whip, but he is rather foolish to fall into the trap that I have just set. That trust opted out of “Agenda for Change” under the last Labour Government. Perhaps he would like to apologise.
Pay is the largest element of NHS costs, and pay systems must evolve. The trusts in the south-west wish to work and negotiate with the trade unions to agree changes, not to dismiss and re-engage staff.
Mr Burns
The hon. Lady only recently walked in. She has not been here from the beginning.
I call on the unions to respond positively to the issue and the national discussions on “Agenda for Change”. I also hope that the Opposition will support the policies that they put in place when in government.
The Opposition have used this debate to make yet another sorry attempt to paint a distorted picture of the NHS. That is wrong. The shadow Secretary of State pours scorn on the performance of the NHS, while we admire the excellence of the staff; he belittles their achievement while we laud them; he scaremongers, while we present the truth more transparently than at any other time in the history of the NHS.
The accusations in the motion are simply wrong, and I ask my right hon. and hon. Friends to join me in the Division Lobby at the end of the debate to defeat the motion.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I inform hon. Members that there is now a five-minute limit on speeches.
Grahame M. Morris (Easington) (Lab)
Thank you for calling me early, Mr Deputy Speaker. I am delighted to be able to participate in this important debate just before the recess.
I refer hon. Members to part of the Opposition motion:
“That this House regrets the growing gap between Ministers’ statements and what is happening in the NHS; notes mounting evidence of rationing of treatments and services by cost, despite Ministers’ claims to have prevented it”.
I would like to highlight one specific example. The Minister, who is not paying attention at the moment, may wish to make note of the issue, because it matters to cancer patients in my area and across the country. I am talking about the lack of access to advanced radiotherapy.
By way of background, I should say that the national cancer action team told NHS commissioners that radiotherapy is involved in 40% of cases in which cancer is cured. Furthermore, radiotherapy by itself now cures 16% of cancer patients. By contrast, cancer drugs are the main cure of only 2% of cancer patients. We can draw the conclusion that I hope the Department of Health and Ministers would accept: radiotherapy cures far more cancer patients than drugs. They should issue instructions to commissioners to reflect that and make money available for radiotherapy.
The current allocations are inadequate and arguably paltry. The radiotherapy budget for the current year is just £350 million, while the cancer drug budget is close to £1.5 billion. Within that sits the Government’s flagship cancer drugs fund, which, according to information that I have received, was underspent by £150 million. Despite that underspend, an additional £200 million is going into the cancer drugs fund. My concern is that that money is not for cancer patients but for cancer drug companies.
The whole idea is becoming discredited—so much so that, as has been reported in the newspapers, even Mr Clive Stone, the Prime Minister’s constituent who originally inspired the fund, has asked for less money to be put into the fund. Why? He now needs advanced radiotherapy for his cancer and there is no money available for him.
The cancer drugs fund cannot be used to fund advanced radiotherapy, and that is a real concern. I have no doubt that during the winding-up speeches we will be told that the Government are putting in an extra £150 million into new radiotherapy treatments over the next four years. The Minister of State, the hon. Member for Sutton and Cheam (Paul Burstow), keeps telling us that, but when I ask him where the first and second year allocations—£13 million and £22 million—are being spent, he tells us that he does not know.
I thought I would try to help out the Minister, so I sent freedom of information requests to every strategic health authority asking how much of the money they had received and how their PCTs had spent it. I have good news for the Minister, who is not in his place. It is that he is not the only one who is in the dark when it comes to that £13 million and £22 million; the SHAs do not know either. I have the replies with me. I was going to read them out, but unfortunately I do not have time.
The stark truth is that under this Government no new money is going into providing the latest radiotherapy technologies for the NHS. In March last year, the Secretary of State commended some of the new facilities, including the new CyberKnife system at St Bartholomew’s hospital in London. Members, some of whom have also been to see the system, are concerned that charities are having to be used to raise money to buy that vital equipment. When I raised that issue in this Chamber, the Minister disputed that, but I have furnished him with a list of areas where it is happening. The Minister should accept his responsibility, get a grip on the situation and ensure that cancer patients needing advanced radiotherapy have access to the service that they need. I support the motion.
Mr Stephen Dorrell (Charnwood) (Con)
It is a pleasure to follow the hon. Member for Easington (Grahame M. Morris), who is a member of the Health Committee. I hope he will forgive me if I do not follow him down the specialist course of radiotherapy services.
I want to address my remarks primarily to the shadow Health Secretary and to begin with an echo from a different era. When I first came to the House, there used to be something called “Whitelaw’s law”, which, obviously, referred to the late Willie Whitelaw. “The more he blusters,” we used to say, “the less he believes it.” The shadow Health Secretary gave us an Olympic-class demonstration of the principle of Whitelaw’s law. He blustered from the Dispatch Box and got himself into several dead ends. It became clear that he did not really believe that he had answers for the challenges facing the NHS.
I refer the right hon. Gentleman to a point that he made and which I agree with. The most important statement about the current state of the health service was not made by him as Secretary of State—and, with great respect to my right hon. Friend the Secretary of State, it was not made by him either. It was made by Sir David Nicholson in his annual report to the national health service in May 2009, and it was endorsed by the right hon. Gentleman. Sir David said, looking forward to the period of this Parliament:
“we must be prepared for a range of scenarios, including the possibility that investment will be frozen for a time. We should also plan on the assumption that we will need to release unprecedented levels of efficiency savings between 2011 and 2014—between £15 billion and £20 billion across the service over the three years.”
I agreed with what the shadow Secretary of State said about the importance of what we, in the Health Committee, dubbed “the Nicholson challenge”. I believe that that is the central challenge facing the national health service. The sadness in this debate was that the right hon. Gentleman gave us no hint as to how he believes the health service should address that central challenge about which he and I agree.
Mr Graham Stuart
Meeting that challenge, and dealing with the challenges in the NHS generally, would be all the more difficult if one believed, as the right hon. Member for Leigh (Andy Burnham) does, that real-terms increases in investment in the NHS are irresponsible.
Mr Dorrell
I agree with my hon. Friend, but let us not go down that route. At the time when Sir David Nicholson was writing, the Labour Government were contemplating the possibility not of a real-terms freeze, which is in effect what is planned under the coalition, but of a cash freeze, which would have been substantially more difficult to achieve.
The main issue now is how we deliver services that meet the demands placed on the system against the background of a resource allocation to the health service that was always going to be dramatically less generous than it was during the earlier years of the Labour Government. We heard from the right hon. Gentleman a commitment that an incoming Labour Government would go through a clean-sheet-of-paper redrawing of the map—
Mr Dorrell
The right hon. Gentleman shakes his head, but he said that he would repeal the Health and Social Care Act 2012, the result of which would be to commit the health service to precisely the kind of reorganisation—or re-disorganisation—that he accuses the Government of introducing.
The challenge for the Opposition is to show that they are willing to map a future for the health service, in much more constrained financial circumstances, that allows it to meet the demand for services that is going to be placed on it and to fulfil the aspirations that we all have for improved quality of service. That becomes increasingly difficult in the light of motions such as the one that the right hon. Gentleman has put down for the House to consider. He invites us to regret
“the increasing number of cost-driven reconfigurations of hospital services”
and
“growing private sector involvement in both the commissioning and provision of NHS services”.
Yet when he was Secretary of State and bore my right hon. Friend’s responsibilities for meeting this challenge, he made it clear that service reconfiguration was precisely how the health service needed to meet the challenges that it faced, and that the private sector had an important role—of course, not an exclusive role—in introducing the solutions to the challenge that Sir David Nicholson articulated in May 2009. The same approach was taken in the Labour party’s manifesto for the 2010 general election.
The challenge that the right hon. Gentleman has to address if he is to discharge his responsibilities as shadow Health Secretary is to move on from party political ding-dongs, of which we have had too many. [Interruption.] The right hon. Member for Holborn and St Pancras (Frank Dobson) is commenting from a sedentary position. I have always been aware that he, at least, does not agree with the commissioner-provider split that the shadow Health Secretary operated as Secretary of State and has always said that he is in favour of considering.
Frank Dobson
Would the right hon. Gentleman care to confirm for the House that in the last year when he was Secretary of State, NHS hospitals carried out 5.7 million operations and at the end of the Labour Government’s period in office it was carrying out 9.7 million operations?
Mr Dorrell
I am grateful to the right hon. Gentleman for drawing attention to the fact that throughout the history of the health service, under Governments of all political complexions, there has been a growth in the level of services, and improvement in the quality of services, provided to patients. It happened under the Tory Government of whom I was a member and under the Government of whom he was a member. Of course, that is delivered not by the politicians but by the doctors and nurses who work in the health service.
The challenge faced by the current generation of policy makers, including the shadow Health Secretary, is how to meet the rising demands and the requirement for improved quality in much more constrained financial circumstances than I or he faced as Secretaries of State. He signally failed to meet that challenge today.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
This debate comes less than a week after the Secretary of State’s announcement that he is putting South London Healthcare NHS trust into administration. He will therefore not be surprised, and nor will the House, that I intend to focus on that issue.
Not surprisingly, this announcement has caused massive alarm and concern across south-east London. Staff working for the NHS in all three affected boroughs—Greenwich, Bromley and Bexley—are all worried about whether they will continue to have a job. Patients and their relatives are worried that the NHS services on which they have depended for years may no longer be available, as rumours abound about potential cuts and closures affecting hospital services. What is most regrettable is that all this is utterly unnecessary. Indeed, there is a strong suspicion that the whole process of putting South London Healthcare into administration is driven by politics—by the Government’s wish to send a message about being tough with trusts in deficit rather than by a rational assessment of what is most likely to help the trust to improve its clinical and financial performance.
Let us look at the facts. At the time when the Secretary of State made his announcement, briefings appeared in the media about South London Healthcare being a failing trust with poor standards of clinical care. On the contrary, the trust has shown significant improvement in clinical performance. It is one of the top five trusts in the UK in terms of low mortality, hospital infection rates are three times lower than the national average, and the four-hour target for A and E patients has been met month on month since February. For those of us who have been working with South London Healthcare to raise its performance, it is particularly galling to see the Secretary of State dismissing those achievements and incorrectly claiming, as he did on 28 June in a communication to MPs, that patients at the trust
“experience some of the longest waits for treatment”.
That is simply not true of South London Healthcare today. It may have been true a year ago, but, as I said, there has been improvement, and the Secretary of State has ignored that. Indeed, he himself appears to realise that his criticisms were wide of the mark, as just one week after he made that statement I received a letter from him, as did many other London MPs, starting with the following memorable words:
“Dear Colleague,
I wanted to write to you with a summary of the excellent performance of the NHS in your area”.
You couldn’t make it up; talk about the left hand not knowing what the right hand is doing.
What about the deficit? Yes, there is a deficit—about £70 million last year—but South London Healthcare has been implementing a series of service changes designed to reduce it over the next four years while at the same time improving the standards of health care. Ironically, its task has been made much more difficult by the Secretary of State, who knows only too well that two years ago, in summer 2010, he intervened to halt the implementation of a clinically led plan to reconfigure services in south-east London entitled “A picture of health”, which, after six months’ delay and a review that he imposed, was judged to meet all four of the necessary tests. His intervention merely delayed a reconfiguration process that was going to improve services and save money. Now, after a wholly unnecessary and costly delay, the plan is proceeding, with the consolidation of A and E services on two, rather than three, sites and similar moves to concentrate specialisms: stroke at Bromley; elective surgery at Queen Mary’s, Sidcup; and maternity at Queen Elizabeth, Woolwich. All those changes have helped to improve performance and have made savings. Ironically, the same Secretary of State who delayed the implementation of these improvements is now blaming the trust for the deficit without acknowledging his own part in the process.
South London Healthcare has been in existence for just three years. It came into being as a merger of three trusts, all of which faced deficits and needed support and help to get out of their problems. As the trust’s ex-acting chair, who was removed from office today, said in his letter to the Secretary of State on 9 July,
“We have been prepared to take strong action—we are the only Trust in London to successfully close an A and E department and move maternity services…What we have not been prepared to do is to promise more than is within our capacity to deliver; nor to mask structural issues that need to be addressed.”
It is a tragedy that, rather than supporting the trust in its really good work in improving patient care and reducing the deficit, the Secretary of State has acted in an arbitrary and unfair way and is trying to blame the trust for a problem for which he has a large measure of responsibility.
Karen Lumley (Redditch) (Con)
I want to highlight some of the issues that people in Worcestershire are facing. Like many parts of the country, we are facing a joint services review of our acute trust.
For those who do not know Worcestershire, it has three hospitals, including a private finance initiative hospital, which is costing 5% of the total health spend in the county. The PFI deal was made under the Labour Government, who have admitted that there is a case for saying that they were poor at negotiating PFI contracts from the outset. In Worcestershire, not only were they poor at negotiating the contract; they also put the hospital in the wrong place. Our PFI hospital is in the south of the county, which is all very well for people who live there, but for the 200,000-plus people who live in the north of the county, it is extremely difficult to get to. For somebody who lives in Redditch, it is far easier to get to a hospital in Birmingham than to one in Worcester.
We are now undertaking yet another review. Once again, people in Redditch see that their hospital and their services, including A and E, maternity and children’s services, are under threat. I say once again because six years ago we were in the same position. I know that spending in our health economy has been increasing, but we in Worcestershire are paying for the overspends of the past few years and need to save money.
I put it on the record that the people of Redditch want to retain their A and E. As their Member of Parliament, I totally agree with them. We are in the early stages of the consultation, but I urge Ministers to look closely at this matter. The Secretary of State has visited the Alexandra hospital and seen for himself what a good hospital it is. Importantly, it was paid for and is owned by the NHS. I will be asking for a cross-party meeting in due course, which I hope my right hon. Friend will agree to, because the people of Redditch are once again working together. Apart from the Labour parliamentary candidate, people have put party politics aside to work together to save our A and E.
I know that many other Members want to speak in this debate. I just wanted to put the marker down that we in Redditch want our A and E and that I intend to fight for it.
Frank Dobson (Holborn and St Pancras) (Lab)
We all know that the massive top-down reorganisation of the national health service that the Government have pushed through had not a jot of public support, that no one voted for it and that it was not mentioned in the famous coalition agreement. Nevertheless, it was proceeded with.
We are now faced with something that was not in the election manifesto of either of the Government parties. Nor, I suspect, was it in any of the election literature of any of the MPs from those parties in the south-west. I do not think that any of them said, to use the phrase of the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), “We admire you people in the health service so much that we have decided that you will have to pay more for your pension and work longer, and that your pension will be smaller.” I do not think that any of the Lib Dem or Tory candidates in the south-west put in their leaflets, “We admire you people in the national health service so much that we intend to reduce your pay.” None of them said, “We admire you so much that we are going to reduce your entitlement to leave.” None of them has said, at a time when there is rightly increasing concern about the standard of care in hospitals at the weekend, “We intend to reduce or get rid of your overtime pay at weekends.” I would not wish to be admired by a Health Minister, because something nasty would clearly appear shortly afterwards.
People in the national health service are sick to death of this massive reorganisation, of thousands of their colleagues being made redundant, of people having to reapply for their own jobs, and of being expected to do their day job while falling into line with the preposterous ideas in the major health legislation that went through this House. On top of that, they are now being told that they cannot be paid what they used to be paid. Apparently, people in the south-west say, “Pay down here tends to be lower, so let’s reduce the higher pay of people in the public sector, such as those in the hospitals, to the miserable levels that the private sector pays people here.” It is not likely that giving people even lower pay, which is always associated with poor health, will improve the public health of people in the south-west, which the hon. Member for Totnes (Dr Wollaston), who is herself a GP in the south-west, has talked about.
What the Government have done is disgraceful and is in clear breach of their manifesto commitments. They are now attacking people in the national health service. I laud and admire people who work in the national health service. There may be some bad ’uns—there are bad ’uns everywhere—but most of them work very hard and brilliantly on our behalf, none more so than those at University College hospital in my constituency and at the Kentish Town health centre, which I was happy to be at recently with Alan Bennett for the ceremony to celebrate 125 years of the Wigg practice, which serves people brilliantly. Believe me: when I talk to people at those two institutions, the main people who are denigrated are the Tory Ministers who have wished all this upon them. I join in that denigration.
Stuart Andrew (Pudsey) (Con)
I am extremely grateful for the opportunity to speak in this debate. The NHS is clearly important to all of us. I have seen it personally because I have had a number of operations and through my working life in the hospice movement, where I saw how the care that is provided is so important to the families we were looking after. Clearly, the dedication of the staff is great and I pay tribute to them.
Listening to the Opposition today, it is hard to take them seriously. We can see from their actions in Wales what they would do with the NHS if they were in power. They have cut the budget, resulting in an increase of 51% in the number of patients waiting to start treatment and an increase of 156% in the number of those waiting for more than 26 weeks. All the bad news from the Opposition is therefore difficult to swallow.
I will give a couple of examples from my area. I recently met some GPs and clinicians to talk about the work they are doing to redesign musculoskeletal services. They have brought in innovative ways of ensuring that the patient knows exactly what will happen to them. Clinicians across primary care, community services and secondary care are working together to ensure that the patient has a clear understanding of the care that they will receive. They use map displays, which show a clear pathway, offer educational content for GPs to ensure that patients get the highest standard of care, and ensure that information is available for the patient.
I am proud to say that on Friday, one of the surgeries in my constituency will open a new well-being centre, which will provide a place where health care, social care and the third sector can come together to provide better ways to improve health and well-being in the town.
Jim Shannon (Strangford) (DUP)
Does the hon. Gentleman share the concerns of many Members, as I believe he does, over the closure of surgical units for children in the middle counties of England? If so, what is he doing to prevent it in his constituency?
Stuart Andrew
The hon. Gentleman pre-empts the next part of my speech and I am grateful to him for that.
As this is a health debate, I am sure that my right hon. Friend the Secretary of State would expect me to talk about the safe and sustainable review of children’s heart units. Like other Members, I have received a number of e-mails from various organisations today. One of them said that some MPs should seek to reignite the debate and that I should think about the children because if I had children, I would move heaven and earth to ensure that the service was the very best. Frankly, throughout the campaign on children’s heart units, I have only ever thought about the children. Of course I want the very best service for them, as do the right hon. and hon. Members from all parts of the House who have worked on the campaign. I have always accepted that there is a need for change. That is why I want to discuss a few related points this evening. I know that I will have an opportunity to raise it in greater detail tomorrow, but it is important that I speak about it tonight.
Access and travel times are incredibly important to the families who use children’s heart services. Logical health planning surely dictates that services should be based according to where the population lies. The British Congenital Cardiac Association states:
“Where possible, the location of units providing paediatric cardiac surgery should reflect the distribution of the population to minimise disruption and strain on families.”
Andrew Percy
That is exactly the point that Members who represent Yorkshire and northern Lincolnshire are concerned about. The proposals will mean that patients will have to travel, and expecting families in northern Lincolnshire to get to Newcastle is simply not acceptable.
Stuart Andrew
I thank my hon. Friend, who brings me to my next point. Independent analysis of patient flows showed that the majority of people in the Doncaster, Leeds, Sheffield and Wakefield area would not go to Newcastle; they would probably choose centres in Liverpool, Birmingham or even London. The NHS constitution states that patients have the right to make choices about their NHS care, yet the joint committee of primary care trusts has asserted that Newcastle could reach the minimum number of procedures if parents were “properly managed”. That flies in the face of patient choice.
Furthermore, the review has ignored the views of the people. I do not think there has ever been a petition as large as the one from Yorkshire, with more than 600,000 people’s signatures, but it counted as only one representation in the meeting at which the decision was made. I will raise a number of issues tomorrow to do with the scoring process that was used in the review, but I believe that the change will provide a poorer quality of service for Yorkshire and Humber families. Clinical experts from the BCCA, the Bristol inquiry, the Paediatric Intensive Care Society and the Association of Cardiothoracic Anaesthetists say that paediatric services should all be under one roof. In Leeds, we have a dedicated children’s hospital with all the services under one roof, so it is ready-made.
I urge Ministers to look into the process of the review and see whether they believe it was properly run. Given the closeness of the scores for Leeds and Newcastle, and considering the outcry that has come from Yorkshire and the Humber, I hope that they will give both centres an opportunity, until April 2014, to demonstrate that they can comply with all the standards that the clinicians on the safe and sustainable steering group have recommended. If one or both centres fail to meet any of those standards, the decision should be reviewed.
This is a very important issue for my constituents. The number of letters that I and my colleagues from around Yorkshire and the Humber are receiving shows how strongly people feel about it, and I urge Ministers to listen to our concerns.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Thank you for giving me the opportunity to speak in this important debate, Mr Speaker. I wish to bring to the House’s attention some of the realities on the ground.
NHS North West London is currently conducting a flawed consultation, which is cynically being held during the Olympics and the summer months, on proposals for the reconfiguration of acute hospital services. The proposals would mean the closure of four out of nine accident and emergency departments, including Ealing’s, and the effective closure of Ealing hospital, my local hospital. My right hon. Friend the shadow Secretary of State recently described those shocking proposals, accurately, as “butchery”, not reconfiguration.
The proposals are put forward as clinically led, but that is far from the truth. At a recent meeting convened to discuss them, consultants at Ealing hospital and GPs from right across the London borough of Ealing voted unanimously against the proposal to close Ealing hospital. Other clinicians from right across north-west London are also opposed to the changes, and the hon. Member for Ealing Central and Acton (Angie Bray), who has just left the Chamber, has rightly said that they are financially driven. I take this opportunity to congratulate and thank the staff at Ealing hospital, who are working hard to provide services to patients during this time of uncertainty.
The Nicholson challenge means that across the country, £20 billion of savings must be found in the NHS by 2014, and £1 billion of that is earmarked to come from north-west London. It is clear that this is a top-down restructuring of hospital services, driven totally by financial considerations. The proposals are being railroaded through by the remnants of the old PCTs before they are abolished next April and replaced with clinical commissioning groups. That is a top-down reorganisation of local hospitals by an unaccountable body that, after making these major decisions, will no longer exist. That flies in the face of what the Prime Minister said to me at Prime Minister’s questions—that such a decision should have the support of local doctors and patients. Local GPs and patients are overwhelmingly against the proposals, so they should be withdrawn immediately. The Prime Minister has also repeatedly told me that there are no plans to close Ealing hospital. Given that after his visit to Ealing he said that he liked what he saw, I expect him to join me, local doctors, patients and all political parties in opposing the plans.
The Secretary of State, too, is on record as saying that there were no plans to close Ealing hospital’s A and E, and as asking where all the people who use it would go. Approximately 100,000 people a year attend there, of whom 55,000 use the urgent care centre and 45,000 are treated in the full A and E department. Where will all those people go for treatment if Ealing’s A and E is closed? Other A and E departments that are not proposed for closure are already under pressure from their own population and would not be able to cope with the extra numbers. Services would suffer, and waiting times would become intolerable.
The preferred option being consulted on also includes the closure of the Central Middlesex, Hammersmith and Charing Cross A and Es. That would be reckless and dangerous, and would leave a large swathe of west London without adequate A and E cover. Three London boroughs—Ealing, Brent and Hammersmith—would be left without any A and E. What would happen if there were a major incident similar to the Southall rail crash in Ealing or elsewhere in west London, or, God forbid, an air crash or terrorist incident?
The plan is opposed by clinicians, patients, politicians of all parties and members of the public, and it should be scrapped immediately. I will support the motion this evening.
Andrew George (St Ives) (LD)
It is a pleasure to follow the hon. Member for Ealing, Southall (Mr Sharma), a fellow member of the Health Committee. He makes a strong case on behalf of his constituents, and one hopes that any reconfiguration will be evidence-based and, above all, based on clinical governance and clinical safety.
This is an important debate—indeed, we cannot debate the future of the NHS enough, because it concerns many Members and their constituents. It draws passion and a great deal of interest, because it affects everyone’s lives. I therefore congratulate the Opposition on giving us the opportunity to debate it this evening.
I apologise to the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), for not having heard his speech. I had to attend an urgent meeting with a Minister to discuss the closure of a Remploy factory in my constituency. My hon. Friend the Member for Southport (John Pugh) gave me a précis of the Minister’s wise remarks as best he could—without, of course, being able to convey fully his panache and oratorical dexterity. I understand that the Minister made a number of important remarks about one issue that I want to discuss, as a Member representing west Cornwall and the Isles of Scilly, which, apart from being the centre of the world, are in the far south-west. That issue is pay and conditions for staff. As I understand it, he emphasised the point that no such independent review of pay, conditions and the salaries of staff in such an area can proceed without the full involvement and support of the unions, and their engagement in the final decisions.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is absolutely right that the trade unions should be involved, because this is an enormous issue, particularly for staff morale in the south-west. Does the hon. Gentleman not share my concern that thus far the consortium has shown no great desire to undertake that consultation in the south-west? That really has to change.
Andrew George
The hon. Lady makes an important point. Lezli Boswell, the chief executive of the Royal Cornwall Hospitals Trust, wrote to me on behalf of the consortium about concerns that have been raised, including by the unions, saying that once the national pay review has concluded under “Agenda for Change” it would then be appropriate, if it is at all appropriate, for any further local discussions to proceed. Without union involvement in the work of the consortium, I agree with the hon. Lady that the proposal is irrelevant and potentially disruptive and dangerous, given its impact on staff morale throughout the NHS in the south-west. My hon. Friends will be listening closely to this debate, and to the concerns that have been raised by many Members and, indeed, by staff across the south-west about the consequences for staff morale and the impact on NHS services. I certainly hope that the Secretary of State will address those issues when he concludes the debate.
A key issue is one that dare not speak its name—it affected staff morale under the previous Government as well—but it is the increasing pressure on front-line NHS staff. The staffing levels at the coal face have never been sufficient to provide a safe staff to patient ratio. Many people have been critical of nursing and care standards in the NHS, but they often overlook staffing ratios.
I have also expressed concerns about the out-of-hours service in Cornwall—I know that we will not have time to discuss that—and the Care Quality Commission will produce a report as a result of those concerns, which were also voiced by the hon. Member for Truro and Falmouth (Sarah Newton).
On pay for staff in the south-west, the chief executive of the Royal Cornwall Hospitals Trust said to me in a letter:
“In recent years NHS organisations have largely exhausted other avenues of potential cost-saving (including reducing reliance on bank or agency staff and implementing service improvement initiatives). Monitor…has also estimated that NHS organisations with a turnover of around £200m will need to produce savings of around £9m a year for each year until 2016/17 to remain in financial health.”
She goes on to say that the consortium, which consists of 20 organisations in the south-west,
“is looking at how pay costs may be reduced, whilst maintaining a transparent and fair system that is better able to reward high performance, incentivise the workforce and support the continued delivery of high quality healthcare.”
Does the Secretary of State agree with that, and how does he intend that that should proceed? How will he protect staff and staff morale, because the consequences will, I fear, derail national negotiations on “Agenda for Change” and drive down pay and morale, particularly in an area of very low wages? I hope that he is listening.
Mr Speaker
Order. The Front-Bench winding-up speeches will begin at 7.10 pm, so the two remaining colleagues can divide the time if they wish, but not if they do not. I call Mr Barry Gardiner.
Barry Gardiner
Thank you, Sir. I shall try to respect your advice.
In November 2011, the following announcement appeared on the Central Middlesex hospital website:
“A and E at Central Middx Hospital is temporarily closing overnight between 7 pm and 8 am starting from Monday 14 November 2011.
The urgent care centre next to A and E will remain open 24 hrs a day 7 days a week to treat patients with minor injuries and illness.
We are making this temporary change to ensure we continue to provide a safe service to patients during the winter months.”
In those three paragraphs, we hear twice over that that overnight closure is temporary, which gave minimal comfort to my constituents in Brent who used the facility. The overnight closure is indeed temporary. On 2 July, a consultation entitled “Shaping a healthier future” was launched in north-west London, and residents can submit their views until 8 October this year. The consultation, promoted by a transitional body called NHS North West London, aims to centralise and rationalise hospital services in the area. Each proposal outlined in the consultation includes the closure of the A and E at Central Middlesex—not overnight provision, but the 24-hour facility—for good.
The motion speaks of
“the growing gap between Ministers’ statements and what is happening in the NHS”.
I may have trouble agreeing with that, because it depends on which Minister and which statements. The Minister of State, Department for Education, the hon. Member for Brent Central (Sarah Teather), received an e-mail from me today advising her that, if called to speak, I would quote her in this evening’s debate. I wanted to do so, because she made the following three statements. First:
“The Tories would be a disaster for the NHS, they plan a part privatised service”.
The second quotation:
“These cuts will hit the poorest and most vulnerable hardest”.
The third quotation:
“The government must take urgent steps to safeguard our local NHS”.
Those three quotes date respectively from 2003, 2007 and 2007, when the hon. Lady was campaigning to keep open the accident and emergency centre at Central Middlesex hospital—campaigning for something which she, in her government, is now closing. No wonder her latest comment is:
“This flawed consultation, which does not allow residents to say that they want to save the A and E, is a kick in the teeth for all local people.”
I do not speak Parseltongue—I do not understand it—but I deplore the pretence of opposing a policy that you are pushing through in government. That is really disgraceful.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Mr Cunningham, you have until 7.10 pm before the Minister responds.
Alex Cunningham (Stockton North) (Lab)
Thank you, Mr Deputy Speaker.
Patients in my constituency of Stockton North are already feeling the pain from the Tories’ policies. The number of admitted patients who have waited longer than 18 weeks for an operation rose by a staggering 49% between May 2010 and November 2011, and I have no doubt that the figure is much higher now.
The North Tees and Hartlepool NHS Foundation Trust faces a drastic cut to its budget of £40 million over three years. Chief executive Alan Foster has said that that is the most difficult financial position that he has ever faced and has acknowledged that the cuts will undoubtedly lead to unpopular decisions to keep the trust afloat. The trust is trying very hard, and it has even resorted to car boot sales to try to balance the books. Some of those cuts could be achieved if the Government got behind the trust and did something to ensure that the two North Tees and Hartlepool university hospitals are replaced by one midway between the two communities.
My fear is that there will be no new hospital and the trust will be forced to close one of the existing hospitals if it is to have any chance at all of delivering £40 million cuts in the next few years. We could end up without any of the benefits of a new hospital, and the targets might still not be achievable. Such a cut would almost certainly cause irreparable damage to the trust’s ability to maintain the excellent range of high-quality services of which it is justly proud. It will undermine all the good work that has gone on in the trust over the past 10 years.
I know that the trust will keep patient safety, quality and performance at the top of its agenda as it goes through this difficult period, but it will not be easy to deliver services to the 350,000 people who depend on them, as they have in the past. The north-east already experiences far greater levels of poor health than the national average. It must be due to the heavy industries and resultant poor environment, as our region mined coal, built ships and made chemicals and steel. The budget cuts will only worsen this position.
The last Labour Government worked hard to reduce the kind of health inequality faced in my constituency, where men can expect to live 14.8 years less in one part of the constituency than in another. Real progress was made to close the gap, but even so, it has proved painstakingly slow, as much work requires huge resources, which are now being denied. I feel the gap growing, even though I know that Stockton borough council has recently appointed a high-calibre person to head up public health. We will not be able to make the progress everyone wants if he and the NHS are starved of resources.
Andrew Gwynne (Denton and Reddish) (Lab)
We have had a good debate, albeit one slightly curtailed by statements. We have heard 10 speeches from Back-Bench Members and I would especially like to commend my right hon. Friends the Members for Greenwich and Woolwich (Mr Raynsford) and for Holborn and St Pancras (Frank Dobson) and my hon. Friends the Members for Easington (Grahame M. Morris), for Ealing, Southall (Mr Sharma), for Brent North (Barry Gardiner) and for Stockton North (Alex Cunningham) for their contributions. I also rightly want to pay tribute to the many thousands who work in our national health service, doing a tremendous job in often challenging and difficult circumstances.
As we have heard in the debate today, there are growing problems in the national health service. We know that two thirds of NHS acute trusts—65%—are reported to have fallen behind on their efficiency targets. As we have heard from right hon. and hon. Members, we are starting to see temporary ward and accident and emergency closures, while a quarter of walk-in centres are closing across England. Despite the “Through the Looking Glass” world of Ministers—one where the Secretary of State for Health closes a debate—we now have growing rationing across the national health service, with treatments—including cataracts, hip and knee replacements—being restricted or stopped altogether by one primary care trust or another.
John Pugh (Southport) (LD)
Does the hon. Gentleman not acknowledge that the real weakness of this debate, as specified by the Select Committee Chairman, is that the Labour party has at no point spelled out how it would meet the £20 billion Nicholson challenge? Will he tell us?
Andrew Gwynne
We set out the Nicholson challenge, but I notice that the hon. Gentleman does not defend the decisions being taken by his Government to restrict or stop these treatments.
It is becoming increasingly clear that there is a gap between Ministers’ statements on the NHS and people’s real experience of it on the ground. In opening, the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) incorrectly said that GP referrals have gone down. Figures published by the Department of Health on 13 July 2012 show that GP referrals are up by 1.9% year on year. Those are statistics from the Minister’s own Department’s. He is out of touch. Furthermore, the Minister said that NHS Hull is not restricting procedures on ganglia, but a freedom of information request we received says:
“NHS Hull will not routinely commission excision of ganglia”.
That was in April 2012, and it is a fact, again showing that Ministers are out of touch. The Secretary of State claimed that there is no such evidence of treatments being restricted or decommissioned.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
Will the hon. Gentleman give way?
Andrew Gwynne
I will not, as I do not have time now.
In the Secretary of State’s annual report to Parliament, he dismissed restrictions on bariatric surgery as “meaningless” and continued to say:
“Time and again, he says”—
that is my right hon. Friend the Member for Leigh (Andy Burnham)—
‘“Oh, they are rationing.’ They are not”.—[Official Report, 4 July 2012; Vol. 547, c. 923.]
But Opposition Members all know the truth. Aside from the evidence presented by the Labour party and the GP magazine, verified by Full Fact, primary care trusts acknowledge that they are restricting access to bariatric surgery. The National Institute for Health and Clinical Excellence recommends surgery for anyone with a body mass index of 40 or a BMI of 35 and co-morbidity. Many PCTs, including NHS Stockport in my own constituency of Denton and Reddish, impose additional restrictions.
Recent freedom of information requests of PCTs and shadow clinical commissioning groups across England have revealed that 149 separate treatments, previously provided for free by the NHS, have been either restricted or stopped altogether in the last two years, with 41 of those being entirely stopped in some parts of the country. This provides the clearest evidence yet of random rationing across the NHS and of an accelerating postcode lottery, which appears to be part of a co-ordinated drive to shrink the level of NHS free provision. From our study, it is clear that many patients are facing difficulties in accessing routine treatments that were previously readily available, and there is evidence that some patients are being forced to consider private services in areas where the NHS has entirely stopped providing the treatment.
Of course, there has been a real reduction in the number of nurses working in the NHS. The Government have claimed that there are only 450 fewer nurses, and at Health questions last month, the Minister, the right hon. Member for Chelmsford said that the figure was “nowhere near 4,000”. But now we all know the truth: figures for the NHS work force in March 2012 showed clearly that there are 3,904 fewer nurses than in May 2010. We have seen broken promise after broken promise, including on reconfigurations.
It was this Government who, when in opposition, spent millions of pounds during the general election putting up posters throughout the country reassuring the electorate that under the Conservatives there would be a moratorium on hospital and A and E closures. Indeed, in opposition, they pledged to overturn some very difficult reconfiguration decisions taken by the previous Labour Government. Yet, as we have seen, the moratorium has not materialised, and there is now evidence of major changes to hospital services across the country.
It is worth remembering that the Prime Minister gave a firm pledge not to close services at Chase Farm hospital, but in September 2011, this Secretary of State accepted the recommendations and approved the downgrading and closure of services at Chase Farm. And there are several others, such as the Hartlepool, the King George hospital in Ilford, the East London, the Trafford General, the North London, the St Cross in Rugby and, as we have heard today, the West London, too, that have either closed or are set to close. What is becoming clear is that when it comes to reconfiguration, Ministers are hiding behind their new localism and are happy to blame the soon-to-be-abolished structures for the forthcoming closures.
In the brief time remaining, I want to deal with Government spending on the health service. As we have learned, actual Government spending on the NHS in 2011-12 fell by £26 million.
Andrew Gwynne
No, I will not.
This was the second successive real-terms reduction in NHS spending, following a reduction of £766 million in the Government’s first year in office. This is in clear breach of the commitment given by the Conservatives and Liberal Democrats in their coalition agreement.
Of course, a long line of professionals have come, one after the other, to express their concern about the damage that will be done to the health service if hospital is pitted against hospital, and doctor against doctor. That is where we start. The Health and Social Care Act 2012 now allows hospitals completely to change character over time. The Government have essentially set everybody on their own. Hospitals are being told, “You’re on your own. There’s no support from the centre any more; no more bail-outs.”
We know that there are problems with the NHS meeting efficiency targets. Indeed, a survey of NHS chief executives and chairmen found that one in four believe that the current financial pressures are the
“worst they have ever experienced”,
with a further 46% saying they were “very serious”. More than half of foundation trusts missed their savings plan targets, according to Monitor’s review of the last financial year.
Ministers have said that every penny saved will be a penny reinvested to the benefit of patient care, but in reality £1.4 billion of the £1.7 billion not spent by the Department of Health has been returned to the Treasury—more broken promises. It is therefore clear for all to see that there is an increasing gap between what the Government are saying and what is going on in the NHS, and the experience of ordinary patients on the ground.
The Government have increasingly broken their promises on the NHS. They promised no top-down reorganisation and a moratorium on hospital closures and they promised to maintain spending levels in the NHS. They have broken all those promises—they are the three biggest broken promises in the history of the NHS. There is clearly a yawning gap between what the Prime Minister and others say and the reality of patients’ experience.
During the general election, the Prime Minister said:
“I’ll cut the deficit, not the NHS.”
It is now clear that the Government are cutting our NHS. The NHS is important for the people of our country, and they deserve better. I commend the motion to the House.
The Secretary of State for Health (Mr Andrew Lansley)
I was rather disappointed by the speech of the hon. Member for Denton and Reddish (Andrew Gwynne). Like the motion, the hon. Gentleman failed to say anything about NHS staff, or to reflect the admiration and respect we have for them. The motion and his speech were just another occasion for Labour to use the NHS as a political football, fuelled by nothing but distortions, inaccuracies and myths.
I always welcome such debates, because they give hon. Members an opportunity to raise constituency issues. Many did—I will respond to the points they made—but the right hon. Member for Leigh (Andy Burnham), the shadow Secretary of State, did not. When the Conservative Opposition raised debates on the NHS before the election, as we often did, we had an alternative policy to express and arguments to put forward. Like the motion, his speech was empty of argument and of fact, and he and the Labour party are empty of policy.
The right hon. Gentleman told us only that he wants to abolish the Health and Social Care Act 2012. If that happened, there would be no clinical commissioning in the NHS. In fact, nobody would be responsible for commissioning. He would abolish local authorities’ responsibilities for public health in their area, which they are embracing and acting on. He would abolish health and wellbeing boards, which are integrating health and social care more effectively. He would abolish the duties in the legislation for NHS bodies to act to reduce health inequalities, which rose under a Labour Government.
Let me address some of the points—
Mr Lansley
No. I will address the points made in hon. Members’ speeches, including the hon. Gentleman’s. He was the first Back-Bencher to speak in the debate. He talked about more support for radiotherapy. He must recognise that we committed to £150 million additional support for radiotherapy in the cancer outcomes strategy. That will be available. He mentioned CyberKnife, which is a brand name for stereotactic beam therapy. That form of therapy is available in the NHS and will continue to be available. He neglected to mention that I announced during the past few months new plans for the establishment of two major centres for proton beam therapy in this country, which will mean that patients no longer have to go abroad to access it.
Mr Lansley
No.
My right hon. Friend the Member for Charnwood (Mr Dorrell) made an important point on the Nicholson challenge, which a number of Opposition Members mentioned. At least one or two of them had the good grace to recognise that David Nicholson’s proposals were set out in May 2009, under, and endorsed by, a Labour Government. Labour Members now want nothing to do with the consequences of meeting that financial challenge. They fail to recognise, as my right hon. Friend said, that the challenge was against the background of an expectation that a Labour Government would not increase the NHS budget, and that the challenge would have to be achieved within three years. The Conservative Government have increased the budget for the NHS. Over the course of this Parliament, it will go up by £12.5 billion, which represents a 1.8% increase in real terms. The right hon. Member for Leigh and his party were against that.
No Opposition Member recognised in the debate the simple fact that, in the first year of this Parliament, £4.3 billion of efficiency savings were achieved, and performance improved, across the NHS. That was not even in the time frame for the Nicholson challenge. We have now had one year of the challenge. The target was £5.9 billion of efficiency savings, and we achieved, across the NHS, £5.8 billion. Things are on track, which completely refutes the shadow Secretary of State’s argument that we cannot have reform and deliver on the financial challenge at the same time. Actually, we can do both, and in addition improve performance in the NHS.
The right hon. Member for Greenwich and Woolwich (Mr Raynsford) completely contradicted the hon. Member for Eltham (Clive Efford) on the South London Healthcare NHS trust. The latter said he was against changes at Queen Mary’s, Sidcup, but the former said that I did not get on with the changes soon enough. The hon. Member for Denton and Reddish complains from the Opposition Front Bench that I did not have a moratorium, but the right hon. Member for Greenwich and Woolwich complains because I did have one.
Let me be clear about this: I did introduce a moratorium, and the four tests. Reconfigurations that meet the four tests should go ahead, because they will improve clinical outcomes for patients, meet the needs of the people of that area, deliver on the intentions of local commissioners, and be in line with the views of the local public. If they meet the four tests, they should go ahead; if they do not, as my hon. Friend the Member for Redditch (Karen Lumley) made clear in respect of Worcestershire, they should not go ahead. That much is clear.
My hon. Friend the Member for Pudsey (Stuart Andrew) made good points on how clinical commissioning is bringing improvements in musculoskeletal services. He also rightly made it clear, as the right hon. Member for Leigh did not, that Wales does not meet anything like the same standards as England and is cutting its NHS budget by 8.4%. We are increasing resources for the NHS in England and improving it. It is expected that, by the end of this Parliament, expenditure per head for the NHS in Wales will be below that of England. That is what we get from a Labour Government.
Let me reiterate to the hon. Member for Ealing, Southall (Mr Sharma) and my hon. Friend the Member for Ealing Central and Acton (Angie Bray) a point I made a moment ago. The hon. Member for Ealing, Southall should admit that the plans being looked at in north-west London are entirely the same ones considered under a Labour Government before the election. I will insist that the plans are subjected to the four tests I have described. If they meet those four tests, they can go ahead; if not, they will not. I advise him to continue making speeches in the House, but also to ask the general practitioners and clinical commissioners in Ealing what they think is in the best interests of their patients—his constituents. That is a good basis to start with.
My hon. Friend the Member for St Ives (Andrew George), the right hon. Member for Holborn and St Pancras (Frank Dobson), and a number of other hon. Members, asked about the south-west pay consortium. When I went to the NHS pay review body just a couple of months or so ago, I made it very clear that the Government believe we should do everything we can to support NHS employers to have the flexibilities in the pay framework that are necessary for them to recruit, retain and motivate staff.
Mr Lansley
The right hon. Gentleman should not interrupt from a sedentary position. I am answering the question. Members are interested in this. When I went to the pay review body, I made it clear that, in my view, we could achieve that through negotiations on the “Agenda for Change”. That continues to be my view, and the south-west pay consortium makes it clear in its documentation that it supports such a negotiation. It is right to pursue such a negotiation nationally and for local pay flexibilities to be used in the national pay framework. That is what most NHS employers do, with the exception of Southend.
I have made it clear, as the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns) has, that we are not proposing any reductions in pay as a consequence. I do not believe they are necessary or desirable in achieving the efficiency challenge.
Andy Burnham
I have a simple question for the Secretary of State. Is he therefore overruling the south-west consortium?
Mr Lansley
No, because the south-west consortium has made no such proposal. Its document is clear: it wants the “Agenda for Change” national pay framework to give it the necessary flexibilities. My view is that we should do that, and I hope that the Opposition, along with the trade unions and the staff side, will support it. As a consequence, no proposal for the reduction of pay or the dismissal and re-engagement of staff is, in my view, desirable or necessary. Indeed, when I went to the pay review body, I made the point that I did not believe reduction of pay in the NHS to be necessary.
Let me conclude. There was a lot that those of us in the Chamber did not hear from Opposition Members. Much of it was in the annual report that I published just two weeks ago—waiting times below what they were at the time of the last election; the number of people waiting beyond 18 weeks cut by 50,000; the number waiting beyond a year reduced by nearly two thirds; infection rates in hospitals at their lowest ever level; cancer waiting times met; ambulance trusts all meeting the category A8 standard; 95.8% of patients seen, treated and discharged from A and E within four hours; 92% of in-patients and 95% of out-patients saying that their care was good, very good or excellent; and patients across the NHS saying that they support the NHS and believe the care they received to have been excellent. On that basis, the House should reject the motion as unfair in its characterisation of the NHS and wrong in its denigration of the NHS.
Question put.
Adult Social Care
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
21:59 - The House divided: - Ayes: 225 / Noes: 292 - Question accordingly negatived.
Liz Kendall (Leicester West) (Lab)
I beg to move,
That this House notes the growing crisis in adult social care; welcomes many of the proposals in the Care and Support White Paper including national minimum standards on eligibility, stronger legal rights for family carers, portability of care packages and improvements to end-of-life care; notes that many of these ideas were proposed by the previous administration, but believes they are now in danger of appearing meaningless without the ability to properly fund them; is concerned that the Government is considering a cap on individual costs as high as £100,000; is committed to the important Dilnot Commission principle that protection against the risks of high care costs should be provided for everyone; and calls on the Government to honour the commitment in its 2010 NHS White Paper to introduce legislation in the second session of this Parliament to establish a legal and financial framework for adult social care.
The issue of how we provide decent care for older and disabled people and their families is one of the biggest challenges facing Britain today. Ten million people in the United Kingdom are now over 65, and that figure will rise to more than 15 million by 2030. The number of over-80s is growing even faster, and is set to double to nearly 6 million in 20 years’ time. Medical advances also mean that people with disabilities are living longer than ever before.
The fact that we as a nation are living longer is something that we should celebrate. There have been many improvements in adult social care over the past 10 years, and I shall say more about that in a moment. However, too many people still face a daily struggle to get the care and support that they need if they are disabled or become frail and vulnerable in their old age. The ways in which we provide and fund care need major reform if we are to deliver a better, fairer and more sustainable system. That reform is vital for older and disabled people and their families who want and deserve a decent system of care and support, but it is also vital for our economy. The Office for Budget Responsibility’s fiscal sustainability report states that the primary pressure on the public finances is our ageing population. Without major changes to pensions and, crucially, to health and social care, the long-term growth of our economy and the sustainability of our public finances could be put at risk.
Last week, the Government had the chance to show that they were prepared to meet the challenge of fundamentally reforming care and support, and many of the promises in their White Paper and draft Bill on social care are welcome. They build on Labour’s achievements when we were in government. Indeed, many of the Government’s announcements were put forward by Labour in our White Paper, “Building the National Care Service”, more than two years ago. They included a shift in the focus of local council and NHS services towards prevention and early intervention to help more older and disabled people to stay living independently in their own homes, and more joined-up NHS and council care to stop families having to struggle with the different services to get the support that they need.
Mr Graham Stuart (Beverley and Holderness) (Con)
I am experiencing a sense of déjà vu. Those of us who take an interest in these matters pleaded with the previous Government in debate after debate to take action and to make some tough decisions to ensure that we looked after our ageing population, but, time and again, they failed to take any real action. We are not building on what they did; we are having to go into the space where they failed to act.
Liz Kendall
I always respect the hon. Gentleman’s interventions, but he seems to forget that we faced up to those difficult decisions and choices on adult social care in “Building the National Care Service”. We tried to get cross-party agreement on those proposals, but they became a political football at the last general election. The hon. Gentleman should be encouraging those in his Front-Bench team to engage seriously in cross-party talks and to take the difficult decisions that need to be taken.
Liz Kendall
I want to make some progress, then I will give way.
Labour proposed better information and national minimum standards to tackle the postcode lottery in care. We also proposed that everyone should have the right to have a personal budget—which we introduced—that people should be able to take their care package with them if they moved to a different area, and that carers should have the right to have their own needs assessed and met independently of the person for whom they cared.
The difference between the Labour Government and the present Government is that we set out the difficult decisions about how those changes would be paid for. The absence of that information is the gaping hole at the heart of this Government’s plans. There is a risk that their promises of new rights and services will be meaningless without the ability to fund them properly. Indeed,
“this White Paper is not worth the paper it's written on.”
Those are not my words, but those of the Alzheimer’s Society, which has damned the White Paper as a massive failure. Similarly,
“the key test for this White Paper was to deliver an urgent timetable to reform social care funding. The Government has failed this test.”
Again, those are not my words. They are the words of the Care and Support Alliance, which consists of more than 65 organisations that represent and support older and disabled people.
Kelvin Hopkins (Luton North) (Lab)
I entirely support the principle of a national care service, but will my hon. Friend go slightly further and be as bold as Nye Bevan in suggesting that it should be free for all at the point of need?
Liz Kendall
I know that my hon. Friend is passionately committed to this issue, and he will know that we remain determined to ensure that there is a fair, affordable and sustainable system for care and support in future.
The Government have failed to take proper action to tackle the immediate care crisis, and they have failed to confront the difficult funding decisions that we need for the future. Last week we heard nothing but complacency from the Government about the desperate care crisis that faces people throughout the country. Ministers repeatedly claim that there is enough money in the system, but the truth is that the Government’s savage cuts in council budgets have pushed an already pressurised care system to breaking point.
Adult social care accounts for about 40% of council budgets—it is up to 60% in some areas—and for the largest elements of councils’ discretionary spending. When council budgets are slashed by a third, it is inevitable that care services will be cut. Figures from the Government’s own Department for Communities and Local Government show that more than £1.3 billion has been cut from older people’s social care provision since the coalition came to power. Fewer people are receiving the support that they desperately need as councils raise eligibility thresholds. Charges for vital services such as home help are soaring, with huge variations across the country. That is a stealth tax on the most vulnerable members of society. At the same time, the quality of care is being put at risk as councils are forced to pass on cuts in their budgets to care providers. [Interruption.] From a sedentary position, the hon. Member for Truro and Falmouth (Sarah Newton) asks what we did in 13 years. We increased spending on adult social care by 53%, we invested £1.2 billion in the carers’ grant, we provided new rights for carers to have their needs assessed and to request flexible working, we introduced the Supporting People programme, and we spent £227 million on extra care housing. I rest my case.
According to the United Kingdom Homecare Association, one in 10 home care visits now lasts for only 15 minutes. That is a completely inadequate amount of time if frail, vulnerable people are to be helped to get up and to be washed, dressed and fed. Residential care is under huge pressure too. Nine out of 10 home care providers say that low council fees are creating a two-tier system, with new investment being directed only towards wealthier parts of the country. Unpaid family carers are suffering as well as they are forced to give up work, and their own health suffers because they cannot obtain the help that they need to look after their loved ones. Yet the Government repeatedly deny the scale and urgency of the care crisis.
Liz Kendall
Last week, local councils throughout the country will have listened in disbelief as Ministers repeatedly insisted that there was enough money in the system and no need for councils to cut care provision. Sir Merrick Cockell, the Conservative chairman of the Local Government Association, has said that the current system does not have enough money to provide care for
“anyone other than the most needy, or those who can afford to pay for all of their own care.”
Without more funds, he says, we will
“see some of the most popular services councils provide, such as parks, leisure centres…winding down by the end of the decade.”
The Government are astonishingly complacent about the impact that cuts in social care are having on the NHS. Last week the Secretary of State for Health brushed aside concerns about delayed discharges from hospitals, saying that they were
“broadly the same as… last year”.—[Official Report, 11 July 2012; Vol. 548, c. 322.]
Liz Kendall
In reality, the number of days on which a hospital bed is occupied by someone who could have been discharged has risen by 18% since this time last year, and by a staggering 29% in the last 18 months. These delays now cost the NHS £18.5 million every single month, and more than a third are due to cuts in social care. The number of delayed discharges from social care has risen by 11% in the last month alone.
Instead of burying their heads in the sand, Ministers should be taking action. Labour has called for £700 million from last year’s NHS underspend to be ring-fenced for social care immediately, and I was delighted to learn that the all-party group on local government today called for those funds to be used for that purpose, rather than being absorbed back into the Treasury coffers. I hope that, when the Minister responds, he will tell us whether he agrees.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I congratulate the hon. Lady on giving way at long last. It is nice of her to do so, and we are most grateful. Given that she began by saying that she wanted to see a consensual, non-partisan approach to the issue, can she explain why we have just heard a party political diatribe? I find that very disappointing.
Liz Kendall
I was stating the facts about the care crisis, which have been made clear not by me but by organisations representing older and disabled people, by local councils and by the NHS. It is the Government’s denial of the existence of the care crisis and their insistence that there is enough money in the system that I am seeking to correct.
As I have said, the Government have failed to recognise, let alone tackle, the care crisis, and they have failed to face up to the difficult decisions that we need for the future. Their progress report on funding merely says that the Government support the principles of Andrew Dilnot’s commission on the funding of long-term care and support. They now claim that it is only right for Dilnot’s proposals to be considered as part of the spending review. That was not their view two years ago, when they made a clear promise in their NHS White Paper to legislate on a new legal and financial framework in the current parliamentary Session. Now we have only a draft Bill to reform social care law alone. At best that means that there will be no change in funding before the next general election, and at worst it means no change at all if the Government return to power.
Liz Kendall
I want to make a little more progress.
According to yesterday’s edition of The Sunday Telegraph, Andrew Dilnot has said that the delay has left older and disabled people in fear and misery. He expressed serious concern about the possibility that the Government will set the cap at a far higher level than that proposed by his commission—at £75,000 or even £100,000 rather than £35,000. He also said:
“if you go beyond £50,000 it is less effective in giving reassurance to the population and ceases to be a way of helping people with lower levels of assets.”
Instead of making real progress on funding reform, the Government trumpeted proposals for a national deferred payment scheme, providing loans to cover the costs of residential care.
Sarah Newton (Truro and Falmouth) (Con)
Does the hon. Lady recall what the Secretary of State actually said when he announced his proposals last week? He made it very plain that, if the hon. Lady’s party sat down seriously with Ministers and reached the consensus that the whole country is clearly crying out for, the necessary mechanisms could be introduced in the Bill and the funding could be found in the comprehensive spending review. We need less party politics and more consensual conversations.
Liz Kendall
It was Labour Members who proposed cross-party talks, and it was Government Members who decided unilaterally to publish the progress report on which we had been trying hard to agree. The hon. Lady accuses Opposition Members of not being serious about funding reform. We are, and I will set out what we would like to happen so that those talks can proceed.
The deferred payment schemes that were announced last week already exist in some parts of the country and are currently interest-free, but according to the Government’s plans interest will be charged, which will make loans more expensive than they are now. Many councils remain utterly unclear about how they will find the money to pay for those schemes. As the Local Government Association says,
“Councils are not banks and the implication of this level of debt in an already overstretched system needs urgent attention.”
The truth is that the Government have so far ducked the care challenge, and the reasons for that are clear. First, owing to their disastrous economic policy, they are now borrowing £150 billion more than they originally planned to borrow. The Treasury has pulled the plug, and has kicked long-term care funding into the long grass.
Richard Fuller
I thank the hon. Lady for giving way. As she recognises, cross-party consensus is required if we are to solve the social care problem. Care workers—the people who actually provide the care to people—do not get sufficient attention, however. One of the problems they have suffered from over many years is per-minute billing. Does she recognise that our changes to get rid of per-minute billing are worth while, and what impact does she envisage that will have on the provision of care over the long term?
Liz Kendall
The hon. Gentleman raises a serious point. I know from shadowing care home assistants in my constituency that commissioning by the minute can cause considerable problems. For instance, it does not allow the staff to meet the individual needs of those who are most desperate for help and support. As I have said, we welcome many of the proposals in the White Paper, but they need to be properly funded, and that is why I am so concerned that the issue of long-term care funding has been kicked into the long grass.
The second reason why the Government have failed on this issue is that the Health Secretary’s obsession with reorganising the NHS has been a disastrous distraction. Two years have been wasted on an unwanted and unnecessary reorganisation, when everyone should have been relentlessly focused on the key challenge of our ageing population: meeting rising demand for care at a time of unprecedented financial pressure.
The third reason is the most fundamental of all. Many Conservative Members have still not grasped the basic principle that we must collectively and universally pool the risks of facing catastrophic care costs, as we do in the NHS, in order to make things better and fairer for us all. A voluntary system that leaves it up to individuals and their families alone will not work. The only way forward is through an effective partnership between individuals and the state.
Kelvin Hopkins
I agree with what my hon. Friend is saying. The Government keep on talking about consensus, but the problem is that we say yes to Dilnot, but they do not. If they were to say yes to Dilnot, we might have a basis for consensus.
Liz Kendall
We remain serious about trying to achieve cross-party consensus. If one party comes forward on its own and proposes a controversial and difficult decision, that always leads to a political fight; we saw that only too clearly before the last general election. However, we need cross-party consensus because this is a long-term challenge. We have to try to get agreement so that, whichever party is in power, people know there is a system that they can understand and pay for in future.
Government Members have criticised Labour’s record in government, but we are proud of our achievements on social care. We increased spending by 53% when we were in government. We helped drive up quality through national performance assessment of local councils and independent inspection of care services. We championed integration, with new legal powers for the NHS and local councils to pool budgets, and new care trusts jointly to commission care. Those care trusts will be swept away under the Health and Social Care Act 2012. We supported carers through the carers grant and new rights for carers. We introduced the first ever national dementia strategy, and we backed improvements in housing through the Supporting People programme and extra care housing. [Interruption.] The hon. Member for Reading East (Mr Wilson) mutters from a sedentary position that that is not real action. He should try telling that to the carers we supported through breaks that are now under threat, and the people who have benefited from extra care housing and the Supporting People programme, which his Government have cut by 12%.
We understood that we had much further to go, however. That is why before the last general election we published plans for fundamental reform, including difficult decisions on how care should be funded. We tried to get cross-party agreement. We did not succeed, but we are determined to try again now.
A year ago, my right hon. Friend the Leader of the Opposition made an open and sincere offer of cross-party talks, and it is a matter of genuine regret that the Government unilaterally decided to publish their own progress report on funding, rather than the joint report we had wanted to agree. Labour remains committed to serious and meaningful cross-party talks.
I hope that the Minister will tell the House whether the Government will commit to addressing the current funding gap as well as future reform. Andrew Dilnot says that that is vital. Will they also set a clear timetable for reform, with legislation on funding reform in this Parliament, as Labour has called for? Will they agree to include their Treasury team in the talks, which Labour has offered from the start?
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
One of the authors of the Dilnot report was Lord Warner, who was a member of the previous Labour Government. He made the point that one of the reasons for the funding crisis is that the previous Government failed to invest adequately in social care; it received only 70% of the funding compared with the NHS. That was one of the major failings of the previous Government. They should have invested more in social care when the sun was shining and the country had the finances to do that.
Liz Kendall
I politely say to the hon. Gentleman that we did not cut local council budgets by a third. I have always said that social care budgets have been under increasing pressure for many years, which is why we desperately need funding reform. I know that he supports that reform and will work with us in the years ahead.
The Government’s decision to kick the issue of long-term care funding into the long grass is a bitter blow for older and disabled people and their families. It is a huge disappointment for local councils, which are desperate for a new social care settlement, and it is a disaster for our NHS, which will face intolerable pressure as our care system crumbles further still. This issue will not go away, because our population is ageing. Our care system needs fundamental reform—reform this Government have so far failed to deliver. I commend the motion to the House.
The Minister of State, Department of Health (Paul Burstow)
Let me begin by striking a note of agreement between Government and Opposition, before moving on to the areas where we disagree. I agree with the hon. Member for Leicester West (Liz Kendall) that our debates about our ageing society are too often couched in terms of burdens and impacts on public expenditure, when they should be a cause for celebration as we have more people living longer and living healthier for longer. That stands as a tribute to our national health service, our local authorities and many others besides.
I sat in the House for 13 years in opposition to a Labour Government, and it became very clear to me that, despite the wealth of the nation being much greater at that time than it is now, the Labour party was not willing to tackle the pressing need for serious systemic reform of social care. I shall talk in a moment about the Labour Government’s last-minute moves to address that agenda.
Social care is Bevan’s orphan. It was left over after the NHS was established in the 1940s, and it has suffered ever since. It has been hidden behind its favoured sibling, the national health service, out of sight until life takes a turn and tips people into crisis. Social care’s founding principles date back to the Poor Law; it was a poor relation to the NHS, ripe for reform, but neglected for decades.
Much of last week’s reporting about the Secretary of State’s statement in the House and the publication of the White Paper and draft Bill gave the impression that the only subject that was talked about was who pays for care—where the line is drawn between what an individual personally is responsible for in meeting their care costs and what costs the state would pick up. The Government do not dispute that that is an important issue, and we have made significant progress on that agenda, but it is not enough simply to redraw the boundary between personal responsibility and state support, because the system of social care in England is undoubtedly broken.
Given that there were 13 years of Labour inaction, the hon. Member for Leicester West must face up to some of the challenges in respect of social care. A White Paper finally emerged in the dying days of the last Labour Government; it was published on 30 March, just seven days before a general election was called. That is not good enough; it is too little too late. What did that White Paper say? It talked about national eligibility, but when? It was by 2015, so it was going to take Labour five years to introduce that change. On portability, it did not commit to ensuring that support would be provided immediately in the area to which the person was moving. In other words, there was still a risk of interruptions. In addition, that Labour White Paper said nothing about the rights of carers. The hon. Member for Leicester West was absolutely wrong when she told the House that Labour was responsible for introducing carers legislation. Back-Bench Members in this House, tirelessly arguing the case, were responsible—[Interruption.] Labour, Conservative and Liberal Democrat Members supported those many measures over a number of years, but none came from the Front-Bench and none came from the Labour Government.
Hugh Bayley (York Central) (Lab)
I would like to get back to the issue in hand and call a spade a spade. The only substantial asset that most families have to pass on to their children and grandchildren is the home they live in. If the Government want a new inheritance tax, would it not be fairer to levy it at the same percentage rate on rich and poor alike, and not simply target those people who have the misfortune to fall ill at the end of their life?
Paul Burstow
I will come in a moment to our response to the Dilnot commission recommendations, so I will deal with the hon. Gentleman’s point at the right time.
Paul Burstow
No, I am talking about the time at which in the sequence of my speech I will make the point about the Dilnot commission recommendations.
I wish to make one other observation on the national care service White Paper that the Labour Government published seven days before the last general election was called. Our White Paper addresses the end-of-life care issues, but Labour’s failed to address them.
Mr David Anderson (Blaydon) (Lab)
The Minister is rightly critical of the failure of the previous Government to bring in care for the people of England. Does he support what was done in Scotland by the previous Government?
Paul Burstow
I am not certain which thing the hon. Gentleman is inviting me to support. Many measures were introduced by the coalition Government in Scotland over a number of years to reform the social services system in Scotland, not least some relating to adult safeguarding which this Government are now making progress on.
Andy Burnham (Leigh) (Lab)
I think that the Minister has unfairly misrepresented the process we went through in the last Parliament. We did not just have a White Paper before the general election. We had a Green Paper in the summer of 2009, and the whole process was kicked off in the 2007 spending review. Upon a request from the then shadow Health Secretary, I agreed to cross-party talks. So the Minister is unfair in saying that nothing was done and then a rabbit was produced from the hat. May I say to him that the White Paper that I produced before the election addressed both service reform and funding? I am afraid that the same could not be said of the White Paper that emerged last week.
Paul Burstow
That is interesting, because the White Paper that was published seven days before the general election was called carried no details on who should pay, what they should pay or when they should pay. It contained no details of that sort, and I urge people to read it and compare it with the White Paper, draft Bill and other details that we published just last week. In 13 years, when the money was available, the Labour Government did not do anything; they left it until the last seven days and even then did not come up with the details.
In the space of two years, this coalition Government have advanced further and faster than any in the previous 20 years on addressing a wide range of issues and challenges and backing that with tangible action. Unlike what happened with Labour’s royal commission, so firmly kicked into the long grass, this Government have accepted all the recommendations of the Dilnot commission as the basis for a reformed system. Many of those recommendations are translated into the legislation that we published last week. Crucially, the Government accept the principles of a capped cost system as the basis for protecting people from catastrophic costs. Labour’s motion seems to suggest that Labour does, too. I want to make it clear that we are keen, still, to engage with the official Opposition and other stakeholders in reaching a final settlement on this question of the boundary between the state’s responsibility and the individual family’s responsibilities for meeting care costs.
Mark Field (Cities of London and Westminster) (Con)
Does the Minister not recognise that any cap, be it at £35,000 or £60,000, as was initially proposed by Dilnot, is likely within a very short time to be wholly inadequate, given the funding constraints that we are under? The harsh reality is that people who wish to preserve an inheritance for their children—that is an understandable desire—must recognise, as must their children, that those children will have to take on the burden of looking after aged parents, in both time and financial terms. It sounds like a hard truth, but it needs to be put on the record, because otherwise we are not going to get any further forward in dealing with this matter.
Paul Burstow
The hon. Gentleman expresses an opinion that is held by many people, but the Government’s position is not to take that view. We take the view that a cap on care costs is an important component in a redesigned system for funding in this country. What we have said clearly is that we have to address how that is paid for as part of a spending review. That is why we believe that both a cap and an increase in the means-test threshold provides the necessary assurance for a family to plan and prepare for care, and provides the mechanisms by which the financial services industry can grow and develop to offer appropriate products.
Mark Field
Is there not a problem with what the Minister has said? I understand that this is an incredibly difficult issue, which we all have to deal with. I have lost both my parents. One died at the age of 70, only 18 months ago, at a time when we were on the cusp of putting her into full-time care, which would have been ruinously expensive. Is not the problem with all this that if we put in place today any system with a fixed cap, it will almost certainly be superseded by events and will then be seen as unjust for future generations?
Paul Burstow
The hon. Gentleman identifies one of the issues associated with the design of the introduction of a cap. It is worth pointing out that the interaction between the cap and the means-test threshold means that every family would have a different level for which they would be liable to meet their care costs. The issues relating to design are real, as are those about how to meter the system from the point someone enters it, and they require detailed work as part of the design of an effective implementation alongside the costings of it.
Hugh Bayley
The hon. Member for Cities of London and Westminster (Mark Field) is right to identify that there is a link between inheritance and the high cost of end-of-life care for people. May I put it to the Minister that if there is a cap of £100,000, the entire inheritance could be wiped out for a family who have a modest home in the north of England, whereas somebody living in a home worth 10 times as much in southern England would still maintain a large proportion to pass on?
Paul Burstow
That is why we have to explain this clearly. By lifting the means-test threshold to £100,000, the interaction between the absolute cap and the means test means that the amount the individual will ultimately pay as their lifetime contribution towards their care costs is related to their wealth. I urge the hon. Gentleman again to look at both the tables and the graphs in the progress report, as he will see exactly how it protects the assets of a family, even in the scenario he has described.
It is also important to understand that redrawing the boundary between what the individual pays and what the state pays does not—things all too often were conflated in this way last week—add any new spending power to the system. That leads me to the question of getting funding into the system. Before the 2010 spending review, the Dilnot commission urged the Government to protect baseline funding for social care, and we did just that. In October 2010, we confirmed an extra £7.2 billion of support for adult social care, which, together with a programme of efficiency, was sufficient to protect access to support. That included an unprecedented £4.2 billion of NHS resources to support social care, to promote integration and innovation, and to support the expansion of reablement services. The Labour party wants to paint a picture of doom and gloom up and down England on these services, tarring every council with the same brush of being crude cutters of services, when that is not the case.
Kate Green (Stretford and Urmston) (Lab)
Perhaps I could describe to the Minister what is happening in Trafford, which has a Conservative council and is where my constituency is located. We are seeing a twin squeeze, despite the Minister’s apparent sanguinity about the funding. On the one hand, we are seeing thresholds for access to care being raised as a means of rationing the way in which the money is spent. On the other hand, as care providers are telling me, commissioners are reducing and reducing the price they are prepared to pay providers to the point where they can hardly sustain their business at all or meet minimum wage legislation.
Paul Burstow
We know from the surveys that although last year there was a cash freeze in the increases that local authorities paid to provider organisations, this year across the country the average was a 1.4% increase. Again, that does not quite tally with the picture that some hon. Members want to paint.
It is also worth saying that the picture of local authorities grappling with tough budget settlements is complex. Different councils are responding to the pressures on budgets in different ways. Some are acting in a very smart way, as the Demos report, “Coping with the Cuts”, revealed. Such councils are protecting access by focusing on reablement services, helping more people to get back on their feet without the need for long-term support, which is better for the individual and more cost-effective. Indeed, the latest figures from the Association of Directors of Adult Social Services reveal that councils are protecting front-line care.
Roberta Blackman-Woods (City of Durham) (Lab)
Would the Minister agree to look closely at the report of the all-party local government group on social care, published today? It makes it very clear that a funding gap still exists and recommends that NHS money should be used to plug that gap. Will the Minister commit to continuing to do that and to considering the other recommendations in the report?
Paul Burstow
Obviously, I will happily look at the report and I look forward to meeting the all-party group to discuss its findings and recommendations later.
I want to report to the House the findings of the ADASS survey, which was published recently. Last year’s survey found that for every pound saved by local authorities in social care, 69p came through greater efficiency. This year, it found that that had risen to 77p in every pound. Yes, some councils are cutting services, and last year 23p in every pound that councils saved came from service reductions, but this year that figure is just 13p in every pound. Local authorities are getting smarter in organising their services, so I want to pay tribute to those councils and councillors who have worked hard with service users, carers and providers to protect services to make the best possible use of the extra money the Government have provided. As a result, between last year and this year, council budget spend on social services has gone down by just 1%.
Sheila Gilmore (Edinburgh East) (Lab)
On the question of efficiencies, would the Minister include councils that tendered a service and made a saving, but to the detriment of the end user of the service? That is how we got to the 15-minute, short-term care options. Is that an efficiency or a cut in service?
Paul Burstow
When there is a crude race to the bottom and contracting is by the minute simply to ration access to the service, resulting in a care home provider or home care provider delivering care on a very time-and-task oriented basis, that is totally unacceptable. We know that in places such as Wiltshire, where home care services are organised on an outcomes basis, that is delivering better results for the service users and releasing resources to reinvest in services.
Richard Fuller
When I intervened earlier, Mr Deputy Speaker, I forgot to refer hon. Members to my entry in the Register of Members’ Financial Interests as the director of two care companies.
The Minister is absolutely right to say that there is a patchwork of responses from local authorities. I absolutely welcome the end of per minute billing, which is a tremendous step forward, but I draw the Minister’s attention to the comments made by the hon. Member for Stretford and Urmston (Kate Green). She talked about the pressures of meeting the minimum wage and the pressures that local councils are putting providers through. The Government must consider that issue, because there is exploitation in some areas. As businesses and charities try to meet the requirements local councils are putting on them, workers are finding it difficult to achieve a sustainable wage in providing care services.
Paul Burstow
My hon. Friend is absolutely right to highlight that issue, which the Low Pay Commission has commented on over a number of years, including before this Government came into office. In our White Paper, we make it very clear that local authorities, as the commissioners of such services, must be mindful of their responsibilities in ensuring that the resources they provide to providers are sufficient to allow them to fulfil their legal obligations.
Heidi Alexander (Lewisham East) (Lab)
The Minister talks about the financial pressures faced by local authorities in providing care to elderly and disabled residents, but is he aware that the cost to local authorities of self-funders who have to fall back on the state is in the region of £1 billion a year? Does he agree that that is a very unpredictable thing for local authorities to deal with? What proposals does he have to help local authorities in that regard?
Paul Burstow
I am grateful to the hon. Lady for her question, because it allows me to talk about some of the points I think will directly address it. Reform of our care and support system is about more than just who pays for care; it is also about some other very important issues. A central proposition in the White Paper we published last week concerns the move from a service focused on managing crisis, and often not doing so very well, to one focused on supporting people’s well-being by concentrating on early intervention and prevention. That is why, alongside the White Paper, we published a draft Bill that will underpin the reforms we intend to make, consolidating, simplifying and modernising the legislation. The Bill sets out for the first time in statute some very clear governing principles about how decisions are made in social care, focusing on people’s well-being and living by the idea set out by our first White Paper in government of “No decision about me, without me”.
The Bill sets out a number of important changes that go to the heart of people being able to plan, prepare and have proper choice about the care available to them. First, it makes it a requirement for local authorities to ensure that there is a universal offer of information and advice so that people can plan and prepare. Secondly, it requires for the first time local authorities to focus on prevention. Thirdly, it requires a sufficiency of quality care so that choice is available to people locally. Fourthly, it requires integration and co-operation not just between the NHS and social care but between those agencies and housing.
The Bill will not only do that; it will simplify the point of entry into the state system. It will ensure consistent national eligibility and, for the first time in Government legislation, will ensure that there are rights for carers not just to an assessment of their needs but to support for those needs. It will also deal with the often mentioned issue of protection from disruption when people move from one part of the country to another or when a child moves from children’s services to adult services. It will guarantee continuity of services, which is not currently provided for.
Personal budgets, which were started by the Opposition but have not stuck well because of the legal framework, will for the first time be given a clear legal basis. I am delighted to say that whereas when this Government came to office in 2010 we inherited 168,000 people receiving personal budgets, by March of this year 432,000 people were benefiting from them. There will also be clear legal duties on the NHS, police and councils to safeguard people.
At the heart of our White Paper reforms is the notion that we need less variability on quality, to ensure that providers are responsible for driving up quality and accountable for doing just that, and to have more and open information about the quality of provision. That is why our provider quality profiles will provide that information in a way that will allow people to compare and rate providers for the first time and why we are putting an extra £32.5 million in to support those services.
Andy Burnham
The Minister is mentioning the things in the White Paper that he will ask councils to do. Can he give us a figure tonight for how much the Government have estimated that the cost to councils will be of providing all those things and tell us how councils will pay for it?
Paul Burstow
I will come on to give a specific figure in a moment, so the right hon. Gentleman will have to be patient.
I wanted to pick up again on the point about the White Paper ruling out crude contracting by the minute—a culture of clock-watching which has been allowed to grow up for years in too many places and which is not good for dignity, respect or quality. Under the Labour Government there were years and years of delay and dither when it came to addressing the quality of care workers and health care assistants. This Government are putting in place a code of conduct and national minimum training standards, and will double the number of people able to access apprenticeships in the care sector to 100,000.
Andrew George (St Ives) (LD)
I am grateful to my hon. Friend for his remarks. I hope I am not taking him back too far, but given that he is talking about the integration of services, particularly among authorities, and implying the portability of assessments for those with care packages, will he comment on the extent to which the Local Government Association has approved and supported the proposals in the Government’s White Paper?
Paul Burstow
On the proposals for portability of assessment and guaranteed continuity of care, the LGA is certainly aware and has been engaged in the consultations that we undertook last year as part of our preparations for the White Paper. It did not, of course, negotiate line by line the text of the White Paper, but it has the opportunity, as does everyone else, to participate now in the scrutiny of the draft Bill that we introduced. I hope the LGA will do so. We wish to engage with the LGA on these issues.
Integration is an important part of these reforms. Too often, people feel bounced around the system. What we do for the first time in the White Paper is set out a number of important steps towards more integration of the two existing systems.
Jim Shannon (Strangford) (DUP)
The Minister has used the term “integration” several times. In Northern Ireland we have an integrated health and social care system, which is working extremely well. I am conscious that that is very different from the position on the mainland. Are there lessons from the integrated system in Northern Ireland that could be applied here? We have done it well in Northern Ireland. Perhaps the example could be used here.
Paul Burstow
From my own limited study of the system and from visits that I have made over the years, one of the conclusions that I would draw, which is at the heart of our reforms as well, relates to culture and collaborative behaviour across the various parts of the system. That has been essential to delivering genuinely integrated care in some parts of Northern Ireland. I believe it is essential to delivering genuinely integrated care in England as well.
I mentioned earlier that end-of-life care was an omission from the Labour Government’s last White Paper. It has not been omitted from ours. We are doubling the budget of the pilots that we have instituted to test the patient funding mechanisms and to make sure that we have the necessary data to understand the benefits of a free social care system at end of life. We want to make it clear that we see the merits of such a change, and it is why we want to make sure that we have the information on which we can base the final decision.
Our goal is to shift the focus of the system to prevention and early intervention, not to wait for the system to stutter into life when a crisis strikes. We want to make it easier for people to plan and prepare, both to avoid and reduce the need for care and to meet the need for care in the first place. Last week we laid out a reform agenda of universal information and advice, national eligibility, deferred payments, integration of health, housing and social care, better transition for children to adult services, and support for carers. Together those constitute the most comprehensive overhaul of adult social care in 60 years, and they are a contrast to the motion before us, which adds nothing, says nothing about how change will be paid for, and says all that it can to scare people about the current system.
Rather like 13 years of a Labour Government, today’s motion gets us nowhere. That is why we are investing an extra £300 million in the system to support change, and why I urge my right hon. and hon. Friends to vote against the motion.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To accommodate as many Members as we can, a five-minute limit will be introduced, with the usual overtime for two interventions.
Mr Michael Meacher (Oldham West and Royton) (Lab)
The Minister, as always, sought to present a positive picture of his proposals, but I continue to be struck by the internal conflicts of the White Paper.
The whole thrust of this Government has been to shrink the state, but Dilnot will clearly expand it. The Chancellor, who torpedoed Labour’s social care proposals just before the last election by claiming that they represented a death tax, is now supporting his own death tax, only this time it will be £35,000 to £50,000, as opposed to Labour’s £20,000. Now the Chancellor has once again sabotaged a fair and reasonable inter-party settlement, which is plainly needed, by abruptly breaking off the talks and introducing a pretty vacuous White Paper with no costs in it—or, to use the words of Sir Alec Douglas-Home in 1964, a menu without the prices.
Furthermore, the Chancellor clearly wants the adult social scheme to be voluntary—I think this is what lies behind many of the difficulties—but the sums add up only if there is compulsory risk pooling. Yet the Chancellor—it is he, rather than the Secretary of State, whom we must deal with—still will not face up to the ineluctable logic of a mandatory adult social care system, and he is still trying to dodge it in two rather unscrupulous ways: first, he is kicking it into the long grass by postponing it to the uncertainties of the next spending review in 2014, even though gross neglect is endemic and reform is needed urgently; and secondly, he is evading today’s realities by ignoring any need for upgrading standards. The Minister referred to upgrading standards, and clearly he wants to, but the means with which to do so are incompatible with the White Paper. The Treasury’s £1.7 billion is purely a dead-weight cost to protect family inheritances. It takes no account of rising care costs or the imperative need to lift care standards, which in many cases shame a civilised society.
This is where we come to the crux of the matter. At present, many local authorities pay only for 15-minute or 30-minute visits, and many do not pay for the journey time, even though that is part of the contract, or the petrol costs, which care providers are obliged to provide themselves. Frankly, it is impossible in 15 or 30 minutes to get an elderly and often infirm person out of bed, to clean the sheets, which may well be soiled, to get him or her dressed, washed and fed, to clean and tidy up and, of course, to engage in some kind of conversation to generate some decent human relationship. Equally, it is impossible, as my hon. Friend the Member for Leicester West (Liz Kendall) pointed out, with the minimum wage rates paid by local authorities because of their squeezed budgets—a funding shortfall of at least £1 billion this year—for care providers to offer the higher standards the Minister talked about and which they want to provide and which the service users deserve.
How is the big black hole in the White Paper to be dealt with? The Local Government Association says that the gap between the money available this year and the predicted cost is about £1.4 billion, stretching to £16.5 billion by 2020, when spending on social care will exceed 45% of council budgets. Against that shortfall, the £300 million of extra funding announced by the Secretary of State in his statement last Wednesday looks derisory.
This dilemma is by no means insoluble. The long-term costs of Dilnot are estimated at about £3 billion a year. In his Budget four months ago, the Chancellor had a choice in the allocation of precisely such a sum, but he decided to spend it on the top 1% earning more than £3,000 a week by cutting the 50p rate of tax. For the same amount of money he could have funded Dilnot in full, but for this Chancellor the priority are the super-rich, not the elderly, infirm or disabled people in need of social care. The long-term answer to this problem is the introduction of a new social insurance scheme.
Fiona Bruce (Congleton) (Con)
I welcome the Government’s White Paper “Caring for our future: reforming care and support” and its priority of putting the well-being of the cared for and their carers at the heart of its approach. As the Member who represents the constituency with the highest proportion of elderly people in the north-west of England—there are 72,000 carers in Cheshire—I particularly welcome the proposals.
For the first time there will be a clear legal basis for the cared for and their carers having their own individual care and support plans, a tangible recognition of the utterly invaluable contribution that some 6 million carers make, many of whom often work more than 50 hours a week, at great personal cost. With 2 million people moving in and out of caring roles each year, the Government are right to recognise that giving carers a right to personal assessments and plans is a priority so that their own health and well-being are supported and recognition is given to the fact that they, too, have lives to live.
I am also pleased that the Government have already allocated £400 million for carers’ breaks over the current five-year period, but it is important that that is reviewed to ensure that the effectiveness of such payments is maximised. I welcome the new duties placed on local authorities, which will substantially help the cared for and their carers to access appropriate support, as the fragmented health, housing and care support services that have existed until now have caused at best frustration, and at worst despair.
Clearer dissemination, and the duty on local councils to provide advice and preventive services, should go a long way towards alleviating the problem described by one volunteer in the care sector, when she said that social workers just do not have time to help signpost carers to information, advice and support.
The Government are to be commended for their commitment to working towards the assurance of quality care standards through improved training provision for care workers, the introduction of a new code of conduct and of minimum standards for care workers and the appointment of a chief social worker, and for their aim of doubling the number of care apprenticeships to 100,000 by 2017. In that respect, I commend the excellent work of the apprentices on Cheshire East council’s A-Team, who are already blazing a trail through their apprenticeships as carers for the elderly in our community —soundly rebutting the myth that younger people do not care for our elderly or give them the dignity and respect they deserve.
I also welcome the Government’s proposals to fund adaptations to keep the homes of the elderly safe, because the NHS is estimated to spend £600 million a year treating injuries caused by hazards in inappropriate housing—the majority of cases associated with falls. The Government’s new care and support housing fund of £200 million over five years, to support the development of specialised housing and adaptations of homes, is particularly welcome.
I welcome also the Government’s commitment to abolish per-minute billing for care visits. That will be music to the ears of a distressed care worker who came to my surgery and said that she was seriously considering leaving the profession, because not only was she unable to provide within the time frame allocated the care needed for those she visited, but there was nothing like the necessary allocation of travel time between the homes that she needed to visit. In some cases, they were even in different towns. She showed me her timetable, and I can only say that I entirely agreed with her.
I welcome in particular in the White Paper the Government’s recognition that if we are to address this massive challenge and make a reality of good quality, comprehensive care provision for all, which I am sure is everyone’s aspiration across the House, we will do so only if we harness the energy, resource and skills of the whole community, including community groups, many of which are highly professional and which work very hard to support carers and the cared-for.
I am very pleased that the Government have committed to working closely with Age Action Alliance jointly to find practical approaches to improving the lives of older people; that they have decided to invest funds through Big Society Capital, so that social enterprises, charities and voluntary groups can access greater resources in order to make a difference in communities; and that they have decided to involve those communities in strategic decisions on health and care services through local health and wellbeing boards. That will be particularly welcomed by Crossroads Care Cheshire East, whose director told me, shortly after I was elected in 2010, that
“we could do so much more and add so much value if we were more involved in strategic discussions about care provision.”
The Government’s proposals in the White Paper are to be welcomed.
Mr David Anderson (Blaydon) (Lab)
In 1989 I became a care worker after losing my job as a coal miner. I did so almost by mistake, but it was one of the best decisions I ever made, and over the next 16 years, as a care worker and as a representative of people working in care, I came to realise that we can look at care in three ways: we can provide none, provide it on the cheap or provide quality. We cannot do a combination of the three, and I hope that in the Chamber tonight we all agree that, if we are going to do quality care, we need to look after the work force properly, train them properly, treat them like professionals, have them in numbers, respect them, treat them with dignity, have the resources in place and give them some responsibility. They respond to that if allowed to, and the best way they respond is by showing respect for, and treating with dignity, the people they are taking care of, building the trust and confidence not just of those they are caring for but of their carers—their family and their friends who look after them.
I believe that my Government did some good things over their 13 years in office, regardless of what the Minister says, but in truth we did not do enough. In 1999 we set up the Sutherland commission, but we backed down on it—we chickened out. We did the right thing in Scotland, and, yes, it was done under coalition government, but the commission was set up by a Labour Government.
We should have done more, and we have a chance today to do more. My view is clear: why is someone needing care because they cannot take care of themselves different from someone who needs care because they are ill? We never say to anyone who needs physical or mental care on the NHS that they cannot have it, but we do say that to people who cannot take themselves to the toilet, bath themselves or take their medication. We would never do that with children, so why should we do it with the elderly and disabled?
I am clear that there is a cost; of course there is. I want to ask the Minister about some of the things he was saying earlier, and I hope that I get a response. What resources are we going to put in? If there are to be 100,000 apprentices, what will that cost? If there is to be a new code of conduct, what is the implication of that? If there is to be extra training, what will that cost? All those things are welcome, but if we are just going to talk about them and not resource them, we might as well not bother to talk about them.
I would like to have clear in my mind the issue raised by my right hon. Friend the Member for Oldham West and Royton (Mr Meacher). What is the difference between what is now proposed and the death tax that the current Secretary of State so cleverly used during the last election to undermine the stuff that my Government were trying to do? He talked then about £8,000 a year and a saving of £40,000 for everyone. That has all disappeared—it is all under the carpet. Did he mean what he was saying back then and does he mean what he is saying now?
Yes, if we are going to do this properly, there will be a cost—but we always find the cost of going to war and of extending the nuclear deterrent. In the past week, we have found the cost of taking 3,500 troops off duty to save the embarrassment of the Home Secretary. If we can do all that for those reasons, why can we not do it to take care of the elderly, vulnerable and frail in this country?
We were attacked by the Minister, who said that Labour MPs were moaning and whining on. That is part of the game that we play in this place, but what about what other people are saying? The Care and Support Alliance says that
“the social care system faces collapse”,
while the Alzheimer’s Society says:
“Millions of vulnerable people had been promised vital reform but today they are being massively let down.”
Mencap says:
“this promising blue print will never get off the ground if it fails to address the chronic underfunding in social care.”
Finally, the UK Home Care Association says:
“The Coalition Government’s White Paper has failed the frail and disabled”.
Those are those organisations’ words—not mine, and not my party’s.
Like other Opposition Members, I believe that the only real answer is a care system funded from general taxation. We have a generational chance to make this a crusade, just as 60 years ago people in this House made a crusade for the NHS. I know that some Government Members will say that that has been anathema, because ultimately the NHS—when we get down to the bare bones—is socialism in action. It is socialism delivering for the people of this country. What I want would be exactly that—the strong providing for the weak, not the weak being let down by the strong. We have the chance to do that. It is a challenge for this generation. The question for all of us on both sides of the House is: are we up for it?
John Pugh (Southport) (LD)
I want to be constructive. I fear that this debate may take a different route from that taken in the recent consensual Back-Bench debate. We all recognise that the cost of adult social care is a problem not just for this country, but for every advanced society that we can think of. The outline is fairly familiar: funders, private and public, feel stretched and frightened by demographic change and the elderly are scared and anxious about mounting costs. Treasuries throughout the world are nervous whenever the issue crops up, and normally they vacillate. Last week, the Government were, in part, accused of that—of dragging their feet.
That is nothing new. Back in 2009, following the publication of the Green Paper, there was very much the same thing. The current Secretary of State, who was then the shadow Secretary of State, said:
“One debate always seems to roll into another with this Government. We need a decision, and we need serious, costed proposals to be the basis for that decision.”
The current shadow Secretary of State, then the Secretary of State, said:
“we are putting forward three broad options for the country to debate, and it would be wrong to force the pace of that debate.”
For the Liberal Democrats, my hon. Friend the Member for North Norfolk (Norman Lamb) said that the Green Paper
“comes 12 years too late. It is this Government’s shameful legacy that they will leave office having failed to reform a system that the Secretary of State”—
now the shadow Secretary of State—
“himself has described as a cruel lottery.”—[Official Report, 14 July 2009; Vol. 496, c. 160-62.]
When social care is viewed as a sustainable enterprise, Governments always see it as involving a big—and, worse still, an uncertain—sum, and that is why Treasuries usually baulk at it and we make very little progress. Governments are far happier in clarifying people’s rights and then passing the buck to local authorities. What paralyses Governments is the potential, not the identifiable, cost—what it is and how we are going to share it out —and that amounts to a huge political headache.
In order to resolve this, we need to do two things. First, obviously, we need to get a handle on the costs; but secondly, we need to work out a way of trying to defray them. Elderly people to whom I have spoken following our recent debates and last week’s statement have spoken in slightly different terms from how we speak here. They are sceptical about some of the Armageddon scenarios. They are resentful about their perceived lack of contribution to society—not in the past but currently. They do not see themselves, en bloc, as a drag on society.
We know that some people incur massive costs because they are frail, disabled, suffer with dementia and so on, and the social, personal and family costs are appreciable, but we also know of many pensioners who make a huge family and social commitment, and some who are even in employment. My predecessor, Lord Fearn, still has a delivery round of 500 copies of “Focus”, as does his wife, and they are both in their 80s. That shows the benefits of delivering “Focus”. We do not know enough, and need to know more, about how we get people into the category of the fit and keep them out of the category of the frail. We need to know why people end up in one category or the other and what the relative costs are of maintaining them there in terms of drugs, treatment and so on. We do not know whether by advocating an active, healthy old age we are deferring costs or eradicating them. The science of gerontology has an appreciable way to go. It is not clear to me, and probably not to many Members, how public health can move people into the better category of the fit and away from the category of the long-term frail.
My main point—to some extent it is not mine, as it was suggested to me by what the hon. Member for South Thanet (Laura Sandys) said in a previous debate—is that even if we accept that there is no way of avoiding the cost of the last years of life and the fact that as people get older their maintenance gets more expensive in terms of calls on the NHS, there is a case for considering whether we should do some serious number-crunching to re-engineer social care in order to sharpen up and prioritise interventions, as we have seen with dementia and arthritis. We do not know at this stage what the true benefits of that could be. I am not quite sure what I mean by re-engineering social care even as I say it, but we need to find out what it means and try to implement it in order to defray the costs.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Thank you, Mr Deputy Speaker, for calling me to speak in this important debate.
I am often contacted by my elderly constituents and their families about social care and its funding, and I can tell the House that it is a massive worry to many of them. While I welcome many of the “in principle” recommendations in the Government’s White Paper, their lack of commitment to reforming the long-term funding of social care means, in effect, that they are kicking this urgent reform into the long grass. Dilnot recommended capping social care contributions at £35,000 and increasing the means-tested savings figure to £100,000. Supporting that in principle is all well and good, but the fact that the Government are not proposing anything specific until the 2013 comprehensive spending review and not implementing anything this side of the general election means that thousands of my constituents will continue to face anxiety about the potential cost of their social care and a substantial loss of their lifetime savings. One in 10 of them will face catastrophic social care costs of over £100,000. That is not acceptable and shows that the Government are out of touch and ducking the issue.
Social care funding is in crisis. Councils across the country have been forced to cut £1 billion from social care. In Ealing, the Labour council has had its overall budget cut by 30%. With a substantial proportion of its budget being spent on adult social care, it is struggling to protect the most vulnerable, who depend day in, day out on the social care that it provides. It has found 70% of the £85 million that it must cut over four years from efficiencies and has cut a smaller percentage from adult social care to try to protect the vulnerable.
The spend on social care is decreasing while the number of elderly people in need of social care is increasing. The Local Government Association recently released a report on local government financing that made it clear that with the elderly population and the cost of social care both increasing, unless the Government reform social care funding urgently, by the end of the decade, councils will be able to pay only for social care and all other council services, such as refuse collections, will have to stop. That is not a sustainable situation for social care or for other council services. The Government cannot afford to do what they have done in this White Paper. They have not grasped the financial nettle, but have kicked social care funding into the long grass.
One action that the Government could take immediately would be to use some of the £1.7 billion underspend from the NHS—£1.4 billion of which has been returned to the Treasury—to tackle the funding crisis in social care. Labour is sensibly calling for £700 million of that underspend to be given to councils immediately to tackle the crisis in social care funding. That would be a significant step that would help my constituents who have social care needs. The need for a long-term funding solution is critical. I hope that the Government will engage urgently in all-party talks so that a solution can be found without further delay. I therefore support the motion.
Margot James (Stourbridge) (Con)
I will start my contribution with some points that I wanted to make earlier in the debate about the origin of the problems. I accept that there are severe problems with adult social care. I do not know where the hon. Member for Leicester West (Liz Kendall) got her figures about the last Government’s record on adult social care spending, but according to local government figures, between 2004 and 2010, spending increased by 0.1%. Meanwhile, the population of over-65s grew by 7.7% and the number of over-80s by 11.6%.
Liz Kendall
I am grateful to the hon. Lady for being more generous with her time than perhaps I was. I got my figures from an independent assessment of Labour’s record in Government that was produced by the King’s Fund before the last general election.
Margot James
I am grateful to the hon. Lady for clarifying that. According to local government statistics, in the six years up to 2010, the spend was flat, and I have mentioned the demographic pressures. Interestingly, the same analysis states that over the same time, NHS expenditure rose by 27%, expenditure on the police rose by 20%, and even expenditure on schools rose by 12%.
A picture is emerging of the deprioritising of adult social care under the last Government. That is the origin of the problem that we are debating. That is what gave rise to the restrictions of the eligibility criteria for care. Long before this Government came to office, many local authorities started to restrict eligibility to those in moderate need of care and then to those in critical need of care.
Mr Anderson
I appreciate it.
May I suggest that in criticising the last Government, the hon. Lady needs also to look at the record of the Government before that? Throughout the 1980s and 1990s, the social care and health service budgets were drastically reduced to a degree that was an embarrassment to this country.
Margot James
I welcome the hon. Gentleman’s intervention, but I will move on to the present day, relevant though the NHS and social care budgets of 20 or 30 years ago no doubt are.
We are beset by problems, although I was pleased to hear the Minister confirm that according to ADASS, social care spending has gone down by just 1% in the past year. Given the incredibly difficult economic situation that we are in, much of which we inherited from the previous Government, that is an achievement. However, we do have problems.
People value their independence, and most older people want to stay in their own home. With the right support, many can. To a large extent, the White Paper proposals will provide the support that is needed to enable more people to stay at home. Carers are a vital source of people’s ability to maintain their independence at home, and the 5 million carers who do an incredibly important job in our country do not get enough support at the moment. I welcome the extra money that is being put towards enabling them to have respite, because carers tell me that a break is what they need first and foremost. I am sure that no amount of money would ever be enough to give them the breaks and support that they need, but at least the White Paper proposals will provide some support.
Many people do not realise that social care is means-tested until they get to the point in their lives at which they need it. That means that we need more information to be available. We need to be honest with people about what is possible, what is available and what is not. All Governments are guilty of putting the best picture forward, which is sometimes misleading. I applaud the Government’s decision to commit £32.5 million to improving information, but perhaps I can make a plea on behalf of some of my older constituents: that investment should not all be online. Many older people do not communicate in that way, so we must allow for some leaflets in GPs’ surgeries, libraries and day centres, and for other traditional forms of communication. Otherwise, we will make older people who do not engage with new media even more dependent on other people to get information for them.
Margot James
No, I promised not to take any more interventions, because I know other Members want to speak.
Then there is the dreaded assessment. Older people often try hard at their assessment to suggest that they can do more than they really can, especially when their carers are present. At the moment, assessments are conducted inconsistently not just around the country but within communities—it depends on who conducts them. I applaud the initiative to make them far more universal and consistent. The Dilnot proposal of making them portable around the country is certainly a huge step in the right direction.
As Members of all parties have indicated, the quality of care needs to improve. I welcome the emphasis on dignity and respect that runs through the White Paper. It is important that we have better training for care workers and an end, if possible, to the terrible business of contracting by the minute, which flies in the face of dignity. I quite agree with other hon. Members that it is impossible to get an elderly person out of bed and dressed in the amount of time that is allocated these days.
Dignity and respect are at the heart of a good-quality care system, and I am pleased that that has been given the prominence that it deserves in the White Paper. Of course we would like to do more, but I applaud the Government for making a very good start and, if I may say so to Opposition Members, they have done so within two and a half years of coming to office, which is a great improvement on the previous Government, who took 12 years before they got round to the same point.
Nic Dakin (Scunthorpe) (Lab)
Adult social care is probably one of the biggest, if not the biggest, challenges that we as politicians and policy makers face. We have heard thoughtful contributions from Members on both sides of the House explaining why it is so difficult. If people are fortunate, they never need to access adult care. If they are unfortunate, they do need to do so, or members of their family do. As we heard from the hon. Member for Southport (John Pugh), it can be a cruel lottery. One of our purposes should be to minimise the extent of that lottery and maximise entitlement and support for all individuals.
One of the most humbling experiences I have had since becoming Member of Parliament for Scunthorpe was going to visit a constituent in his home last week on this very issue of care and support. He is a similar age to me. When he was younger, near the end of his training in the medical profession, he went out into the sea and suffered a terrible accident. As a result, he was paralysed from the neck down. Since then, he contributed to society in a number of different ways. He retrained in higher education until he was advised by his GP to retire because if he did not, in the GP’s words, “the wheels would come off” and he would no longer be able to contribute to society.
After going to see my constituent, he wrote to me—this is about individuals and real people’s lives—about the publication of the draft social care bill:
“I have just been reading the latest on social care funding on the BBC website—it would seem that meaningful cross-party dialogue re Andrew Dilnot’s recommendations has broken down and that the government wants to put decisions off until the spending review late next year.
My suspicions about kicking into the long grass appear justified!...I have already contributed over £60000 towards my care package and seem to be paying more and more each year—despite the fact that North Lincolnshire council reduce the value of my care package every time there is a review.
My condition has not improved. I am, in fact, starting to suffer more and more of the long term complications that inevitably hit ageing tetraplegics.”
The worry and concern are there. When visiting my constituent in his home, I observed that the people who were providing the care were brought in at his expense. Resources were not adequate, because that cost was being taken out of his small pension from working in higher education, which went up by 5% a couple of weeks ago, although the contribution to North Lincolnshire council went up by 25%. What is the incentive to do the right thing in difficult circumstances when those sort of things happen?
What I have described was additional care. The core care was provided by my constituent’s mother, who was in her mid 80s, and his sister, who travelled for two and a half hours to spend half the week helping to care for him. As politicians, we need to step up to the plate. It is about leadership—cross-party leadership—and being able to do the right thing for people, such as my constituent, who suffer misfortune. Had that misfortune occurred, as he said to me, in a car crash, he would have received insurance compensation, which would have paid for his care package. Because it took place in a situation of utmost tragedy—nobody was responsible for it, but it was a total misfortune—there is no underpinning support from the state, which should properly protect him and his family from having to pay more and more money. My plea is for us to show the leadership across the parties—
Sarah Newton (Truro and Falmouth) (Con)
I am delighted to follow the hon. Member for Scunthorpe (Nic Dakin), as I completely agree that this issue is about leadership. Some of my hon. Friends alluded to a better-tempered debate, such as the Back-Bench business debate, to which all parties made thoughtful contributions, based on a great deal of expertise from different walks of life—whether from people in the medical profession, those who had spent their life in social services or those who had a personal point of view from being a carer. We heard some heartfelt contributions in that debate, so I think we are united in the desire to do something about this issue.
What I have found deeply disappointing about today is the fact that this debate was called in the first place. There was significant and genuine desire by this coalition Government to solve once and for all this problem that everyone agrees needs to be solved. Everyone agrees that it needs cross-party support—for reasons that are obvious to anyone sitting in the Gallery or watching this evening’s debate and to all the various voluntary organisations that have been very substantially misquoted or very selectively quoted this evening. There is a unity of purpose, but it is not being served by the Opposition who are tabling Opposition day debates, falsely dividing the House.
If the Opposition were to put their efforts into working closely with the two parties that form this coalition to come to a sensible solution, I believe that measures would be in the White Paper, but we are still seeing sledging and negative comments from Opposition Front-Bench Members as we have seen all day. It is deeply disappointing that the Opposition are so thoroughly letting down the people whom they claim they represent. I do not believe it is too late, and I really urge them to get back to the table and to be more positive about the steps that the Government are taking—[Interruption.] Here we go again; I cannot even finish a sentence without Opposition Members chuntering.
The fact is that I worked very closely with a number of Opposition colleagues. Various Members have talked about the very good work we did in the inquiry led by the all-party group on local government that looked at this issue. There was an all-party agreed proposal that identified many measures—which the Government have picked up in the draft White Paper—that we can achieve together. The effort should be focused on what we agree on, so that we can offer the reassurance that is needed by the desperately worried people all around the country that have been quietly identified this evening. People are worried not only about the social care system now, but the social care system in the future. We should be reassuring these people and giving them hope that this House has the necessary combined will and determination. I do not think any of us want to face the electorate at the next general election saying that this problem has not been solved.
As to the timetable, yes, I would love to be able to stand here today and congratulate the Government on finding every penny to fund a long-term solution. If we can get the cross-party talks into gear in September, we should be able to put in place the mechanism that, as confirmed by the Secretary of State, could be built into a Bill and put before Parliament. When all parties have agreed on how this is to be funded—as many people have rightly said, it will cost billions of pounds every year and we are in a very difficult financial situation, so all parties must agree on how those billions can be found—there is every possibility that such a Bill will get through Parliament and, when next year’s comprehensive spending review is developed, the money will be found.
Yes, it is frustrating if we have to wait another year or 18 months. Before I entered the House, I spent the best part of my adult life working for Age Concern England and for the International Longevity Centre in the UK, coming up with solutions that previous Governments certainly kicked into the long grass, so this is our best hope in a generation.
Heidi Alexander
I respect the hon. Lady’s work on this issue, but does she recognise that there is almost universal agreement outside the House that the big disappointment is that there were no proposals last week on how, in the longer term, we provide the funds that we all want for care for the elderly and those with disabilities?
Sarah Newton
I accept that there is genuine disappointment, but people equally understand that all parties in the House must be committed on where the billions of pounds each year will come from, so that the proposals are sustainable for the long term, and so that people can save and invest without fear of the rug being pulled from beneath them.
The proposals are a sticking plaster—there is no doubt about that—but if only people could hear the facts, they would appreciate that more money is being put into the system while the problem is being resolved for the long term. It is not true that all councils are cutting back. Cornwall council has not cut its adult social care. It is working in extremely innovative ways with the NHS and the voluntary sector to ensure that services are improved. I do not accept the shroud waving from Opposition Members, who say that every part of the country is in crisis.
Richard Graham (Gloucester) (Con)
My hon. Friend has a high interest in, and knowledge of, these matters. Does she agree that counties such as hers and mine—Cornwall and Gloucestershire—that prioritise adult social services precisely because of their ageing populations, are helping to find a solution to the problem, which is so badly needed by constituents all round the country?
Sarah Newton
I agree. I encourage people to read the good report published today by the all-party parliamentary group on local government, because it contains good examples from all over the country of how proper integration of social services with housing and the NHS is beginning. There is every possibility, as a result of HealthWatch and the health and wellbeing boards, that such integration innovation will deliver the joined-up services for families and carers that will lead to an agenda focused on public health and the prevention of the problems that lead people into acute settings such as A and E and hospitals. People currently end up in such settings far more than they need to.
I am confident that, in a years’ time, hon. Members on both sides of the House will come here to share best practice from those parts of the country that grasp the opportunities of the Health and Social Care Act 2012 and make the most of the changes. We can then encourage other parts of the country that do not prioritise those matters to do the best they can for older people and carers in their societies. All hon. Members want them to have higher-quality and better care so that they can live in dignity for the rest of their lives.
Kelvin Hopkins (Luton North) (Lab)
The hon. Member for Southport (John Pugh) was kind enough to say that people of a pensionable age can sometimes make useful contributions. He is very kind to me—I am the only Member of a pensionable age to speak in the debate. I am 37 in my mind, but with a son of 42, that is rather unlikely.
The Government have failed at the core of the White Paper on the question of funding. This is about money, not leadership or consensus or saying nice words in the Chamber. I am very pleased that Labour Front Benchers have accepted Dilnot. His proposals are not perfect, but he goes a long way to proposing a free national care service, which my hon. Friend the Member for Blaydon (Mr Anderson) and I want.
I know Andrew Dilnot well—he is a fine, highly intelligent and compassionate man. He went to great lengths to tailor a precise scheme that could be accepted by the Government, but at the last minute, they have buckled and not committed to it. The problem is the Treasury—the worst Government Department of all. It has failed the country over and over again with terrible mistakes. The European exchange rate mechanism destroyed the credibility of the Conservatives, but the Treasury has done lots of other bad things. It is a dreadful Department. I hope that Ministers now tell me how wonderful it is.
There has been almost no mention of the royal commission on long-term care from some 14 years ago—I think my hon. Friend the Member for Blaydon mentioned it—which recommended free long-term care, which is precisely what he and I want. However, the Government at the time—they happened to be a Government I supported—could see that the report was going to be unanimous, so they slotted in two people at the last minute to ensure that it was not unanimous, and from that point onwards they hung on to the minority report of those two members. It was a bit of a disgrace, and I made that point strongly. I tabled an early-day motion in the 1997 to 2001 Parliament calling for implementation of the royal commission’s recommendations, which was signed by more than 100 Members of the House at that time, and in the 2001 to 2005 Parliament I tabled another early-day motion saying the same thing, again with the same sort of support. I also have the support of the National Pensioners Convention—a body with which I am closely associated—which also wants free long-care on the same basis as in the NHS.
In Scandinavia they do it. Indeed, what I have always wanted my party to do—as well as the others, but particularly mine—is to move in the direction of Scandinavia, not the United States of America. If Members read the book “The Spirit Level”, they can see that the civilised societies—where people are happier and all sorts of social problems are lesser—are in the Scandinavian- style countries. The worst end of the spectrum is in America, and we have been steadily moving towards the American end, not the Scandinavian end.
In the end it is about cost and this word “affordability”. We choose what is affordable. It is not written in stone: we can choose to make things affordable, and we can choose to pay for them by progressive taxation—if we wish. It is a political choice. People say, “Oh, well it’s not affordable.” However—I have told this story many times—I remember that when my children were young, if they asked for a second ice cream, my wife would say to them, “Mummy can’t afford it,” when what she was really saying was: “You can’t have another ice cream.” Of course she could afford it. We can afford to pay for free long-term care too, but we choose not to—so far. I hope to persuade my side at least to commit to it in time.
The extra costs of Dilnot would initially be £2 billion a year. That is the equivalent of 0.5p on the standard rate of income tax. I have put this to many people in meetings and asked them, “What would you choose: the threat that your home would be taken away, with no equity to hand on to your grandchildren, or an extra 0.5p on the standard rate?” Without exception, they say 0.5p on the standard rate. Of course, we do not have to do it that way, because there is plenty of cash in the tax gap, which is estimated to be as much as £120 billion a year, or even more. If we collected a tiny fraction of that—one sixtieth—we could cover Dilnot’s proposals; and, if we have to have a bit more, let us squeeze the tax gap a bit further. However, since Margaret Thatcher’s time as Prime Minister, we have seen the standard rate cut by 5p, which is 10 times more than the cost of Dilnot, so do not let us pretend that it not affordable. We choose not pay for it, because we think—or some people think—that low taxes are better or that letting tax evaders and tax avoiders get away with it is better than looking after elderly people in great need.
We are also committed, apparently—I understand that this goes for both sides of the House—to the idea of owner occupation, but we are actually seeing the gradual erosion of owner occupation, particularly by poorer people having their houses taken away when—
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
It is a great pleasure to follow the hon. Member for Luton North (Kelvin Hopkins). I commend him for his ability to get Europe into almost every debate we have in this House. I am not sure whether his sums quite added up at the end of his speech, but it is commendable that we have seen a commitment across the House this evening to improving the dignity and quality of elderly care, which is something I am sure we would all like to see.
All previous Governments have taken steps in that direction, but I believe that the White Paper and the draft Bill that this Government have brought forward represent the most significant steps towards improving dignity in elderly care for a generation. The “in-principle” support for Dilnot and the Dilnot proposals is a good recommendation, and it needs to be considered in the context of whole-government spending at the next spending review. However, for the first time there has been an in-principle agreement by a Government that social care is one of the most important issues and challenges facing our country. How we are going to provide dignity in elderly care—high-quality care in the community—is a clear priority for this Government, and that should be commended.
I want to outline some of the real challenges that face people who are in receipt of social care, particularly the frail elderly. The hon. Member for Blaydon (Mr Anderson) pointed out that it can be difficult to distinguish between NHS care and social care, because they often involve exactly the same things. They include supporting the activities of daily life that we all take for granted, such as washing, dressing, getting in and out of bed or the bath and going up and down stairs. Those are the kinds of things that we mean when we talk about providing high-quality social care, and this Government have put forward strong measures that will make it much easier to provide such care for the people who most need it.
The White Paper and the draft Bill provide for support for carers, and for improving the personalisation of care, which is particularly important for younger people in receipt of social care, as the hon. Member for Scunthorpe (Nic Dakin) said. Respite care is also recognised as an important means of better supporting carers, giving them a break from the hard work of looking after people and ensuring that the role of carers is properly supported. The proposals also include a commitment to portability of care, and to a universal care assessment.
Glyn Davies (Montgomeryshire) (Con)
I raised the issue of portability with the Secretary of State last week. It is crucial that a debate should take place about what we are doing here and what is happening in Wales, as this is a devolved matter. There must be close liaison between us. I understand that the initiative must come from the Welsh Government but, without that liaison, people will fall between the two countries.
Dr Poulter
My hon. Friend makes an important point. Social care and NHS care do not recognise county borders, which is why portability is so important. They certainly do not recognise the boundaries between England and Wales or between any other parts of the United Kingdom. We have devolved responsibility for the NHS, and the fact that there are different funding priorities in the different parts of the UK, with the Government in England supporting investment in the NHS and the Labour Administration in Wales cutting NHS spending, highlights the importance of my hon. Friend’s point. I am sure that the Minister will be able to reassure us that the coalition Government are taking steps to ensure that portability can take place across those borders wherever possible.
The White Paper also contains a commendable commitment to improving integrated care and ensuring that more joined-up working takes place between the NHS and social care.
Sarah Newton
Would my hon. Friend like to comment on some of the Opposition’s assertions that the efficiency savings from reductions in management levels in NHS are not being put back into front-line services to enable integration, and that they are somehow being siphoned off to the Treasury? I do not believe that—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I must ask the hon. Lady to turn round so that the microphone can pick up what she is saying. I know that she is finding that difficult, but she should be heard by everyone in the Chamber.
Dr Poulter
I thank my hon. Friend for her intervention, and I agree with her. The Government are making a clear commitment to encouraging integrated care and to putting savings made in the back office back into the front line of NHS care. Many billions of pounds have already been committed, and there is more money in the draft Bill to encourage better integration between the NHS and social care services.
As the Minister of State said, it is important to shift the emphasis away from crisis management and towards preventive care. The focus on housing as part of the integrated care system is important. My hon. Friend the Member for Congleton (Fiona Bruce) made the point that, far too often, older people fall over and injure themselves as a result of poor lighting or a lack of handrails in their homes, ending up in the accident and emergency department, when better lighting and preventive care in the home would have provided a much more effective way of looking after them properly, as well as saving the NHS and social care a lot of money. That key commitment to more integration between the NHS, providers of housing and social services providers is a fundamental ingredient of the way in which we can improve the day-to-day quality of adult social care, while also saving a great deal of money, which can be spent on improving care for everyone else.
Finally, let me talk a little about funding. The Dilnot proposals have been agreed to in principle, and I hope that the Opposition will at least give the Government some credit for the fact that there has been a once-in-a-generation attempt to deal with this issue. It is not good enough to say, 13 years into an Administration, “Three weeks before the general election, we will publish a White Paper.” No one could consider that a serious commitment to tackling the challenges that we face.
The way forward now must be the cross-party working that we all believe is desirable. That means that all parties must work together and support the Government’s White Paper, support day-to-day improvements in care for older people, and support the agreement in principle to the Dilnot proposals that the Government have presented.
Julie Hilling (Bolton West) (Lab)
While we sit here discussing this issue, families will be sitting in their living rooms or around hospital beds trying to decide what to do for their loved ones. Can they stay in their own homes? Will someone be able to deliver 24-hour care? How long will the situation continue? What will happen when the money runs out? What should they do for the best? While we sit here listening to the Minister telling us that we will sort things out in the future, families—now—are making the most difficult decisions of their lives.
I want to talk about the reality for my constituents, and to plead with the Minister to work with all the political parties in this place to find a long-term solution to the growing crisis of adult social care. It has to be a long-term solution: it has to be a solution that will last for many years, whoever is in government, and we have to find it now, not after the next general election. Old age happens only once to each individual. It is not something that we can return to and do better next time.
We cannot just look at residential care; we must also look at the systems that keep people in their own homes, and allow them to lead fulfilling lives and live in dignity. The present situation is dire. Bolton council has had to cut £15 million from its budget for adult social care, which means that it can no longer give support to the 536 people aged between 18 and 64 and to the 1,312 people aged over 65 who have moderate needs.
Roberta Blackman-Woods
Does my hon. Friend agree that we have heard nothing from the Government this evening that demonstrates that they have any idea of the funding crisis that is hitting a number of local authorities throughout the country? There is no urgency at all in the Government’s actions.
Julie Hilling
Yes. The cuts faced by northern local authorities in particular are dire. Bolton will have to find £100 million worth of cuts during the current Parliament.
Sheila Gilmore
Does my hon. Friend agree that it simply is not good enough to express—as the White Paper does—concerns about matters such as short periods of care time, or the fact that some carers are not even earning the minimum wage, if there is no way of making things work financially? I do not believe that councils have chosen 15-minute slots deliberately; I believe that they have done it in order to save costs and make efficiencies. Similarly, there are carers who have to pay for their own travel.
Julie Hilling
We have to realise that we are facing a crisis now, not a crisis in the future. People in our constituencies are suffering daily. A young man in my constituency who has learning difficulties and has relied on carers to help him with his everyday life will now see his carer only once a week. Contact with a carer is the only contact that many such people ever have with another human being, and that contact is now going. It is truly a false economy. This low level of care for people with moderate needs is what keeps them in their homes, keeps them healthy, and stops them ending up in residential care prematurely. Bolton is managing to maintain substantial and critical care, but it will have to find £34 million in cuts over the next two years, and it is worried that it will have to join other councils in only providing critical care.
Paying for home care is a huge worry. The average cost is £13.61 an hour, but it can be a great deal more; in Brighton and Hove, carers cost £21.50. It is not unusual for people paying for care to have to find more than £10,000 a year to cover that cost. That spending needs to be taken into account if we are to have caps over the whole amount. Many Members will know that my mother has been in and out of care over the past 12 months. We have spent £20,000 since October on her care.
The cuts to local authority budgets are affecting other support services, and the consequent cuts to the voluntary sector are having dire consequences. The voluntary sector provides luncheon clubs, social activities and carers groups, all of which are under pressure or at risk.
Horwich visiting service in my constituency has lost funding and can no longer employ its part-time co-ordinator. That was the person who recruited volunteers, sorted out the police clearance, provided training, ascertained the needs of clients and supported the volunteers. The volunteers will continue to visit the elderly and disabled people with whom they are currently in contact, but it will not be possible to recruit new volunteers or take on new clients.
The fees local authorities pay to care homes is also an issue. There has been a significant real-terms cut over the last two years. That inevitably impacts on care. It also means self-funders are charged more in order to subsidise the costs of council-funded residents.
The choice of home is another huge concern. The other day, I was speaking to one of the police officers on the parliamentary estate. He told me his mother was in a care home. He and the family had chosen a home that suited her needs and they had sold her house to pay for the care, but now the money is running out and he does not know whether the local authority will pay the care home fees, whether his mum will have to move or whether the family will somehow have to pay the additional costs. If the cap is ever introduced, that will be too late for him, but he still needs to know that the care costs will be met in future.
The needs of the elderly and disabled do not move in a straight line. Some people may need to go into care for a period of time, such as when recovering from an illness or an accident, but, with support, they may be able to return home. However, we were told that after six months my mum would have to sell her flat to pay for her care. In fact, after eight months in a care home, she has returned to her own flat. That shows that people do not move in a straight line through the system. Decisions should not be taken on the basis of cost alone; they should be taken on the basis of needs, too.
Let me conclude by reading out a comment from a constituent of mine called Amy:
“Alongside the funding crisis there is also a huge injustice in the way we pay for care. This includes the dementia tax, where tens of thousands of families are left to pay all their care costs whilst other terminal conditions are paid for by the NHS.
The significant cost of care means many carers face financial hardship and are often forced to give up work.
We need reform to build a fair and sustainable care system which delivers dignity, independence and peace of mind.”
Amy is right. We need to get on with this. We need to find a solution where people’s needs are taken into account, and where people do not live in fear for both themselves and their families. We need to find a solution to this problem that all of us can live with, and that cares for people who are in need in our society.
Mr Speaker
Order. The Opposition Front-Bench speech must start at 9.40 pm, so the hon. Member for Blackpool North and Cleveleys (Paul Maynard) has a tiny window of time in which to make his contribution.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I shall be very brief then, Mr Speaker. I have just two minutes.
When we talk about social care, we tend to spend most of our time discussing the elderly. I want to say a few words about young disabled people, however, who benefit from social care, and who need to have a voice in this debate. I chair the all-party group on young disabled people, and we have been discussing many of the key issues. Last week, we discussed housing, for example. I welcome the money proposed in the White Paper for improving housing for the disabled, but may I sound a note of caution? At present, too many wheelchair-adapted houses are not going to those who need them—people in wheelchairs. It is all very well constructing these houses, but we must get the allocation policy right, too.
I welcome the transition funding, but I have a plea to make on that. There is a concern that there is a cliff-edge at the age of 18. For many families it is, as it were, a gradual cliff-edge. Things start to decline at 14, so the care package they get at 18 might not be the appropriate one they need as an adult. May I ask the Minister to look at that issue closely?
I welcome the introduction of portability, as that is crucial. I know that the Opposition brought similar measures in when in government, but we are taking this further. It is far more important for younger disabled people than it is for those who are elderly. We talk a lot in this Chamber about social mobility. One of the main hurdles for young disabled people who wish to go to university is the great fear that when they get there they will not have the same social care package as they had when they were at home with their parents. That is the main fear they face; it is what keeps them at home and means that they do not take full advantage of the educational opportunities on offer. I will stop there.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
No family in the land is untouched by the challenges of social care. Families up and down the land who will watch this debate or read about it know that if social care is not an issue for them today, it may be an issue for them later. Labour Members therefore think it is important that it is spoken about not in policy wonk or accountancy terminology, but in terms of people. That is because it is an issue about people, be they the elderly, the disabled, the young disabled, about whom we heard eloquently just now, the carers within the family or the tens of thousands of men and women who work as professional care workers, about whom my hon. Friend the Member for Blaydon (Mr Anderson) talked so eloquently earlier.
Let me say from the outset that the Opposition accept that this is an issue about which we could have done more. Social care and the challenges it poses in the 21st century are unfinished business for Labour. However, it is not true to say, as some Government Members have unfortunately done, that Labour was wholly inactive on the issue of social care. We heard from my hon. Friend the Member for Leicester West (Liz Kendall) about all the steps we took and the innovations we made on issues associated with social care. To say that we were totally inactive is quite wrong and is merely party political point scoring, but it is true that we did not grasp sufficiently early the political nettle of how social care is to be paid for. That is why, from the very beginning, we offered talks and entered willingly into them, and why we remain willing to resume talks, so long as Ministers are acting in good faith.
Social care is an issue for families up and down the land. Government Members have said that people have to understand that they are going to sell off their homes, but the point about that is that homes are not mere bricks and mortar. These may be the homes that people came to as a young married couple and where they brought up their children; these are homes freighted with memory, emotion and family life. It is too easy to say that people have to be ready to sell off their homes. This is about people; it is not just about figures on a piece of paper.
Social care is also quintessentially an issue for the squeezed middle, to use the phrase of my right hon. Friend the Member for Doncaster North (Edward Miliband). The very poor will not have to meet their own costs, although there are still issues to address about standards of care, and the cost of care is not a problem for the extremely wealthy. This is an issue for the squeezed middle; it is an issue for people who, perhaps through years of struggle, have a home and assets and now see the frightening possibility—this is particularly the case for the elderly—of those assets being drained away because of a system that is not yet under control.
Ms Abbott
I am afraid that I will not be able to give way, because I want to leave sufficient time for the Minister to make her remarks.
We also have to address the issues of dementia and Alzheimer’s. They are largely dealt with as social care issues but in fact they are an increasing challenge for people as they grow older.
The Minister called social care Bevan’s orphan and I think that that is a little unfair. The world we face today is very different from the world of William Beveridge and the framers of the first national health service. People live much longer and do so with all sorts of long-term conditions, whereas changes in the role of women mean that there is no longer a vast, mute and hidden army of carers. There are also issues with dementia and Alzheimer’s.
The Opposition want to be collaborative rather than party political, but I would be failing in my responsibilities if I did not draw to the attention of Ministers the one message given to my colleagues and I as we have gone up and down the country talking to local authorities about the new public health arrangements and social care. Those in town halls, whether they are Labour or Conservative-led, have said that local authorities are under unprecedented financial pressure. Some of the things we heard from Ministers seemed to suggest a certain carelessness about or unwillingness to face up to the financial pressures that mean that local authorities are making real decisions that are affecting real people and real families. Ministers heard what local authorities are trying to do to make the money stretch. On the one hand, there are more stringent criteria, so people need to be in greater need to get social care at all, but on the other hand, they are squeezing the money and the standards. That is the only way it can happen.
If I could say only one thing to Ministers, it would be that they should listen not to the Opposition spokespeople or to Labour councillors but to their own Conservative councillors, who are trying to make them address the scale of the crisis that they face. They are very alarmed—we know that they are—that Ministers appear to be poised to place additional responsibilities on them without any ideas of how to provide funding.
I remember what the Prime Minister told this House in February 2010, speaking about social care. He said:
“What we want to know is: where is the money coming from?”—[Official Report, 10 February 2010; Vol. 505, c. 904.]
I have to say that councillors and families up and down the country, as well as Members of this House, want to know what is behind the fine words and what Ministers will do to fund the proposals outlined in their White Paper.
Precisely because I do not want to be party political, I will refrain from talking about the Conservative party’s party political broadcast on the death tax and the posters that said:
“Now Gordon wants £20,000 when you die. Don’t vote for Labour’s new death tax.”
I am not a party political person, so I shall leave that. I shall put it to one side.
We support Dilnot in principle, but we are a little concerned about the Secretary of State’s pick-and-mix approach to the recommendations. We are worried that although the White Paper reads well, it makes too many vague commitments. I would be grateful if the Minister could give me an answer on the question of loans, in particular. On that question, as she will be aware, the 1999 royal commission—sadly, we did not address the issues of funding that it raised—said that
“there would need to be an initial outlay of potentially between £1bn and £2.8bn…the scheme would be complex to establish, and to administer, probably very expensive initially and would leave the state with an uncertain liability. If Local Authorities administered it, they might be left with a complex burden of assets which would differ greatly from one part of the country to another. The Commission consider there little overall benefit to be gained from such a scheme.”
I would be grateful if the Minister could tell me —[Interruption.] It is a deferred payment scheme at the discretion of local authorities—[Interruption.] We want to know how the Government will fund the upfront costs and about the levels of interest. Members will appreciate that elderly people, in particular, are very concerned about issues of debt. On that and on a range of other issues, we are waiting for a little more detail from Ministers. They can sit on the Front Bench and make party political remarks, but that is no help to families throughout the country who are worried about how they can fund social care in the future. It is no help to local authorities, which say that in a very few years the cost of social care will have inflated so much that they will not be able to meet other needs from their budget.
There are many things in the White Paper that we welcome, not least because many of them were in the White Paper introduced by my right hon. Friend the Member for Leigh (Andy Burnham) on building a national care service. We say to Ministers that it is easy to score points. It is easy to talk about what could have been done in the past, but we need to meet the challenge of how we care for our elderly, our disabled and our young disabled. That is the challenge that the nation is facing now. The White Paper reads well, but Age Concern and all the stakeholders are asking how Ministers will fund it. We stand ready to enter talks. We stand ready to work with Ministers. All we ask from Ministers is that they act in good faith.
The Parliamentary Under-Secretary of State for Health (Anne Milton)
I was heartened by some of what I read in the motion tabled by the Opposition. Welcoming the measures laid out in the care and support White Paper was a good start to a process that will be immensely easier with genuine co-operation and communication. However, the speeches from the Opposition Front Bench were partisan and contained no acknowledgement that for 13 years they did nothing. The hon. Member for Leicester West (Liz Kendall) seems to have amnesia. Cheap party political squabbling is not attractive. I remind the hon. Member for Hackney North and Stoke Newington (Ms Abbott) that she was very political by trying not to be political. I remind her also that 40,000 people a year had to sell their homes to pay for their care. It reflects badly on her and on the House and does nothing to improve the lives of service users, carers and staff. A White Paper seven days before the general election announcement counts for little.
Care has to be funded in a way that is fair on service users and fair on the taxpayer. We agree with Dilnot that financial protection through capped costs and an extended means test are the right basis for any new funding system. Given the extra public spending that will be involved, we need to consider that alongside other priorities. An issue that has been raised throughout the debate is the funding for the means-tested system. The right place—the responsible place—to consider that is in the course of the spending review and I do not intend to pre-empt that tonight. I draw hon. Members’ attention to the progress report. Many of the answers to the questions that they raise are included in that. The hon. Member for Hackney North and Stoke Newington would do well to refer to figure 4 in the report.
We have allocated an extra £7.2 billion to improve care and support as part of the spending review. That comes as part of what we know is a tough settlement for local government. If spent well, it will go far and will help local authorities maintain people’s access to care and support. The recent report from Demos and Scope shows that this can be done, and that reduced funding does not have to mean a reduced service. By putting more into reablement services that help people regain their independence, for example, or by supporting people to live in the community instead of in expensive residential care, local authorities can provide the best standards of care while saving money.
My hon. Friend the Minister of State mentioned the £32.5 million for better online services and traditional communication methods to help people see what services are available, whether their care is paid for by them or by the state. Likewise, there is an additional £200 million for specialised housing. That additional money more than pays for the White Paper proposals leading up to the comprehensive spending review. As my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) said, the issue was ducked repeatedly by the previous Government in far more favourable economic times. He also drew attention to the absurd distinctions between health and social care and the need for integration.
My hon. Friend the Member for Congleton (Fiona Bruce) spoke from the heart about the needs of carers, the £400 million we have provided for carers’ breaks and the end of permanent billing. My hon. Friend the Member for Southport (John Pugh) spoke of the contribution older people make and how to stop the fit becoming frail. My hon. Friend the Member for Stourbridge (Margot James) reiterated the ADASS figures and the desire for people to stay in their own homes. My hon. Friend the Member for Truro and Falmouth (Sarah Newton) spoke with passion and knowledge of the unity and commonality of purpose we need and the divisive nature of the Opposition’s motion. My hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) pointed out the huge need to address the needs of people with disabilities.
These are ambitious plans. As well as setting out a comprehensive package of reform for the longer term, the White Paper announces changes that will make a difference immediately: a national eligibility threshold; proper and meaningful portability; duties to share information to ensure that people can move without losing their care; a focus on housing; provider quality profiles so that people can finally have clear information on the quality of care providers; mandatory adult safeguarding boards; and a requirement to assess carers’ needs and actually meet them—much neglected help and support. It also announces a code of conduct and minimum training standards for care workers so that people know that their care is underpinned by high standards of training and ethics. We will train more care workers, with 50,000 more apprenticeships by 2017, double the current number.
Anne Milton
The hon. Gentleman should welcome that.
The White Paper opens for business the new national information website so that people can find out more about all parts of the care and support system. It sets out legal entitlements to personal budgets so that care users, their families and their carers can choose what services they get. There are improvements to the transition from children’s services to adult services. These are big changes, egalitarian changes and, most of all, they will be effective changes. We are also reforming the existing social care legislation through the draft Care and Support Bill. The White Paper is about keeping people well and helping them to take control, get independent and live the lives they deserve with the certainty and security they need to do so with dignity.
There are times when we, as politicians, need not only to open our eyes and ears to the world outside this House, but to stand in the shoes of those we represent. They do not want to see us argue, squabble and bicker over their lives. On this issue, perhaps more than any other, we need to work together. If we do that, we can improve the system for millions of people, whether they use the services or care for someone who uses them. The system is funded until the next spending review.
I urge Opposition Members and Front Benchers to put aside party political differences and work alongside us to ensure that we have a system that is sustainable not only for this year and next, until the next general election, but for the years ahead. Older people in this country, the carers who support them and people with disabilities deserve that. The White Paper gives us a foundation on which to work, a foundation that has been missing for far too long. In 13 years in government, in favourable economic times, those now on the Opposition Benches did nothing that was sustainable in the long term. We need a foundation that gives us a chance to build a care and support system that future generations will be proud of. I urge the House to reject the motion.
Question put,
Business without Debate
Parliamentary Commission on Banking Standards
(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)
I beg to move,
(1) That a Committee of this House be established, to be called the Parliamentary Commission on Banking Standards, to consider and report on—
(a) professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the LIBOR rate-setting process;
(b) lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for Government policy;
and to make recommendations for legislative and other action.
(2) That Mr Andrew Tyrie be Chair of the Commission.
(3) That Mark Garnier, Mr Andrew Love, Mr Pat McFadden and John Thurso be members of the Commission.
(4) That the Commission have leave to join with any committee appointed by the Lords to consider the said matters.
(5) That the Commission may hold meetings under the provisions of paragraph (4) of this order at any time after the Lords has agreed to appoint a committee.
(6) That the Commission shall, except as provided for in this order, follow the procedure of a select committee of this House.
(7) That the Commission shall have power—
(a) to send for persons, papers and records;
(b) to examine witnesses on oath;
(c) to appoint specialist advisers;
(d) to invite specialist advisers (including Counsel appointed as specialist advisers) to examine witnesses;
(e) to adjourn from place to place;
(f) to sit notwithstanding any adjournment of the House; and
(g) to report from time to time.
(8) That the Commission shall have power to appoint sub-committees to consider matters specified by the Commission within the terms of this order and a subcommittee shall have—
(a) the powers in paragraph (7)(a), (b), (e) and (f); and
(b) the power to invite specialist advisers appointed by the Commission (including Counsel appointed as specialist advisers) to examine witnesses;
and the quorum of a sub-committee shall, subject to paragraph (12)(b), be one member of this House.
(9) That the Chair may report to the House an order, resolution or Special Report as an order, resolution or Special Report of the Commission which has not been agreed at a meeting of the Commission if he is satisfied that he has consulted all members of the Commission about the terms of the order, resolution or Special Report and that it represents a decision of the majority of the Commission.
(10) That the quorum of the Commission shall be two members of this House.
(11) That, whenever this House shall stand adjourned other than to the next day, any report, Special Report, order or resolution agreed to by, or evidence taken or received by, the Commission, including any under paragraph (9) of this order, may be published or printed under the authority of this House, shall be deemed to have been reported and shall be reported when this House next sits.
(12) That, when the Commission operates under the provisions of paragraph (4) of this order, the following provisions shall apply—
(a) the quorum of the Commission shall be two members of this House and two members of the House of Lords;
(b) the quorum of any sub-committee shall be one member from either House; and
(c) the power of the Chair to report under paragraph (9) may also be exercised with the Chair’s agreement by a member of the Commission who is a member of the House of Lords.
(13) That the costs of the Commission shall be assessed by the House of Commons Commission from time to time and shall be paid by Her Majesty’s Government for the credit of the House of Commons (Administration) Estimate.
(14) That the Commission shall report on legislative action no later than 18 December 2012 and on other matters as soon as possible thereafter.
(15) That a message be sent to the House of Lords to desire their concurrence.
On 5 July, the House debated professional standards in the banking industry for a full day and resolved to establish a Joint Committee of the two Houses on that matter. As I said in that debate, I do not think there is any disagreement between the Government and the Opposition on what we need to do, which is to sustain in the UK a strong, vibrant, transparent and more accountable financial sector that commands international confidence.
The motion before us is the result of negotiation following the House’s decision to establish a Joint Committee. I thank my hon. Friend the Member for Chichester (Mr Tyrie) for the work that he has undertaken while also chairing a very active Select Committee. I also thank Her Majesty’s Opposition. Following the debate, it was essential that Parliament was seen to be acting in the best interests of the public in resolving the issue before it, and that could happen only if the Joint Committee were supported not only by the parties in Government but by the Opposition. I am grateful to those who have added their signatures to the motion.
I do not intend to detain the House for long. I want to make five points, spending half a minute on each. [Interruption.]
Mr Speaker
Order. Before the Leader of the House makes his five points, to which I wish to listen carefully, may I gently say to the House that he should be heard? Any Member should be heard, but the Leader of the House is a very senior Member, and Members should not be sitting chuntering to each other; they should show him some courtesy, which they all learnt at one time.
Sir George Young
As I said, I have five points and will spend half a minute on each one.
First, the process to establish the Commission is not following the normal process for establishing a Joint Committee. The Commission, if established tonight, will be able to begin its work immediately and to meet during the recess. It is my hope that before the other place rises, it will also establish a Committee of an equal number of members to act jointly with the Commission that we are establishing tonight.
Secondly, the Commission is being established with powers that are already inherent in our parliamentary system. It will also have the novel power to invite special advisers, including counsel appointed by the Commission, to examine witnesses. I do not think that that will become the modus operandi of other Select Committees, but it will give the Commission the teeth that it needs to carry out its important investigative role quickly and effectively.
Thirdly, it is proposed that
“the Commission shall have power to appoint sub-committees to consider matters specified by the Commission”.
Unusually, the sub-committees will have a quorum of one. I have discussed that with my hon. Friend the Member for Chichester. The purpose is to allow a single member of the Commission to consider a specific issue, for example a technical matter, and to send for papers with a view to informing the wider Commission. That will feed into the Commission’s work and allow it to tackle a broad-ranging subject in a compressed time frame.
Fourthly, paragraph (13) of the motion directs the House of Commons Commission to assess the costs arising from the Parliamentary Commission to be paid by the Government. As the Chancellor said in the debate on 5 July:
“I commit to giving it any resources it needs to do its job.”—[Official Report, 5 July 2012; Vol. 547, c. 1136.]
I hope that that reassures my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who sought reassurance during our debate on 5 July that the Commission should not raid
“the staff and resources of other Committees.”—[Official Report, 5 July 2012; Vol. 547, c. 1149.]
Fifthly and finally, the motion sets a deadline for a report on legislative action of 18 December. That will include pre-legislative scrutiny of the banking reform Bill and any recommendations of the Commission’s inquiry that require a legislative vehicle in order to be implemented. The December deadline will give the Government time to consider any recommendations in time for the introduction of the banking reform Bill, which is planned for January 2013. If the Commission cannot complete all its work by 18 December, we will expect it to report on the other areas as soon as possible thereafter.
We have in this Parliament the skills, expertise and mandate to do the job. I am confident in the ability of the new Commission to rise to the challenges that confront us and to address the central issue at stake: restoring confidence in the UK banking industry. I commend the motion to the House.
Ms Angela Eagle (Wallasey) (Lab)
Like the Leader of the House, I do not wish to repeat the debate that we had on 5 July. We are in slightly calmer waters, we hope. In that debate, all parties on this side of the House felt that we needed a judge-led inquiry into the LIBOR scandal and wider issues in the banking industry. We did not win the vote so, despite our reservations, we decided to co-operate with the inquiry led by the hon. Member for Chichester (Mr Tyrie). I am grateful to the Leader of the House for his admission that the success of the Commission relies on the Opposition’s support. That gets us off on a better foot than might have been the case.
There are some novel elements to the motion, as the Leader of the House pointed out, not least the sub-committees of one. We will look with interest to see how that works in a Commission of the size that is proposed, especially given that it is a joint Commission with the other place.
I am particularly pleased with the assurances that the resources that are needed will not be taken out of House of Commons resources for other Select Committees. I wonder whether the Leader of the House has a view on what amount of resources might be used and whether we will be kept informed as the process goes on. The Opposition are keen that the ongoing work of the Treasury Committee, the primary job of which is to hold the Government to account, must not be badly affected by its members, not least its Chairman, being engaged in other important work, which may have a tendency to take them away from their day job. We will obviously keep a keen eye on the situation, to ensure that the Treasury Committee’s work of holding the Government to account does not suffer as a result of the other duties that the hon. Member for Chichester and other members of the Committee who are to sit on the Commission will take on.
Having emphasised once again our belief that we needed a judge-led inquiry, the Opposition are happy, given that the vote on that was lost, to co-operate with the hon. Gentleman’s inquiry, and we will watch its progress with interest. If the House divides this evening, we will join the Leader of the House in the Lobby.
Richard Fuller (Bedford) (Con)
I rise briefly to welcome the motion and wish all the members of the Commission the best. I recognise the willingness that my hon. Friend the Member for Chichester (Mr Tyrie) has expressed for the Commission’s work to be forward-looking, and I understand that its role will not be to act as prosecutor. However, I give its members this piece of advice. They are doing the people’s work, and the people have an expectation of the review of the financial crisis and the financial services sector. They will not understand the work of the Commission unless this is accomplished: somebody has to go to jail.
Criminal prosecutions are an essential part of cleansing our financial services sector and moving us forward, to ensure that the City can reassert itself and its reputation not only in the eyes of the world but in the eyes of the British people. That is one of the most important requirements of the parliamentary inquiry, and I leave it to the Commission to consider that comment.
John Mann (Bassetlaw) (Lab)
It appears that this Commission, which was originally described as a very narrow one, is broadening so that, as the Leader of the House said, it can now look at particular matters with sub-committees of one, and there are suggestions that it should broaden into criminal prosecutions.
The issues remain as they were, but the evidence is changing and will continue to change. That is the problem with setting up ad hoc committees. Just in the past hour, further e-mails have come from the Bank of England that have some significance for matters that have already been looked at, looked at again and looked at a third time. Those e-mails are significant to what the Treasury Committee looked at the first time, and doubtless information will continue to emerge.
This is a moving feast, and the problem with a moving feast is that setting a time limit when one does not know what will happen next can lead to a certain momentum, which can be in the wrong direction. The problem is not that it is an arbitrary time limit—any time limit is arbitrary—but that it could be an irrational one.
Tomorrow in the United States, a new court action is being initiated not on LIBOR but on other market manipulation by banks, and specifically a British bank. We will see what happens as that court action proceeds, but simply examining LIBOR, and especially only the one bank in which what has gone on has been partially exposed, rather misses the point about market manipulation by investment banks over the past 10 years.
Even within the context of LIBOR, we have only just reached the stage of seeing some of the market manipulation that happened, and only in one bank, Barclays, which has received bad publicity. There is far more to be revealed about that, and I am certain that there will be more surprises to come in the next day, week or two weeks. Those surprises may well continue to flow.
Even in the case of Barclays, the manipulation of LIBOR is one tiny part of the allegations of market manipulation and anti-competitive work. A swathe of evidence is beginning to emerge, and more people are now prepared to speak out about how a range of markets have been manipulated in a range of ways. Derivatives have been used as the basis of that manipulation, but in fact it is much more complex than that. At its heart, as Barclays has said, was the making of a quick profit. In the past two weeks, courts in Canada have specified in a non-LIBOR-related case where the judge has pronounced that it was manipulation for short-term profit on an anti-competitive basis.
That is just one bank. No one can answer—the question was not answered by the Financial Services Authority today; perhaps it is not in its remit to do so—what the contingent liability is for Barclays. That is a small concern, and of significance to people working for the bank, people who have shares in it, and the wider economy, but it is clear that the largely state-owned banks, not least the Royal Bank of Scotland but also Lloyds TSB, have been doing the same thing. The problem that we will face is not just the issues of criminality that may or may not emerge. Proving a criminal case in any of that is fiendishly difficult—both finding the person who has committed an act and finding a victim so that a case can be taken. If law suits, beginning in the United States but spreading elsewhere, start to succeed, the amounts of money that have been fiddled are so great—because of the instruments that were used—that the British taxpayer may face a huge, unquantified bill, and we do not know when it will arrive. The future of Barclays is somewhat in question.
Mr Speaker
Order. I appreciate that the hon. Gentleman is indulging in scene setting—offering the House the context—but I would politely suggest that he will wish to turn to the proceedings and composition of the intended Committee. If it is helpful to him, I gently remind him, in relation to the motion, that he has 15 paragraphs from which to choose when deciding how to focus his remarks.
John Mann
I thank you for your guidance, Mr Speaker. My initial remarks related to the remit of the Committee, rather than its composition, which is frankly an irrelevance compared with the problems of the moving feast of its remit.
The remit has been set so vaguely that it can incorporate anything and everything. We will face the economic consequences when the partially state-owned banks are hit in the same way. These issues are entirely out of our control—indeed, they are entirely out of British control. The American authorities are two years ahead of the British authorities, and have taken a lead, so they will dictate the time scale for what comes next. Whether the considerations are legal or political—there are elections coming up, so there may well be more of a political imperative to be seen to be doing things—they will have grave consequences for these financial institutions and the British taxpayer.
That is why although it may well come up with worthy and credible recommendations, the investigation cannot match the task that it has been set. Because of the course of events and the changes that will happen, arbitrary time limits are, by definition, self-defeating. There is another problem that goes alongside that, and it concerns the other options available to look at those matters. I am pleased that the Leader of the House appears to have given a commitment, and I urge him to clarify it, that no staffing resource will be removed from the Treasury Committee in that period of time. If that is the case, that is a significant step forward. If the Treasury Committee were mothballed at precisely this time, the ability of the House to respond to fast-moving events would worsen significantly.
The Treasury Committee has a heavy workload. Today, Commissioner Barnier was supposed to appear before the Committee in relation to the 17 EU directives and draft directives relating to financial services on the books at the moment. It is essential that this House properly scrutinises and takes a view on what happens with those directives, but that has not been happening—it is a key role that the Treasury Committee needs to fulfil.
Mr Kevan Jones (North Durham) (Lab)
Does my hon. Friend agree that there may well be some dispute about what the Treasury Committee should look at and what this new Commission should look at—if, for example, another scandal or something like it emerged in the next few weeks?
John Mann
My hon. Friend makes the point that I have been stressing—that we do not know and cannot predict them, but we know that there will be a lot more scandals emerging, as we are only seeing the tip of the iceberg at present. [Interruption.] I appreciate that this is not good listening for those hon. Members trying to work out how to respond to this, but if this House is to set up arbitrary ad hoc committees at random every time there is a problem, it will potentially undermine itself. Which Select Committee will be next to give away some of its powers to an ad hoc committee? Is this the appropriate way to determine such matters?
If some of the powers set out in the motion were reinforced not just in respect of the Treasury Select Committee but of other Select Committees, that would reinforce the scrutiny of this House over what goes on both in government and in the country, so there are some good proposals here. The good proposals, however, are bespoke to this particular Commission—for example, the ability to call in a QC and the ability to take evidence on oath. If they are good enough for this new Commission, they should be made available to any Select Committee looking at any issue. The House is ducking this problem.
Mr Peter Bone (Wellingborough) (Con)
I think the hon. Gentleman is making some powerful and important points. Does he share my surprise that the Treasury Select Committee was not given this role? He is absolutely right: these powers should be given to all Select Committees to make Parliament more powerful.
John Mann
I take the hon. Gentleman’s point and I agree with him, but I do not intend to go through all the previous debate on this issue—interesting though it would be to do so—because I am sticking to the detail of what is in front of us, however badly worded it is. There is, however, clearly a case for saying that if the Treasury Committee had been allowed to carry on this work, it could have done so as effectively as this Joint Committee. I am sure that the five Members from the House of Lords who are as yet unknown and unnamed will bring great wisdom to this Joint Committee, but if the House of Lords wants to look into matters, it can look into them. This is the elected Chamber, and for this elected Chamber to hand over some of these powers of scrutiny to an unelected Chamber seems a retrograde step, which will come back to haunt us in future.
Once a precedent has been established and it suits the Government, it is likely to happen again—and this was a Government initiative. I am rather surprised that the Opposition Front-Bench team, perhaps looking forward to being in government themselves, have been seduced into accepting this way of undermining the historic, developed and improving role of this House to scrutinise. That, I think, is partly what is at stake here, if this becomes the way of doing business in this House.
I do not see how a Select Committee, denuded of half its members, can in any way work as effectively as a Select Committee operating with all its members. That is the reality of what will happen, and we need to be aware of the unintended consequences that might come from a potential eurozone crisis and other problems emanating from Europe that conflict across the work of this Joint Committee—and are wrongly not referred to within it—because proposals from Brussels are, rightly or wrongly, a fundamental part of the equation, affecting decisions made by this House and by the banking industry in this country and across the world. That aspect has been ducked by the creation of the Commission, which will create unhealthy confusion in the debate.
What should have happened? The remit given to the investigation, which should have been carried out by the Treasury Committee, should have been far broader—[Interruption.] An hon. Gentleman says “Boring” from a sedentary position, but this is not boring. For example, seven investment banks colluded to rig the price of the Kraft takeover of Cadbury’s. That is the real scandal that underpins the profits in investment banking. In some areas, there is ferocious competition, but in the vast majority of investment banking, there is no competition whatever. That is the scandal that created the culture that led to the LIBOR rigging. An investment bank called in by a company to advise on a sale or takeover has so much knowledge of the workings of the company that it has the ability to manipulate the market to determine how things will go. That is the fundamental weakness in the system of investment banking. The implications for British manufacturing and manufacturing elsewhere in the world—
Mr Speaker
Order. I have noted the hon. Gentleman’s references to investment banking, but I fear—very considerably—that he is now going to proceed to discuss the state of British manufacturing and any relationship between the banking and manufacturing sectors. He is gyrating between referring to the terms of reference of the Commission and matters of composition, and then talking about matters that are quite outwith the terms of the motion, which ought to afford him adequate scope. I feel cautiously hopeful that he may be nearer to the end of his remarks than to the beginning.
John Mann
I have so far got to paragraph (1)(b) of the motion, which I shall quote, so that you are assured, Mr Speaker, that my remarks are directly pertinent. Paragraph (1)(b) refers to
“lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for Government policy”.
That is precisely what I was talking about in relation to how investment banks operate. The lack of transparency, conflicts of interests and the narrow remit—
Mr Speaker
Order. I am sure the hon. Gentleman is public spirited and trying to be helpful, but he should not misunderstand the terms of the motion. The paragraph to which he refers underlines the importance of the inquiry in learning those lessons. It is not necessary or feasible for the House to do so tonight. It would be a triumph of optimism over reality for him to suppose that the House would do so courtesy of his speech, no matter how compelling it is.
John Mann
Thank you for that guidance, Mr Speaker. I am merely outlining my objections to the lack of breadth in the remit given to the Commission.
My final questions on paragraph (1)(b)—[Hon. Members: “Hooray!”] I am surprised hon. Members are so keen to stay and hear the debate, given some of their sedentary comments. It would be helpful if the Leader of the House confirmed unambiguously that the principles behind the setting up of the Commission will in no way—practically and in reality—undermine the ability of the Treasury Committee to meet as often as it has over the past year to discuss subjects that it chooses to investigate. It would help if he confirmed that it can call the witnesses it chooses and that it will have the access to the staffing resource and expertise that it currently has. If he can give those assurances, I will not seek to divide the House on the motion. I look forward to hearing from him.
John McDonnell (Hayes and Harlington) (Lab)
I want to make a brief point about paragraph (1)(a), which sets out the terms of reference. Some months ago there were reports, which I raised with the Prime Minister, about the Bank of England’s intervention with at least one bank, and perhaps more, about the manipulation of the quantitative easing auctions. I would welcome an assurance that paragraph (1)(a) will cover that issue as well, rather than just the LIBOR issue, because it is a matter of concern if a single bank or a number of banks sought to profiteer from the quantitative easing that was put in place by the Government to rescue the banks. Indeed, it seems extraordinary that the banks would seek to profiteer from the taxpayers’ money that was used to intervene and save them from the crisis that they had brought about. I would welcome an assurance from the Chair of the inquiry that that matter, as well as LIBOR, will be looked into when we consider the issue of transparency and the ability of the banks to manipulate the system overall.
Mark Durkan (Foyle) (SDLP)
I have quite fundamental reservations about the motion before us this evening, because, a bit like the hon. Member for Bassetlaw (John Mann), I have serious concerns about the implications for the work of the Treasury Committee. The way in which we are moving to set up the Commission, with a selection of members of the Treasury Committee—almost a Treasury Committee A team—being assigned to the Commission, will obviously have an impact on the Committee’s working capacity at a key time.
We heard from the Chancellor in the Chamber two weeks ago that he was appointing Martin Wheatley, the incoming chief executive of the Financial Services Authority, to conduct a review that would report within six weeks. That review was going to make recommendations that could feed into reconsideration of the Financial Services Bill. I would have thought that the outcome of the Wheatley review would be the subject of serious consideration by the Treasury Committee. I also wonder how the House would consider the implications of that urgent review, which the Chancellor has instigated, under Martin Wheatley. Will the Financial Services Bill Committee be reconstituted or will we just receive scrambled amendments? There will be confusion, because the Wheatley review is meant to come up with recommendations for legislative change—through the Financial Services Bill first, but possibly also through the banking reform Bill, which the Government have told us is due in the new year. Surely the journey to the banking reform Bill should involve serious consideration and pre-legislative scrutiny by the Treasury Committee, and perhaps others too.
I am not sure how the Treasury Committee can perform its usual role of giving such key legislative consideration if so many of its members and its Chairman are absorbed in the inquiry that this motion establishes—an inquiry that will be intensive and could even turn out to be extensive, in terms of the issues it gets into. We as a House are asking the Commission to surf a very dense, murky and smelly swamp in short order and come up with clear findings and recommendations. We are assigning it quite an inordinate task, which not only will be hard to achieve in itself, but will end up damaging the work of the Treasury Committee.
As someone who sat on the Financial Services Bill Committee, I was conscious of the fact that we had many members of the Treasury Committee serving on that Committee. I was also struck, however, by the fact that they resiled from positions that they had agreed to, as members of the Treasury Select Committee, in their very good report into aspects of the Financial Services Bill. It was quite common for the hon. Member for Nottingham East (Chris Leslie) to make points in that Bill Committee in which he quoted extensively from the Treasury Select Committee report, only for members of the Select Committee to disown the report or distance themselves from it. I was almost expecting them to say that they were not inextricably linked to their membership of the Select Committee in that particular capacity. That experience gives me concern about splitting the attention and capacity of the Treasury Select Committee in this way, and I worry that this might be a well-motivated misadventure in regard to its implications for the work of the Committee.
I hope that the Leader of the House will be able to clarify the Government’s hopes and intentions in relation to the timing of the Financial Services Bill and any amendments that they believe should be made to it in the light of the LIBOR scandal, given the Chancellor’s statement two weeks ago, and in relation to the banking reform Bill. There appear to be potentially overlapping and intersecting reviews going on, and if we in this Chamber are mandating them, we need to take responsibility for the possible confusion that could be caused to others and to ourselves.
I do not believe that these arrangements will be enough to deal with the scale of the problem or the questions that it raises not only about banking but about the competence and due diligence of this Parliament. Are we as parliamentarians up to the task of properly scrutinising legislation and introducing regulatory changes? Is it enough for us to devolve the task to a group of people hand-picked from the Treasury Select Committee by the Whips and expect them to come up with all the answers while we take responsibility only for receiving them? I do not think that that is good enough.
I did not vote for a parliamentary inquiry device when we voted on the matter the week before last, but I accept that this is the chosen outcome. I have serious reservations about the way in which the terms of reference for the Commission have been laid out here, and about the possibility of its composition weakening the Treasury Select Committee at a key time when two Bills are due to come back to us in the autumn, along with another Bill in the new year. I am also worried about the Committee’s ability to deal with other unfolding revelations that might emerge not only from the LIBOR scandal but from issues relating to quantitative easing, to which the hon. Member for Hayes and Harlington (John McDonnell) referred, and to deal with the outflow from the machinations in the eurozone.
There is a lot of work for the Treasury Select Committee to concentrate on, and I am not sure that it will be assisted by the creation of this device. If the Committee is content with the arrangement, I will have to accept its opinion. However, that does not absolve us in this Chamber from our legislative responsibility in respect of those two Bills, which the Chancellor has told us could be directly relevant and whose scope and reach will need to be adjusted to take account of the LIBOR scandal and possibly other scandals as well.
I have profound reservations, but I wish those who are undertaking the inquiry well. They have a difficult task ahead of them, and I do not know how they are meant to perform it if, as the motion suggests, they will sometimes be expected to work as sub-Committees of one. That would create the bizarre scenario of a sub-Committee of one relying on the hired specialist advisers and other agents who will be licensed by this motion. That would create some fairly peculiar scenarios that Parliament might find hard to stand over. Members of the Commission might also find it hard comfortably to take ownership of all the undertakings of the Commission, given the odd construct that is provided for in the motion. I accept that this is a scramble in particular circumstances, and that time is pressing. However, I am not sure that it has been a good scramble. I think that there should have been better thought and more consideration, and I think that many of the people who are comfortable with this device now may end up regretting their decision.
Mr Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow the hon. Member for Foyle (Mark Durkan), who is always worth listening to, but I have to say that on this occasion I disagreed with many of the points he made. I think that this is a chance for Parliament to assert itself. I think that it is a new adventure for Parliament. If the Commission is successful—if it produces a report that is unanimous and not split along party lines, and if it uses all the additional powers that it is being given—that will be a great step forward, and the arrangement may be repeated in the future. I take a much more optimistic view than the hon. Gentleman. The fact that so many Members are in the Chamber late at night shows how interested they are in the issue.
I have just two questions to put to the Leader of the House. One concerns paragraph (3), which names the members of the Commission. I am not sure how they were selected. I would have found it understandable for all the members of the Treasury Committee to be members of the Commission, because they were elected to their positions, but how did these particular names come to be here? Certain other Members’ names are not here although perhaps they should be. I am surprised, for instance, that a certain lady Member’s name is not included. Was it purple smoke, or was it, as I fear, the usual channels? Perhaps the Leader of the House could clear that up.
I welcome the Leader of the House’s announcement of an open-ended commitment from the Treasury to provide money for the counsel to the Commission. Does he hope, like me, that the counsel will act rather like a congressional committee and will grill the witnesses, and that members of the Commission will then be able to ask questions? I think that if we set up that sort of arrangement, we shall be moving Parliament forward.
Mr Kevan Jones (North Durham) (Lab)
Let me begin by reiterating the point made by my hon. Friend the Member for Wallasey (Ms Eagle), who said that we had voted for a judge-led inquiry. We are setting an onerous task for the Commission. I think it was my hon. Friend the Member for Bassetlaw (John Mann) who said that it would be looked at very closely by members of the public, who now have very little faith in our banking system, whether because of national scandals or because of their dealings with their own local banks.
The terms of reference are set out clearly in paragraph (1)(a), which mentions the
“professional standards and culture of the UK banking sector”.
I should be interested to know how “culture” is defined in the context of banking. Does it refer only to banks, or to building societies as well? We should bear it in mind that the banking industry consists of not only high-street chains but, for instance, mutual societies. Will they be included in the Commission’s investigation?
LIBOR was the catalyst for the establishment of the Commission. Paragraph (1)(b) refers to
“lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for Government policy”.
You pulled up my hon. Friend the Member for Bassetlaw on the issue of corporate governance, Mr Speaker, and I accept your ruling. However, many of the matters that the Commission will consider will not relate purely to banking. As my hon. Friend said, they will relate to lending and takeover bids for companies. Will the Commission look into the culture of, for example, the Kraft takeover, which my hon. Friend mentioned? If it restricts its consideration to the banking sector, will not the inquiry be of limited use, not just in view of the vehicles involved in events such as the Kraft takeover but—I hasten to add—in view of some of the things that have been going on in local government? I have raised the issue of the refinancing of Newcastle airport, for example, which was a huge scandal in the north-east two years ago. That was driven by the idea that we could get a better deal for the local council tax payer by refinancing. In fact, it got them a worse deal. Will the Commission look at such situations?
Turning to transparency and governance, Government Members had strong opinions about private finance initiative deals when they were in opposition, and they still hold to those views now. Will such financing arrangements fall within the remit of paragraph (1)(a) and (b), as they are clearly part of a new culture that has emerged, and they are a new mechanism for funding Government policy? Paragraph (1)(b) refers to
“implications for regulation and for Government policy.”
Would today’s announcements on the investment in the railways fall within the remit? That is being financed in part through Network Rail, which is a completely separate organisation and is off the Government balance sheet. The Commission’s remit could lead to such areas being investigated. There are some wider implications here, therefore, and it will be interesting to see if the Commission resists going down certain paths. If we do not have a full inquiry that looks at all these areas, the public may well think we are just concentrating on a small part of the banking and finance industry, when there are many other concerns that directly affect them, too.
I have great respect for the Chair of the Treasury Committee, the hon. Member for Chichester (Mr Tyrie), who will chair this Commission, but the hon. Member for Wellingborough (Mr Bone) mentioned the absence of any women on the nomination list from this House. Are we saying that there are no able hon. Ladies from either side of the House who could sit on this Committee? We have in the past tried to ensure that all Committees in this House included women Members. This is an omission, therefore. It may be possible that all the members from the House of Lords will be men, too. We would therefore have a Committee made up entirely of males, which would be very wrong. It would be right to include a certain—female—member of the Treasury Committee on the Commission. Obviously that hon. Lady did not fit the loyalty criteria set by the usual channels, however. Her inclusion could have been useful, especially in the light of her previous life in the banking industry.
We are going to agree this motion tonight when we do not know who the Lords members of the Commission will be. I agree with the position of my hon. Friend the Member for Bassetlaw: this is a slippery slope as we are agreeing to have a Joint Committee to scrutinise and make recommendations with some members who have never been elected—and some of whom are, perhaps, unelectable.
Another interesting question is what the powers of this Commission will be. Paragraph (7)(a) states that it will have the power to
“send for persons, papers and records”.
What will happen if an individual says, “No”? Will the Commission have the full powers of Parliament to enforce its will in this regard?
It is also stated that witnesses will be under oath, and also that the Commission will be able to appoint special advisers. That is very important in respect of the expertise it will bring to the Commission. There is a question to be asked about a possible declaration of interests by those individuals, however. Many of the people who have expertise in this field will have had direct involvement in the culture that this Commission will be examining. So what will be the restrictions on the appointment of those advisers in respect of either their past lives or any future involvement they may have? That needs to be spelt out from the beginning. We need to make sure that they have not got their fingers in any of the pies that this Commission is investigating.
I do not wish to cast aspersions on any members of the Commission from this House, but we do not know who its members will be from the other House. How are we to define declarations of interest? Are these interests that those individuals hold now or in previous lives? If they are commercial interests, that will raise questions about the impartiality of those individuals, and anything that does that will damage the Commission from the outset.
Paragraph (7)(d) has already been mentioned. It states:
“to invite specialist advisers (including Counsel appointed as specialist advisers) to examine witnesses”.
I am not sure what that means. The normal procedure that Select Committees follow is that the members ask the questions, and questions and briefing notes are clearly written in advance by advisers. This arrangement, however, is very different. This is about having special advisers being able to cross-examine witnesses. So what is the status of those individuals? As the hon. Member for Wellingborough has said, that is a huge change from the way in which Select Committees have operated in this House. When I served on the Select Committee on Defence we had some very able advisers, but the idea that they would cross-examine witnesses is a strange one. We need clarification on that matter.
What about specialist advisers and conflicts of interest? If they are going to be counsel, we need to ask whether they have ever acted for banks or financial institutions. Would that debar them from being appointed as an adviser to the Commission? It is important that we have those things laid out clearly right at the beginning. I do not think it is right to leave them up to the Committee or the Chair to determine. [Interruption.] Government Members may well think that this is frivolous, but to many of our constituents it will be very important, in terms not only of how their money is looked after, but of trying to get credibility back into a sector that is vital to this country’s economy. This is very important in terms of making sure we get it right and of the reputation of the Members of this House who are going to be serving on the Commission.
The other thing I wish to discuss is how the Commission is going to be financed. Paragraph (13) says that
“the costs of the Commission shall be assessed by the House of Commons Commission from time to time and shall be paid by Her Majesty’s Government for the credit of the House of Commons (Administration) Estimate.”
We all know that, if someone wants to control the activities of a committee or any organisation, they can starve it of money. Are we saying that this Commission has a blank cheque? Unless it has, the Government will be able to starve it of money and limit the scope of its activities.
Paragraph (7)(e) states that the Commission can
“adjourn from place to place”.
If a lot of foreign travel is involved, as may well be the case, that will create an expense. Who makes the determination on that in terms of the work the Commission does? Will the Treasury at some point try to limit it by saying, “I am sorry, but you have spent too much and so you cannot undertake that foreign travel or employ that expert witness to interrogate and produce the report”?
There are a lot of—[Interruption.] The hon. Member for Ealing Central and Acton (Angie Bray) is chuntering from a sedentary position, but she has only just come into the Chamber. I know that she did not have a very good week last week, but I wish her all the best for the future.
The financing of the Commission will be very important, so we need some assurance that we will not have interference by Government in the Commission’s work by stealth—that is, by starving it of the resources it needs.
Mr Bone
The hon. Gentleman is making serious points about parliamentary scrutiny, and it is great that so many Government Members are present to support him. Does he welcome this new initiative? If there is unlimited funding, if there can be counsel and if the Commission can cross-examine in the same way as congressional committees, is that not a good thing?
Mr Jones
It is—[Hon. Members: “Ah!] Hon. Members have not heard what I am going to say yet. I agree with the hon. Gentleman, but we have seen this problem with Select Committees, whose travel was limited in the previous Parliament, hampering their work. As the Commission will be subject to the Government’s decision on whether they can fund it or not, that is a very important point. If the situation will be that suggested by the hon. Gentleman, we should have the same arrangements for Select Committees. That would ensure that Select Committees could not only employ the proper advisers—and perhaps more of them—and see expert witnesses but undertake the detailed travel that is sometimes required.
My other concern is paragraph (12)(b), which concerns the setting up of sub-committees. There is no detail about how sub-committees will be set up or about their composition. Paragraph (12)(b) states that a sub-committee will have a quorum of one, but how big will the committees be?
I am very uncomfortable with the idea of a sub-committee of one person making decisions or taking evidence. It should include at least one person from each House: a Member from this House and one from the other House. Likewise, on the question of political balance, it could include a Government Member and an Opposition Member. If we are going to have sub-committees, surely it would be right to increase the quorum to at least two, one from each House, and, potentially, to try to get political balance.
There are many provisions in the motion that prompt many questions. The hon. Member for Wellingborough made a very good point, in that it sets a lot of precedents and, I hope, sets a way forward that Select Committees can follow to draw down more resources and increase their powers.
I also want to raise the issue of the Commission’s reports. The motion states that it will
“report from time to time.”
Who will decide? If the Commission as a whole decides to produce interim reports or short reports throughout its life, some of them will be very market sensitive. Will not the Commission have to be very cautious in what it releases? I am sure that many finance houses, banks and other parts of the financial sector will be looking very closely at what the Commission recommends, and it could affect the share prices of those organisations. There is no guidance in the motion about how those reports should be produced, according to what time scale and for what reasons.
The other question that was mentioned earlier is whether we are happy now that we have basically set up a new type of Select Committee. Personally, I am not. I think that this inquiry would have been far better done by the Treasury Committee. Obviously, those on the Front Bench from my own party argued strongly for a judicial-led inquiry, which was the right approach to get confidence in the banking system. In the absence of such an inquiry, the Treasury Committee would perhaps have been a better vehicle. I worry about the precedent that this sets and whether it will allow the Government of the day to dictate to Select Committees or hybrid Committees. That goes to the heart of the independence of those Committees and their accountability to Parliament. The Commission will have a huge job to do and I wish it well in its deliberations, but we should undertake a serious examination of the new system and the precedent that that sets for our Select Committees.
Question put and agreed to.
Ordered,
(1) That a Committee of this House be established, to be called the Parliamentary Commission on Banking Standards, to consider and report on—
(a) professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the LIBOR ratesetting process;
(b) lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for Government policy;
and to make recommendations for legislative and other action.
(2) That Mr Andrew Tyrie be Chair of the Commission.
(3) That Mark Garnier, Mr Andrew Love, Mr Pat McFadden and John Thurso be members of the Commission.
(4) That the Commission have leave to join with any committee appointed by the Lords to consider the said matters.
(5) That the Commission may hold meetings under the provisions of paragraph (4) of this order at any time after the Lords has agreed to appoint a committee.
(6) That the Commission shall, except as provided for in this order, follow the procedure of a select committee of this House.
(7) That the Commission shall have power—
(a) to send for persons, papers and records;
(b) to examine witnesses on oath;
(c) to appoint specialist advisers;
(d) to invite specialist advisers (including Counsel appointed as specialist advisers) to examine witnesses;
(e) to adjourn from place to place;
(f) to sit notwithstanding any adjournment of the House; and
(g) to report from time to time.
(8) That the Commission shall have power to appoint sub-committees to consider matters specified by the Commission within the terms of this order and a subcommittee shall have—
(a) the powers in paragraph (7)(a), (b), (e) and (f); and
(b) the power to invite specialist advisers appointed by the Commission (including Counsel appointed as specialist advisers) to examine witnesses;
and the quorum of a sub-committee shall, subject to paragraph (12)(b), be one member of this House.
(9) That the Chair may report to the House an order, resolution or Special Report as an order, resolution or Special Report of the Commission which has not been agreed at a meeting of the Commission if he is satisfied that he has consulted all members of the Commission about the terms of the order, resolution or Special Report and that it represents a decision of the majority of the Commission.
(10) That the quorum of the Commission shall be two members of this House.
(11) That, whenever this House shall stand adjourned other than to the next day, any report, Special Report, order or resolution agreed to by, or evidence taken or received by, the Commission, including any under paragraph (9) of this order, may be published or printed under the authority of this House, shall be deemed to have been reported and shall be reported when this House next sits.
(12) That, when the Commission operates under the provisions of paragraph (4) of this order, the following provisions shall apply—
(a) the quorum of the Commission shall be two members of this House and two members of the House of Lords;
(b) the quorum of any sub-committee shall be one member from either House;
and
(c) the power of the Chair to report under paragraph (9) may also be exercised with the Chair’s agreement by a member of the Commission who is a member of the House of Lords.
(13) That the costs of the Commission shall be assessed by the House of Commons Commission from time to time and shall be paid by Her Majesty’s Government for the credit of the House of Commons (Administration) Estimate.
(14) That the Commission shall report on legislative action no later than 18 December 2012 and on other matters as soon as possible thereafter.
(15) That a message be sent to the House of Lords to desire their concurrence.—(Sir George Young.)
Business Without Debate
Hon. Members
Object.
business, innovation and skills
Ordered,
That Mr David Ward be discharged from the Business, Innovation and Skills Committee and Mike Crockart be added.—(Mr Alan Campbell, on behalf of the Committee of Selection.)
petitions
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am pleased to have chosen this evening to present this petition from residents of my constituency and the neighbouring areas, prompted by a meeting that I held with local police officers.
The petition states:
The Petition of residents of Stalybridge and Hyde and the Greater Manchester area,
Declares that the proposals made in the second part of the Winsor Review will have a devastating effect on the morale of frontline officers, and risk a detrimental effect on the quality of service the Police provide to the public.
The Petitioners therefore request that the House of Commons urges the Home Secretary to reject the recommendations contained within the Winsor Review.
And the Petitioners remain, etc.
[P001103]
Mr Peter Bone (Wellingborough) (Con)
I have a petition with 3,673 names on it, organised by a very nice lady in my constituency called Mrs Dorothy Maxwell. The problem that we have in Rushden is that the East Midlands Ambulance Service is rather poor and is getting worse. The way that the ambulance service has decided to solve that problem is to close the ambulance station. That, as might be expected, has not been universally welcomed.
The petition reads:
The Humble Petition of residents of Rushden, Higham Ferrers, East Northamptonshire, and surrounding areas
Sheweth,
That the proposed closure of Rushden Ambulance station will detrimentally affect the 97,500 people that live in the local area, reducing response time and providing an inferior service.
Wherefore your Petitioners pray that your Honourable House requests the Secretary of State for Health to urge the Northamptonshire County Council, the District Council of East Northamptonshire and East Midlands Ambulance Service to work together to find a solution that will allow the Rushden Ambulance station to remain open.
And your Petitioners, as in duty bound, will ever pray, etc.
[P001110]
Chris Kelly (Dudley South) (Con)
It is my pleasure to present this petition when the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), is on the Front Bench. I was recently contacted by Vijaykumar Lad of Kingswinford, the proprietor of Ian McArdle’s, the independent pharmacy in Brierley Hill, which has been trading for more than 40 years. Mr Lad is concerned about the number of applications for 100-hour pharmacies in Brierley Hill, which he and his customers feel will threaten the survival of existing pharmacy provision there.
Upon visiting McArdle’s pharmacy to meet Mr Lad and several of his customers, I was presented with a petition signed by more than 1,000 residents who wished to see McArdle’s of Brierley Hill saved. I therefore present this petition to the House.
The petition states:
The Petition of users of McArdles Pharmacy, Brierley Hill and others,
Declares that the Petitioners are concerned about proposals to allow three further pharmacies to open in Brierley Hill town centre that will each trade for more than 100 hours per week, as the Petitioners believe that adequate pharmaceutical services are already provided by the network of three well established pharmacies and that these unnecessary and undesirable new pharmacies will jeopardise the existing businesses that have provided personal care to customers for more than 40 years. The Petitioners therefore request that the House of Commons urges the Government to ask Dudley Primary Care Trust to reject any application for the opening of further pharmacies in Brierley Hill town centre.
And the Petitioners remain, etc.
[P001111]
NHS (Rationing of Care)
(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Mary Glindon (North Tyneside) (Lab)
This issue has already been raised today in the debate on a motion in the main business of the House, but I believe that the growing concern about rationing in the NHS justifies further debate tonight. For almost as long as the NHS has existed, rationing has been a matter of concern. Resources are finite, but in the past two years rationing has reached an unprecedented level; more than 125 previously free treatments have now been restricted or even stopped altogether, and they cover the full health care spectrum, from the cosmetic to the essential and all stages in between.
These findings were revealed in a survey, carried out by Labour’s shadow health team, of all NHS primary care trusts and shadow clinical commissioning groups in England. It is important to state the relevance of Labour’s new NHS check, which I will refer to in my speech, because as well as conducting surveys it gathers together the views of those working in the health service and takes into account the views of those receiving the service and their families. The submissions are considered alongside evidence from freedom of information requests to produce an accurate and relevant monthly report, such as the one on rationing.
Labour’s findings are backed by members of the British Medical Association who warn that creeping NHS rationing is making patients suffer unnecessarily, with people who need hip and knee replacements having to wait longer for operations while suffering in pain. GPs believe that the rationing is the result of the drive to make savings in the NHS of up to £20 billion by 2015. That is further borne out by the results of a poll conducted by the BBC in March, which found that more than four out of five GPs expect the rationing of NHS care to increase in response to financial pressure.
The concerns of the medical profession are echoed by other professions in the health service. Ahead of this debate I was contacted by the Chartered Society of Physiotherapy, which is very concerned about the rationing of NHS physiotherapy services and has a number of examples of patient care and outcomes suffering as a result. The CSP opposed the Health and Social Care Bill and the Government’s reforms to the NHS because of concerns about the negative impact on patient care resulting from rationing and the fragmentation of services. It is particularly concerned about the “any qualified provider” model and has found that patient choice is being adversely affected by the clear rationing of treatment and access in some of the “any qualified provider” service specifications, which it has systematically reviewed. For example, in Nottinghamshire the amount of treatment prescribed is limited without regard to patient need. In other areas, no re-referrals are allowed within a six or 12-month period, also regardless of patient need. This rationing is likely to lead to increased orthopaedic referrals and unnecessary surgical interventions.
The CSP has further concerns about the impact of the “any qualified provider” model, including a reduction in patient choice and the quality of care, the loss of clinically and cost-effective innovations such as self-referral to physiotherapy, the negative impact on the physiotherapy profession and the risk of conflicts of interest among private providers. Those are all legitimate concerns from a respected professional body, so I hope that the Minister will address them specifically with the society.
The Minister has denied the relevance of the shadow health team’s extensive survey, the NHS check, but perhaps he should reconsider his opinion of it, because the survey’s findings mirror those of GP magazine, which gathered evidence under the Freedom of Information Act, showing that 90% of primary care trusts were imposing restrictions. The magazine received responses from two thirds of England’s 151 trusts on the procedures that they considered to be non-urgent. The most common restriction was on tonsillectomies, but there was rationing in other areas, too.
Mr Deputy Speaker (Mr Nigel Evans)
Order. You can make an intervention, Mr Reed, but not from the Opposition Front Bench. If you step up to another Bench, you may intervene from there.
Mr Reed
Thank you, Mr Deputy Speaker. I trust that this is in order.
Will my hon. Friend join me in asking the Minister, who has indicated that he will not take interventions from me this evening, whether he will undertake a nationwide investigation into the clear rationing that is occurring in the NHS, and whether the Government will publish a list of procedures in which the eligibility criteria for treatment are now being changed? Will she join me also in asking the Government to act where various NHS organisations are breaching NICE guidelines on treatments offered to patients?
Mrs Glindon
I certainly will, and my hon. Friend may find that at the end of my speech I reiterate some of what he has said.
There is rationing in other areas, too, with 66% of trusts limiting cataract surgery and more than half rationing weight-loss surgery and hip and knee operations. Dr Richard Vautrey of the British Medical Association describes the situation as a “cost-saving exercise”, saying quite rightly:
“Patients fully understand the NHS doesn’t have unlimited resources...but they don’t understand, or believe it’s fair, when services are provided in one area but not another.”
The Labour party’s survey provides evidence of random rationing throughout the NHS, and of an accelerating postcode lottery. A number of rationed or decommissioned treatments are common across several PCTs and clinical commissioning groups, while some are specific to individual PCTs and CCGs. That demonstrates the wide variation throughout the country.
The survey found that rationing of treatment varies from capping, as in NHS South West Essex and NHS South East Essex, where a cap has been placed on the community diabetes service, to restricting treatment based on age or clinical need, as in NHS Warwickshire, where new criteria require that a patient must complain of intense or severe symptomatology and have a BMI of less than 40 to be listed for a knee replacement.
Evidence also showed, alarmingly, that PCTs and CCGs are diverging from the NICE guidelines, as in NHS Bassetlaw, where needle fasciotomy for Dupuytren's contracture is considered only if the patient is aged over 45 and has a loss of extension in one or more joints exceeding 25°, or if the patient is under 45 years old and has a greater than 10° loss of extension in two or more joints. However, the NICE guidelines do not refer to degree of loss of extension or any specific age criteria, other than to say that the procedure would be more appropriate in older people.
Equally alarming are the findings that show that patients now have to pay for treatments that had been free. In a surgery in Yorkshire, patients needing treatments for cysts, skin lesions and in-growing toenails were told that they were no longer available on the NHS. But the practice had established a private company to offer those minor operations at a cost: £56.30 for the removal of a small cyst; £126 for larger cysts; £146.95 for the removal of an in-growing toenail; and £243 for the removal of a non-cancerous mole. In response to the GP magazine report, the Minister said:
“It is quite unacceptable if this is going on in all those cases. As you’ll appreciate, it is a complex issue. But the defining point is that people should be treated on clinical need, and not financial considerations.”
The findings of the BMA, the concerns of other health professionals, such as the Chartered Society of Physiotherapy, and the results of Labour’s in-depth survey all point to the fact that, because of increasing rationing, people are being treated on the basis not of clinical need, but of financial considerations.
Will the Minister respond positively to Labour’s call for an immediate review of rationing in the NHS and act immediately on the new evidence showing treatment restrictions on cost alone? How will he ensure that national guidelines can be implemented? Will he take action, pending the outcome of the review, to reverse immediately rationing decisions that leave patients in severe pain, restrict mobility, limit their ability to live independently or have a major psychological impact? Will the Government initiate a public debate on whether all other treatments should be provided by the NHS, rather than allowing them to be restricted in a random fashion?
Mr Reed
I am grateful to my hon. Friend for letting me intervene once more. Will she also join me in asking the Minister to publish whatever assessment must have been made into the claims forthcoming from the freedom of information requests shown to the Department of Health? Will she join me in asking the Government to publish that assessment of those claims?
Mrs Glindon
I certainly join my hon. Friend in asking the Government to publish the assessment.
In denying the findings of Labour’s survey of rationing and the supporting evidence from the BMA and other professional bodies working in the NHS, the Government are denying the people of this country the full NHS service that they deserve and have contributed towards.
Julie Hilling (Bolton West) (Lab)
I am listening with great interest to my hon. Friend’s speech. Does the decrease in care free at the point of delivery match the increase in the care that is then paid for by patients? Are the hospitals now offering all that care to people as long as they pay for it?
Mrs Glindon
I thank my hon. Friend for that intervention. As I have outlined, one of the terrible things is that people have to pay. However, in some instances, treatment is simply not available any longer.
Finally, I should say that my party accepts that there has to be a debate on some treatments that are of borderline value, but that debate should be part of a national review. I hope the Minister will respond positively to the request for an immediate review, allow a full and positive debate to begin, and arbitrary and unfair rationing in the NHS to end.
The Minister of State, Department of Health (Mr Simon Burns)
I congratulate the hon. Member for North Tyneside (Mrs Glindon) on securing this debate and the shadow Minister, the hon. Member for Copeland (Mr Reed), for more or less keeping a straight face during the course of it.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Minister give way?
Mr Burns
No, I will not; I am going to make some progress. This is not the hon. Lady’s debate and I have only just started.
If the hon. Member for North Tyneside or any other member of her party or of the public brought forth genuine evidence of cost-based rationing—blanket bans on treatment—this Government would act decisively to stamp it out, but the fact is that so far we have been brought no such convincing evidence of that.
The core principle underpinning the NHS is that it is a comprehensive health service, available to all, free at the point of use and based on need and not ability to pay. That principle is enshrined in the NHS constitution and reaffirmed in the Health and Social Care Act 2012.
Mrs Glindon
Does the Minister therefore disagree with all that has been said by the BMA and other professionals about their concerns about the rationing that is taking place? Does he doubt them? Does he think that the thousands of people who have contacted Labour’s health check are not telling the truth?
Mr Burns
It is not a question of not telling the truth. If the hon. Lady waits, I will deal with the NHS health check that she has mentioned. I am not sure whether she was here for the earlier debate, so she might not have heard me describe it as being as worthless as the piece of paper that Chamberlain brought back from Munich. In the course of my comments, I will outline why that is.
As I said, the core principle of the NHS is that it is a comprehensive health service, free at the point of use for all those eligible to use it. That principle remains as true and relevant today as it was when the NHS legislation was passed in 1946 and enacted in July 1948, and it will remain true in the years and decades to come for as long as the three main political parties continue to subscribe to that core belief.
Before I move on to the specific accusations of rationing that the hon. Lady makes, may I first point out that it is this Government who are protecting NHS budgets and increasing the amount of money available to the NHS by £12.5 billion over the course of this Parliament? It was the right hon. Member for Leigh (Andy Burnham) who described such a commitment as “irresponsible”—a comment that I find particularly bizarre coming from a Labour shadow Health Secretary.
May I ask what the hon. Lady’s party is doing where it is in control of the NHS? Is it increasing spending, or is it cutting it by 6.5%? The lucky escape of the NHS in England is that it has growing budgets under this Government compared with the falling budgets it would have had had her party won at the last election. If the hon. Lady, who looks a bit perturbed, does not understand what I am talking about, I can tell her that I am referring to what is happening under a Labour Government in Wales who are cutting the NHS budget—a warning to anyone living in England.
Of course the financial challenge is a difficult one. On its own, the extra £12.5 billion will not be enough to cover the growing demand for NHS services. It is vital that we get the most value—the very best health outcomes, as we like to say—out of every single penny that taxpayers spend, by cutting out waste and focusing more on prevention. It is true that the hon. Lady’s party recognised this too. When Labour was in office, it established NICE—the National Institute for Health and Clinical Excellence—to help the NHS to improve patient care within the finite resources available to it in order to ensure value for money. Through its world-class commissioning programme, it rewarded commissioners for setting priorities. Furthermore, it first recognised the scale of the £20 billion gap between funding and demand that emerged in 2009. The result was the QIPP agenda—quality, innovation, productivity and prevention—with its focus on improving patient care, increasing innovation and gaining greater accountability.
Since then, the world has changed. Thanks to the horrendous mess in which the hon. Lady’s Government left the nation’s finances, the NHS faces one of the toughest financial settlements in its history, even with its protected budget. That is one reason why the Health and Social Care Act was so vital. To get the best care for patients during a difficult financial settlement, we needed to put clinicians in control—making the connection between clinical and financial decisions, always putting patients’ interests first, and always looking for value for money.
In future, local priorities will be determined by local clinicians, not by administrative organisations that lack sufficient clinical input and are cut off from patients. Commissioning decisions will be based on a far deeper understanding of local need, with clinical commissioning groups working with health and wellbeing boards, local authorities and key community organisations to meet the needs of their local population. There will be better, more effective, more efficient care for patients.
Let me address directly the accusations of rationing. We are clear that it is completely unacceptable for commissioners to impose blanket bans on treatments. That is set out in case law and in Department of Health policy, which requires commissioners to allow exceptions in individual circumstances. We are also clear that commissioners must never restrict access to treatments on the basis of cost alone. That message was reiterated in a letter from Professor Sir Bruce Keogh, the NHS medical director, to the medical directors of strategic health authorities as recently as September 2011. He emphasised that any decision to restrict access to a treatment or intervention must be justified by a patient’s individual circumstances. By that, I mean not their financial circumstances, but their clinical circumstances and condition.
Since then, my ministerial colleagues and I have reiterated the message in our communications with the service that treatments available on the NHS are based on clinical need; that there should never be any arbitrary rationing based on cost, either locally or nationally; and that we will take action against any organisation found to be arbitrarily restricting treatment without clinical justification.
As hon. Lady said, the Labour party recently made a series of serious accusations in its NHS health check—accusations that services are being restricted or decommissioned without clinical justification. Had the hon. Lady done some rudimentary checking of her own, she would quickly have come to the same conclusion that we did: that such claims are nonsense dreamed up in Labour party headquarters.
The NHS health check claimed that there was a blanket ban by NHS Hull on the removal of wrist ganglia. We spoke with NHS Hull. There is no such ban. The health check claimed that 11 out of 100 primary care trusts or clinical commissioning groups restricted laser revision surgery for scars, but such cosmetic surgery has never been routinely available on the NHS, either in the lifetime of the coalition Government or in the 13 years of the last Labour Government. The position has not changed one iota since the Government came to power.
The NHS health check claimed that weight-loss surgery is restricted. It states:
“patients generally have to be over 18 and have a BMI over a certain level to receive weight loss surgery”.
Incredibly, people have to be overweight before they will be considered for weight loss surgery. To me, that seems perfectly logical. Why would the NHS want to treat people who were not overweight? From reading the Opposition’s NHS health check, it appears that the Opposition define rationing as a clinician denying treatment to a patient who has no clinical need for it. That is patently ridiculous. Treatments available on the NHS are based on clinical need. As I said, there should never be any arbitrary rationing based on cost, either locally or nationally. Such practices are totally unacceptable.
Julie Hilling
I have listened very carefully to the Minister, who is saying that he does not believe the reports are true. Does he feel, however, that he ought to do more investigation? The BMA’s research and other research makes these points, whereas he simply says he has spoken to one commissioning group. They say that there is no smoke without fire, and it seems to me that the Government ought to take these allegations seriously and investigate properly what is happening.
Mr Burns
Of course the Government take these allegations very seriously, which is why my officials rang NHS Hull to ask about wrist ganglia and were amazed to be told that there were no restrictions as described in the Labour party’s political leaflet. [Interruption.] If the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) will just hush for a minute, I will answer the question. I am always very pleasant to her, as she knows from experience.
I have personally made checks on two allegations about rationing, one in south-east Essex, south of my constituency, and one that I believe from memory was in Bedfordshire. My officials investigated both claims, which arose out of a meeting that I had with a clinician, and both claims were untrue. There had been a mistaken understanding of what was going on, and there was no rationing based on cost. The conditions in each trust were quite specific, and cases were determined on clinical grounds.
I also looked into one example after reading a story in my local newspaper about what was allegedly going on in the mid-Essex primary care trust, which is now part of the north Essex cluster. It was to do with the treatment of people suffering from overweight. Again, the story was inaccurate. There was no truth in the allegation that the trust was refusing to treat smokers or people who were overweight. They were treated, providing that it was clinically safe to do so. The three specific allegations that I have investigated, both myself and through my officials, have proved to be untrue.
As I said earlier, we have had officials look at the Labour party’s political document because, on the face of it, it raised serious allegations that merited investigation. I am afraid that the examples that I have given have not met the reality of the headline claims.
Mr Reed
I appreciate the confidence that the Minister is showing in refuting the evidence put to him based on freedom of information requests to the PCTs in question. He mentioned three cases out of 125. When will he assess the remaining 122, and will he publish that assessment?
Mr Burns
This debate is half an hour long, and I have been fortunate enough to have 15 minutes. We have investigated all the claims, but it would not be in the interests of the hon. Member for North Tyneside, or possible in the time allowed, for me to go through all of them. I have been assured that the evidence that Labour claimed to have in its party political document does not live up to the hyperbole of the hon. Member for Copeland or the shadow Secretary of State.
Appropriate, clinically based decisions about the setting of priorities will continue to be taken by commissioners in the NHS. However, by shifting decision making to local clinicians, we will ensure that those decisions are fair, transparent and based on the best clinical evidence. Treatment should never be restricted without clinical justification, and I say again that we will take action should any genuine evidence emerge that that is occurring. We regard it as unacceptable as Opposition Members do; the trouble is, the evidence that they have come up with so far does not live up to the claims that they make about it.
Question put and agreed to.
Written Ministerial Statements
(12 years, 5 months ago)
Written StatementsRead Full debate Read Hansard Text
Environmental Taxes
(12 years, 5 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Miss Chloe Smith)
A simple efficient and cost-effective policy framework will meet environmental objectives while supporting growth and maintaining a sound fiscal position. Market-based solutions to price carbon are at the heart of this approach, achieving objectives at the lowest possible cost. Tax policy will be developed in the context of wider Government levers (such as voluntary agreements and regulations) and overlap of policy instruments will be avoided.
The Government classify environmental taxes as those that meet all of the following three principles:
The tax is explicitly linked to the Government’s environmental objectives; and
The primary objective of the tax is to encourage environmentally positive behaviour change; and
The tax is structured in relation to environmental objectives—for example, the more polluting the behaviour, the greater the tax levied.
The Government have defined the following as environmental taxes based on these principles. These taxes will form the baseline for the proportion of tax revenues from environmental taxes, against which the Government will be assessed against the coalition’s commitment to increase the proportion of tax revenue accounted for by environmental taxes:
Climate Change Levy;
Aggregates Levy;
Landfill Tax;
EU Emissions Trading System (EU ETS);
Carbon Reduction Commitment Energy Efficiency Scheme;
Carbon Price Support.
Building on the baseline established here for environmental taxation, the Government will continue to explore opportunities to further green the tax system over the course of this Parliament. There are a number of environmental priorities which could be pursued through the tax system including:
Climate change mitigation; carbon reduction; energy efficiency.
Climate change adaptation; water efficiency, water quality in the environment (diffuse pollution), flood mitigation.
Environmental protection and improvement: waste reduction, protection of virgin resource, biodiversity, air quality.
Any options considered will be assessed against the fundamental priority of deficit reduction and strategic aim of simplification.
Tax | Actual Revenue Raised 2010/11 | Actual Revenue Raised 2011/12 | Revenue Forecast 2012/13 | Revenue Forecast 2013/14 | Revenue Forecast 2014/15 | Revenue Forecast 2015/16 |
|---|---|---|---|---|---|---|
Climate Change Levy | £0.7bn | £0.7bn | £0.7bn | £0.7bn | £0.7bn | £0.8bn |
Aggregates Levy | £0.3bn | £0.3bn | £0.3bn | £0.3bn | £0.3bn | £0.3bn |
Landfill Tax | £1.1bn | £1.1bn | £1.1bn | £1.2bn | £1.5bn | £1.6bn |
EU ETS | £0.4bn | £0.3bn | £0.7bn | £1.5bn | £1.6bn | £1.7bn |
Carbon Reduction Commitment | 0 | £0.7bn | £0.7bn | £0.8bn | £1.0bn | £1.0bn |
Carbon Price Floor | 0 | 0 | 0 | £0.6bn | £1bn | £1.2bn |
Total | £2.5bn | £3.1bn | £3.5bn | £5.1bn | £6.1bn | £6.6bn |
2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 | |
|---|---|---|---|---|---|---|
Total Revenue from Environmental Taxes (£bn) | £2.5bn | £3.1bn | £3.5bn | £5.1bn | £6.1bn | £6.6bn |
Total Tax Forecast Receipts (£ bn) | £550.8 | £570.4 | £591.5 | £622.5 | £658.4 | £692.0 |
Proportion of total tax receipts | 0.5% | 0.5% | 0.6% | 0.8% | 0.9% | 1.0% |
Environmental Impacts from Budget 2012 announcements by year | ||||||
Impact from Budget 2012 (already included above) | 0 | 0 | -£15m | +£60m | +£30m | +£30m |
Based on Budget 2012 forecasts including impact of Budget 2012 announcements. Total Revenues as % of GDP = 0.2% (2011/12) |
Revenue Raising Taxes and Fiscal Instruments with Environmental Benefits
In addition, the Government believe that the design and structure of other taxes can play a role in achieving the coalition commitment.
These are taxes and fiscal instruments which are primarily designed to raise revenue or to achieve other objectives, and therefore do not qualify as environmental taxes on the basis of the Government’s three principles. However these instruments may have an environmental impact due to behavioural change and in some cases may be explicitly designed to do so. On that basis, the Government believe that it is important to make reference to the revenue (or revenue forgone) of transport taxes, levies and exemptions/reliefs in its overall assessment of environmental taxation.
For example, vehicle excise duty is primarily a revenue raising tax but is, for cars bought new after 2001, structured to incentivise the purchase of cars with lower CO2 emissions. Other taxes may include reliefs or exemptions which promote environmentally positive behaviour change but within a wider set of objectives.
We will continue to explore opportunities to improve, update and reform revenue-raising taxes to increase their environmental benefits.
Tax | Actual Revenue Raised 2010/11 | Actual Revenue Raised 2011/12 | Revenue Forecast 2012/13 | Revenue Forecast 2013/14 | Revenue Forecast 2014/15 | Revenue Forecast 2015/16 |
|---|---|---|---|---|---|---|
Vehicle Excise Duty | £5.8bn | £5.8bn | £5.9bn | £5.8bn | £5.8bn | £5.8bn |
Fuel Duty | £27.3bn | £26.9bn | £27.3bn | £28.1bn | £28.9bn | £30.1bn |
Air Passenger Duty | £2.2bn | £2.7bn | £2.9bn | £3.0bn | £3.3bn | £3.5bn |
Company Car Tax | £1.8bn | £1.9bn | £2bn | £2.1bn | £2.3bn | £2.6bn |
Fuel Benefit Charge | £0.4bn | £0.4bn | £0.4bn | £0.5bn | £0.5bn | £0.5bn |
Van Fuel Benefit Charge | £10m | £10m | £10m | £10m | £10m | £10m |
Van Benefit Charge | £65m | £65m | £65m | £65m | £65m | £65m |
Feed in Tariffs* | £0.0bn | £0.2bn | £0.5bn | 0.7bn | 0.8bn | £0.9bn |
Renewable Obligations* | £0.5bn | £0.6bn | £0.8bn | £1.0bn | £1.2bn | £1.4bn |
Total | £38.1bn | £38.6bn | £39.9bn | £41.3bn | £42.9bn | £44.9bn |
Total Tax Forecast Receipts (£bn) | £550.8 | £570.4 | £591.5 | £622.5 | £658.4 | £692.0 |
Proportion of total tax receipts | 6.9% | 6.8% | 6.7% | 6.6% | 6.5% | 6.5% |
Exemption/Reliefs with environmental benefits | Not costed separately but are classed as revenue foregone. These include: Enhanced Capital Allowances; Landlord Energy Saving Allowance and Capital Allowance for thermal insulation of buildings. | |||||
Based on Budget 2012 forecasts *Based on OBR forecast |
The Government's definition compared to the ONS definition of environmental taxes
The Office for National Statistics (ONS), OECD and EuroStat all follow the same broad definition of environmental related taxes but all three include different sets of taxes within that definition.
The Government also accept this broad definition but the Government’s definition focuses on the taxes that are explicitly environmental (e.g. climate change levy, landfill tax, aggregates levy etc) and those that are environmentally related but primarily revenue raising (e.g. fuel duty, air passenger duty, vehicle excise duty etc).
Non-departmental Public Body (Pension Reform)
(12 years, 5 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
The Government accepted the recommendations of Lord Hutton’s Independent Public Service Pensions Commission (IPSPC) as the basis for discussion with unions on the reform of public service pensions, Official Report, 23 March 2011, column 951. The Hutton pension reform process was explicitly applicable to public service pensions in general, including non-departmental public bodies (NDPBs) and other types of public bodies as the interim IPSPC report (page 134) made clear. As announced in the Queen’s Speech on 9 May, the Government intend to bring forward legislation during the current parliamentary Session to provide a consistent legal framework for public service pensions. Those reforms will allow the major unfunded public service pension schemes to provide pension benefits to employees of new and existing NDPBs with unfunded pension schemes. In future, new bespoke schemes for NDPBs will be allowed only in compelling circumstances, provided they follow Lord Hutton’s design recommendations. The Government will consider further how to reform funded defined benefit schemes in line with Lord Hutton’s recommendations. Funded defined contribution schemes will not be reformed as part of this process as they do not impose liabilities on the Exchequer. A provisional list of existing NDPBs’ pension schemes due for reform will be published when the Bill is introduced.
The Government will honour in full the accrued rights earned by all scheme members and, where applicable, will maintain the final salary link for past service for current members. Members of NDPB pension schemes will also benefit from my announcement on 2 November 2011 that no-one within 10 years of retirement on 1 April 2012 will see any change in when they can retire nor any decrease in the amount of pension they receive, Official Report, 2 November 2011, columns 928-29.
Once the major scheme reforms are settled, we will look to begin discussions with NDPB staff and their representatives, whom we invite to work with the Government to ensure the changes are introduced as effectively as possible no later than 5 April 2018.
Retail and Manufacturing Consultation (Government Response)
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb)
The Government are committed under the red tape challenge to reduce the burden of regulation which acts as a barrier to growth. Unnecessary regulation has to be removed especially if it is outdated and no longer applies.
We are today laying before the House two statutory instruments which will revoke 13 measures identified under the retail and manufacturing themes of the red tape challenge. Three of these measures were introduced to revoke previous instruments.
Many of these statutory instruments were introduced to tackle a specific problem relating to a particular product such as safety issues arising from hood cords on outer clothing or safety standards for prams and pushchairs. While these regulations may be very effective at stamping out the problem they were designed to tackle, they are not flexible enough to deal with new products or practices. The revocation of these measures is beneficial as some of them are based on standards which are redundant.
The removal of these measures will not reduce consumers’ protections but increase clarity and make the law for business and consumers more straightforward.
Prescriptive regulations in the areas covered are no longer necessary and this was the general view highlighted in the consultation responses. The General Product Safety Regulations 2005 protect consumers from products which are not safe for use, provided the supporting European standards offer an acceptable level of safety protection. In addition to this the issue of price fixing is now covered by the Competition Act 1998 which deals with agreements and practices which prevent, restrict or distort competition.
A full list of the statutory instruments to be revoked is as follows:
Bunk Beds (Entrapment Hazards) (Safety) Regulations 1987 (SI 1987/1337)
Children’s Clothing (Hood Cords) Regulations 1976 (SI 1976/2)
Imitation Dummies (Safety) Regulations 1993 (SI 1993/2923)
Wheeled Child Conveyances (Safety) Regulations 1997 (SI 1997/2866)
Gas cooking Appliances (Safety) Regulations 1989 (SI 1989/149)
Heating Appliances (Fireguards) Regulations 1991 (SI 1991/2693)
Gas Catalytic Heaters (Safety) Regulations 1984 (SI 1984/1802)
All-Terrain Motor Vehicle (Safety) Regulations 1989 (SI 1989/2288)
Cooking Utensils (Safety) Regulations 1972 (SI 1972/1957)
Indication of Prices (Beds) Order 1978 (SI 1978/1716)
Child Resistant Packaging and Tactile Danger Warnings (Safety) (Revocation) Regulations 1992 (SI 1992/2620)
Stands for Carry-cots (Safety) (Revocation) Regulations 1996 (SI 1996/2756)
Magnetic Toys (Safety) (Revocation) Regulations 2009 (SI 2009/1347)
The Government are currently looking in more detail at the following regulations which were also included in the consultation. We intend to do a separate Government response on them in due course.
Pyrotechnic Articles (Safety) Regulations 2010 (SI 2010/1554)
Pencils and Graphic Instruments (Safety) Regulations 1998 (SI 1998/2406)
2011 Census Results (England and Wales)
(12 years, 5 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The 22nd decennial census of population for England and Wales was taken on 27 March 2011. Today, the Office for National Statistics (ONS) publishes the first results in a report that I have laid before the House this morning.
Everyone in the country uses public services at various times—such as schools, health services, roads, public transport, job centres and libraries. These services need to be planned to keep pace with the changing demographics of the country. Government, local authorities, the health service, the education and academic community, commercial business, professional organisations and the public at large all need reliable information on the number and characteristics of people and households if they are to conduct their activities effectively. This need is currently best met by conducting a census every 10 years covering the whole of the population, and by updating the population estimates each year from the census benchmark.
Throughout the UK, broadly the same questions are asked and the information recorded in the same way. This allows the comparison of different groups of people and small areas across the entire nation. It also provides the opportunity of comparing various characteristics of the population and, owing to a high degree of consistency between censuses, allows the measurement of change over time.
The results of the 2011 census for England and Wales, which will in total comprise many hundreds of detailed tabulations designed to meet a wide range of users’ needs, are being published in a series of phased releases over the next 12 months. This first release will establish the new baseline for ONS’s population estimates for the next 10 years, and will help to determine the allocation of future local government funding. The release covers estimates of:
the usually resident population by single years of age and five-year age bands, by sex for England and Wales together, for England and for Wales;
the usually resident population by five-year age bands, by sex for regions, counties and local authority areas;
the number of households for England and Wales together, for England, for Wales and for regions, counties and local authority areas;
the number of non-UK short-term residents for local authority areas.
The final figures show that the usually resident population of England and Wales was 56,076,000, an increase of 7% since 2001. The response rate to the census was 94 % nationally, representing a small improvement on the 2001 census. However, response rates have improved markedly in many of the areas that were found to be most challenging in the 2001 census. The published results make full allowance for those people who did not complete a census form.
Although additional processing has been carried out this time, and an intense programme of quality assurance has been undertaken, publication of these figures is six weeks ahead of the corresponding report from the 2001 census. These first results are being made publicly available via the ONS website and are accompanied by a range of supporting information, including the response rate for each local authority area.
The Northern Ireland Statistics and Research Agency will today publish a similar but separate first release from the census in Northern Ireland. The first release from the census in Scotland will be published by the National Records of Scotland in December.
Further releases over the next 12 months will cover the more detailed results. Within these, data from the full range of questions included in the census will be cross-analysed and presented for a range of geographies down to the lowest level—“census output area” (an output area is, on average, 125 households or 250 people). Strict measures of statistical disclosure control will be applied to each release to ensure that no individual person or household will be identified from the information released.
In line with Government policy on open data, these later releases will be available via the ONS website in a format that will make it easy for organisations and individuals to use the detailed results in their own systems and websites, increasing the use and exploitation of the census results.
As part of the preparations for the future, the Office for National Statistics last year instigated a review of a number of different methods of collecting demographic and socio-economic data from a variety of sources with the aim of providing a viable alternative methodology for collecting census data. The outcome of that review will be reported in 2014 in time to implement plans by 2021.
Logistic Commodities and Services (Transformation)
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Defence (Peter Luff)
I can today announce the launch of an initial phase of a planned transformation project within Logistic Commodities and Services (LCS), part of defence equipment and support.
The primary role for LCS is to provide support to military operations and force generation by undertaking procurement and inventory management of all non-explosive commodity items, including food, clothing, fuel, and medical supplies. This also involves the storage and distribution of these commodity items, together with all other non-explosive stock across defence.
The transformation project aims to consider how we can improve inventory management and stock control, rationalise current stock holdings, improve and rationalise storage infrastructure (releasing surplus for disposal), improve commodity procurement and logistic processes, and optimise the size of the LCS organisation. Under the current model, each commodity area operates in isolation. The storage infrastructure itself requires investment to improve its condition and to rationalise the numerous dispersed locations.
This initial phase of the project, the assessment phase, has now commenced and will explore the alternative delivery models available and whether these would represent value for money. This work will explore two options for delivering support in the future; industry integration and an in-house developed value for money benchmark. No decisions on the final operating model or locations will be made until the assessment phase is complete. This phase will take a minimum of 12 months to complete. The formal process of TU consultation will be followed throughout the project.
“Introducing a Statutory Register of Lobbyists” (Summary of Responses)
(12 years, 5 months ago)
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The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
On 20 January 2012, the Government issued the Cabinet Office’s consultation document “Introducing a Statutory Register of Lobbyists”. The consultation closed on 20 April.
I am pleased to announce that a summary of responses to the Government’s consultation document “Introducing a Statutory Register of Lobbyists”, has been published today, which sets out our next steps in terms of policy development.
Taking into account the evidence—including the recently published report by the Political and Constitutional Reform Committee on the Government’s proposals—we will now develop revised policy proposals with the intention of publishing a White Paper and draft Bill during this Session of Parliament. As part of this process, Government officials intend to meet with a number of respondents to make sure that their points have been fully understood and would be open to meeting any other respondents if they request to do so.
This document is available to download at: www.official-documents.gov.uk. Copies have been placed in the Libraries of both Houses and are available in the Vote Office.
Flooding
(12 years, 5 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)
Over recent weeks we have seen exceptional amounts of rainfall, culminating in the flooding seen in June and most recently over the past couple of weeks. The period from April to June has been the wettest on record and the Government and other agencies have mounted a co-ordinated response in the face of this unseasonal weather.
Earlier in July, areas of south and east Devon received the average rainfall for the whole of July in only 18 hours, with up to 50 mm recorded. Recent flooding has been exacerbated by the wet ground conditions from the exceptionally wet weather through June.
We estimate the number of properties affected in England to be at least 3,000, but as final numbers are collated across the impacted areas this could rise to 4,000. Our sympathies are with all those who have suffered flooding, especially those in the worst affected areas including Crawshawbooth, Todmorden, Hebden Bridge, Mytholmroyd and Dorset. The Environment Agency estimates that 80 properties were flooded over the weekend in Bedfordshire, Cambridgeshire and Shropshire. I know that local communities are pulling together as the recovery operation begins in earnest, and I hope that all will be able to return to their homes as soon as possible.
The Government have activated the Bellwin scheme of emergency financial assistance to help local authorities affected by the recent floods with the immediate costs associated with protecting life and property in their areas. Exceptionally, the scheme will reimburse local authorities for 100% of their eligible costs above threshold, instead of the standard 85% as stated in the Bellwin scheme guidance. This is in recognition of the particular circumstances around these floods and will give the affected local authorities assurance that such costs will be reimbursed.
Protecting our communities against flooding is a vital area of the work of Government, and I am pleased to say that during the events in June and July to date, the Environment Agency estimates that at least 37,000 properties in England have been protected which would otherwise have flooded, through a combination of flood defences, maintenance work, storage basins and temporary defence measures. An example of the benefit of recently completed flood defences is Carlisle—devastatingly flooded in 2005—which has now been saved twice from serious flooding since the defences were built. In addition, flood warnings have been issued to over 167,000 properties.
In our changing climate, we will never be able to completely prevent flooding as we have seen this past fortnight, and also In June. However, through the excellent preparations and work of front-line responders, including the police, fire service, local authorities and the Environment Agency, and the investment being made by Government, we are better prepared for flooding than ever before.
The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) who is responsible for the natural environment and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) will be giving a technical briefing for MPs from relevant affected constituencies this afternoon.
With the immediate outlook continuing unsettled, further flooding is a possibility and the Government and relevant agencies remain vigilant. People should continue to be alert to forecasts and warnings, and be prepared to respond if required.
Afghanistan (Monthly Report)
(12 years, 5 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 19th progress report on developments in Afghanistan since November 2010.
On 1 July three UK servicemen were shot and killed by a member of the Afghan police as they left an Afghan check point in the Nahr-e Saraj district of Helmand province. An Afghan policeman was detained following the attack and an investigation into the incident has been launched. This tragic event will be reported on fully in July’s statement.
In June the UK continued to support job creation and private sector development in Afghanistan, including in Helmand. Through our support to Mercy Corps more than 1,500 male and female students graduated from technical and vocational education and training courses in June. The International Monetary Fund (IMF) board approved the first review of Afghanistan’s programme of support, but more work needs to be done by the Afghan Government to progress key reforms. This approval is vital for giving donors the confidence to make long-term funding commitments at the Tokyo conference. Full details of outcomes of the Tokyo conference will be covered in the July report.
The Kabul ministerial conference on the Istanbul process took place on 14 June. I attended, together with Foreign Ministers from the region and supporting countries. The conference endorsed key confidence building measures in security, development and economic affairs. The Secretary of State for International Development visited Afghanistan between 30 June and 3 July to press the Afghan Government to commit to key reforms in the run up to the Tokyo conference.
An Extraordinary Session of the Afghan Parliament was held on 21 June to debate governance and corruption issues. Over 150 MPs and Senators attended, even though the Session was held during the Afghan Parliament recess. This was the first time that such a Session had taken place.
I am placing the report in the Library of the House. It will also be published on the Foreign and Commonwealth Office website (www.fco.gov.uk).
Strategic Needs Assessment and Joint Health and Wellbeing Strategies
(12 years, 5 months ago)
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The Minister of State, Department of Health (Paul Burstow)
We will be publishing a consultation document seeking views on draft statutory guidance on the preparation of Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies during the summer recess. “Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies”—draft guidance” will be placed in the Library at the appropriate time. The document will also available electronically at: www.dh.gov.uk/health/category/publications/consultations/.
Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies are about the NHS, local government and communities working together to improve health and wellbeing outcomes and reduce inequalities. The purpose of statutory guidance in relation to this is to:
lay out the statutory duties, which underpin Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies to be undertaken by clinical commissioning groups and local authorities through health and wellbeing boards from April 2013;
explain how Joint Strategic Needs Assessments, Joint Health and Wellbeing Strategies and commissioning plans fit together in the modernised health and care system; and
set out how the Joint Strategic Needs Assessment and Joint Health and Wellbeing Strategy process will enable the NHS and local government, working with their community and partner organisations, to make real improvements to the health and wellbeing outcomes of local people.
We will be consulting on the draft guidance to ensure that it is clear and fit for purpose in supporting health and wellbeing boards in undertaking Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies from April 2013. It is also an opportunity to seek views on what further supportive materials health and wellbeing boards would find useful in undertaking Joint Strategic Needs Assessments and Joint Health and Wellbeing Strategies; which the Department can work with sector-leaders to develop.
This consultation will take place over the shortened period of eight weeks due to the fact that the Department undertook engagement with health and wellbeing boards earlier in the year to inform this guidance. We will be publishing the consultation during summer recess to be able to support emerging health and wellbeing boards as they refresh their Joint Strategic Needs Assessments and develop Joint Health and Wellbeing Strategies in order to underpin their commissioning plans ready for April 2013.
Once underway the consultation period for will be open for eight weeks.
Sector Regulation - Consultation and Implementation
(12 years, 5 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
Today I have published “Sector regulation: update on plans for consultation and implementation”.
Following Royal Assent of the Health and Social Care Act 2012, the Department of Health and Monitor are working on proposals on matters relating to implementation of the Act’s provisions on sector regulation. A number of consultation documents will be published over the next year, setting out these proposals and asking for views.
Today’s document describes what the various consultation documents will cover and sets out the expected timing of the consultations. It is designed to ensure that all those with an interest are aware of and able to read and respond to the consultations. The document also sets the consultations in context by recapping the aims and key components of the health and care modernisation programme as a whole, and of sector regulation in particular.
“Sector regulation: update on plans for consultation and implementation” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
The Police ICT Company
(12 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
As part of the wider reform of policing, I wish to update the House on the creation of a new police information communications technology (ICT) company.
Last year, I announced that I would help the police service set up a police ICT company to offer forces a route to better services and better deals. Since then, my Department has been working with key partners in the policing community to design a company that will be responsive to their needs and enable police forces to get better value for their ICT spend.
The company is intended to be owned by police and crime commissioners (PCCs) and led by police forces, as customers. Given that PCCs are not elected until November, my Department has been putting in place arrangements to create the company with interim owners. This will ensure that momentum for the company continues and policing partners can lead the shaping and development of its operations, so that a viable company can be offered to the PCCs to take forward once in office.
I am pleased to announce my Department has now legally incorporated “The Police ICT Company Ltd.”, a company limited by guarantee. The company is jointly owned by the Association of Police Authorities (APA) and the Home Office. The owners are appointing 12 directors from the policing community to form the board of directors of the company so the company will be police-led. The board of directors will be responsible for electing a chair and recommending the appointment of an interim CEO. The APA ownership will transfer to Association of Police and Crime Commissioners (APCC) ownership in November, thus providing continuity through the transition.
The purpose of The Police ICT Company at this stage, through its board of directors, is to provide governance and oversight of the activities necessary to make the company fully operational after PCCs are elected. These activities include generating the long-term ownership group, agreeing the governance of the ownership group and development of the business plan and organisational design.
The National Policing Improvement Agency (NPIA) functions transferring to the new company in due course (the Home Office in the interim) will include: ICT strategy, ICT contract management, procurement and service management, and the management and implementation of ICT projects and programmes.
Domestic Violence
(12 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
From today we will be piloting a domestic violence disclosure scheme in Gwent and Wiltshire police force areas, and in Greater Manchester and Nottinghamshire police force areas by no later than Monday 10 September 2012.
The pilot will test a process for enabling the police to disclose to the public information about previous violent offending by a new or existing partner where this may help protect them from violent offending. There will be two elements to the disclosure scheme. The first will be triggered by a request by a member of the public (“right to ask”). The second will be triggered by the police where they make a proactive decision to disclose the information in order to protect a potential victim (“right to know”). Both processes can be implemented within existing legal powers.
I am committed to strengthening our response to tackling domestic violence and supporting victims. I want to ensure that the public has confidence that a clear framework exists with recognised and consistent processes for disclosing information that meets their needs. We will therefore consider the learning from the pilot very carefully before deciding on next steps.
Equality and Human Rights Commission (Annual Report and Accounts)
(12 years, 5 months ago)
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The Minister for Equalities (Lynne Featherstone)
My right hon. Friend the Home Secretary is today laying before Parliament the Equality and Human Rights Commission’s 2011-12 annual report and accounts. Copies will be available in the Vote Office.
Police Professional Body
(12 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
In December I set out plans to establish a professional body to increase professionalism in policing. In March I announced which of the National Policing Improvement Agency’s (NPIA) functions would transfer to the new body when the agency closes in December.
I can now update the House with further information about the College of Policing, the professional body for policing.
Its mission will be to safeguard the public and support the fight against crime by ensuring professionalism in policing.
The College of Policing will protect the public interest, enhance policing standards, identify evidence of what works in policing and share best practice. It will support the education and professional development of staff and officers and it will motivate the police and partners to work together to achieve a shared purpose, including taking a major role in shaping the work of the higher education sector to improve the broader body of evidence on which policing professionals rely.
It will place officers and police staff members at the heart of the profession, helping them exercise discretion and solve problems to fight crime, including by stripping away burdensome bureaucracy and trusting the judgment of skilled professionals.
I am seeking to create a body that will operate independently of Government. During the interim, while we prepare the necessary legislation, I am aiming to establish a company with the intention of replacing it with a statutory body.
A board will oversee the work of the new body and will comprise police and non-police representatives. Democratically elected police and crime commissioners will be represented on the board and the non-police service representatives will ensure the body serves the public interest.
My officials will shortly begin the process of appointing an independent chair of the board. The chief executive will be an experienced senior police officer.
Those NPIA functions transferring to the new body later this year will do so with their allocated budgets until 2015. I will consider future funding options with the board of the professional body once it is established.
The current role of all Association of Chief Police Officers (ACPO) business areas in developing national standards and police practice will come within the responsibility of the College of Policing. In future, the business area leads will form the core of the College of Policing Professional Committee, chaired by the chief executive, and they will work co-operatively with both the College of Policing and with Chief Constables’ Council in the interests of the police service and the public. As the College of Policing develops there will be greater integration with the work of the business areas.
There is no plan to require individual officers and staff to pay to be members of the College of Policing, for their training or to sit exams. These are issues which the statutory college may consider in the future. The college will not issue any licence to practise policing.
Inquests (Service Personnel Overseas)
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
My honourable friend the Minister for the Armed Forces and I wish to make the latest of our quarterly statements to the House giving details of the inquests of service personnel who have died overseas. When we make these statements, we remember all of our service personnel who have served, or are now serving, in Iraq and Afghanistan, and we reaffirm our lasting gratitude. We remember the families of those service personnel who have given their lives for their country in connection with the operations in Iraq and Afghanistan, and our thoughts are with them. We particularly remember the families of the 10 service personnel who have died since our last statement in May.
In this statement we are announcing the current status of inquests conducted by the Wiltshire and Swindon coroner, the Oxfordshire coroner, and other coroners in England and Wales. This statement gives the position at 8 July 2012.
To supplement this statement I have placed tables in the Libraries of the Houses. The tables include the status of all current cases and the date of death in each case. They display information about those cases where a board of inquiry or a service inquiry has been held.
The Ministry of Defence and the Ministry of Justice will continue working closely together, with the aim of improving our processes and continuing the Government’s support for the coroners who are conducting these inquests. We will also work closely with the new Chief Coroner, His Honour Judge Peter Thornton QC, when he takes up post in September. Once again we would take the opportunity to thank coroners, their staff, and everyone who is seeking to support families and provide information, throughout the inquest process and afterwards.
So that no backlog of inquests will develop, both Departments have provided funding for additional resources since October 2007. Before 1 September 2011, these resources were provided to the Wiltshire and Swindon coroner, Mr David Ridley, because RAF Lyneham, within his district, was the venue for the repatriation of service personnel. Following the transfer of repatriation ceremonies to RAF Brize Norton on 1 September 2011, we now also provide additional resources to the Oxfordshire coroner.
Current status of inquests
Since the last statement there have been seven inquests into the deaths of service personnel on operations in Iraq or Afghanistan. A total of 544 inquests have been held into the deaths of service personnel who have lost their lives in Iraq and Afghanistan, including 23 service personnel who died in the UK of their injuries. No formal inquest was held in three other cases. In two of these cases the deaths were taken into consideration during inquest proceedings for those who died in the same incident. In the third case, where the serviceman died of his injuries in Scotland, the Lord Advocate has decided not to hold a fatal accident inquiry.
Open inquests
Fatalities in Iraq and Afghanistan
There are currently 48 open inquests to be concluded into the deaths of service personnel who died in Afghanistan; 22 of these involve deaths in the last six months.
There is one remaining open inquest into deaths from operations in Iraq.
The Wiltshire and Swindon coroner has retained 11 of the remaining open inquests, the Oxfordshire coroner has retained 17, and 21 are being conducted by coroners closer to the next of kin. Hearing dates have been set in six cases.
Inquests into the deaths of service personnel who returned home injured
Six inquests remain to be held for service personnel who returned home injured and subsequently died of their injuries. One inquest date has been set. When continuing investigations into the remaining five cases are completed, they will be listed for hearing.
We shall continue to inform the House of progress.
Northern Ireland Security (Update)
(12 years, 5 months ago)
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The Secretary of State for Northern Ireland (Mr Owen Paterson)
The Government are committed to putting greater information in the public domain about security threats to the United Kingdom generally. At the time of announcing the winding-up of the Independent Monitoring Commission, I made a commitment to provide bi-annual updates to this House on the security situation in Northern Ireland. I made the first of these statements in February and this is my second such update.
Shortly after coming to office the Government reviewed the security situation and developed a new strategic approach to tackling Northern Ireland related terrorism. We agreed in 2011 an exceptional additional £200 million of investment for the Police Service of Northern Ireland (PSNI) over four years. This is producing results.
There are still a small number who favour violence and reject democracy. They have no respect for life, no respect for human rights and no respect for the will of the people in both Northern Ireland and the Republic of Ireland.
As a result of their activities, the threat level in Northern Ireland remains at “Severe”, meaning that an attack is highly likely.
The threat level in Great Britain is “Substantial”, meaning that an attack is a strong possibility.
While the overall threat levels remain the same, however, progress has been made. The excellent work of the PSNI and other partners tackling the current threat has led to some considerable successes in recent months, with some significant arrests, charges and convictions.
There have been a total of 76 arrests so far this year, including arrests by An Garda Síochána in the Republic of Ireland. There have also been 37 charges against those involved in national security attacks brought since January 2012, including a number of charges for serious terrorism related offences. A number of weapons and improvised explosive devices have been seized. These combined efforts have had a positive impact. Despite this, however, attacks continue and the intent of groups engaged in Northern Ireland related terrorism remains high.
The Real IRA (RIRA), the Continuity IRA (CIRA), and the group that refers to itself as Óglaigh na hÉireann (ONH) all continue to be very active, as do a number of “unaffiliated”, but no less dangerous, individuals. In June, the paramilitary organisation Republican Action Against Drugs (RAAD), which regularly conducts brutal shootings against people in Londonderry, attacked the PSNI with a pipe bomb. The PSNI is pursuing a strategy to tackle the actions of both this group and other reckless vigilante organisations, which command little support from the wider community.
Terrorists continue to seek access to funding and weaponry. They have been undertaking training as well as targeting. Paramilitary groups also continue to be involved in a range of criminal activity, often at the expense of their own communities—both to fund their activities and their individual lifestyles.
Since my last statement on 27 February 2012, Official Report, column 16WS, there have been nine confirmed national security attacks (bringing the total to 14 confirmed attacks so far this year). All but one have been pipe bombs, which have primarily been used to attack PSNI officers or their families. These included a device thrown at a property where PSNI were attending a call out and a number of pipe bombs, which were thrown at PSNI officers while carrying out a clearance operation of a suspicious object. In the most recent confirmed national security attack, a pipe bomb was thrown at a PSNI vehicle patrol; the device functioned but did not cause any injuries or damage to the vehicle. The other attack was a large improvised explosive device containing over 600 lb of home made explosive which was abandoned near the Irish border at Newry. This was successfully defused by ammunition technical officers. It was destined to be an attack on the community in Northern Ireland and would certainly have endangered lives.
In addition to the attacks outlined above, during rioting in North Belfast on 12 July a number of shots were fired at police officers who were there to ensure compliance with the legal determination of the Parades Commission and to facilitate the rights of both loyalist and nationalist members of the community. This should be considered nothing less than the attempted murder of police officers.
There have been no serious injuries as a result of national security attacks this year. We cannot, however, be complacent. The devices used have all had the potential to cause death or serious injury. The community in Northern Ireland have had their daily lives disrupted as a result of terrorist activities.
In addition to direct attacks, terrorist groups seeking to attack the police in Northern Ireland have continued to use hoax devices, acts of criminal damage or orchestrated disorder to create fear in the community and draw police into areas in order to attack them. This tactic is designed to make it harder for the PSNI to provide a good community policing service and should be roundly condemned by all. Despite that, confidence levels in policing across Northern Ireland have continued to rise. The chief constable continues to place community policing at the heart of his policing plan.
As I noted in my last written ministerial statement on the current threat in Northern Ireland, the UDA and UVF leaderships remain committed to their ceasefires, although individuals associated with these groups continue to be engaged in criminal activity.
Both republican and loyalist paramilitary groups continue to carry out paramilitary style assaults. Republican paramilitary groups also continue to carry out shootings on members of their own community. These attacks are both cowardly and sickening. They show a complete disregard for the human rights of their victims and for their families.
The overwhelming majority of people in Northern Ireland stand by the principle that Northern Ireland’s future will only ever be determined by democracy and consent, as established by the Belfast agreement. This is a settlement that requires all those involved in the political process to pursue legitimate goals through exclusively peaceful and democratic means.
Cross-border co-operation in the area of security is vital. I keep in very close contact with the Northern Ireland Justice Minister, David Ford, and the Irish Minister for Justice and Equality, Alan Shatter TD. The levels of co-operation between the PSNI and An Garda Síochána to tackle the threat is unprecedented and has almost certainly saved lives.
In conclusion this Government remain committed to tackling the terrorist threat in Northern Ireland. It is vital that we continue to do this in pursuit of our objectives of a peaceful, stable and prosperous Northern Ireland in which everyone has a genuinely shared future.
EU Bus and Coach Passenger Rights
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I will be publishing a consultation on Wednesday 18 July which puts forward the Government’s plans for applying the EU regulation on bus and coach passenger rights. This aims to ensure bus and coach passengers have rights similar to those using other modes of transport.
The regulation, which mainly applies to bus and coach journeys over 155 miles (250 km), lays out the responsibilities of operators and terminal owners in the case of delays, cancellations, accidents and other issues affecting passengers, including disabled passengers and passengers with reduced mobility.
The public consultation will offer the chance for those affected by this EU regulation to put forward their opinions on domestic enforcement measures, the use of available exemptions and the designation of terminals served by long-distance services where specific assistance has to be provided to disabled people and people with reduced mobility.
I believe that the approach outlined in the consultation strikes the right balance between passenger protection and operator competitiveness. I look forward to receiving responses from interested parties.
Fuel Quality Directive
(12 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Transport (Norman Baker)
Today I am publishing our response to the comments received in the consultation on our proposals to expand the scope of the Renewable Transport Fuel Obligation (RTFO) Order 2007 to include non-road mobile machinery.
The fuel quality directive (articles 1 and 7a(2)) requires that suppliers of fuels used in non-road mobile machinery should be obliged to reduce the lifecycle greenhouse gas intensities of the fuels they supply. Our preferred approach for implementing this requirement of the directive is to amend the current RTFO Order 2007. However, given concerns about the sustainability of some biofuels, it is important that this change does not at this point result in an increase in the absolute volume of biofuel supplied in the UK.
Moreover, following concerns raised during consultation on engine compatibility and storage issues relating to biofuel used in non-road mobile machinery, we have, as announced previously, delayed making this change immediately so as to give industry and transport users time to prepare in terms of infrastructure and information. The requirement will come into force in April 2013. We understand the need for gas oil users to have accurate information on biofuel content. We hope the delay will give them time to engage with gas oil suppliers to ensure that biofuel-free gas oil will be available. DFT guidance on improving the flow of information between non-road mobile machinery users and fuel suppliers is available at the following link:
http://www.dft.gov.Uk/topics/sustainable/biofuels/use-supply/#blending.
I would like to thank all those who took the time to respond to the consultation.
Penfold Review
(12 years, 5 months ago)
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The Secretary of State for Transport (Justine Greening)
Today I am publishing a consultation document detailing proposals to simplify the process of applying for the stopping up or diversion of a highway, where this is required for the purpose of property development.
The Penfold review examined various development consents, additional to planning permission, which developers must apply for. It identified measures the Government could take to minimise the burden of complying with and administering these consents, while maintaining the essential benefits that they protect.
We propose to permit applications for a stopping up or diversion order to be submitted at the same time as applying for planning permission, whereas under existing legislation the developer can only apply after securing planning permission, and are consulting on options for devolving decision making to the local authority level.
These measures were committed to in the 2011 autumn statement and will help to deliver the Government’s growth agenda, by removing unnecessary burdens faced by businesses, speeding up the application process and removing unnecessary bureaucracy. They will play a useful role in encouraging investment and therefore growth in local communities.
Most of the policy options in the consultation will require primary legislation to amend the Town and Country Planning Act 1990, as it applies to England. Subject to the outcome of the consultation, we intend to deliver this through the Enterprise and Regulatory Reform Bill.
The consultation document, including impact assessment, will be available in the Libraries of both Houses and on the Department’s website.
Rail Investment
(12 years, 5 months ago)
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The Secretary of State for Transport (Justine Greening)
Today I am announcing my high level output specification (HLOS) for the railway, as required by the Railways Act 2005. Covering the period from 2014 to 2019, it describes my vision for a railway which is more financially and environmentally sustainable, which supports economic growth and which delivers for its passengers and freight customers.
I am confirming £16 billion of public support for rail in this period, which will support £9.4 billion of infrastructure enhancement. Some £5.2 billion of this has previously been committed, including Thameslink, Crossrail and electrification of the Great Western main line and in the north-west and Yorkshire. The additional £4.2 billion includes:
A new electric spine—a passenger and freight corridor linking the core centres of population and economic activity in the east and west midlands and Yorkshire with the south of England, which includes electrifying the midland main line.
Further targeted electrification alongside this, including the Great Western main line from Cardiff to Swansea and the Welsh Valleys; between Micklefield and Selby in Yorkshire and between Walsall and Rugeley in the west midlands.
Increased rail capacity for commuters, with over £700 million to be invested on the most congested routes in London and the south-east and over £400 million for other cities, including completing the northern hub that will link key northern cities bringing clear benefits to Newcastle, Liverpool, Manchester Leeds and Sheffield. Taken with Crossrail, this will provide for 120,000 additional commuting trips per day into London in the morning peak and 20,000 into our other major cities.
Further investment on Great Western main line, including at Bristol and Oxford stations as well as additional track capacity on the approaches to Bristol.
Over £900 million investment in funding for smaller schemes to improve:
stations, including accessibility so that everyone can use the railways;
the current strategic rail freight network;
passenger journey times and reliability.
Today’s announcement represents another historic landmark in the regeneration and modernisation of Britain’s railway. This Government’s vision for the railways is clear—a railway system that is faster, more reliable, less crowded, and more green.
Just as we are dealing with the budget deficit, so we are also determined to deal with the massive infrastructure deficit we inherited. Rail is just one part of an unprecedented programme of transport investment this Government have put in place to drive growth and job creation in the UK economy. We are building HS2, investing £1 billion in strategic road schemes and supporting 56 local road schemes, as well as supporting light rail and bus projects.
Previous Governments have under-invested in rail. We will not repeat those mistakes. This is a Government with a long-term vision for a modem and efficient rail system that supports growth and improves competitiveness.
Grand Committee
Local Government Finance Bill
(12 years, 5 months ago)
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The Deputy Chairman of Committees (Lord Colwyn)
My Lords, should there be a Division while we are sitting, we will adjourn for 10 minutes.
Clause 9 : Council tax reduction schemes
Amendment 72
Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I shall also speak to our other amendments in this group. The amendments would defer the requirement on local authorities to introduce a council tax reduction scheme by one year so that it will be made no later than 31 January 2014 to come into effect on 1 April 2014. I am delighted to see that this has the support of both parts of the coalition, or at least I think it does since noble Lords have put their names to it, but perhaps things have changed. We should recognise that the Secretary of State has a power under the Bill to defer the introduction of these requirements, but seems intent on rushing ahead with the current timetable. This amendment is not designed to be a wrecking amendment. We have made clear our preference for any council tax support scheme to be part of universal credit, or at least for there to be a national system. However, should this preference not prevail, what is to be put in place must be properly thought through and consulted on, be capable of implementation and be fair.
Designing a council tax support system is not to be taken lightly. Council tax benefit, despite its relatively low take-up, currently offers support to nearly 6 million recipients: by definition, the poorest and the most disadvantaged. The Bill provides only the framework for what is required. The detail will come with the regulations and we are told that these will definitely be with us before Report, but that could be October. We have the statement of intent, but it is not the definitive position and an addendum is promised, and perhaps we can inquire when that will be forthcoming. As I say, designing a benefit or support system is never straightforward. People do not all live straightforward and routine lives that can easily be categorised and encompassed within a simple set of rules. The Government’s own timeframe, in designing and implementing universal credit, is in part recognition of this. It is new territory for local councils. Administering a system is one thing; designing one is something else, especially as the design is supposed to encompass clear work incentives and to sit alongside both the universal credit and the existing benefit system for some years to come.
The current council tax benefit system is hugely complex and no doubt this is one of the reasons for low take-up, but it has a whole raft of components that are there for good reasons. This is not an exhaustive list, but the matters catered for include a basic applicable amount, disabled child premiums, disability premiums, enhanced disability premiums, severe disability premiums, carers’ premiums, the ESA support group component and the ESA WRAG component. There is a disallowance of certain benefits that we compute in income, which include attendance allowance, child benefit, constant attendance allowance, and DLA care and mobility components. There are income disregards at different rates, deduction of income for childcare costs for lone parents, permitted work rules, the second adult rebate alternative, the backdating of claims and the run-on provisions. Moreover, the interface with universal credit is complex, and we will debate that in more detail in subsequent amendments.
This is not only about deciding whether universal credit will feature as income in a council tax support scheme. There are related allowance issues, embedded in the current system, which might be otiose or need to be supplemented: the treatment of unearned income, childcare costs and passporting. Currently, I understand that some two-thirds of council tax benefit recipients are passported on to 100% benefit. Having to means-test all these will present a major administrative burden for local authorities. Of course, we have not yet had the final details of universal credit. These are not due, we understand, until the autumn. Perhaps the Minister will confirm that that is his understanding.
What is the current expectation of when all the detail will be known? How confident is the Minister that local authorities have a full understanding of the intricacies of the possible interactions between universal credit and the existing system? What is the current understanding of the volumes that will flow on to universal credit next year? Which features of the default system reflect the interface with universal credit? We know that universal credit is going to be taken as income, but that is just one component.
We are told in the statement of intent that in prescribing the requirements of those who have reached the qualifying age for state pension and for the default scheme, the requirements will replicate as far as possible the existing provisions. Can we be advised of the detail where the provisions are not replicated? I am happy to have that by letter if it is not available this afternoon.
Of course, the risks for councils are huge. The system is no longer to be demand-led AME-funded. Financial risk passes to local authorities together with the 10% cut—or indeed more—in central government funding. As London councils point out, the focus in the short term may be the 10%, but there is a need to consider the sustainability of any system in the longer term. Increased demand and take-up will add to cost.
The need for local authorities to have more time should be obvious. If the Government want local authorities to have regard to local factors and to have schemes that deliver positive incentives to work, those local authorities need the capacity to do the job properly. To have to do this in short order at a time of considerable turbulence, when staffing levels are under pressure, budgets are being cut, system and organisational changes due to housing benefit are being rolled into universal credit—
Lord Colwyn
My Lords, I think everyone has returned. Shall we continue with the noble Lord, Lord McKenzie?
Lord McKenzie of Luton
My Lords, I was explaining that to have to do this in short order at a time of considerable turbulence—when staffing levels are under pressure, budgets are being cut, and systemic and organisational changes due to housing benefit being rolled into universal credit are being contemplated—is simply unreasonable. At this point, perhaps I should refer to the report of the Local Government Chronicle from 16 February this year. It says:
“More suppliers have joined in the criticism of the government’s welfare reform timetable that risks leaving councils to foot the entire bill for a £480m gap in council tax benefit funding. With Capita having already labelled next year’s deadline ‘impossible’, other suppliers have confirmed they have raised the issue with the Department for Communities and Local Government. As previously reported by LGC, Capita wrote to more than 150 customers in January telling them: ‘It will not be possible to put new systems in place by March 2013, when councils are due to set up their own council tax benefit schemes incorporating a 10% cut in funding’”.
If local authorities are to fulfil the task of taking account of local factors, and in particular to deliver positive work incentives in drawing up a draft scheme, they must know the detail of the universal credit, which will come into existence in 2013. This is especially so given the need for consultation. The statement of intent requires a billing authority to consult any major precepting authority that has the power to issue a precept to it, then to publish a draft scheme, and then to consult such other persons as are likely to have an interest in the operation of the scheme.
What is the latest time at which the Government think that consultation can proceed under these provisions? As for major precepting authorities, it has yet to be determined how funding is to be allocated between the tiers. Although the final say is with the billing authorities, any disagreement on the draft at this point might have considerable impact on the timing of the publication of a draft scheme. Those others who are likely to have an interest in the operation of the scheme could be a very wide group of people.
We discussed last week that it should certainly include local precepting authorities, which will bear part of the cost. When the Government have felt fit to remind local authorities of their responsibilities under the Equality Act 2010, making it clear that they will have to consider how a scheme might affect people who share a relevant protective characteristic, they will certainly need to consider the impact of their scheme on disabled people.
Local authorities have a specific duty under the Child Poverty Act to work with local partners to reduce and mitigate the effects of child poverty. They will be required to take into account their local child poverty needs assessment in designing and developing localised schemes. They will also need to have regard to the position of those at risk of becoming homeless. The statement of intent makes it abundantly clear that inadequate consultation could lead to judicial review, a matter to which we will return shortly.
The Government know that they are putting local government in an extremely difficult position by this timetable. That is why they are validating consultation commenced before the passing of the Act and why they are implicitly encouraging a consultation period of less than the 12 weeks encouraged by the code. This simply will not do. The statement is clear about the prescribed pension credit age scheme, and the Government have been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected. They declined to define further “vulnerable groups”, but we will press them on that later.
Vulnerable groups should be protected and are clearly entitled to be consulted in a meaningful way. The Government are offering or insisting on one they made earlier, in the form of a default scheme. This is designed to be equivalent to existing arrangements. Of course, for those tempted to take this up or who are left with no practical option but to do so, that comes at a cost, because they will have to find the 10% cut in funding. Those who cannot live with the default system are encouraged to adopt a system using the same factors as present, as that would reduce the amount of time and expense in changing the IT systems. That is hardly a principled base on which to build a council tax benefit system.
If local authorities are to play the part required of them, whether we agree with it or not, it must surely be right for them to be given time to do the job properly. We are well aware that councils are working hard to meet the exceptional challenges that this legislation brings. Local government has a strong history of delivering the near impossible, but the timetable must be judged not by the pace of the quickest and the best resourced—those who have a ready pool of extra resources from second homes and empty properties—but surely by the least well resourced, who run the risk of having the default scheme imposed with the 10%-plus hit on services.
We are aware that there is a view that if there is to be a year’s deferral, the Government will extract their 10% by some other means. The Government seem to be adept at finding money here or there for a waste collection scheme or change in fuel duty. However, this is fundamentally about fairness; the Government are asking a lot of local authorities. A chance to do the job properly in the interests of the poorest and most disadvantaged is not unreasonable. I beg to move.
Lord Jenkin of Roding
My Lords, I added my name to some of these amendments. I do not need to go quite as far back as 16 February, which was the date of the Local Government Chronicle article from which the noble Lord, Lord McKenzie, quoted. I go back to a meeting held on 28 May for London Councils, which that body asked me to chair and which was attended by a number of your Lordships. It was addressed by senior officials of London Councils and it aroused in me considerable apprehensions about the timetable to which the noble Lord, Lord McKenzie, referred. At that time, it was clear to those officials that a number of councils in London would have difficulty in adhering to the timetable. That caused me some alarm. My noble friend Lady Hanham will remember that I came to see her and expressed some of the anxieties that had been voiced on that occasion. My noble friend undertook to take account of them and asked that the bodies write to her directly because she had not had quite the same message from the officials in her department, and they did.
However, since then it has become apparent that quite a lot of councils have taken the bit between their teeth. They have realised where they are, and that they will have to devise and adopt schemes for council tax support, as required by the Bill. I am sure that many of them have no wish to be involved in a default scheme, although that is always a fall-back. They have got on with it.
Indeed, when I consulted the Local Government Association—I do not think I need to declare my interest again—its members’ view was made clear to me. Given, as the noble Lord, Lord McKenzie, said, that £500 million savings have to be found in any event, and one remembers that actually the commitment for that goes back to the initial statement in 2010, the dangers of postponement exceed the dangers of trying to keep to the timetable. In putting my name to the amendment, I wanted primarily to raise the anxieties that had been expressed by London Councils, recognising, as does the noble Lord, that this is not a universal view of local authorities.
The main problem that London Councils saw in implementing the date in the Bill is that it would be nearly impossible for councils to be able to achieve what they wanted to achieve by the due date, given the administrative problems with which they would be faced. More particularly, they would be faced with IT problems. Councils, as everyone knows, use a great deal of IT in drawing up their budgets, devising policies and administering the results of their decisions. Much of that is quite properly outsourced to expert providers. At that time, back in May, London Councils saw that there would be some difficulty in getting those providers to come up with the necessary changes.
However, as I said, it now becomes clear that a good many councils are getting on with it. It is to the credit of local government that they are not sitting back, holding up their hands in horror and saying that they cannot deal with it. They do not wish to be where they are, but they have to accept that the Government have set the timetable and they are jolly well going to do their best, as the representatives of the people in the area for which they are councillors, to go ahead and get on with it.
The Earl of Lytton
I rise simply to refer to the points that the noble Lord, Lord Jenkin, made. I attended the excellent meeting that he convened with London Councils. Its views on the problems of the lead-in time for dealing with IT have been corroborated by the views of the Institute of Revenues Rating and Valuation. Larger authorities might well have significant IT capability in their own right, but that cannot be said of all authorities, and I think that the noble Lord, Lord Jenkin, was saying that while some authorities are clearly getting on with the work, others will lag behind until a package is available to them. That is where the fear is.
In the period leading up to when an authority has a useable IT system, there is a question of a brief, and possibly of tendering and commissioning. A programme has to be written, or there has at any rate to be some sort of alteration to an existing programme, which has to be tested, and the staff have to be trained. At the moment, we are right on the edge of the summer holiday period when a lot of people are likely to be away and capacity in all areas of commercial endeavour, not least in the IT world, will be challenged. I simply echo what the noble Lord, Lord Jenkin, said and ask the Minister whether any investigation has been done on the realities of preparing the IT, bearing in mind that all local government finance is heavily dependent on it. What reassurances can the Minister give the Committee?
Lord Tope
My Lords, my name originally appeared on Amendments 78 and 79, and I am concerned that it still appears on Amendments 85 and 88A. That was a mistake. To the extent that I may have had a part in that, I apologise to your Lordships. I do not support postponement and had never intended my name to appear on amendments in this group. I want to say why. I am pleased that we are having the debate. This is important, so a debate on the amendments is necessary.
Had the Government been minded in, say, May or April, while the Bill was in the other place, to postpone the implementation day, I would not have been too unhappy. Indeed, I would probably have been happier if they had abandoned this part of the Bill altogether, but that was not to be. I might have been happier for that to happen provided that the £500 million reduction was also going to be postponed. That, of course, was never going to happen—and we knew that. I have therefore always been at best ambivalent about postponement. That was certainly an earlier view generally across local government. I do not for one moment claim to speak for all local government, but that of which I have any knowledge and contact broadly does not support postponement, for some of the reasons that the noble Lord, Lord Jenkin, alluded to when speaking to the amendments in his name.
Let us deal first with the issue of software. Back in February, when the Local Government Chronicle article was written, there was certainly considerable concern, not least among the suppliers, about whether the software could and would be completed in time. We all know that the record on IT systems has not always been perfect. I hope that the Minister, who must be better informed than me, will be able to comment on this, but my understanding—both from my direct knowledge of my own authority and one or two others that I know a bit about, but more particularly through the LGA, which has been in discussions with the software suppliers—is that that concern is considerably less now than it was in February or more recently. As much as anyone is brave enough to be confident before these things are done, there is no longer the level of concern and alarm about the issue that there once was. However, I speak only with limited knowledge and not with any personal authority. I hope that the Minister can assure us on that very particular point.
The other concern, quite rightly, is whether local authorities would have all the information that they needed before preparing and consulting on their draft scheme. I hope, as the noble Lord, Lord McKenzie, said, that the Minister will reassure us about the information that is not yet published. Much of it is already published and more is to be published this week, perhaps even today, but I have not been able to keep up with that. The noble Lord referred to the autumn. Let us say that by the time we return in October, all the necessary information will have been published as completely as it can be before enactment.
In view of that, we once again look at being where we are rather than where we might wish we were. Quite a number of authorities, including my own, have accepted that it is going to happen in April and have drawn up a consultation scheme. My own authority agreed its consultation scheme in June with all-party agreement—which, in my authority’s case, is both-party agreement—and is now out to consultation on that scheme. Later, our neighbouring authority of Kingston did the same and drew up a slightly different scheme, and that scheme is out for consultation.
I know that many other local authorities are in a similar position—we might wish we were not, but we are. The process is now under way. The considerable work under pressure that has been alluded to, quite correctly, is now under way. My personal view, and the impression I have from those with whom I am in touch, is that at this stage we would not welcome postponement. We might have done a month or two ago or even a few months ago, but at this stage we are so far down the road that we need to accept that this is going to happen. There are different views about that, but we are well down the road on it and we need to get on and make the best we can of it.
Local authorities of all political persuasions generally have a very good record of coping with what is often thought to be impossible, or certainly very difficult, whether that is the front-loading of the budget reductions that we have all experienced or the many other difficult measures. The fact that local authorities quite rightly protest when these measures are proposed and implemented, but when the time comes have to buckle down and deliver, does not mean that they were wrong to protest in the first place. It simply means that local government actually has a very good record of achieving these things. I therefore hope that if this is going to happen in April and proceeds with few, if any, problems, it will not be thought by central government that local government is again crying wolf. It is not; local government is actually getting on and delivering in the way that it always has.
Baroness Hollis of Heigham
Local authorities’ experiences are very different around the country. For example, if you are a smaller council and you are a district authority, which has to have two stages of consultation, you cannot make the deadline work. The latest information I had from Norfolk was that one local authority had a different supplier from the other six. The other six had their supplier coming through with their package only in the third to fourth week in June. They will probably have to spend four to five weeks cutting and slicing the stats to see what the implications will be for different permutations of the discount scheme, which will take them until the end of July. August, to some extent, is a fairly dead month. Once they have come up with the scheme, possibly in early September, it then has to go to consultation with the precepting authority, the county council, which will take perhaps a month, given that it has a committee cycle of six weeks or sometimes longer. That comes back to the district council, which has to amend its scheme. By this time it is the middle of October.
After the scheme is amended, which may take until the end of October, it goes out for consultation perhaps in November. Three months’ consultation takes it into February. It is a pity that it has to go into the financial estimates in December. In other words, it cannot be done if the district council is squeezed, through no fault of its own, on the one hand by software suppliers not producing the package until late June and on the other by having to have two rounds of consultation—perfectly reasonably—with the county council above all as well as 12 weeks with the public. I do not see how the deadline can be met.
Lord Palmer of Childs Hill
I do not have to take my name off the top of this amendment because it was never there. However, I share the natural anxieties of the noble Lord, Lord Jenkin, whose name is to one of these amendments.
The argument put forward in these amendments is to put off till tomorrow what should be done today. There is never a good time to do this. Putting it off will not solve this or help in any way. The argument put forward by noble Lords is that we need a greater lead-in time. The Olympics had a great lead-in time for security but there was still a mess at the end. There may be a mess at the end of this and there may be a mess at the end of the Olympics, but greater lead-in times do not necessarily solve problems.
As other noble Lords have said, local authorities have put in a lot of work. As the noble Baroness, Lady Hollis, says, some are further advanced than others. A district council is, by nature, a smaller authority than a London borough, so size should make it easier to deal with IT, benefits and the like. However, you still need a scheme, although the amount of money involved may be vastly different. I worked with a district council and I am still a London borough councillor, and it is different. The answer to the noble Baroness, Lady Hollis, who makes a very valid point, must be that we need to find a way in which those district councils and other councils that are not that far advanced can be assisted. That is why the Local Government Association, London Councils, neighbouring councils such as Norfolk council, which the noble Baroness, Lady Hollis, described, and the regional authorities have to help those councils through the experience of others. A small district authority should not have to reinvent the wheel.
Baroness Hollis of Heigham
The problem is that in a district council—a billing authority—you have two rounds of consultation to go through. There is the precepting authority. Then you amend your scheme. Then you go out to the public for three months. Then you amend your scheme again before it is accepted. That, as much as the software, is the problem. I entirely take the noble Lord’s point about co-operation.
Lord Palmer of Childs Hill
I agree with the noble Baroness, Lady Hollis, that there have to be different consultations. An authority may have a £500 million revenue expenditure, as Barnet authority has, but you have to focus your mind within that authority and, even if there are two or three levels of consultation, it has to be done. There is a short time in which to do it, but there is time.
The noble Lord, Lord Tope, talked about there being a difficult time over the next few months. I agree. Central government and local government, the Olympics and all sorts of organisations are having a difficult time, but local authorities have a history of rising to the occasion. I believe that they are doing that and that they will continue to do so. Therefore, I am against postponement.
Lord Beecham
The difference between this round of change and a general round of changes is that hitherto we have had to cope with a national scheme. There has been the shift of national and domestic rates, the introduction of the poll tax, and the introduction of the council tax—and they were national schemes. One factor in the present round is that consultation has been meaningful and that people will naturally want to see what is happening in their adjoining authority. The authorities may well consult, but as the whole purpose of this misguided legislation in my view is to create variety across the whole country, and no doubt even within county areas, presumably people will want to know how their scheme, as a resident, compares with the scheme in the adjoining district or in another district at the other end of the county.
These decisions will be very difficult for councils to make and, I would have thought, equally difficult for their residents to understand. They will certainly be concerned—it is the intention of the Bill—if they come up with a wide range of options that will then be exercised. In this very tight timescale, how will the citizen or the organisations that will act as advocates for groups of citizens—we shall come on to some of those in more detail later—be able to contribute meaningfully to this consultation process? There will not be time to weigh the implications of one scheme against another. This is a third dimension to the problems that my noble friends have outlined, and I do not think that they have been taken into account in the way in which the Bill has been drafted and the way in which the Government are proceeding.
Lord Smith of Leigh
I remind the noble Lord, Lord Palmer, that the Olympic Games’ security problems were caused because of the outsourcing of security. As the noble Lord, Lord Jenkin, reminded us, much of the council tax administration is also outsourced, so that may not augur well for us to get a successful conclusion.
I was interested in the point made by the noble Lord, Lord Tope, about his authority already being out to consultation. I question whether the timing is right. Amendment 73 proposes a change to the consultation, and other amendments might come through, so that the consultation that his authority has undertaken might not be the right one when an amendment is passed. That is the danger of rushing it too early.
I would welcome from the Minister in responding to the debate, in addition to answering the questions asked by my noble friend Lord McKenzie, a timetable for the publication of the Government’s default scheme. That would be helpful.
Lord Tope
I agree with the noble Lord, and frankly I was surprised when I saw it in the committee papers back at the beginning of June. However, the way in which my authority worked—and I played no direct part in this—was on the basis that the scheme had to be finalised by the end of January. Therefore, working back from that date, given the committee system that we have now adopted thanks to the Localism Act, it was necessary for the draft consultation to be agreed in committee in June. I am not arguing that it is desirable, and I accept that in the course of the consultation there may well be changes. I am quite sure that at the end of the consultation there will be changes as a result of the consultation, never mind any other changes, but unless local authorities start to get on with it now, they will get into difficulties with the timing. I say to the noble Lord that he may need to look at the timing in Wigan as well.
Baroness Lister of Burtersett
The phrase keeps going through my mind, “More haste, less speed”. It is no criticism of local authorities, but we have to remember that devising a means-tested benefit scheme is very complicated. As the Institute for Fiscal Studies pointed out, councils face a difficult task in squaring a number of circles in devising schemes—and my noble friend Lord McKenzie outlined some of those circles and squares earlier. They have little experience or expertise in designing means-tested support schemes, and very little time to do it. It worries me that we are requiring local authorities to rush this process when they have to take account of so many factors in working out their means test, balancing all the different vulnerable groups that they are supposed to take into account while having their latitude squeezed by having to protect pensioners.
My noble friend Lord McKenzie pointed out that councils will have to take account of their child poverty needs assessments because they have a duty under the Child Poverty Act. A recent survey by 4Children found that fewer than half of English local authorities have a child poverty strategy in place, and 35 of those without a strategy do not even have a needs assessment, so presumably before they can work out their council tax benefit scheme they will have to do a child poverty needs assessment, which will slow things down as well. We will go on to talk about some of the other factors that they need to take into account—disabled people, carers and so forth. It really worries me that, all right, they may have schemes in place, but they will then have a year in which local people will be finding all sorts of holes in those schemes. It will not be us who suffer but local people in need.
Baroness Sherlock
I want to add one brief comment. If I understood correctly, the noble Lord, Lord Tope, suggested that the Committee should not try to press amendments that would delay the scheme because local authorities have already begun to consult on it. I do not want to overly stress the importance of Parliament, but surely the point of this exercise is for us to get the Bill right. If the Government have placed local authorities in a position where they are asking them to start the scheme so early that they are required to consult before Parliament has finished scrutiny of the Bill, surely that is a problem for us, not for them.
Lord Tope
I do not want this to turn into too much of a dialogue, but I said that I welcomed the amendments because it is important that we have this debate. Personally, I do not support them. They will not come to a vote today, but in the unlikely event that they come to a vote in October, which will be a bit late, I will not support them. I am not urging people to press them or not press them. As I said, I actually welcomed the amendments so that we could have the debate. I expressed a view on it, as we all do.
Earl Attlee
My Lords, we have had an interesting discussion on the timing of the implementation of these reforms. As the Committee knows, this reform is about delivering real decentralisation and contributing to deficit reduction—a contribution that must start from 2013.
The funding for the scheme is also a key component of the new business rates retention system. We are not reinventing a whole new system but providing flexibility and not necessarily complexity for councils to deliver a saving and to tailor schemes to their own circumstances with minimal prescription.
In answer to many Members of the Committee, we are building on our statement of intent and we are today publishing two key sets of regulations, particularly about prescribed requirements. Those regulations are coming out today in draft, which will allow councils to press ahead with the implementation without looking over their shoulders to central government prescription. That is why I am confident in saying that councils will be ready to implement these reforms for April 2013.
We need to do everything that we can to allay any concerns. It is interesting to note that experts in local government on this side of the Committee seem to believe that these changes can be implemented, including with the necessary consultation. The noble Baroness, Lady Hollis, told the Committee that district councils cannot meet the timescale because they need to consult twice.
Baroness Hollis of Heigham
I am sure that other councils may have had their software packages back in May, but from the county about which I have a little knowledge, I understand that the majority of councils use the same software supplier and it did not come through until nearly the end of June. That means that the proper consultation could not be gone through until councils had already decided on the scheme. That is the dilemma. Both factors were operating: the late supply of software through no fault of their own, and the fact that as a billing authority and not a unitary authority they in effect have two rounds of consultation. Again, that is perfectly proper, but you have a pincer movement on the timetable.
Earl Attlee
My Lords, I will carry on for a moment.
Just to be clear, all billing authorities required to bring forward a scheme must consult with their precepting authorities and with the public. That is as much the case for London boroughs or unitary councils as for district councils. Taken together, Amendments 72, 78, 79, 85 and 88A would delay the start for localised council tax reduction schemes by a year, pushing back introduction from 2013 to 2014. I am sure that noble Lords only intended to test the Government’s policy and, like my noble friend Lord Tope, welcome the debate.
Let us be absolutely clear. The saving scored in the spending review has to be found, as pointed out by my noble friends Lord Jenkin of Roding and Lord Tope. This is a key element of our deficit reduction plan that we must meet. Delaying the implementation of localised council tax reduction schemes would come with a cost.
The noble Lord, Lord McKenzie, skilfully queried what we would use these cost savings for. He talked about refuse bins. However, he will be aware that my right honourable friend the Secretary of State for Transport has announced a major programme of investment in our railway system. We can either spend money on council tax benefit or take a little cut on that and a little cut elsewhere, then put it all together in order to spend money on developing our infrastructure and promoting growth in the United Kingdom.
Lord Beecham
Will the noble Earl remind me of how much is being devoted to deferring the increase in fuel duty?
Earl Attlee
My Lords, that is always the danger of straying from local government affairs. My point is that the 10% cut in council tax benefit is painful, and I do not deny it, but we have very good projects to spend the money on.
Localising support for council tax is an important localist reform that gives local authorities a greater stake in the economic future of their local area and stronger incentives to get people back into work. It helps to make local authorities fully accountable for decisions over council tax levels and strengthens the incentives to drive down fraud and error. Localisation also has the advantage of giving local authorities real control over how a reduction in funding is managed. It will enable local authorities to offer council tax reductions that match local circumstances and local funding while supporting local policies. Local authorities will take different approaches to managing the reduction, but that is localism in action. Local authorities know their services, their taxpayers and their vulnerable groups, and are best placed to take decisions that affect them.
Delaying localisation does not mean that there will be no saving. There will still be more than £400 million savings to find in 2013-14. Funding for council tax support makes up a significant amount of the local share in the retained business rates system. Not giving local authorities control over this funding from the outset will significantly reduce the funding in the local share and so reduce the incentive that retained business rates are intended to deliver. I know that many noble Lords are supportive of the proposals to enable local authorities to keep a share of the proceeds of growth and would be keen to see local authorities benefit even more from growth. Not localising council tax support would have the opposite effect.
Concerns have been expressed about local authorities’ readiness to implement the schemes. I should like to remind the Committee of the number of significant steps taken by the Government to ensure that local authorities are well placed to press ahead with the development of their local schemes. We have paid £30 million of initial funding to help meet the costs of planning and analysing draft schemes for both billing and precepting authorities. We have provided a free online calculator to help local authorities analyse the potential impacts of their proposed schemes. We have published statements of intent, setting out the details of what will be covered in secondary legislation. We have issued a consultation setting out provisional funding allocations for all authorities. We have published guidance to ensure that local authorities understand their existing responsibilities in relation to vulnerable groups, which I know was a very important point for many noble Lords. We have published guidance setting out the general principles of supporting work incentives to help local authorities design support.
The Government have been clear that local authorities must ensure that they are on the front foot in preparing for this reform. There are things that councils should be doing to help in their preparations: understanding the circumstances of those in their area who currently claim support; ensuring that elected members are aware of the decisions they will need to take; engaging with precepting authorities, such as police and fire authorities; and preparing for consultation.
My noble friends Lord Jenkin and Lord Tope, the noble Lord, Lord McKenzie, and the noble Baroness, Lady Hollis, talked about IT issues. Noble Lords are right to suggest that local authorities and IT suppliers are already getting to grips with the problem. However, there is no need to go for a new and complex system in year one. I would add that if I was an IT supplier, I would point out initially how difficult and expensive it will be because it would be a sensible thing to do in order to try to encourage delay, but noble Lords know that we cannot delay.
The Bill was amended on Report in the other place to make clear that local authorities are able to consult precepting authorities, produce a draft scheme and consult more widely—all before the Bill receives Royal Assent. This was intended to support local authorities in their preparations. I am pleased to note that some local authorities, including that of my noble friend Lord Tope, have already embarked on a public consultation on their schemes.
The noble Lord, Lord McKenzie, talked about the complex matters that LAs will have to take into consideration. However, it seems that LAs are already getting stuck into their work and that it is not an insurmountable obstacle. Local authorities are best placed to take decisions about who should receive support with their council tax. Councils should have the flexibility to manage the reductions in central funding that are crucial to our plans for reducing the deficit. Local authorities should also have a strong incentive to grow their economy by bringing as much funding as possible into the retained business rates system as early as possible and giving them every reason to go for growth.
The noble Lord, Lord McKenzie, asked whether the universal credit details will be available. He is right to suggest that they will be available in the autumn. He also touched on the default scheme. LAs could opt to use the default scheme, but perhaps with some amendment to secure some easy savings. Local authorities could choose to develop a more sophisticated scheme later, but that is a choice that they will have to make.
Lord McKenzie of Luton
My Lords, I thank the Minister for his response and all noble Lords who have spoken in this debate, particularly my noble friends who spoke in support of the proposition. The noble Lord, Lord Jenkin, and the noble Earl, Lord Lytton, passed on their concerns about the apprehensions that still exist out there over the readiness of all local authorities to deliver.
I shall comment first on the contribution of my noble friend Lady Lister, who made a crucial point. Designing systems of benefit can be complex. People’s lives are complex. How does the Minister deal with the point that my noble friend raised about the lack of child poverty strategies? The Government themselves have issued literature that says that councils should have regard to their obligations under the Child Poverty Act. However, here we are, knowing that there is a big gap in the system but the Government want local authorities to press ahead irrespective of that. That issue alone opens up the prospect of judicial review in a whole raft of cases.
No one is arguing—I certainly am not—that local councils are simply sitting back and ignoring all this. I accept that local councils have a strong track record of delivering in very difficult circumstances. However, in something such as this, surely the key point concerns the time capacity of all councils to be able to deliver. The consequence of councils not being able to deliver, particularly those that are less well resourced, is that they are more likely to have to fall back on the default system or to have it imposed on them. That is a double whammy for them: not only do they not have sufficient opportunity to look at local needs but they must pick up the 10% funding tab. That seems particularly iniquitous.
My noble friend Lord Beecham made the point that we are not dealing here with a national scheme. Local authorities that are dealing with the process will perhaps want to weigh one scheme against an adjoining scheme. My noble friend Lady Hollis talked about the issues of timing in two-tier authorities. My understanding is that in that first round of engagement, even though there does not have to be formal agreement between an upper tier and a district or authority, there is meant to be a meeting of minds and a process by which it can take place. That has to be a real process and it takes time. That is a different process from reaching a conclusion and then consulting widely among a range of people on its outcome. I suggest that that requires something much more substantial.
We recognise that deferral would mean that the so-called localisation of council tax could not deliver the saving that the Government are looking for in that way for 2013-14. I simply reiterate the point that the Government have been adept in other ways in finding funding for this or that project. Looking across the whole of government, I find it difficult to believe that something of an equivalent scale could not be delivered in this case.
I object to the characterisation of what is happening as a little cut here and a little cut there. We are talking about reductions in support for some of the poorest people in our communities. I would not characterise that as a little cut here and there.
The Minister said that nobody was required to reinvent a whole new system, but the reality is that we have a whole new system coming down the track called universal credit. We are not arguing here that council tax should be part of that, although the more one goes into the detail the more blindingly obvious becomes that argument. But that is not what this amendment is about—it is trying to probe the interaction and relationship between universal credit and any revised council tax benefit system. There are lots of points where it ought to interact, if we want to have issues around work incentives properly structured.
The IFS booklet—and what on earth would we do without the IFS?—has a complex chapter on this. But if the details of universal credit are not going to be known until the autumn, which the Minister has confirmed, how can local authorities properly take the detail into account in devising their schemes and consulting on their schemes? It is a practical impossibility. Quite apart from the time needed to understand and test what those interactions with that system should be, it seems entirely wrong to say that it is irrelevant to the timing when it is fundamental.
The Minister did not answer the point about what components of universal credit were at the moment incorporated in the default scheme that the Government are going to impose. We know one aspect of it—that universal credit will take account of income—but that is just one of the possible interactions. What are the consequential changes to the allowances, the housing component and a range of other things? Presumably, the Government have taken a view at least in respect of the default scheme. It would be helpful to know the detail.
The noble Lord, Lord Palmer, said that we should not put off until tomorrow what we could do today. I do not disagree with that, but we are not asking for time for local authorities to sit back and do nothing. We are asking for some local authorities that will struggle the most to get a meaningful system in place to have a bit more time to get it right. So we do not judge this by the well resourced and bigger councils that do not need to worry about the cost of it because they have plenty of second properties on their patch and can generate extra revenue from that. The smaller and more challenged resource-constrained are the ones that we particularly speak for in this amendment.
I see that we will not have a meeting of minds on this across the Room this afternoon—
Earl Attlee
My Lords, I am grateful for the opportunity to contribute again. The noble Baroness, Lady Lister, talked about the complexities of the scheme. Yes, I understand that it is a very complex area and there are lots of factors to be taken into consideration. However, if a local authority wants to have a complex scheme, it can have one in later years, and it can go for a simple scheme perhaps based on the default scheme in year one.
The noble Baroness raised a very interesting point about the child poverty strategy. We are merely stating that there are existing strategies that councils need to consider in developing schemes. However, she raised a very interesting point about absent child poverty strategies. I will look into the issue and come back to her.
Baroness Lister of Burtersett
I thank the Minister for that. I was talking about the absence of a needs assessment in particular, because if you do not have a needs assessment you cannot assess the needs of the people whom your scheme is supposed to help. I should add that there is no such thing as a simple means-tested scheme.
Earl Attlee
I was just about to say that the absence of these schemes is no reason not to go forward with the scheme.
The noble Lord, Lord McKenzie, was concerned about universal credit details not being available until the autumn, but I am confident that local authorities will have all the information that they need from the statement of intent that we have already made and the regulations that are coming out in draft today.
Lord Smith of Leigh
My Lords, I have received an e-mail that tells me that a factory employing 100 people on my patch is going to be closed, so that will give me more problems with the council tax benefit. Local authorities have got into trouble over reductions in expenditure in local authorities through legal challenges. Usually, consultations have not taken account of the equal rights of all groups of people, and that is really important. We need to make sure that we do not fall into this trap and create a minefield. Could the Minister give us a timescale for when the department intends to produce the default scheme? I think that might be helpful.
Earl Attlee
Today, yes. I remind noble Lords that, in respect of the difficulties of devising schemes, we have provided £30 million for local authorities.
Lord McKenzie of Luton
I pick up on the point about complexity. I do not think that local authorities are anxious to devise complex schemes; they are trying to devise relevant schemes, particularly those that are focused on poorer members of their communities. It is good news that the default scheme details have been issued today, but I struggle to see how they might be comprehensive if some key aspects of the universal credit are not going to be available until October. Surely how those two things sit together is pretty important for the development of schemes.
The Minister said that the regulations issued today would cover issues about the protected arrangements. Perhaps he could answer a specific question. How does the protection given for pensioners apply to households with two people entitled to state pension credit if one person has reached that age and the other is below that age?
Earl Attlee
On the point about universal credit, we are aware that the approach in the regulations needs further refinement, and we will continue to work with the DWP on the detailed approach to be able to set this out for LAs in the autumn. However, we believe that that provides a clear general indication of how we intend income to be taken into account in the default scheme, which is intended as a legal back-stop and not a model scheme. While LAs will be free to adopt or build on the approach taken in the default scheme regulations, they will not be compelled to do so if they bring forward their own scheme. I hope that that helps the noble Lord.
Lord McKenzie of Luton
I understand the point. If the details of the universal credit that we know can be taken account of only generally in relation to the default scheme, which may or may not help the authorities that want to rely on that, surely it is equally the case for any other tailored scheme that a local authority may wish to devise. How can it consult on something that inevitably is incomplete? We are trying to get an answer to that point. I am not sure that we shall succeed this afternoon. We have given this matter a good airing. I believe that the noble Lord, Lord Tope, said that we should make the best we can of this. Frankly, that is not good enough when we are devising detailed benefit schemes. We ought to have a higher standard than that. I think that is being denied to some local authorities by this timetable. For the time being, I beg leave to withdraw the amendment.
Baroness Donaghy
Baroness Donaghy
My Lords, as this is the first time I have moved an amendment in this Committee, I declare my interests. I am not a vice-president of the Local Government Association, but 22 years ago, which seems quite a long time ago now, I was president of NALGO, which at the time was well known as a local government-related trade union.
I wish to probe the Minister about the steps that the Government are encouraging local authorities to take when consulting their staff on the effectiveness of the scheme. I would like to see that written into the Bill, as too often local government staff are forgotten when it comes to major changes of this kind. Earlier in Committee, the noble Lord, Lord True—I am sorry he is not in his place—asked that consultation between local authorities and the Government should be genuine and should not just go through the motions. I believe that the same applies to genuine consultation between local authorities and their staff. The noble Lord, Lord Jenkin, paid credit to local government for getting on with the job in hand. I endorse that view. I add that that credit would be due to local government staff and the work that they do on these schemes.
The importance of involving staff—I am not just talking about the local agreements that take place—is that they have local knowledge and professional expertise to ensure that we have the best possible schemes. I shall be brief as I believe this speaks for itself. As a former chair of ACAS, who constantly urged consultation as a matter of course, as it was proven time and time again that it improved the motivation of staff and buying into a particular scheme, I hope that the Minister will be able to give me a reassurance that the staff will be fully involved in these schemes. I beg to move.
Lord Beecham
My Lords, I suppose there are two aspects of effectiveness that councils will need to address. The first is the sheer practicability of the scheme and how it can be delivered. We have heard some of the problems that councils face, but assuming that the software goes all right and the mechanical side of the process is, as it were, addressed, there is another issue on which I would have thought it would be very desirable for local authorities to engage with their staff, and that is the assessment of the impact of different proposals within the schemes. The Government are rightly saying in the context of this Bill that councils will need to address the equalities issues and we have heard some of those raised this afternoon, but they will also need to weigh the interests of one group in the community against another group.
That is not a matter for officers in the finance department, with all due respect to them. It should involve the relevant officers and, of course, the elected members dealing with the different groups in the community. It might be social workers looking at the needs of the disabled or children’s services, or welfare rights officers or other officers dealing with different groups in the community—the Armed Forces covenant might apply, for example, to which the Government draw attention. There needs to be collaboration on the policy side rather than on the purely administrative side, as was implicit in my noble friend’s amendment.
Bearing that in mind, I wonder whether the Government have actually had any discussions beyond the consultation process in general with relevant bodies in the professions about the way in which these changes might impact on particular client groups and particularly on the equality duties to which they are at pains to draw the attention of local authorities. Both at the individual local authority level and at the national level where people are professionally engaged with these issues, I would have thought that a proper consultation is needed in order to assess the impact of the various possibilities that will be canvassed and allow the best possible informed decisions to be made at local level, given that the cost of any concession will be borne by other groups within the pool of people eligible for council tax relief. This is a transfer of a burden from the taxpayer as a whole to other council tax payers in the community, particularly those receiving the benefit. These are very complex matters that have to be taken into account, and they should be informed, as I said, on the basis of the experience and knowledge of those working with the groups particularly in that vulnerable category to which the Government draw attention.
Earl Attlee
My Lords, I thank the noble Baroness, Lady Donaghy, for her explanation of her amendment. I strongly agree with her sentiment but I cannot agree with the amendment, which would require local authorities to consult staff on the effectiveness of the scheme. Front-line staff involved in the administration of council tax and council tax benefit will have important insights into the delivery of these services and awareness of the people affected by them—a point made by the noble Lord, Lord Beecham. I would hope that all managers, as a matter of routine, would seek the views of staff when taking decisions about services. This is important for ensuring quality services and it is important for staff morale. This is as true for local authorities as it is for any other organisation. From my experience, if you do not consult effectively, you will not lead effectively and therefore you will not have desirable outcomes.
The noble Lord, Lord Beecham, asked whether the Government have consulted professional bodies. I am sure that there is a wide network of contacts between my department and the relevant professional bodies.
However, I do not think it appropriate to make this consultation a requirement on local authorities in relation to council tax reduction schemes. We have to move away from hand-holding and we have to trust that local authorities have the insight to consult their staff, as I am confident that they have. To impose this requirement would add another administrative burden on local authorities that would be nothing other than unnecessary red tape. I therefore hope that the noble Baroness will feel free to withdraw her amendment at the appropriate point.
Baroness Donaghy
I thank the Minister for his reply. Naturally I am disappointed that he is not willing to put the proposed amendment into the Bill. However, I welcome his very positive statement about consulting staff and I think that that will be seen as some reassurance. In that spirit, I agree to withdraw my amendment.
Baroness Donaghy
“( ) In exercising its powers under subsection (2)(b), the authority must have regard to the impact of the scheme on work incentives for those persons in the area, including for those who are in employment or actively seeking employment.”
Baroness Donaghy
It bears repeating that council tax benefits are in-work benefits. Nearly 750,000 people are non-passported recipients of council tax benefit and in work. It is the most comprehensively claimed benefit, despite the fact that a large number of eligible older people do not claim. People who do claim are in low-paid and often part-time work.
It is government policy to rationalise work incentives, which is why universal credit is being introduced. I realise that there is a genuine debate to be had about whether council tax support should be an integrated part of universal credit or whether it should be localised, as the Government are proposing, but it must be accepted that allowing council tax support to vary throughout the country and introducing it before universal credit undermines any simplification and will make it impossible to judge how well work will pay.
The DCLG advice to councils is:
“The system”—
that is council tax support—
“should not be too complex as to create a disincentive to work”.
The noble Earl said earlier that the Government had given the councils minimum prescription, but that is one of them: work incentives should not be undermined. That statement is the only reference to work incentives. Like TIF 1 and TIF 2, which we discussed the other day, this important topic is not on the face of the Bill. The purpose of my amendment is to ensure that it is central to any council tax support system, so that one government department does not undermine the intentions of the whole Government.
Bearing in mind what the noble Lord, Lord Tope, said about not making Second Reading speeches, I believe that there are at least seven disincentives to work contained in the many council options papers that I have seen. Working people need more transparency and more certainty and I believe that by pointing out these seven work disincentives I am offering an opportunity for the Government to avoid them.
The first is the 10% cut, which noble Lords have already spent considerable time on, so I will be brief. Let us take for example Rossendale, with 44% of pensioners and 56% of adults of working age. A 10% cut will lead to a 20% cut in council tax benefit. Once vulnerable groups are defined and exempted, the cut will be “in excess of 20%”.
Being presented with a council tax bill or an unexpected increase in that bill could be the pivotal point for some working families in deciding that work does not pay. Where are the greatest numbers of working people who will be affected? In County Durham, there are 5,810 working recipients of council tax benefit, more than 8,000 in Manchester, more than 6,000 in Liverpool and 3,500 in Wigan and Salford each. Those are some of the poorest areas in the country. Yet South Bucks has only 420 and the City of London 40. That is a redistribution of wealth which is shameful and which will have consequences for employment and the administration of justice when we see the courts being clogged up chasing large numbers of puny arrears.
The second disincentive to work is an interesting illustration of the mixed messages that we get from the Government. I do not know if it is muddled thinking, doing insufficient homework, the left hand not knowing what the right is doing, speaking before brain engagement, plain doublespeak or a combination of some of the above. Frankly, I do not care, but let us take the option being considered of non-dependant deductions being further exploited. In the June 2010 Budget, the Government decided to upgrade non-dependant deduction rates in three stages. They had been frozen since 2001-02. The intention was to reduce fiscal deficit and, according to the impact assessment by the DWP, to,
“provide an expectation that adults make a reasonable contribution towards their housing costs”.
One objector said:
“If a family living on benefits wants their adult child to stay living at home they are actually penalised—as soon as that child does the right thing and goes out to work. You get what’s called a non-dependant deduction, removing up to £74 off your housing benefit each week. I had a heartrending letter from a lady in my constituency”—
there is a hint there—
“a few weeks ago who said that when her son leaves college next month, her housing benefit will drop significantly, meaning her family may have to split up. This doesn’t seem right”.
The objector was the Prime Minister in a speech only two weeks ago, but councils are considering making this worse as one of their options.
The third disincentive would be by increasing tapers, let us say to 30%. I know that we have had some discussion of this already. Anyone on housing benefit and council tax support will have a marginal tax rate of 95%—65% taper on housing benefits plus a 30% taper on council tax support. In other words, they would keep 5p of every extra £1 pound that they earned. That is not very encouraging, is it?
The fourth disincentive being considered is to remove working tax credit income disregards by varying amounts. One local authority has said:
“Government wants us to incentivise work so this would be against their policy intentions. However, the Working Tax Credit income disregards in UC are sufficiently generous as to allow for a reduction in the earned income disregards applied to local CTS”.
That particular authority estimated that working people could lose between £2.21 and £4.43 per week.
The fifth disincentive is to make workers with income greater than needs contribute more through increasing the rate of withdrawal from 20% to, say, 25%, 27.5%, or 30%. All working people in this category would lose between £0.64 and £1.12 per week.
The sixth disincentive is capping support at the level for band D, E or F. That would have the greatest impact on the older worker and those with children. The asset-rich older person of working age may have to downsize to make ends meet. The difference could be a reduction of £3.72 to £4.10 a week.
The last disincentive, the Committee will be pleased to note, is that everyone pays something, usually 20% to 25%, which is a return to the poll tax but without anything included within income support, jobseeker’s allowance or ESA to cover it. That would hit the poorest hardest and add to local authority billing costs as they clog up the courts with chasing bad debts.
No one is claiming that dealing with poverty-trap issues is easy. Neither is it easy to be clinging on to the job market by your fingernails, trying to raise a family and provide a roof over your head. When I arrived in Westminster two years ago, I was shocked by the ease with which this world swallows its own propaganda. In my world, I have close family members whose job prospects are grim and friends who rely on Mr Beeston’s payday loans, where one unexpected event tips the balance between managing and not managing. The Government have to show that they are serious about keeping low-paid working people afloat and I hope that the Minister will accept my amendment in the spirit in which it is intended. I beg to move.
Earl Attlee
My Lords, I thank the noble Baroness for explaining her amendment, which she has done with some useful detail. I have plenty to say, but perhaps I will have to write to her on some of the detail after consulting my officials.
Amendment 74 would require local authorities to have regard to the impact of their scheme on the work incentives for those in work or actively seeking work. The noble Baroness is right to point to the importance of local schemes supporting incentives to work. It is of the utmost importance that people get more overall income in work than out of work and that people should get more overall income from working more and earning more. It will not be in the interests of local authorities to design schemes that discourage work, locking their residents into low aspiration and poverty. Making local authorities financially responsible for the provision of support gives them a real stake in getting people back into work.
To aid local authorities in designing schemes that support positive work incentives and the objectives of universal credit, we have already published guidance setting out the key design features that could support work incentives and which local authorities will want to consider in designing their schemes. The guidance considers the main design features of local schemes that can be used to support work incentives, including how income from universal credit is treated, how other income is treated and the point at which support is withdrawn. It also considers other factors that can influence decisions about work, including how the scheme is administered and communicated to applicants.
Data sharing related to universal credit between the Department for Work and Pensions and local authorities will be an important way in which local authorities can ensure that their schemes work with the grain of universal credit. The Department for Communities and Local Government and the Department for Work and Pensions are working together to ensure that the necessary data-sharing arrangements can be put in place. We want to ensure that, where possible, local authorities continue to have access to the same data on claimants of existing benefits and will be provided with a breakdown of the full universal credit award before the application of any tapers or sanctions, together with the final amount that the claimant receives.
Furthermore, the Government are doing everything in their power to reduce the risk of potentially unhelpful interaction between local schemes and national universal credit. Indeed, changes have already been made to the proposed design of universal credit to increase some income disregards. These changes will help to reduce the risk of “dual tapering”, where council tax support and universal credit are withdrawn simultaneously, leading to higher marginal deduction rates—the rate at which the gains from increased earnings through work are reduced by the withdrawal of benefits and increased tax—and will help to ensure that the incentives to enter work remain strong.
Finally, as I have already mentioned, we are today publishing draft regulations that set out how we propose to treat universal credit income under the default scheme. We will continue to work with the DWP on the detail of the approach, but we believe that it provides a clear general indication of how we intend to take UC income into account in the default scheme. Local authorities will be able to consider whether to take this or a similar approach. With those explanations, I hope that the noble Baroness will feel able to withdraw her amendment.
Lord McKenzie of Luton
The noble Earl referred to data sharing, in particular to help in the transfer of people who otherwise would be in receipt of 100% benefit under the existing system. I think that all the documentation we have seen talks about the Government working on these matters. Can the noble Earl say when that process is going to be completed? Will the arrangements for data sharing definitely be in place by 1 April 2013? I think that he also said that the Government are doing “everything in their power” to ensure a sensible outcome so far as universal credit is concerned. One would dispute that because the phrase “everything in their power” could include putting council tax benefit where it belongs as part of that. But the noble Earl said specifically that they have addressed the issue of income and how that is to be dealt with—I think we understand that, because we touched on it in an earlier session. What other adjustments so far as universal credit and its interrelation with other schemes are concerned are currently being contemplated? Will the Government be publishing any thoughts, analysis or guidance?
Baroness Hollis of Heigham
Is the Minister saying that, in the default scheme, UC will be counted as income? He has had the advantage of seeing the regulations. We have not seen them so I just wanted some information. Is he assuming that UC will be included?
Earl Attlee
My Lords, the answer to that question is, I understand, yes. My answer to the noble Lord, Lord McKenzie of Luton, is that clearly the arrangements for data sharing will have to be in place by 1 April, otherwise it will not work. We are working to ensure that the data-sharing arrangements are in place at the appropriate moment. Universal credit will come in next October.
Lord McKenzie of Luton
Is the Minister saying that the appropriate moment by which the arrangements have to be in place is October?
Earl Attlee
My Lords, I think that this revises my initial comments. Universal credit will come in next October.
Lord McKenzie of Luton
Perhaps I may press the Minister on that point because it was originally understood that in October next year all new claimants would be claimants for universal credit. There seems to have been some change to that and this issue is obviously important because local authorities have to assess the volume of claims that they will deal with. Can the Minister confirm that the arrangement is that all new claimants coming through from October 2013 will go straight into universal credit and not into JSA, ESA or income support?
Baroness Hollis of Heigham
The legacy cases will spend two, three or perhaps four years coming across.
Earl Attlee
The noble Lord asked some complex questions. The noble Baroness mentioned legacy claims. It will be best if I write in detail on all those points, including the noble Baroness’s point about legacy claims.
Baroness Donaghy
I thank noble Lords who have contributed to the debate and the Minister for his reply. It was beginning to feel a bit like Google Earth, whereby you home in on one house that will be in receipt of universal credit next October. It will be interesting to see exactly how many are in receipt of it by next October. I am disappointed of course that the Minister is not willing to put these provisions in the Bill. I think that I understand why, because it is a contradiction in terms to call this scheme a work incentive scheme. All the points that I have raised exposed that. Nevertheless, I realise that we are not going to have a meeting of minds on this and I beg leave to withdraw the amendment.
Baroness Sherlock
“( ) In exercising its powers under subsection (2)(b), the authority must have regard to the impact of the scheme on disabled people in the area.”
Baroness Sherlock
My Lords, I shall also speak to Amendment 76A in my name and that of my noble friend Lady Lister of Burtersett. I am grateful for a briefing from a variety of voluntary organisations, including Scope and Carers UK.
At present, national rules are clear, if not simple, on the treatment of disabled people and carers within means-tested benefits. These two amendments are designed to try to draw out for the greater understanding of the Grand Committee how those two categories of people will be treated under the new regime. At the moment, the equality impact assessment published by the Government suggests that nearly half of all council tax benefit is paid to households that may contain an adult claiming a disability-related benefit. The figure could be higher if it included disabled children. We are therefore talking about a significant proportion of the caseload now in receipt of council tax benefit and who may be presumed to be receiving council tax support in the future. This is not simply a marginal group.
At present, if someone receives income-related employment support allowance, they are passported on to maximum council tax benefit. If they have to be means-tested, some benefits and allowances are ignored completely—for example, the DLA care and mobility components, constant attendance allowance, exceptional severe disablement allowance, severe disablement occupational allowance paid because of an injury at work or a war injury or, indeed, mobility allowance paid under the war pensions scheme. In other words, the current council tax benefit makes significant provision to ensure that disabled people are given adequate support to enable them to meet their council tax liability.
I am sure that other noble Lords will be aware that there is considerable concern abroad among organisations that work with a variety of disabled people about what is going to happen in the future. The uncertainty out there is very worrying to disabled people and their families.
I anticipate that the Minister may reply that this is a matter entirely for local authorities. I base my predictive powers on his previous answers, but I may be completely wrong and I shall be delighted to be so. He may simply say that it is entirely up to local authorities how they should go about doing that; they have total freedom to decide how they treat disability in the council tax support schemes. However, I would like to test whether there are any limits to that freedom. To that end, I have some specific questions for the Minister. The various DCLG documents on localising support have been kind enough to remind local authorities of their various obligations under the Equality Act and other legislation such as the Disabled Persons (Services, Consultation and Representation) Act 1986; under the Chronically Sick and Disabled Persons Act 1970, which includes a range of duties relating to the welfare needs of disabled people; or, indeed, under the Housing Act 1996, which gives local authorities a duty to prevent homelessness, with special regard to vulnerable groups.
However, these documents are a little light on advice about what kind of scheme might meet the requirements of this assortment of legislation. We turn to the matter of guidance on what constitutes a vulnerable person at a later amendment, in the name of my noble friend Lady Hollis, but meanwhile can the Minister advise the Committee to what extent disabled people currently entitled to council tax benefit are protected under equalities legislation? Do local authorities have to continue existing full exemptions or can they modify as they see fit? If they can modify as they see fit, would the Minister be content if some local authorities, for example, were to count DLA as being income for the purposes of council tax support, while others were not? If that were all right, we could find two people with identical conditions, identical incomes and identical circumstances, living in neighbouring boroughs whose entitlement to council tax support would differ solely because of which side of the line they came from. That may be true of other categories as well.
I want to explore the implications of that for a minute. We have all read the marvellous IFS report on the scheme. The IFS looks at the potential incentives that this change could give to local authorities in a variety of ways. In doing so, it identifies what the incentives could be, although it does not suggest that authorities would necessarily act intentionally based on those incentives. It suggests that the change could give an incentive to a local authority to discourage low-income families from living within its borders because it would be more expensive.
I wish to look at what the implications could be in this area. Let us suppose that there were a difference in entitlement to council tax support for someone receiving DLA on one side of the border compared with the other. The difference in cash may not be huge but may make a significant difference to the income of the person concerned. Would that constitute an incentive for disabled people in that circumstance to live on one side of the borough line rather than on the other? If it did, what might that do to other costs that might follow? I am thinking, for example, of the social care costs that might then be a liability to one authority rather than to another because of a desire of someone in that situation to live in one authority rather than in a neighbouring authority. Is that a policy consequence? If that were to happen, would the Minister be content with that? Is that simply part of what happens in a free market of local authorities determining what kind of support they give? Have the Government considered that? Perhaps the Minister could tell us.
Thirdly, what assessment have the Government made of the cumulative impact on disabled people of the variety of changes and cuts to benefits and services that have preceded this? In that respect, I wonder where the Minister thinks disabled people should go for advice on these schemes and where the best place would be for them to go to understand the implications of changes in council tax support.
Finally, the Government made it clear on the initial consultation that the rationale for seeking no change in council tax benefit payments for pensioners was that they would not expect them to seek paid employment to increase their income. However, the original consultation document I think went on to explain that there were other groups to whom the Government may wish to ensure that local authorities offer support, and that these groups might not be expected to increase their income through work. Given that certain benefits are given to people who are not expected to work by definition, could the Minister comment on the appropriate distinction for a local authority to choose to give full support to pensioners but not to someone who receives a disability benefit that says that they are not expected to work?
The implications of this could be significant. The local authority plans, as my noble friend described just now, to take potentially 20% off the top of the modest disability income of someone who has no ability to increase their income through work and has never been expected to pay council tax in the past. The implications for that individual and for the authority trying to collect money from that individual, through a range of enforcement mechanisms available to it, are only too easy to imagine. If any noble Lords have a failure of imagination, they may recall various noble Lords’ speeches about what happened with the poll tax when local authorities tried to extract money from some very poor families who were suffering a variety of problems.
Amendment 76A relates to carers. This is an area in which again I need some help from the Minister. Council tax is paid at a flat rate, regardless of how many people live in a property, but if only one person lives in a property, or no one who is treated as such, a discount can be applied to the bill. Noble Lords will realise that a number of people are disregarded and treated as not living in the property when calculating council tax. At the moment, a category of people are seen as carers who can be disregarded entirely when working out whether someone must pay council tax and, if so, how much should be paid. At present, to be disregarded as a carer, someone must provide care for at least 35 hours a week, live in the same property as the person they are caring for, and must not be the spouse, partner or parent when caring for a child aged under 18, and the person being cared for must either receive the highest rate of the care component of DLA or the higher rate of attendance allowance or constant attendance allowance.
I hope that I will be forgiven for reading all this into the record, but I want to understand what happens. Will any change be made to council tax liability for carers in that category when the new regime comes in? I am not referring to council tax support but to liability for council tax itself. It may be in the documents, and I apologise if I failed to find it, but otherwise I hope that the Minister will be able to explain the situation.
I could go on great length about the other implications for means-tested benefits and carers, but I shall put just one more specific question. How should local authorities treat carers’ allowance in deciding what council tax support should be available? The Minister may want to reply only in respect of the default scheme, but, as I say, I have not had an opportunity to look at it. How will carers’ allowance be treated in assessing entitlement to council tax support under the default scheme?
Carers are a group of people who have been struggling a lot over recent years. A Carers UK survey of over 4,000 heavy-end carers conducted last year showed that four in 10 were already in debt as a result of caring, that the stress of money worries was affecting the health of half of them, and that many were cutting back on essentials such as food. What assessment have the Government made of the likely impact on carers and the people they care for, and what will the costs be of providing social care should carers find that they are not in a position to carry on as a result of this change?
Finally, I should point out that I had originally considered tabling amendments that would try to draw out the impact on a number of categories of people. I could have tabled a similar amendment on the impact on child poverty, which my noble friend Lady Lister raised. I could have tabled an amendment on the impact on homelessness. I could have tabled an amendment on the impact on larger families. I mention this because it is easy to say that the Government want to protect certain categories of people, but, as my noble friend has just explained, if councils are to be encouraged to protect those in work, on whom should the burden fall?
I live in Durham, where the council is doing its absolute best to see how it can address the scheme well, but half of the current recipients of council tax benefit are pensioners, so if it did nothing else, it would mean a cut of 20% for the rest. Once the council takes account of higher levels of disability—in a very poor county—what should it do then? Should it try to protect those who are not expected to work? If so, who should pick up the benefit? If one takes into account the impact on child poverty in the area, again a very poor one, the council might feel that it has to take other steps. If we are not careful, we will end up with one family in Easington paying the entire council tax liability for the whole borough. I make a joke only to make a point. There will be a stage by which only so many circles can be squared.
There is a problem with simplicity. The Minister sought earlier to encourage us by saying that councils could set up simple schemes; they do not have to make complex ones. However, in welfare benefits, simplicity and fairness pull in opposite directions. When the Welfare Reform Bill was being considered in Grand Committee, I commented then that the best example of this is support for children. Child benefit is very simple but it is not fair. If it were the only kind of support, it would not be fair. Tax credits for children are very fair, but even I would not say that they are simple, and I was involved in designing them. I just said that child benefit is an example of something that is simple, but thanks to the recent changes it is going to be less simple. However, noble Lords will take the point. That is the difficulty in dealing with all these different categories. If a county council is to try to be fair to all these groups, not to mention protecting itself from potential legal challenge under the variety of legal instruments I have described, it is going to be difficult for it also to be simple. If it is going to be simple, it may struggle to deliver that by next April. I beg to move.
Baroness Browning
My Lords, I have not participated in proceedings on the Bill so far, but we have now come to the clauses on disability. I refer the Committee to my interests in the register, particularly in respect of autism. I want to add to the initial remarks of the noble Baroness, Lady Sherlock. I hope that the Committee will forgive me for singling out autism, but it is the only disability that has the benefit of statute, through the Autism Act 2009. I believe that that is the only piece of statute that relates specifically to a particular disability.
I have to inform my noble friend that I am becoming rather disconcerted as various pieces of legislation that relate to disability, particularly on the question of council tax benefit, come forward. I worry that Ministers are not consulting, particularly with the Department of Health, which has responsibility for the Autism Act. It is a relatively new piece of legislation on the statute book. The will of the House was to be taken forward in what Parliament intended to be an improvement in the lives of autistic adults in particular. At its heart, the Autism Act was to enable more adults with autism to lead independent lives. It is worrying that, through legislation such as this part of the Bill, there may well now be problems with localism to the degree that certain councils may not be fully aware of—or may ignore—their need to take account of the autism strategy that is associated with the Autism Act.
My first question to my noble friend is: what discussions have his department had with the Department of Health in drafting the clauses on disability and local authorities’ ability to implement and make progress on the autism strategy? I draw the Committee’s attention to the strategy Fulfilling and Rewarding Lives, which states that adults with autism should live in accommodation that meets their needs. That is what we hope the strategy will bring forward. It states:
“Local authorities are required to take account of the needs of adults with autism when considering housing provision”.
It also states that local authorities need to fulfil the equality duty by taking account of the needs of adults with autism in respect of housing.
I seek reassurance from my noble friend that the Autism Act has been discussed and will, even with the choice of localism, continue to be implemented by local authorities that now have that statutory duty under a different piece of legislation. I hope that my noble friend will accept that, while I single out autism because it has the protection of other statutes, I share the concerns outlined today by the noble Baroness, Lady Sherlock, over disability in general. The people who are in receipt of disability benefits—who are already subject to a lot of change and disruption—will find council tax eligibility being added to quite a long list of changes in their lives. Not only will the process cause them distress but it will affect them financially, which could ultimately affect that very important ability to live independently.
Baroness Lister of Burtersett
My Lords, it is always a pleasure to follow the noble Baroness, Lady Browning. What I have to say follows on very well from what she said. My noble friend Lady Sherlock asked some searching questions of the Minister. I want to pick up on the one about cumulative impact. Ringing in my ears are the words of the late Lord Newton, who reminded us in proceedings on several Bills that we have to look at these pieces of legislation together, not separately—yet we always look at them separately.
I have just been reading two relevant reports, which I would like to bring to noble Lords’ attention and which emphasise the question of cumulative impact. One is from Demos and Scope, and says:
“Disabled households are not benefits recipients—they are parents, employees, students, home owners, older people and citizens. They rely on the same diverse range of services as everyone else, but the Government’s failure to grasp the whole picture beyond the welfare reform agenda can lead to an underestimation of the cumulative impact these hundreds of individual cuts can have on each multi-service-using household”.
We are now potentially adding to those cuts, which is why it is so important that there is a proper impact assessment that takes the cumulative impact into account.
The other report, by Citizens Advice and the Children’s Society, says:
“We are very concerned that the scale of the cuts in support for some groups of disabled people has not yet been properly understood, because the changes have been viewed in isolation”.
Again, the danger is that we view the changes here in isolation.
The other point that I want to make refers to carers, who tend to get overlooked constantly. I was slightly bemused because the impact assessment referred to carers as one of the vulnerable groups that local authorities need to take into account, yet the DCLG document, Localising Support for Council Tax Vulnerable people—Key Local Authority Duties, does not seem to mention carers as a group whose needs need to be taken into account. Could the Minister explain which of the two documents local authorities are supposed to take account of, and why there is this inconsistency in the reference to carers as a vulnerable group?
Lord Shipley
I will make three very brief points on these two amendments. The first is simply to acknowledge that, given that council tax support is to be localised, it should therefore follow that local councils have the responsibility for deciding what their schemes entail. That seems a very important principle. We will debate later the role of the Secretary of State in defining any exclusions at all.
Secondly, a scheme agreed by a local authority would be inappropriate if it did not have regard to disabled people and carers, not least for the reason that it would not meet the need of an equality impact assessment if due regard had not been given. However, the list is not exclusive, and we shall shortly go further into the definition of vulnerability. One weakness of the Bill at the moment is that it does not actually define vulnerability adequately.
I agree absolutely with the noble Baroness, Lady Lister, on the cumulative impact and the Government’s understanding—and this is not a particular criticism of this Government, because it has always been the case. Governments are not very good at seeing the cumulative impact of their legislation and the whole picture. A number of us have become very reliant upon the Institute for Fiscal Studies and the Joseph Rowntree Foundation for pointing out some of these things to us, sometimes one would hope before the event but occasionally after the event as well. Governments should be smarter at understanding the cumulative impact of what they are doing.
However, in all this there is another option for local councils, which is to maintain their current schemes effectively and to make the cost of that a general charge on council tax. I might come back to that when we talk about vulnerability, because, where council tax will be localised, vulnerable people will have to be protected. How nice it would be if we had more than one additional band in the council tax banding—not just band I but maybe some further ones—because there is a real risk of redistribution occurring from those who are less well off to those who are better off, as the IFS and the Joseph Rowntree Foundation keep pointing out to us.
The Deputy Chairman of Committees (Baroness Andrews)
My Lords, there is a Division in the House and we will adjourn for 10 minutes.
Lord Deben
My Lords, I rise to say a word or two about the disablement issues; that is why I have come for this part of the Committee. It seems to me that we have not covered the point properly. We have talked about the lack of thinking in the round, but we have not talked about the fact that it becomes more important given the circumstances that we are in at the moment. My 35 years as a Member of Parliament led me to have some pretty grave doubts about some of the claims that people made. You had only to sit in your surgery to see with what tiredness they came in and with what alacrity they left, complaining about some illness or other in the mean time. It was one of those sad things and it was a real problem. The Government—perfectly rightly, in my view—have approached that, and in doing so they have reminded lots of people that some people have claimed invalidity or impairment of one sort or another improperly. The difficulty with that is that it is necessary to put things right, but that creates an atmosphere that can be extremely deleterious to people who genuinely are disabled or in real need of help.
The points that have been raised on both sides of this Committee are very important at this time in particular. It is extremely important to get the balance right and to remind people, particularly local authorities—and some still do need reminding—of the very considerable difficulties in which many disabled people live and the need for them to treat these issues with a degree of sensitivity that I am not sure is found universally. I want to look at that background just for one moment.
Secondly—and I address my noble friend the Minister very carefully—it really is time that the Government got out of their problem; and it is genuinely a problem of all Governments. After all, the Government are telling everybody, rightly, that we should have joined-up thinking. We have pathfinder operations to try to get people to have joined-up thinking about property locally, local councils and government property and to try to get various organisations to work out their problems together. So we have a Government very keen on reminding people about this, and yet they still have not dealt with the central issue that we still have silos when it comes to this kind of issue.
I am interested in the comment that we all have to look to the Joseph Rowntree Foundation, the Institute for Fiscal Studies and others—it is hoped before but certainly afterwards—to see the real impact. The question that I really want to ask my noble friend is: will he take back to the Government, in his own inimitable way, the request that it is about time that they learnt from these outside bodies? Why have we had this kind of discussion for as long as I can remember in politics, both here and in the other place? There is nothing new about this. It has always been true.
Why is it so hard for Governments ever to learn a lesson such as this? I remember the difficulty when I was Secretary of State for the Environment of trying to get government offices to have all their area offices and headquarters of other offices in the same town so that you could actually get a job done. You often used to have to go to five different towns to make any kind of decision, and then you would discover that the area covered by each department was different, as far as that region was concerned. We got over one or two of the more extreme cases, but the thing that really worries me is that the conversation that we have just had—which, after all, has been most amicable and agreed on both sides—is one that we have had too often.
I wonder whether this Committee might be the one in which we could say enough is enough and that this is a matter for governments seriously to deal with. Otherwise, it does not matter who is on which side. We will go on having this discussion. If it is not about disability, it will be about something else where as similar problem arises—where the Department of Health, the Department for Work and Pensions, the department responsible for local government and everyone else have not really got together to see how their various concerns impact on particular individuals.
This is the effort of a long-time Member of Parliament and a very long-serving Minister to say that having failed myself, and being honest about that, do you think that we could on this occasion bring it home to someone who is very much above the pay grade of anyone in this Committee? This is something that the Government have to take seriously. It is very boring, constantly, to have this conversation, with good-hearted people on both sides of the House saying the same things and, in the end, knowing very well that it will not have the effect that we really want.
Lord Beecham
My Lords, this has been an interesting debate with some extremely perceptive contributions. I very much welcome the contribution of the noble Lord, Lord Deben. He and I occasionally crossed swords during his tenure at the Department of the Environment, as it then was, but he was right to say that we need a balance in the view of claimants that is so often the focus of public debate in the media and, sometimes, by politicians. There are always some who abuse the system, but they are not by any means in the majority. There are many people who do not claim who should claim, whether it is for disability or other things. That reference to balance is highly desirable.
However, I am slightly nervous about his reference to government offices because there certainly was a problem and the Government have certainly solved it—they have closed them. There are now no government offices for people in the regions to go to. It has all been centralised. However, his fundamental point is right. The Government need and have failed, so far as one can judge in connection with the Bill, to look across departmental interests and the client groups that may be represented by various government departments.
It is interesting that there is no specific mention of disability or any other particular category in the impact analysis, although it is a significant element in the Bill, the Government illustrate only the impact on pensioners and other age groups. The analysis does not refer at all to disability as a specific issue and yet, as we heard from the brilliant forensic analysis by my noble friend Lady Lister, there is a huge problem that affects a variety of people with different disabilities and conditions, and of course their carers, which clearly must be taken into account.
Lord Beecham
In all events, it is fairly modest, but that will also disappear unless it is retained. If it is retained we come back in a vicious circle to the fact that it will be retained essentially at the expense of the working poor, whom, I say with due respect to the noble Baroness, Lady Hanham, we constantly hear that this whole scheme is designed to incentivise. That mantra is wearing a little thin. It is absurd to imagine that the whole burden can simply be borne by those people. It may have to be, if the Government require councils to do it or if councillors feel obliged to do it, because it is unlikely that they would be able to fund any move towards meeting the needs of this or any other group.
However, it is clear that authorities should consider the impact of the scheme on disabled people in their areas. I would like to know whether the Government have conducted any kind of analysis and tried any kind of modelling, with or without the assistance of individual local authorities on how this might work in practice. If they have not, frankly, that would be disgraceful. They may have and, in that case, I commend them. But there is no evidence in the impact analysis that anything like that has happened. In a matter of this significance, for this group in particular but not only for this group, that is simply not good enough.
At all events, these amendments at least focus some attention on the issues. They have the disadvantage of not supplying the answer in terms of the financial resources to meet those needs—and again one would have to go back to the Government. When it suits the Government, money can be found. As I implied in the question to the Minister, who is not departmentally responsible for these matters although he is something of a transport buff, money has been found to fund the deferment of the increase in fuel duty. There may or may not be good reasons for doing that—perhaps there are, but it was found. Apparently, the somewhat hapless Treasury Secretary believes that there was significant under-spending across government from which that money was drawn. Perhaps some of that money might have been used to moderate the impact of these provisions. Again, there was the other obsession of the Secretary of State about weekly bin collections, for which £250 million was offered. I gather that not much of it has been accepted, so there may be a saving there. As my noble friend pointed out earlier this afternoon, that money might be used either for the purposes of delay, which does not seem to be likely to commend itself to Ministers, or at least to help meet the needs of the very groups which they will apparently be advising local government to protect as far as possible.
The Government need to be honest about this. If they are not going to provide resources, they should acknowledge that local authorities will find it extremely difficult to do so. They should not be raising expectations that it will be done easily, if at all. That would be a shabby way in which to proceed, and I know that the noble Earl, Lord Attlee, and the noble Baroness, Lady Hanham, are not politicians of that stamp—absolutely not. But those with greater responsibility than, unfortunately, lies within their powers, need to demonstrate that that is not a course that they wish to pursue.
Earl Attlee
My Lords, I thank the noble Baroness, Lady Sherlock, for the explanation of her amendments. Noble Lords have asked a number of questions about specific groups and local authorities’ responsibilities in relation to those groups. I want to be clear that the legal requirements that established those duties, which your Lordships have already considered as part of legislation, will remain. As accountable public bodies, local authorities will need to continue to take account of all relevant duties. I am grateful to noble Lords for bringing some of those duties to the attention of the Committee.
The noble Lord, Lord Deben, asked me some interesting questions about the organisation of the machinery of government. I am confident that I know how to exercise that machinery but it is rather above my pay grade to try to change it by addressing the issues that he raises. The noble Lord used the term “above my pay grade” after I had drafted my speaking notes on his contribution.
The noble Lord, Lord Beecham, talked largely about financial issues. It is important to remember that, across local government spending, this is only a 0.4% reduction in the budget.
Earl Attlee
The 0.4% refers to these specific reductions.
The noble Lord, Lord Beecham, tested us on the overall government policy. I am fully signed up to all government policy, as the noble Lord will know.
Amendment 76 would require local authorities to have regard to the impact of their scheme on disabled people in their area. This is an important consideration and local authorities already have responsibilities in relation to disabled people. These include their responsibilities under the public sector equality duty in Section 149 of the Equality Act 2010 which requires authorities, in the exercise of their functions, to have due regard to equality between people who share a relevant protected characteristic and people who do not share it. Equality legislation explicitly recognises that disabled people’s needs may be different from those of non-disabled people. Therefore, public bodies should take account of disabled people’s disabilities when making decisions about policies or services. This might mean making reasonable adjustments, or in some cases treating disabled people more favourably than non-disabled people to meet their needs.
The Department for Communities and Local Government has already published guidance reminding local authorities of the statutory framework in which they operate and their existing responsibilities to people in vulnerable situations, including responsibilities under the equality duty. Therefore, I do not believe that an additional duty to have regard to the needs of disabled people is needed, especially when local authorities have an already established and understood framework of responsibilities.
Amendment 76A would require local authorities to have regard to the impact of its scheme on carers in the area. I was asked several questions about carers, including whether we would change existing relief for them. There are no plans to make any changes to the existing relief. I was also asked how the default scheme takes carers into account. The default scheme preserves the current CTB regime as far as possible. CTB makes provision for carers through a specific income disregard.
Baroness Sherlock
Before the Minister leaves that point, I want to be sure that I understand what he has just said. I specifically asked how carers’ allowance would be treated in the default scheme. Could he tell me how carers’ allowance is to be treated? Is he saying that there will be no changes from the current treatment under the default scheme?
Earl Attlee
My Lords, I expect I shall get some inspiration on that point in a moment.
My noble friend Lady Browning asked how local authorities should have regard to the Autism Act. She raised local authorities’ other responsibilities, particularly in relation to the Act. That is precisely why we have not proposed a new and potentially cost-cutting definition. Local authorities have a range of duties that they will want to consider. My noble friend is right to point to the Autism Act as one of the key matters that needs to be considered.
The noble Baroness, Lady Lister, claimed that there was no reference to carers in the guidance. The guidance is not exhaustive. It highlights some key legal duties.
Baroness Lister of Burtersett
Surely the Minister will accept that if it does not highlight carers, the chances are that carers’ needs will not be taken into account.
Earl Attlee
My Lords, they are already taken into account. We are not saying that carers should not be taken into account. A competent local authority will take the needs of carers into account. Why would a local authority not? That is part of its duties.
I was asked whether pensioners and other vulnerable groups are protected. Low-income working families in an area will face a cut in support. Local authorities will have choices about how they manage the reduction in funding. They will be able to choose whether to pass the reduction on to council tax payers, using their flexibility over council tax, or to manage the reduction within their budgets. I know that noble Lords do not like hearing it, but that is the fact.
Lord Beecham
Can the Minister explain what flexibility councils have, given the capping regime?
Earl Attlee
My Lords, council tax support is part of the total rate retention support. Local authorities can make arrangements for their scheme. They do not have to rely just on the funds relating to council tax benefits.
Lord McKenzie of Luton
I wonder whether the Minister could help me on one further point. He talked about pensioners being protected. Can he deal with the point about the circumstances in which one member of a couple may have reached state pension age but the other has not? Is that household protected under the Government’s proposition?
Earl Attlee
My Lords, it is clear that I am going to have to write to noble Lords on a lot of these points.
Baroness Hollis of Heigham
I understand that the Minister will have to write. Could he pick up the point about one of the problems being that different presumptions and rules are associated with the range of benefits that we currently have when couples straddle the pension age, and will he say what is proposed for universal credit? As I am sure the Minister will know, if one of you is below pension age, both of you will be treated as though you are below pension age. That is not the situation now. There are in effect two sets of schemes, according to whether you are a newcomer into UC or a legacy claimant, and cutting across that will be a CTB discount scheme, which is supposed to embrace both. Perhaps the Minister can take on the issue of this complexity when he writes.
Earl Attlee
It may help the Committee if I explain why I am experiencing such difficulties. The proposed amendment talks about disability in very general terms. If noble Lords table an amendment that deals specifically with their concern, I can address that concern specifically, but I am struggling to answer these very technical questions, which are too detailed for me to answer at the Dispatch Box. If I had a more detailed amendment, I could do so.
I would like to say a few more words about carers. Carers provide a vital role in society, and I expect that local authorities will want to consider what provision to make for this important group. Currently council tax benefit makes provision for people who are carers through a specific income disregard and a premium towards their applicable amount. Local authorities will be free to do so under localised council tax support.
The Department for Communities and Local Government is working with the Department for Work and Pensions to ensure that local authorities will continue to receive data on current benefits and universal credit. This could include data that would help local authorities to identify carers so that they are able to provide support in the future if they choose to do so under the terms of their schemes.
Baroness Sherlock
My Lords, I thank all noble Lords who have contributed to making this a very interesting and useful debate. I have learnt much from it.
I am slightly smarting from the Minister’s criticism that my amendment is too general. By referring to disabled people in general, I was seeking to avoid detaining the Committee by tabling a whole succession of amendments dealing with a full range of disabilities, which I might reasonably have done; but I have learnt my lesson for the future. I shall look forward to visiting the Public Bill Office with more regularity in future.
I asked the Minister at least eight questions, and I do not think that I got answers to any of them, since “inspiration” did not arrive in time. I was not trying to ask technical questions; I was trying to draw out, so that the Committee could understand, what the implications of these changes are for some of the most vulnerable groups in our country in order that we might understand whether we needed on Report to seek to take any specific steps to protect those groups. Given that, I would be very grateful if the noble Earl, when his team has had the opportunity to reflect and to give him all the appropriate advice, would agree to pick up specifically the range of questions that I mentioned when he comes to write. I would add that, even though it might have sounded general, the point about the possible unintended consequences of having neighbouring authorities with different regimes and what that might do to drive both differential costs between authorities was particularly important. Although it might sound like a debating point, it was intended to try to find out to what extent the Government had modelled for that.
I urge the Government to reflect very carefully on the points raised by all noble Lords in this debate, but, this being Grand Committee, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
“( ) No regulations under paragraphs 2 and 4 of the new Schedule 1A to the LGFA 1992 shall be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.”
Lord McKenzie of Luton
My Lords, this is a brief and, I hope, straightforward amendment that I trust the Minister will accept in principle, if not in its detailed wording.
Schedule 4, as we are all now well aware, introduces a new schedule to the Local Government Finance Act 1992 and hence the framework for the council tax reduction schemes. However, regulations under paragraph 2 of the schedule can cover a range of matters, including stating who must or must not be included in a scheme, maximum and minimum reductions, and what might be included to mirror existing arrangements. Paragraph 4 covers regulations for a default scheme. The Delegated Powers and Regulatory Reform Committee, in its fourth report of the Session, reviewed the powers of the Bill and concluded:
“The change from national rules to local schemes is not an insignificant one in an area of law that the government acknowledges must secure appropriate support for vulnerable individuals, and the constraints and requirements imposed by regulations under paragraph 2 will form an important feature of the local schemes. It seems likely that some authorities may model their own schemes on the ‘default scheme’ established by regulations under paragraph 4. In the light of that, we recommend that the Bill should require the affirmative procedure for regulations under paragraphs 2 and 4 of new Schedule 1A”.
This is what the amendment seeks to achieve. I beg to move.
Earl Attlee
My Lords, the effect of the amendment would be to make regulations prescribing the requirements for a local scheme and prescribing a default scheme subject to the affirmative procedure. I fully recognise that these regulations will be vital to the operation of local schemes and that provisions in the default scheme could influence the decisions that local authorities take about the shape of the scheme that they wish to operate for working-age claimants, which will generally not be covered by the prescribed requirements.
It is because of the importance of both sets of regulations that the Government published their statements of intent in May, setting out in great detail what they intend to cover in these regulations. Importantly, the statement of intent made clear that with a very few limited exceptions the effect of these regulations would be the same as those currently in operation in relation to council tax benefit: that is to say, local schemes will be required to include provision in respect of pension credit-aged claimants that is the same as the current council tax benefit scheme. For the default scheme, regulations will recreate the current scheme for all claimants.
We are today publishing the draft regulations for the local scheme—which in the main will set out the requirements relating to those of state pension credit age, and which I will refer to as the pensioner regulations—and the default scheme. This will put beyond doubt that our intention is to recreate the effect of existing council tax benefit regulations in the default scheme and to require equivalent provision to be made for those of pension credit age in all local schemes.
Council tax benefit regulations have been in force in various forms for a number of years. Local authorities understand their operation and effect. It is not our intention to bring in significant new untested processes and procedures, and by publishing draft regulations well in advance of the regulations actually coming into force, and ahead of Royal Assent, there will be considerable opportunity for scrutiny by local authorities, Members of this House and the other place.
The default scheme is not intended to apply generally, but only in those authorities who fail to adopt a scheme in time, and for the first year of the localised scheme. Thereafter, any scheme in operation in a local authority will in effect be its adopted scheme, and it will be able to review and alter or replace it for 2014. I understand that the Delegated Powers and Regulatory Reform Committee has indicated that additional scrutiny is needed because local authorities may choose to model their schemes on the default scheme. If they choose to do this, they will in effect be choosing to model their scheme on the existing regulations. The changes that we will be making in bringing forward our own regulations will be limited and largely confined to taking into account changes in other parts of the welfare system. While local authorities may choose to model their schemes on the default scheme, they will not be required to do so.
In relation to the pensioner regulations, government may from time to time need to amend the regulations. This may be needed to amend cash values in the means test, or to reflect future changes to the welfare system. It would not be a good use of parliamentary time to require a debate each and every time an amendment is required.
In conclusion, I am not persuaded that it is sensible to make subject to the affirmative procedure regulations that will recreate provisions that have been in operation for a number of years and that will be published in draft form for consultation while this Bill is still before the House and well before Report. This will give noble Lords ample opportunity to debate the regulations, and I am not clear what value there would be in further parliamentary debate at the point where they are made. In publishing draft regulations now, noble Lords will nevertheless be able to consider while the Bill is still before Parliament what, if any, provisions in the draft regulations differ sufficiently from the existing regulations to warrant making the regulations subject to the affirmative procedure. I therefore suggest that the noble Lord withdraws his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. I must say that I am a bit taken aback. I thought that it would be pretty much routine to accept the recommendations of the Delegated Powers and Regulatory Reform Committee. I thought that the reasoning was a bit spurious. It is welcome that regulations have been published now and welcome that we will, I hope, have some chance to debate them when we get to Report, although debating at that stage is not necessarily the iterative process that we could have in Committee.
Baroness Hollis of Heigham
Can my noble friend recall any other instance in the past 10 years or so when recommendations from the Delegated Powers Committee suggesting that we go for an affirmative rather than negative procedure have not been followed by the Government?
Lord McKenzie of Luton
I cannot. I can remember one occasion as a Minister when I was minded not to take the advice, but Ministers always did if it was pressed upon them. I am truly shocked by what the Minister says. We have other business to debate tonight so I am not going to prolong the thing, but this is something to which we will come back on Report because I do not think that the answer is satisfactory. I beg leave to withdraw the amendment.
“Council tax discount: vulnerability
The Secretary of State shall issue guidance to all local authorities determining who shall be considered vulnerable for the purposes of eligibility for council tax discount.”
Baroness Hollis of Heigham
I was hoping that we would get to this amendment tonight, so we decided that it was not wise to spend time debating Clause 9 stand part.
The amendment would require the Secretary of State to issue guidance as to who is vulnerable. After the sequence of amendments and discussions that we have had, I think that we need that. At the same time, I want to raise the deeper issue behind it, and I assure the Minister that this is in no sense a technical issue but an issue about policy. I therefore look forward to his reply. On his complaint that we sometimes raise things that are technical, that is of course what Grand Committee is for compared, with Report or Second Reading. If we cannot explore the technicalities here, where can we? I take it a little amiss to be reproved for asking about things that are technical and that cannot therefore be answered in this Committee.
Baroness Browning
My Lords, I have added my name to this amendment because it is a very reasonable request to the Government. The noble Baroness, Lady Hollis, has made a compelling case to do with the individual, as opposed to the locality. If we are about anything in this place, surely we are about how legislation affects the individual. The consequences of not taking the impact on the individual into account are profound, not least in an area where there is, as we have discussed, a lot of other legislation and the cumulative effect could have unintended consequences.
I was very grateful that the Minister’s office sent me a paper, Localising Support for Council Tax: Vulnerable People—Key Local Authority Duties, which I have studied. I was rather concerned to see from the introduction that the Government, despite having,
“been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected”,
none the less go on to explain, in paragraph 1.3, that, with the exception of,
“applicants of state pension credit age … the Government did not intend to prescribe the protection that local authorities should provide for other vulnerable groups, but would consider what guidance was needed to ensure local authorities were able take into account existing duties in relation to vulnerable groups in designing their schemes”.
It would be helpful to hear how the Government intend to put that promise into practice and to have a better understanding of how the Government define vulnerable people, particularly those who come under the category of disability. The Government have prayed in aid the equality duty by which all local authorities are bound. The relevant protected characteristics are covered by the equality duty. Disability is just listed as “disability” but there are other vulnerable groups there. It is important to get more clarification of that vulnerability.
I say to the Committee that you could write my knowledge of local government finance on the back of an envelope; it is very much based on my 18 years as a Member of Parliament, dealing with constituency casework. There are certain things that I spent a lot of time dealing with but others that are quite a mystery to me. However, one thing that is clear throughout the country is that you have district authorities that will administer council tax, as will unitary authorities, but a lot of the vulnerability of the individual is not actually dealt with by a district council but by a county council. You could argue that unitaries should have an overview of the whole shooting match and a better understanding of it, but as regards disability and the individual’s needs, a social services department will have a lot of knowledge and awareness of what those needs are, but you could not expect the district council administering the council tax to have very much knowledge of them at all. I cannot see an obvious tie-up between the two.
Lord Deben
My Lords, I am so often in agreement with the noble Baroness, Lady Hollis, that I hesitate to intervene, but this is entirely the wrong way round and I deeply disagree with her. This is a very important aspect of what we are doing because the problem with localism is that everyone who has ever been concerned with centralism will find on every occasion that it will be better done by those clever people at the centre. What was behind the noble Baroness’s comments was to say, “The vulnerable will be protected only if we at the centre make sure that no one has any input on this at all in case they might make a different measure and balance, given their available resources”.
I must say that I really wonder what I would say if I had been a local councillor and had heard her comments about what was likely to happen if the local council had made these decisions. The noble Baroness represented a Labour council that decided that in local terms it would bilk the Government’s policy on the sale of council houses. It said, “We have a right to do this”. My noble friend was the one who had to stop the council doing that because it was a government policy, but the council took its own view. It was against the law. It actually broke the law in order to uphold localism as it saw it.
Baroness Hollis of Heigham
My Lords, we did not break the law. I actually won the first round for judicial review. It was only when subsequently it was clear that it would cost the local authority a lot of money if we went to appeal—against Lord Denning—that I decided that we would negotiate. What then happened was that the regional officer was sent in to run the sale of council housing for us and, after six weeks—I was deposed as housing chair—he came knocking at my door saying, “Could we discuss this?” He was hidden behind a huge bouquet of flowers. I said “Of course, of course”. He said, “No one will work with me because when I’m gone, you will still be there”. I said, “Oh, dear me”. We negotiated and six weeks later, he went off to Africa as a chaplain and we went back to where we were.
Lord Deben
As we are going down memory lane, I will just remind the noble Baroness that no other local council thought what her council thought about the law. Everyone else accepted that the law was as it was, and indeed it was the law of the land. I am not blaming her for it; I was cheering her on. In those days, she did think that localism mattered, even in a matter so clearly a national policy. My problem with everything she has said is that I have heard it again and again, but normally from officials. Normally it is central government civil servants who sit there and say, “Better not, Minister. If you allow people down there to make decisions, you never know what might happen”. I would say this to her: you have got to start somewhere. Why can we not start here? After all, council tax is a local tax. It is ludicrous to say that the tax is local but the arrangements for the tax rebate should be national. I find that unacceptable and therefore I hope very much that the Ministers will not read out a concession or a helpful comment. I want the Ministers to be tough about this and say, “This is a matter for local authorities”. If local people don’t like it and think the local authority has not been generous enough or has not used the extra funds from something it is able to control—I hope that local authorities will be controlling more and more because I believe in localism—those local people have in their hands the ability to change the authority. This is exactly what has destroyed local government over the years, and my party has been as guilty of it as others. We are always frightened about giving local councillors the real decisions about things.
I do not want to go too much into the detail, but I can also argue that not all reasons for local council tax rebates are central and national. I can cite a lot of examples where the pressures and the concerns about vulnerability are different in some parts of the country from others. Rural areas have different demands with regard to vulnerability from close-knit communities. I merely say that one could go through a list of those.
I come now to the thing that really made me stand up. It was the use of the phrase “postcode lottery” by the noble Baroness. It is a Daily Mail argument that she should never use.
Lord Deben
We want postcode decisions, not a postcode lottery. We want local authorities to make their own decisions about their own communities and their own priorities. What has been wrong in this society for too long is the use of this ridiculous argument.
The noble Baroness says, “You may be on the wrong side of the line”. Well, frankly, that depends on what you think is the wrong side of the line. It may be that in a particular locality, scarce resources are used in a different way from the neighbouring locality. That does not mean to say that you are on the wrong side of the line, it means that you are on the wrong side of the line as defined by the noble Baroness. That is the trouble. Central government has always believed that defining these lines is the business of central government and never of anyone else.
When I was Secretary of State for the Environment I remember addressing a local government conference. When I said that I believed we should do nothing in Brussels that we could not do in Westminster, but what we had to do in Brussels we should do well, and we should never do anything in Westminster that we could do in county hall, but that anything we do in Westminster should be done well, I was cheered. When I went on to say that we should nothing in county hall that we could not do in district council offices, I was cheered again. But when I said that we should do nothing in district council offices that we could not do in the parish council, I was booed. Why was that? It was because everybody believes in subsidiarity—up to there. The moment you talk about subsidiarity below them, all hell breaks loose. The world will fall apart and vulnerable people will be totally stamped on—because we are the only people who know.
That was a very good example of “the man in Whitehall knows best”. It was always the purpose of centralists to claim that no one else could make decisions. I have been longing to say this about the postcode lottery and the moment has come, because it is exactly that which we are fighting against. I must say to my noble friend the Minister that, if she gives way on this, she will be taking away the fundamental element of proper localism; that is, you risk local people making decisions that are different from those that you would make. That is the challenge of localism. The noble Baroness has given us the opportunity to take the most difficult example and say, “No, here we stand”.
Baroness Hollis of Heigham
How then would the noble Lord explain why council tax benefit was originally included in universal credit and the White Paper, why all the planning assumptions were based on that and why it was only subsequently extracted in a deal between departments? How does this have anything to do with localism as a principle?
Lord Deben
It is because the Government have not gone far enough yet; that is the whole point. I would have a different structure, but the noble Baroness must not ask me to answer for the Government. I am lucky enough to be formerly a Minister and to be able to say one or two things which need to be said. I disagree with the noble Baroness, but she will find on other occasions that I am stalwart in support of some of the things that she says which this Government do not agree with. However, on this occasion, I beg my noble friend to stand firm.
Baroness Donaghy
I must admit that I enjoyed that. I even agree with one or two points that the noble Lord, Lord Deben, made. I look back to the days when local government had real power and it would be good if that happened again. Given the more centralist-inclined Governments that we have had during the past 30 years, that is probably not very likely.
As your Lordships will see, my name is attached to the amendment. That was a mistake; it was a case of mistaken identity. When the noble Baroness, Lady Browning, went to table the amendment, my name was put down instead of hers. I cannot imagine why, but I was very happy to keep my name on it even though I did not put it there. Incidentally, on the same day, having sorted out that one to our satisfaction, I sat down and found that my name had been added to a debate in the main Chamber on the misuse of alcohol. I was considerably more worried about that.
Baroness Browning
I would have been very happy to have had my name added to the debate on the misuse of alcohol.
Baroness Donaghy
I thought that there might be some misunderstanding, so I went to the office to sort it out and realised that it was the noble Lord, Lord Donoughue, who was supposed to be on the speakers list and not me. However, since then, my post box has been full of mail from organisations urging me to carry on my campaign against misuse of alcohol. That was to add a little to the fun.
I understand that the amendment, to which my name is attached, is to some extent a contradiction in terms, which is what I accused the noble Earl, Lord Attlee, of doing earlier on. If we get a national description of vulnerability, it will go against the spirit of imposing these varying cuts on different people. However, the whole point of the amendment is to show how difficult it will be to make judgments about who is vulnerable in different areas of society. I come from a town where, in the case of some kinds of vulnerability, people are treated very badly in the streets, being knocked over, booed, spat at and all sorts of things. There is not much understanding there. The local council may well attract quite a bit of support if those people are all cut from local council tax benefit.
Making judgments about what I would regard as a human right is a serious issue and should be compared with making judgments about, for example, the right of a local person to vote in or vote out their council. There is a worry there. What we are expecting at the moment is that councillors should do more and more for less and less resource, which is very much what Governments have been doing for quite a long time. This is the basic Hobson’s choice, with councils being asked to do an impossible job impossibly. They are going to be making decisions about work incentives, as I said earlier; they are being told to exempt pensioners, who in some areas are the majority of those who enjoy this particular benefit, and they are being asked to identify those considered vulnerable but given no guidance about it. All I have to say is that I am very glad that I am not a local councillor. It must be a horrible job to have to do. But if we are going to have a debate about centralism versus localism, let it at least be a comprehensive issue and not just a rather enjoyable debate of this kind. It should be one where we can genuinely ask where those decisions should be taken. When they interfere with people’s basic human rights, I think that there is a difficulty.
Lord Greaves
My Lords, I would not agree that being a local councillor is a horrible job, but it is quite often more difficult than people imagine. I have two fundamental questions that I want to raise arising from the amendment tabled by the noble Baroness, Lady Hollis.
In relation to what my noble friend Lady Rumbold said—
Lord Greaves
My noble friend Lady Browning, I am sorry. The noble Baroness is being mixed up with everybody today. I have been mixing them up for many years. I am coming to the view that perhaps we should close down this Grand Committee and go home, but we shall struggle on.
On the points that my noble friend Lady Browning made about local councillors, I believe that they will be able to make a good fist of this, but the problem is, as the amendment says, they will be making it on the basis of different criteria and views in different places. The question is whether that is a legitimate argument in favour of localism so well put forward by the noble Lord, Lord Deben, or whether it is a step too far.
The noble Lord attacked the postcode lottery, and I, too, cringe when I hear that phrase. It is an attack on localism and local decision-making by centralists everywhere, whether they are in the Daily Mail, the Labour Party or anywhere else. It is not a phrase that I would ever use, and it is something that I attack all the time. However, we do not want everything done at parish council level. I can imagine a situation in which the next time this country decides to go to war and invade a country such as Iraq the Army will be raised in a traditional manner by people going round and rounding people up whom they find in the fields and streets. Each parish council will be allowed to decide whether people should be rounded up from its parish, or not. That may be the way in which the Army is going with its cuts—that is the future—but I doubt it.
I am making a very important point, which the noble Lord, Lord Deben, made, that there are levels of government. I am a passionate localist and believer in subsidiarity, but I am also a federalist in the sense that there are different layers of government. The important thing is that each layer of government and democratic control should be responsible for those things appropriate to that layer. The noble Lord mentioned the European Union and Westminster, local authorities and parishes. The principle should be to push things down to the relevant levels. That is what I believe in. The argument is not whether everything should be done at parish level or even district council level—although I would be delighted with that, as long as we had the funding. The argument is what the appropriate level is to push things down to. The argument we have here is whether the council tax reduction—the council tax benefit, as it is now—should be a national benefit under which people in the country are all treated the same or whether that itself is appropriate to localism. On balance, I come to the view that it should be a national benefit decided at national level, precisely for the reasons that noble Lords have put forward. I do not think that that makes me any less of a localist.
The problem with the amendment was raised by the equally passionate speech of the noble Baroness, Lady Hollis, in moving it. She was speaking to the question of the level of the council tax reduction which will take place, whereas the amendment is about something more fundamental. The noble Lord, Lord Deben, explained the difference: it is about eligibility, not the level of the benefit. None of us have any hope of persuading the Government on the level of the benefit. I think that they are absolutely determined that it will go ahead on the basis that local authorities will make their own decisions. However, it ought to be possible to persuade them that the amendment has merit, particularly if the guidance was made on the basis not that it was government guidance of the traditional sort, which is actually an instruction which you disobey at your peril, but genuine guidance, where local authorities could improve the protection for disabled people—in other words, if the government’s guidance was an accepted minimum. Discussion might take place around that idea.
My second point was to go back to the 1930s. I am conscious that when I picked up the point made by the noble Baroness about the 1930s last week, Hansard thought that I had said the 1830s. Let me make it clear that I am talking about the 1930s, but the system was very much the same in the 1830s. The reason why the system of benefits was nationalised and the old localised Poor Law was abolished is that too many places were being too mean. The local position with the workhouses, and so on, was in some places unacceptable and therefore had to be raised to a standard level for everyone. The danger is that if you allow local authorities to decide on the level of benefit or, as we are now discussing, eligibility, some will behave in an appalling manner. That results in the wheel turning and rules and regulations having to be set out to prevent them doing that.
However, that was not always the case. There was at least one instance in the London Borough of Poplar in the 1920s, when it was run by a man called George Lansbury, when the local authority started to behave in a very generous manner and, in particular, started giving out relief—in other words, benefits in cash and kind that meant that people did not have to go into the workhouse but could continue to live in the community. The local authority was taken to court and to judicial review and was prevented from being too generous.
I say to the Government: be careful what you wish for, because the time will come, when economic growth resumes in this country, when it is easier for local authorities and other bodies to develop new schemes. Local authorities will have been given a power of general competence and at some time—who knows when?—there may be resources for local authorities to do things that central government think are outrageous because they are being too generous, not too mean. As I said, be careful what you wish for.
Baroness Lister of Burtersett
The noble Lord, Lord Deben, gave us a rousing speech, but I did not hear him address the argument made by my noble friend Lady Hollis, which is that the needs arising from vulnerabilities are not locally determined, they are the same, regardless of where a person lives. I wonder whether the noble Lord would argue that the Government were wrong to protect pensioners from above, because for some reason, pensioners are being treated as part of a national scheme whereas people below pension age, who may be just as vulnerable, are not being treated as part of a national scheme.
Lord Deben
I thought that I made it clear that the assessment of vulnerability does not necessarily have to be central . I do not happen to think that if it were local it would be any less unpleasant or pleasant than if it were done centrally. As to the comment about whether the Government are protecting this group rather than another, I was suggesting that this is at least one step in the direction in which local people can have some real control over what they want to do.
The idea that they will all be less generous than the Government seems to be rather rude about locality and it shows that in the end people do not believe in localism because they always think that people at the top will make a better decision than people at the bottom. I just happen to think that Suffolk County Council does it much better.
Baroness Lister of Burtersett
I certainly do not want to be rude about local authorities. Some things should be locally determined, but this is not one of them. I am sure that my noble friend Lady Hollis will return to that much better than I could.
I want to raise one point that I know will cut absolutely no mustard with the noble Lord: the position of people who move between local authorities, which some government policies encourage them to do. If there is no national guidance on vulnerability, they will not know how they will be treated when they move from one authority to another. The researchers in the report that I quoted earlier by Demos and Scope, said that they were struck by an “oppressive sense of uncertainty” that many disabled people were living with which,
“clearly jeopardised their emotional wellbeing”.
Without clear guidance, that uncertainty will be aggravated.
It is not only disabled people who feel uncertainty; it is part of living in poverty. There is a sense of insecurity and uncertainty. At least national guidance would allow people to know how they would be treated when they moved from one authority to another.
Lord Shipley
Perhaps I may raise one issue that we have not pinned down yet: whether the failure to define “vulnerability” may prove to be a legal issue that could be challenged through judicial review? I would appreciate the Minister's guidance in reply as to whether the Government are really happy that the failure to define “vulnerability” may actually prove to be a difficulty.
I think that vulnerability includes the working poor. They may not immediately be regarded as a vulnerable group, but in terms of all the benefit changes in welfare reform that are being implemented, they may prove to be seriously vulnerable. The Secretary of State should issue guidance on what “vulnerable” means. I think back to several long debates in the Localism Bill about what “sustainable development” meant. It actually mattered that we reached a common understanding. Without a common understanding between different local authorities acting in the spirit of localism, which I applaud, I fear that you may end up with judicial review from organisations that believe that their council has not properly considered the definition of “vulnerability”. It would therefore be much better if the Secretary of State issued guidance. That guidance could be advisory as opposed to statutory, but there needs to be a government view about this. Otherwise, we will head for some difficulty in the months ahead.
Baroness Sherlock
I would like to pick up where the noble Lord, Lord Shipley, left off because he made the point that I was going to make. I want to add just one thing. Irrespective of the debates about where the decisions should be located in general, the point about vulnerability is one that the Government brought into play. He said that the Government made a decision and said, in their own documentation:
“The Government has been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected”.
The Government have put this issue out there, so it is not unreasonable for a local authority to say, “What do you mean by ‘vulnerable’?”. I spoke to one local authority last week that was extremely concerned that, almost irrespective of what definition it chooses, it will end up being subject to legal review because it will exclude some people, and it cannot imagine any way in which it could do that that would not have that consequence. In responding, the Minister may point out that a local authority could choose to adopt the default scheme and therefore the legal responsibility would lie with the Government, but that would work only if the authority has the resources available to be able to make good the difference. It does not apply to any other scheme or variation of it that it could take on.
I am very much with the noble Lord, Lord Beecham, who pointed out that there is a very real risk, in addition to the legal point, that the Government are raising expectations by reassuring everybody that vulnerable groups will be protected without explaining what that means. That makes it even harder for local councils to justify whatever decision they take that is short of the total quantum of vulnerability that could be defined out there.
I will make one final point, triggered by something that the noble Baroness, Lady Browning, said. One of the difficult areas in policy and one of the reasons why some decisions should be made centrally is that some kinds of vulnerability are not seen on a sufficiently large scale in an individual area for local councils to be expected reasonably to understand them and make prescriptions about them. It is analogous, perhaps, to health policy where, in commissioning, there will still be certain kinds of rare conditions that are dealt with centrally. Sometimes there are good policy reasons, even if one is being localist, to have guidance coming from the centre so that people can reasonably be expected to understand vulnerabilities that they may not encounter every day. Can the Minister perhaps address that as well?
Lord Smith of Leigh
My Lords, I have found this debate and the ones previously on Amendments 76 and 76A fascinating. I need to remind noble Lords that I am still leader of Wigan Council. Therefore, for me, this is not a theoretical debate. I will have to determine a scheme within my authority, with colleagues, that will decide who is eligible, who is not eligible, which group will be regarded as vulnerable and which group will not be regarded as vulnerable. It will not be easy. I was going to say that it is not a zero-sum game, but I remind noble Lords that it is not even a minus 10% game; it is a minus 20% game if we exclude pensioners. So we are lucky in that sense.
I find myself agreeing with much of what the noble Lord, Lord Deben, said about localism. I recognise what he said and I agree with it. Where I would differ from him and what we need to recognise is that local authorities come at this with very different needs in terms of the number of people who are receiving council tax benefits, as has been said earlier, and the potential changes, as I mentioned earlier. I already know from being in this meeting that I have 100 more people who will be regarded as needing council tax benefits as a result of their factory closing this afternoon. So these things are changing all the time, and we need to recognise that.
I have had some interesting solutions to my dilemma from various quarters today, such as applying reserves. The noble Lord, Lord Beecham, is absolutely right. My treasurer is already coming to me to say, “You are going to lose probably £500,000 on your council tax collection because these people are not going to be able to afford to pay the cost, so you have to think about that”. We have talked about the problems of increasing demands on council tax benefits as it becomes a local thing, and I think that the noble Lord is right that we will do it much better than it is done at the moment, so that probably will encourage more people who do not claim at the moment to start to claim.
Earlier in this Bill we talked about the problems of business rates and the fact that they will have some risk element, so we will have to put that in. We talked about the flexibility of council tax, which is a very interesting phrase. Perhaps the Minister could let me know whether he means by “flexibility of council tax” that he is going to allow me to put the council tax up and is not going to require me to hold a referendum. I cannot believe that anyone sensible is going to say that they are going to have a referendum to put council tax benefits up: “Please vote for it and you will pay more council tax”. We would never win that, so it is not going to work.
We have heard that we should make further cuts. In my authority I am planning £66 million of cuts over four years. The Government thankfully gave me some warning and we have them in place. If I now have to make more cuts to accommodate all this—probably between £2.5 million and £3 million-worth—where are they going to come from? What have I got to do that I am not already looking at? I need to remind noble Lords that it is the vulnerable groups who rely most on councils’ services. If I cut services to vulnerable groups, they suffer. I can put up daily charges or raise the qualification for receiving social care. All these things affect vulnerable groups and there is no easy solution.
The difficulty for me is this. Presumably all the people we give council tax benefit to are regarded as vulnerable people, otherwise we should not be giving them that benefit. If we start to define vulnerability—here I echo what the noble Lord, Lord Shipley, said, as well as the comments of other noble Lords about the needs of different groups in communities—the danger is that we will define who are the deserving and the non-deserving poor. In the future, there will be people who get council tax benefit support and those who either get less or nothing.
A lot of vulnerable groups have strong lobbying sectors, but the ones who do not get that kind of support are the working poor. I remind the Committee that we are talking about a marginalised and alienated group in our society made up of people who do not vote very much at the moment. But they could be tempted to vote by extremists who say, “We will listen to you”. It is happening in certain communities. People are listening to those who are giving them false promises. We know that Respect, which was mentioned by the noble Baroness, the BNP or whatever group it is will offer things that they cannot deliver. The result of this Bill and the way we will have to design the council tax support scheme will drive more and more people to the political extremes. Are we doing a good job here?
Lord Best
My Lords, I am provoked to give a short preview of the amendments tabled in my name that are to follow—but not tonight. However, I thought I might briefly whet appetites because they relate so closely to what we are talking about. I see that noble Lords are all agog.
These amendments are about more localism. They are about removing some of the inhibitions on councils deciding precisely how they want to raise the funds that will pay the £400 million the Treasury is waiting for. They are about whether pensioners are included or not included as a vulnerable group being decided locally. This is the point made by the noble Lord, Lord Deben. In my full and unamended speech I will say that there are many grounds on which pensioners might already be treated slightly more favourably than some of the other vulnerable groups. I will contend that in respect of the groups that are considered to be vulnerable, local authorities should have greater discretion, and suggest that local authorities should also have greater flexibility in how they raise council tax, not only in respect of the current discounts for empty and second homes, but in respect of single person discounts. I will explain that if local authorities were allowed to vary the single person discount, currently fixed at 25% and set centrally by diktat from Whitehall, some might choose to reduce that discount across the board to 20%, meaning that all those who currently receive it would have to pay another 46 pence a week. It is not a vast sum, but it would raise more than the £400 million across the piece and make it unnecessary for us to define vulnerable groups and get ourselves into all kinds of tangles in reducing support for the very poorest in our communities. In advance of moving those amendments and in the context of this debate, I thought that noble Lords might like to hear the preview.
Lord Beecham
My Lords, we have had a longer and more entertaining debate than many of us thought we would have. We had the Browning versions, two of them, and we have had an interesting conflict between Norfolk and Suffolk. I hesitate to arbitrate between those two counties. In relation to the remarks by the noble Lord, Lord Deben, from time to time, I have been tempted to form a society for the preservation of the postcode lottery. In some areas of policy, it is absolutely the right line to take. We have had too much regimentation and prescription nationally about what should and should not be done.
However, we are not talking about policies here but about the people’s basic right to a minimum income. To take the point made by the noble Lord, Lord Deben, to its logical conclusion, we would have differential benefits across the piece. We would have different benefits for disabled people, pensions, child benefit and whatever up and down the country, determined locally. The noble Lord shakes his head, but where is the difference? The difference that he advances is that council tax is raised locally, but that is an irrelevance to the person looking at his disposable income that he has to deploy in support of his family. Where the localism part should come in—not the faux localism of the Poor Law—is that you would have a national basic minimum entitlement which, if the local authority thought it right, you could increase and enhance benefits. That would seem to be a reasonable application of localism because everybody is guaranteed a national minimum and locally the community may decide to augment it but, in our view, it should not be in a position to reduce it.
One of my noble friends, or perhaps the noble Baroness, Lady Browning, referred to Localising Support for Council Tax Vulnerable People. Paragraph 3.4, about equality information and engagement, states in connection with child poverty that:
“authorities will be required to take into account their local child poverty needs assessment”.
That is fine.
“Local authorities should be able to design localised council tax reduction schemes in a way that best suits local circumstances, tailored to what child poverty looks like”—
looks like—
“in the local area”.
I will tell you what child poverty looks like in any area. It is the undernourished child going to school, perhaps dependent on free school meals. These days, he may have to go to a breakfast club to get a breakfast. According to a recent survey, 50% of teachers are going into schools with food that they can distribute to the children. Child poverty is children going badly clothed, living in fuel poverty so the house is cold, and perhaps with dysfunctional families, although that is, of course, not simply a financial matter. This can occur anywhere. These children can be found in the city that the noble Lord, Lord Shipley, and I have represented and led and in the city that the noble Lord, Lord Smith, still leads. They can be found in villages in Suffolk, I guess, and in Norfolk, and in Kensington and Chelsea for that matter. They can be found anywhere. As my noble friend said, it is not locality that determines the character of poverty. It may possibly exacerbate a basic condition of poverty, but locality is not the determining condition, and it should not be locality that determines the basic support given to children in poverty or, indeed, to any other vulnerable group. To say that this is somehow an issue of localism is to pervert the proper definition of localism. The noble Lord has advanced a weak argument—from the best of motives because, in policy generally, he has a strong point. But in this area it is entirely misconceived.
Lord Deben
Let us take child poverty of the kind that the noble Lord described which is certainly true in some of our villages in Suffolk. It is up to the local authority to decide whether it is going to spend its resources making sure that those children all have a hot meal and all have breakfast rather than by having a special element in the council tax arrangements to deal with that. If the noble Lord feels that there is not enough elbow room for local authorities, I wish he would listen to his noble friend’s comments, because it seems to me that we should be pushing for many more opportunities for local people to have the resources to do the things that matter. How you deal with poverty in very distant rural areas is very different from the way in which you deal with it in Limehouse.
Lord Beecham
With respect, a decent basic family income is needed. That is the starting point. I entirely agree with him about the other things. Matters for local concern include how much should be put into the school meals service, what price should be charged for school meals, and how you promote the take-up of these benefits. That is a strong function of local government, particularly as the Government, as I said in a previous debate in Committee, declined to say, in answer to a parliamentary Question of mine, that they would make efforts to increase the take-up of benefits. The £1.8 billion of unclaimed council tax benefit—much of it, by the way, due to owner-occupying pensioners—is a matter that local councils could and should be promoting.
In my authority, I helped to initiate the welfare rights service in 1974, when I was chairman of the social services committee. Under administrations of different political colours, it has been a very successful authority in promoting take-up of one kind or another. However, that is not the same thing as having a sound basic income. Of course, some authorities have been looking at options. I have here 13 pages of options about local council tax support and one of them is to remove child benefit income disregards. At the moment, that is a national provision. That is one option that they are considering and no doubt they will be consulting, along with the other 40 or 50 recommendations, in the short time that they have before they have to implement them, as we heard earlier. The effect of that on 2,025 families would potentially be an average difference per week of £3.09. That is not a lot to anyone in this room but for people who are living on the margins, that £3 a week is quite significant. That is something that, under the dispensation of the noble Lord, Deben, that particular council has on the table, although I am not saying that it will choose that. I do not think that this is at all acceptable.
We are debating this matter in the Moses Room. We have Moses and the “Judgment of Daniel”. It occurred to me that the judgment of another of my co-religionists might have been relevant in these debates, the judgment of Solomon, as that is what we are looking at. We are looking at utterly impossible decisions about how you carve up—not in this case a child—child benefit or many of these other benefits. That is not acceptable in a modern society.
To return to the remarks made earlier this afternoon by the noble Lord, Lord Deben, there is certainly a balance between local and central. The Government are offloading responsibilities to localities in a way that is absolutely irrelevant to the needs of the people who most need that basic entitlement which, thank God, has been extended to them since we got rid of the Poor Law and that kind of local decision-making which was in the hands of a minority of people which so damaged the lives of generations of our citizens.
Baroness Hanham
My Lords, I refer to the comments just made by the noble Lord, Lord Beecham, and by one or two other Members of the Committee about the present situation. The noble Lord has defined people in poverty and children in poverty and what is happening now under a national scheme. It is not a scheme that is operated by local authorities but one that is operated nationally. I am sure that the noble Lord will have known of many people who have looked for disability allowance and carers’ allowance, who have not been granted them. Do not start by thinking that the current scheme is brilliant because it is not. There are certainly disparities across the country where there are different needs. There may be different needs in cities or in rural areas for children in poverty and children in need. It is for local authorities to decide where those vulnerable people are. There will be more disabled people and pensioners in one local authority than there will be in another. Would it not be right for that local authority to have the right to make the decisions on what is required and make a scheme according to what it knows and who lives in the area? We have had a long dissertation today on vulnerability but it actually turned out to be yet another go at the scheme itself.
The fact of the matter is that the council benefit scheme was removed entirely from universal credit and there is therefore not the slightest point in trying to equate the two and include the scheme again. We are dealing with a situation where localism and local authorities are going to deal with council tax benefit, otherwise there would not be any such benefit—or else there would have to be some form of top slicing to enable the money to be raised. Let us get real about this. Let us be absolutely clear what we are talking about. We are talking about putting the scheme locally because we believe—I accept that the Opposition does not—that local authorities can be trusted to develop schemes that are relevant to people in their areas.
The noble Baroness and one or two others talked about the dividing line between what happens regarding those schemes in Hammersmith and Fulham, Kensington and Chelsea, Rotherham and Preston. Local authorities are already administering schemes. They make decisions daily on criteria regarding who is eligible for one scheme or another. They do that in relation to children, old people, health and public health. They are making decisions all the time. Why say that they cannot make decisions on this? Of course they can and they consider what schemes they should put together.
The noble Lord, Lord Beecham, produced 20 options. If I was putting together a scheme such as this, I would expect at least 50% of the options to be totally unacceptable. I would know that they were totally unacceptable and that they would never get further than the discussion stage. However, you have to look at those options and take them into account. We need to shift this discussion on to the basis of looking at what local authorities are doing and what they need to do. The council tax benefit scheme is already there with its criteria and all its ramifications. Local authorities know what the current scheme involves.
I simply do not accept the arguments that have been put. I very much thank my noble friend Lord Deben for one of his rare but gallant performances, and for providing some sparkling entertainment between him and the noble Baroness who moved the amendment. The whole discussion turned into an interesting event.
I have screeds of notes that I can tell you all about. Let us start with the setting of guidance on vulnerability, which the noble Baroness, Lady Browning, asked to be included in the Bill. I do not know of any guidance in a Bill, but I know that guidance can be positively directed. The guidance is out today and people can look at it to see what it involves. There is no definition of vulnerability, which needs to be dealt with at a local level. Local authorities are already working within the definitions and they know what they are. Noble Lords look sceptically at me, but if local authorities do not do that, they are not very good local authorities and it is time that someone took a decision about having them changed. Local authorities are well aware of their responsibilities and the guidance will help practitioners to understand the statutory framework in relation to vulnerable people because that is already there. We discussed that earlier when my noble friend Lord Attlee was answering from the Front Bench.
The guidance will remind local authorities of the statutory framework in which they operate and their existing responsibility in relation to people who are vulnerable. Those responsibilities are also included in the statutory duty. Local authorities will have to take account of the equality duty; that is very relevant to the point made by the noble Baroness, Lady Lister, about disabled people. They have a statutory responsibility to look at that in making local schemes and to have due regard to the need to advance equality of opportunity between people who share the relevant protected characteristics. That is there and they will have to look at it.
I am sure that everybody here knows the relevant characteristics covered by the equality duty. They are age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, and sex and sexual orientation. The disabled fall very clearly within those criteria. The equality duty is not prescriptive about the approach a public authority should take in order to comply with its legal obligation. However, authorities do have to think consciously about the need to do the things set out in the aims of that duty. I am sure that local authorities will not want to be found wanting under those circumstances. Carers are already covered under the legislation—I think it is this legislation. They will have to be taken into consideration in the same way as part of this.
Baroness Sherlock
Under what legislation are carers to be taken into account? I am not sure what the noble Baroness is referring to.
Baroness Hanham
Oh crumbs, I will stop swinging from the lights. The council tax benefit regulations take carers into account and I am sure that local authorities would want to do that.
Lord Greaves
I apologise to my noble friend, who is doing rather well. In what context will council tax benefit regulations apply when council tax benefit is abolished?
Baroness Hanham
I suspect that they will stay in place, but I will answer that later. I will write to my noble friend. I do not want to be wrong because I am doing very well here.
Baroness Lister of Burtersett
It seems unlikely that council tax benefit regulations will apply once council tax benefit is abolished, so rather than prolong the Minister’s agony, perhaps she will write to us as to what statutory authority will ensure that carers’ needs are taken into account as part of the vulnerability guidance.
Baroness Hanham
I do not want the noble Baroness to think that any of this has put me into agony. We will write about council tax benefit; but it is all there under the default scheme.
I was asked a number of questions—in fact, there have been a number of stirring speeches—and I have already responded to my noble friend Lady Browning: I do not think that guidance will be in the Bill, but the guidance is there now and she can see what it is.
I am sorry that I cannot remember who asked the question, but I think it was the noble Baroness, Lady Hollis, about how the precepting authorities and the precepted authorities will work. There will be a requirement to consult: the billing authority will have to consult with the precepting authority to make sure that their policies are aligned. That seems to be the most sensible way of doing it and, presumably, if there is a great difficulty between one and the other, they will resolve it themselves.
Baroness Hollis of Heigham
My Lords, this is not a formality: I thank everyone who has taken part. In a way, the Committee caught alight on this, and it is good that that was on such an important issue.
The noble Baroness, Lady Browning, was right when she said that there was an issue about precepting and billing authorities, which the Minister referred to at the end: the knowledge is on one side and the billing authority is constructing the discount scheme on the other. The lesson that I suggest to the Minister that we take from that is a different one: that you should certainly consult and should have time to consult. She should therefore think again about her response and that of her colleague, the noble Earl, Lord Attlee, to my noble friend’s amendment about the ability to delay, because I assure her that it just will not be possible to get the schemes in alignment and, having done that, to move them out to public consultation all within the financial cycle, ready for introduction in April. That will not work. The Minister, as well as the noble Baroness, Lady Browning, has made our point for us in spades. I hope that as a result she will be able to review the Government's position on the amendment in due course.
I have the greatest admiration for the noble Lord, Lord Deben; on many issues we have been side by side and he was the Minister who, above all, stopped planning in local authorities being subject to the free market, a legacy bequeathed by his colleague Nicholas Ridley, a former Secretary of State for the Environment, which allowed many of us to protect our historic buildings, streets and centres. The noble Lord is in the book of the almost very good in most local authorities, and I am sure that he would want to keep that reputation intact.
No one doubts that planning is a local decision. Obviously there are inspectors and so on, but none the less it is local. However, when you have a number of elderly folk who need care and support and the local authority—rightly, in my view—makes a decision about whether it is more appropriate in its area to go for residential care or, possibly because it is a rural area, to go for extended domiciliary services, it is right and proper that one local authority should differ from another according to the geography and nature of the locality. The noble Lord and I have no differences about that; I was not in local government for 25 years to knock localism. That is why I bothered with it, as do many people in this Room today.
However, it is not a matter of centralism versus localism when you come to the individual entitlement to income. It is simply a different category. In planning, the planning authority is acting as umpire between local residents and car drivers. In residential care, it is a case of deciding how a particular type of need is best met, and many flowers may bloom. However, individual entitlement to income is a basic human right and not part of the proper territory of debate between centralism and localism. This is not about the clever people in the centre knowing best, to copy the noble Lord’s words—that really is an absurd statement—but neither do local people know best. Will the noble Lord argue equally that, because joblessness rises in a locality, unemployment benefit should be locally determined? I await his reply.
Lord Deben
Unemployment benefit does not relate to a local tax. We are talking about a local tax, and in a locality it would be sensible for a local council, for example, to say that the way to deal with child poverty in this area is to spend the money on providing the means for them to be fed because it had discovered that by doing it in another way the children did not get the food because the parents used it elsewhere. That is a perfectly reasonable thing for people to decide.
Baroness Hollis of Heigham
We could have another argument about whether to have cash or benefits in kind, but the point about income is that it is a national entitlement. We have accepted that for unemployment benefit, I think. Even though the lack of a job may arise because of the peculiar distinctiveness of the locality, we do not then say that, as a result, that should determine the level of unemployment benefit. Equally in housing, rents and policy are determined locally. Is the noble Baroness going to argue that housing benefit should also be a local benefit as opposed to a national one? I do not think so. The main argument that he has used is that because council tax is levied locally, council tax benefit should be structured locally. That takes no account of the fact that half the country is in two-tier authorities where they have no control over what the precepting authority may levy on the billing authority, yet the billing authority takes the problem, cost and moral responsibility for the discount scheme that runs. As a former MP for an area with a rural district council in Suffolk, the noble Lord will know that as well as anyone. His argument does not run in two-tier authorities—it cannot, because the council tax is not generated by the billing authority that is constructing the discount scheme, and any toughness in the scheme to impress on people what their value for money is does not relate to that particular billing authority.
Lord Deben
They do have control over it—they have an election. If they do not like what the county council has done they can vote against it. If the noble Baroness is really saying that the only system that people can understand is a single-tier system, she is making a mistake that is very much wider than this. Many people know which do what, and, if they do not like what one of them does, they vote against them in the local election, as we all know.
Lord Beecham
Does my noble friend agree that although there is a significant reduction in the amount of central government support for the benefit, it is still approximately 90% government funded? So it is going towards a council tax, but the funding is still essentially central. Unfortunately, some more of it will fall on the locality as a result of what the Government are doing, but the greater part is still centrally funded.
Baroness Hollis of Heigham
My Lords, that is absolutely true, even more so in two-tier authorities where 75% of the expenditure that falls on local residents is through the county council precept. The precepting authority does not have to do the same as the billing authority, which has to devise the discount scheme.
I understand the noble Lord, Lord Greaves, on the postcode lottery, because I would defend local decision-making as far as possible. The point here is that what a local authority has in terms of resources will depend on the accident of the demography of its particular locality. If only 30% of its population are pensioners, it will have to find a lower degree of cut on people’s working age than if 60% of its population are pensioners. That is an accident of demography. Equally, when anybody seeks help with their council tax discount, it will be determined not by their own efforts, their willingness to vote or the resources of the local authority, but by how many pensioners and other vulnerable people are ahead of them in the queue. That is not localism; it is rationing by queue, with central government having already determined that certain constraints, such as the number of pensioners, shall be imposed on the system. In that sense it is random—you need not call it a postcode lottery, but it is one. The size of cut that your locality will face is accidental, and it will not necessarily bear a resemblance to your particular need. Even though it may be identical in the neighbouring authority, it will experience a different income because the demographics will be different. That is not reasonable.
I suggest to the noble Lord and the Minister that if there were no proposition to find £500 million of cuts, there would be no such scheme about localising council tax benefit before us today. This is not localism; it is the exporting of cuts to localities by central government and then dressing it up in the fancy clothes of localisation issues, even though people’s needs have not originated by virtue of the locality and the random demography of that patch will determine who gets what. That is not localism. It is exporting cuts without any constraints, which will be experienced differentially by vulnerable people who happen to have been unlucky in the lottery of living in one authority rather than another. I regard that as deeply unfair.
As my noble friend Lord Smith said about where the cuts will fall, it is not about centralism versus localism but about the centre exporting its cuts. The noble Lord, Lord Best, may speak to his amendments on a subsequent day in Committee. The noble Lord, Lord Shipley, was absolutely right. Given this distinctiveness between local authorities, there will be judicial reviews. Mencap will run them if CPAG does not, according to how they are treated. They will probably have a very good case.
The Minister said that local authorities should, in her words, develop schemes that are relevant to their authorities. That challenges the core of my argument. She assumes that vulnerability and poverty are so peculiar and distinctive to a particular local authority as to justify separate local schemes. I simply do not accept that for one moment. Whether you are autistic, have a disability, are a carer with an elderly mum or are a child in poverty, it is not generated by your locality although it may be experienced in your locality. Given that it is not distinctive to your locality, it is not relevant to your local authority. Therefore, there should be a national scheme.
I leave the Minister with two questions. Who will she exclude from the scheme? We know that pensioners are automatically covered. Unfortunately, we have not had the pleasure of seeing the guidance because it did not come out on Friday but on the very day when we are sitting. Therefore, we cannot cross-refer to it, which is shame. The Minister says that vulnerable people will apparently be protected. The working poor will also need to be protected, so who is not? That is 100%. Who is not protected? Who does the Minister think should see their council tax benefit cut, given that pensioners, vulnerable people and the working poor and their incentives are protected?
Secondly, if there was no £500 million cut, does the Minister think that any local authority in the land would seek to establish its own distinctive council tax scheme and to pull it out of universal credit? She knows that would not happen. I have put two questions to her. She is welcome to respond to me—to tell me what is wrong with council tax benefit, who is already covered but should be excluded and whether, if we did not need £500 million of cuts, any local authority would touch this scheme with a barge pole. I think everyone in this Room today knows the answer to all those questions. They are not answers that enforce the Minister’s argument.
Baroness Hanham
I have answered the questions that the noble Baroness has asked me today if not on previous days. I am sure we will return to them. We have had an extremely wide debate today, although we are not over our time. I repeat that local authorities know very well who their local people who need help and support are. That is a very localist issue. The noble Baroness may not agree with me but those are my words on the subject. She gave me the opportunity to say so.
Baroness Hollis of Heigham
My Lords, I simply disagree. According to the knowledge of the local authority—or not as the case may be—individuals may see their entitlement to income support decreased. However, the time is late; I beg leave to withdraw the amendment.
Earl Attlee
My Lords, this may be a convenient moment to adjourn the Committee until Thursday at 2 pm.
House of Lords
Schools: Primary School Places
(12 years, 5 months ago)
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Baroness Jones of Whitchurch
To ask Her Majesty’s Government what action they are taking to create 450,000 additional primary school places across England before the next general election.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, while it is the responsibility of local authorities to manage the supply of primary places, we have doubled the rate of spending on primary school places from the levels we inherited. In addition, we have allocated a further £1.1 billion over the past year, bringing to £2.7 billion the total we have given to local authorities so far to support additional places. We are working closely with local authorities and will work to reduce costs so that every pound spent goes as far as possible.
Baroness Jones of Whitchurch
I thank the Minister for that reply. Can he assure parents that sufficient, properly designed classrooms will be provided to meet all this extra demand? Does he agree that it is unacceptable for teaching to take place in temporary buildings that are not designed for this purpose, as increasingly seems to be the case currently? Do the Government now accept the folly of cancelling the Building Schools for the Future project without having a comparative school-building programme in place? Why are they continuing to give priority to funding new free schools when are not necessarily sited in places of greatest demand and there still remains a shortfall in funding for the more urgently needed extra primary places?
Lord Hill of Oareford
My Lords, trying to work backwards, first, so far as free schools are concerned, of the primary schools that we announced on Friday with proposals to come forward for 2013, nearly 90% of those are in areas of basic need where there is a shortage of places. I agree that good design is important but do not accept that temporary buildings cannot be part of a solution. Local authorities need to be free to make the judgments that they think are best to respond to the pressures that they have locally. Generally, as I said with the figures that I have set out, we have doubled the funding we are putting into primary school places. The birth rate started to rise in 2002; it peaked in 2008; so the Government are trying to address a serious challenge in the problem of the growing numbers that we have inherited.
The Earl of Listowel
My Lords, is the Minister concerned about the number of primary school head teachers now nearing retirement and how to replace them? Are the Government looking closely at the pilot of 20 school leaders from primary schools in the Future Leaders charitable trust this year, which was so successful for secondary school leaders? Will the Government be looking at that and thinking carefully about how we secure sufficient highly skilled head teachers for primary schools for these 450,000 children?
Lord Hill of Oareford
Yes, my Lords. The quality of teaching in primary schools is obviously hugely important and I was encouraged to see today that, for the first time, the number of men applying to teach in primary schools has increased. I think all sides of the House would find that a welcome development. I agree with the noble Earl on the importance of the kind of example that he cites and I am sure we can learn lessons of the kind that he sets out.
Lord Tope
My Lords, is the Minister aware that the Greater London Authority’s population prediction shows that there will be more than 150,000 additional primary-aged children living in London in 10 years’ time? Is he further aware that, in addition to funding all the extra places necessary, a particular problem in London is where to put the new classrooms and the new schools? What will the Government do to help access to sites for new schools in London?
Lord Hill of Oareford
The noble Lord is right that there is a particular challenge in London with the availability of sites. We intend to work with local authorities to give them capital and to help identify sites. The responsibility for that resides with local authorities, but I agree that the Government must work with them and help to find ways of making sure that we can find as many sites as possible.
The Lord Bishop of Newcastle
My Lords, given the continued popularity of church schools, and noting that many are oversubscribed, will the Minister ensure that local authorities have regard to the balance of denominational places in an area by involving diocesan boards of education in decisions about where to target the extra funding that he has mentioned?
Lord Hill of Oareford
It is important that local authorities should make sensible decisions about where places are needed, irrespective of the type of school. The Government have made it easier for good, popular schools to be able to expand. Church schools, typically voluntary-aided schools, are their own admissions authorities and so have the ability to expand, but local authorities should address decisions about where to increase places irrespective of the school type.
Baroness Farrington of Ribbleton
My Lords, does the Minister agree that it would not be right for an academy to expand to take in primary school pupils, taking away sports facilities from that academy, in an area where the local authority, in Pimlico, says that there is not a need for more primary school places?
Lord Hill of Oareford
My Lords, I know the case to which the noble Baroness refers. With regard to new primary provision, in many cases where there is new free school provision coming in, there is a basic need. In the specific case to which she refers, it is also the case that we are trying to increase the supply of excellent places and the academy that is seeking to open a primary has done a brilliant job in turning around a school that was previously failing. It became a sponsored academy under the previous Government. If it can extend that to primary school children, I think that it will be doing a good job.
Baroness Sharp of Guildford
What proportion of children in primary schools, given the pressure on places, is likely to be in classes of more than 30 in the next few years?
Lord Hill of Oareford
I am not able to give my noble friend precise figures, partly because we are working with local authorities to get a better understanding of the particular pressures at a very local level. I am advised that the number of classes of more than 30 has been falling, but we will need to keep an eye on that and the legislation dealing with it remains in place.
Georgia: Public Services
(12 years, 5 months ago)
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Lord Harries of Pentregarth
To ask Her Majesty’s Government what lessons they are learning from the introduction of “one-stop shops” for public services in Georgia.
Lord Wallace of Saltaire
My Lords, the Government are always willing to learn from examples of good practice from overseas. I compliment the noble and right reverend Lord for highlighting the Georgia case. He may be aware that US Secretary of State, Hillary Clinton, has just made some very complimentary remarks about the Georgian public service halls. The wider public sector in the UK has already done a great deal on one-stop shops, working across organisational boundaries and making it easier for customers to access services in a more joined-up fashion. The implementation of the Government’s Digital by Default agenda will provide government information and services online and in one place that will be simpler, clearer and faster for users.
Lord Harries of Pentregarth
I thank the Minister for his reply. I am indeed aware of the Government’s desire to reform public service provision. As he has mentioned, the example of Georgia is truly remarkable. While driving to one such public service hall when I was there recently, our escort asked us for our details. When we arrived only 15 minutes later we were all presented with replica Georgian passports. This was just one example of their speed and user-friendly approach. Will the Minister encourage different government departments to look at the actual design of these halls, because whatever we have in the way of digital provision, there will still need to be a place where some people can go? Secondly, will he see if they can work together, perhaps with the Post Office, in such public service halls?
Lord Wallace of Saltaire
I congratulate the noble and right reverend Lord, Lord Harriesvili, on his new citizenship. On the question of design, I have looked at the pictures of some of these new public service halls in Georgia—they are magnificent buildings, on a scale that I do not think would be easily accepted by the media in this country; it is easier for a country that is coming out of a socialist era in the way that Georgia is doing. The Government are aware, however, that the Georgian provision depends heavily on using new technology, and that parallels exactly what we are attempting to do with the Digital by Default exercise.
Lord Haworth
My Lords, Georgia is a small, faraway country about which we tend to know very little, although today we now know a little more. The question raised by the noble and right reverend Lord, Lord Harries of Pentregarth, about the way in which Georgia has developed one-stop shops is extremely important. I was with him on the visit to the facility in Rustavi and I was also issued a passport by the Georgians in double-quick time. I also went to a similar facility in a small community high up in the Caucasus, where exactly the same provision is being extended. The modernised interface between public and state that these facilities embody is highly impressive. The Minister may not want to take it from me but he has already mentioned Secretary of State Clinton, although he did not quote her words about,
“very creative and impressive advancements”,
and “modern technological wonder”. Will the Minister reflect on this and possibly consider inviting a delegation of Georgians to come to this country to share best practice with us?
Lord Wallace of Saltaire
My Lords, I received a detailed briefing from the Georgian embassy this morning, as they discovered that I was due to answer this Question. We are doing a number of things that work in the same direction: we are looking at the provision of the public service estate, and the capital assets pathfinder exercise, working between central and local government, is looking precisely at how you can bring offices together so that services are integrated. In Hampshire, the new Havant public service village, which is the furthest along in this development, is a project that will bring together Hampshire County Council, Havant Borough Council, Hampshire PCT, Hampshire and Isle of Wight police, Capita, Citizens Advice and other voluntary sector partners in the same building. The aim is to transform public service delivery in Havant. That is very much the sort of thing that we have in mind and, incidentally, will save a considerable amount of space by the time it has finished.
Lord Wallace of Saltaire
My Lords, G4S is an international company but I have absolutely no idea whether it has yet been engaged in Georgia.
Baroness Hayter of Kentish Town
My Lords, we are about to have elections for police and crime commissioners, with material only on the web and no leaflets. Digital by Default, which the Minister has mentioned, will do for some, but there are a lot of people who need all sorts of things such as passports, licences and debt advice. Could the Minister go to Georgia himself or possibly send Francis Maude there to see what we could learn about people still needing face-to-face advice?
Lord Wallace of Saltaire
My Lords, I have been to Georgia three times in the last 15 years and would love to go there again. The speed at which our population is moving towards using digital services is quite remarkable and I find, as someone of the older generation—like everyone else here, if I may put it tactfully—the estimates of how many people will use digital services by preference in 10 years’ time very encouraging. However, as in Georgia and the Havant exercise, people who do not find digital access quite so easy will still need assistance to help them use facilities that are more easily available online.
Lord Shipley
My Lords, does the Minister agree that the £4 billion new investment programme announced today for our rail network needs to be accompanied by a more streamlined planning system and that following the abolition of the Infrastructure Planning Commission, the Secretary of State has become the one-stop shop for major projects? Will the noble Lord confirm that the planning process will be better as a consequence?
Lord Wallace of Saltaire
My Lords, that is a little wide of the Question. However, I did book my train tickets for the next two weekends from London to Saltaire online this morning so I am moving in the right direction in using digital means. In terms of planning, all I have done in respect of railways this morning is to check exactly what the Castlefield corridor, part of the new northern hub, is.
Baroness Knight of Collingtree
My Lords, is my noble friend aware that there is absolutely no need for him to go to Georgia, nor indeed for visitors to be brought over from there, when they have an excellent ambassador, from Georgia, here in London? I suggest that he talks to the ambassador.
Lord Wallace of Saltaire
My Lords, I am embarrassed to admit that I taught the current Georgian ambassador in 1995 and 1996.
Gibraltar
(12 years, 5 months ago)
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Lord Hoyle
To ask Her Majesty’s Government what has been their response to incursions into the British sovereign waters off Gibraltar by the Spanish Guardia Civil.
Lord Anderson of Swansea
My Lords, on behalf of my noble friend Lord Hoyle, and with his permission, I beg leave to ask the Question standing in his name on the Order Paper.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, the Royal Navy challenges Guardia Civil and other Spanish state vessels whenever they make unlawful maritime incursions into British Gibraltar territorial waters. In such cases, we also make formal protests to the Spanish Government through diplomatic channels, making clear that such behaviour represents an unacceptable violation of British sovereignty.
Lord Anderson of Swansea
My Lords, the Minister is well aware that in spite of the fact that Gibraltar territorial waters are recognised by the UN Convention on the Law of the Sea, there has been a considerable increase in incursions by Guardia Civil vessels into Gibraltar territorial waters. There were none in 2009, eight in 2010, 280 in 2011 and well over 160 this year. In light of that escalation, and to avoid any further increase, will the Government join the Gibraltar Chief Minister, the honourable Fabian Picardo, in challenging our good ally Spain to refer the matter for determination by the International Court of Justice or by the International Tribunal for the Law of the Sea? Otherwise, on behalf of Gibraltar, will we take the matter to those international courts ourselves for final determination?
Lord Howell of Guildford
The noble Lord is quite right about the increase in the number of these incursions. The problem about referring the issue to the International Court of Justice is that of course it requires all involved parties to agree to it, which does not appear to be in prospect. We believe that the right way forward is the one we are adopting, which is that the response should be measured, we should continue to press the Spanish Government very carefully and there is no point raising the temperature or tension in these matters, as they can be resolved by discussion. We would like of course to go back to the trilateral talks based on the Cordoba agreement, if we could. They were progressing, but that route, too, seems blocked. The way forward is, as I have described, to insist that these are unlawful maritime incursions and should not be accepted. We raise them in the strongest possible terms with the Spanish Government at every opportunity.
Lord Luce
My Lords, is the Minister aware that some 12 years ago, when I was governor of Gibraltar, we faced similar problems, and that there are lessons to be learnt from all this? In welcoming the setting up of the working party by the Government of Gibraltar to work with Spanish fisherman and environmental experts to try to find a way forward, will the Minister nevertheless assure the House that the British Government are providing whatever naval presence is needed to uphold sovereignty?
Lord Howell of Guildford
Yes, I can give that assurance, and there have been no complaints from the Gibraltar Government about the lack of adequate resources. There is the Gibraltar squadron, which has two patrol craft, some rigid-framed inflatable boats and crews. The responses they work out can be preceded by radio warnings, but they are effective and will continue, so I can give that assurance.
Lord Kilclooney
My Lords, has the increase in these incursions not really arisen since the European Union decided that, as regards environmental matters, the waters around Gibraltar were Spanish and not British? Is this being challenged and are the Government doing anything to expedite the court case?
Lord Howell of Guildford
I am not sure that that is the right analysis. That case, which continues, is about how these waters are designated as a European Union special site of community importance, and it is being disputed. The immediate pattern seems to have been that with the new Gibraltar Government the informal agreement which allowed Spanish fishermen certain opportunities to fish, entirely on an informal basis, has ended and the resultant tensions have been fostered by the fact that Spanish fishermen now come accompanied by Guardia Civil vessels, which obviously raise the tension further. That is the cause of the difficulty now. The other issue that the noble Lord raised continues to be disputed vigorously because these are British sovereign waters and any designation as an EU site will be the responsibility of the British and Gibraltar Governments.
Lord Roper
My Lords, will the Minister tell the House what other steps are being taken to resolve practical problems between Spain and Gibraltar?
Lord Howell of Guildford
There are a range of detailed practical problems that can and should be arranged and should be discussed. We would like to see a move back to the previous trilateral arrangements, which included the British Government, the Spanish Government and Gibraltar and were a good forum for making progress. At the moment, that is not encouraged and does not seem to be favoured by the Spanish Government, so I have to report that the linkages to deal with these smaller matters are really either informal or in small groups. No general strategy is being successfully carried forward, and we would like to see one developed.
Lord West of Spithead
My Lords, does the Minister agree that this escalation in events is quite worrying and that while one understands efforts to defuse the situation, we need to do more to get the message across that this is unacceptable? We might otherwise find ourselves in the position we were in on 15 July 1798, when HMS “Lion” took on four Spanish frigates, capturing one and sending the rest running—a position we would not like to be in again.
Lord Howell of Guildford
The noble Lord is absolutely right that it could develop seriously, but from the point of view of the Spanish fishing community, the Spanish Government, ourselves or the people of Gibraltar there is no interest in escalating this to the point of any kind of physical action. Therefore, we think that dialogue is the best way forward. We have good relations with the Spanish Government. My right honourable friend the Foreign Secretary met the Spanish Foreign Secretary on 29 May and discussed it, and we think this is the right channel through which to develop a better dialogue and to meet all these detailed issues, including the fishing incursions. Once we have solved them, we would take a broader view about whether Spain is going to co-operate closely with us and Gibraltar on the kind of trilateral regime we had before, but the first thing is to solve the fishing dispute.
Lord Swinfen
My Lords, what is done with the vessels that are caught illegally operating in Gibraltarian waters? Are they destroyed?
Lord Howell of Guildford
They are escorted and moved out of British sovereign waters by our patrol craft. They are asked to go and they go.
Syria: Olympic Truce
(12 years, 5 months ago)
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Lord Hylton
To ask Her Majesty’s Government whether they will propose within the United Nations that steps be taken to apply the Olympic Truce in Syria during at least the period of the 2012 Games, and if possible for the traditional 100 days.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, we are committed to the Olympic Truce’s ideals of conflict prevention and peace. In the case of Syria, the six-point plan of the joint special envoy, Kofi Annan, sets out clearly the steps to a ceasefire. This has not been implemented by the Syrian regime, despite its undertaking to do so. We are therefore pressing for full implementation of the Annan plan to stop the terrible violence in Syria and allow a Syrian-led political transition.
Lord Hylton
My Lords, I thank the noble Lord for his reply. It seems that the Annan plan has not been accepted in any way by the Syrian Government. Will Her Majesty’s Government consider barring access to this country for the Olympic Games to Syrian athletes, officials and even spectators unless they agree to a truce?
Lord Howell of Guildford
Anyone applying to enter the United Kingdom is treated according to our Immigration Rules. If an individual is currently the subject of a European Union or UN travel ban, they will not be able to come to the Games. However, I emphasise that this is a matter that relates to individuals, not to teams generally, groups or nationalities. I repeat: accreditation to the Olympics will be refused to any individual who may present a safety or security risk, or whose presence at the Games or in the UK would not be conducive to the public good.
Baroness Falkner of Margravine
My Lords, my noble friend mentioned the Annan plan. Amnesty International reported today that Syria is in a state of civil war. In his Statement to the House of Commons on 11 June, the Foreign Secretary said that if there was a full civil war the Annan plan would be set aside and the United Kingdom would move to a resolution in the Security Council. Are the Government co-operating with the French to do so next week?
Lord Howell of Guildford
My understanding was that it was the International Red Cross that raised the concept of civil war, although whether it is qualified to establish an accepted viewpoint is debatable. The British Government are looking at the issue in the light of what has been said and the continuing, horrific and totally unacceptable level of violence. I cannot say more than that at the moment. We have not reached a clear view on the point that my noble friend raised.
Baroness Symons of Vernham Dean
My Lords, the Question of the noble Lord, Lord Hylton, is topical for the worst of all possible reasons—we have heard of another appalling atrocity this weekend. I am sure that the Government are very concerned about these terrible reports of slaughter after slaughter, but will the noble Lord tell us whether, the Annan plan notwithstanding, any thought is being given to the creation of safe havens on the borders of Syria, where people can go when they feel that they are in such appalling danger? I am sure we all feel that this is a terrible situation, but we seem utterly stuck in it.
Lord Howell of Guildford
I can understand the noble Baroness’s feelings. On the broad issue, Kofi Annan is now in Moscow pressing the Russians who—with the Chinese—are a key part of this story, so that we can move to a Chapter 7 UN resolution. As for safe havens, of course thought is being given to these matters, but the noble Baroness knows that for them to be policed and operated on Syrian soil means the involvement of personnel and conditions inside Syria which simply do not exist at the moment. They would involve much higher risks and many more dangers than we face even at present. As to safe havens, the authorities in Turkey have created some refugee havens and areas to which many people have crossed the border and entered. However, safe havens and corridors within Syria have been considered but are not a realistic possibility as we see it at the moment.
Lord Bates
Although I share my noble friend’s revulsion at the events in Syria, the fact is that Syria is a co-sponsor of the Olympic Truce resolution which this Government have done so much to promote, and which this Government proposed to the UN General Assembly last year. These are desperate times and there is a case for desperate measures. Could not one of those measures be to use the Olympic Truce which comes into force on 27 July as the basis on which a delegation involving the previous proposers of the Olympic Truce, China, and the next proposers of the Olympic Truce, Russia, could go to Damascus under the auspices of the UN and the IOC to plead for Syria to honour this important commitment?
Lord Howell of Guildford
First, I acknowledge and salute my noble friend Lord Bates’ work in promoting the Olympic Truce ideal, which is widely supported. Of course, the British Government took the lead in co-sponsoring UN Resolution 66/5 on, “Building a peaceful … world”. The question that my noble friend rightly poses, through some very creative thinking, is whether we could not somehow involve China and Russia in joint action to mount more pressure on Damascus—indeed, on both sides in Syria—to cease their appalling and violent activity. A short while ago my right honourable friend the Foreign Secretary agreed with Mr Lavrov, the Russian Foreign Minister, a joint statement on co-operation on the ideals of the Olympic Truce. There is a basis there for further discussion. I am also sure that Kofi Annan will be raising the matter in Moscow now while we are discussing it here. The basic ingredients are there for something along the lines that my noble friend mentioned. However, I am afraid that it is a long haul ahead and there are many difficulties in the way. But the truce is a potential asset in trying to move forward and get a grip on this horrific situation in Syria.
Legislative Reform (Annual Review of Local Authorities) Order 2012
Baroness Garden of Frognal
That the draft Legislative Reform Order laid before the House on 10 May be approved.
Relevant document: 1st Report from the Delegated Powers and Regulatory Reform Committee, considered in Grand Committee on 12 July.
Further Education Institutions and 16 to 19 Academies (Specification and Disposal of Articles) Regulations 2012
Lord De Mauley
That the draft Regulations laid before the House on 24 May be approved.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 12 July.
Nationality, Immigration and Asylum Act 2002 (Authority to Carry) Regulations 2012
(12 years, 5 months ago)
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Lord Henley
That the draft Regulations laid before the House on 30 April be approved.
Relevant document: 1st Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 12 July
Smoke-free Private Vehicles Bill [HL]
Lord Ribeiro
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Supply and Appropriation (Main Estimates) Bill
(12 years, 5 months ago)
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Lord Grocott
My Lords, I rise only to reflect that if this were a fully elected House, the proceedings that have just taken us about 30 seconds would probably have taken us three weeks instead.
Groceries Code Adjudicator Bill [HL]
15:36 - Division on Amendment 2 - Ayes: 164 / Noes: 195 - Amendment 2 disagreed.
17:39 - Division on Amendment 11A - Ayes: 186 / Noes: 217 - Amendment 11A disagreed.
Lord Browne of Ladyton
Lord Browne of Ladyton
My Lords, as I explained on the first day in Committee, having set out to legislate in language that is,
“intended to be easier for everyone to understand”—[Official Report, 22/5/12; col. 761.]
that is, in plain English—it is arguable at least that the Government have failed that test in the first effective sentence, which is in the third line of the Bill. It reads:
“There is to be a Groceries Code Adjudicator”.
As I argued on the first day in Committee, I know no one who speaks plain English who uses that construction. This is not the most important issue that we will discuss in relation to this Bill but it gives your Lordships’ House an opportunity to discuss this issue of plain English, which occupied us intermittently throughout our debate in Committee. Unfortunately, we did not find a comfortable way in which to deal with all aspects of this and some of them may recur in our deliberations on Report.
In order to make my point, I attempted to improve this sentence by simply amending it to read, “There will be a groceries code adjudicator”. I was told by the Minister that that changed the meaning of the sentence and that the construction I had chosen was a prediction and not a statement of fact. However, she graciously agreed to take this matter away and to think on it. Perhaps I may say that that was not surprising because, arguably, the sentence:
“There is to be a Groceries Code Adjudicator”,
also appears to me to have an element of prediction about it.
However, the Minister having graciously offered that opportunity, I grasped it. I too have thought about this sentence. With the assistance of a conversation with the Bill team, I now propose an amendment which reads:
“A Groceries Code Adjudicator is established”.
Now neither of us is in the prediction business. We are in the present tense and this Bill will now establish a groceries code adjudicator, which I hope will find favour with the Government. At this stage of my short life in your Lordships’ House, I should be delighted if I were able to improve a piece of legislation. This is an opportunity for the Government to accept this amendment. I beg to move.
Lord Knight of Weymouth
My Lords, this side is entirely supportive of my noble friend’s amendment. I simply ask the Minister if she could briefly update us on her conversations with the noble Lord, Lord True, and his concerns about plain English and the sense of the preambles in the Bill, which were raised in the last moments in Committee.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the issue of plain English was raised at Second Reading. It was revisited at some length in Committee. The Government have considered this further. Noble Lords will recall that we discussed the possibility of saying, “There will be an adjudicator” or “There shall be an adjudicator”. I am glad to say that the proposal in the amendment in the name of the noble Lord, Lord Browne, is consistent with previous Bills and, I hope, clearer for those reading the Bill. In the spirit of this, and having heard the positions of several noble Lords in Committee, I would be happy to accept the amendment in the name of the noble Lord, Lord Browne.
As to an update on my conversations with the noble Lord, Lord True, I have a fulsome response for him later in the proceedings. Perhaps the noble Lord, Lord Knight of Weymouth, will kindly leave it until then for me to respond.
Lord Browne of Ladyton
My Lords, I hope I do not spoil the achievement of having the Government accept this amendment, but I cannot resist the temptation to express how delighted I am that I have managed to effect change to legislation in your Lordships’ House. I am absolutely sure that as we devote a substantial part of the immediate future to discussing the immediate future of your Lordships’ House, this will be cited as a historic moment in which the revising powers of the Chamber were exercised to the benefit of the ordinary people of the country.
Lord Grantchester
“The Groceries Supply Order
(1) The Secretary of State must make an order to establish the Groceries Supply Order by statutory instrument.
(2) The Secretary of State shall commission a review by the Office of Fair Trading, in consultation with the Adjudicator, into the effectiveness and scope of the Groceries Code to report no later than two years following the commencement of this Act.
(3) An order may not be made under subsection (1) until a review under subsection (2) is completed.
(4) An order made under subsection (1) is subject to the approval of both Houses of Parliament.”
Lord Grantchester
My Lords, I declare my farming interests on the register. In moving Amendment 2, I am also speaking to Amendment 26. Having investigated the grocery market on two separate occasions, the Competition Commission found that abuses of market power by retailers damage suppliers’ confidence and their ability to innovate and invest. In turn, this can lead to a reduction in choice and availability and increased costs to consumers. The Competition Commission in 2010 set up a strengthened code of practice and the Bill sets up the adjudicator to enforce the code. We wish to see it enacted as soon as possible.
In Committee, we debated the anomaly that the Bill creates the office of an adjudicator to hear and rule on complaints brought under the groceries supply code of practice, which itself is not on a statutory footing. It was also brought to the House’s attention by the Delegated Powers Committee that the code may be altered or revoked without any parliamentary involvement. This amendment seeks to clarify that Parliament will be able to scrutinise the code’s workings.
Notwithstanding the strengthening of the code in 2010, my noble friend Lord Knight of Weymouth gave further examples of the complaints not covered under the code. The Food and Drink Federation has also given examples of further abuse, such as the unilateral deduction of invoices without sound business reasons or prior agreement. The amendment requires that the Office of Fair Trading, which has competence for the code, must set up a review in consultation with the adjudicator into the effectiveness and scope of the code, to report no later than two years after the Bill becomes enacted. It is vital that the workings of the code are updated and are relevant and responsive in an organic sense to changing market conditions.
Last Wednesday, more than 2,500 dairy farmers came to Parliament to make public the cuts and their concerns about a drop in prices of more than 10% on short notice this spring. At present, this situation is not covered by the code, which only covers the relationship between the top retailers and their immediate suppliers. The code does not cover the whole supply chain. The downward pressure from supermarkets is simply transferred from suppliers to their suppliers. The response of supermarkets to seeing their suppliers reduce prices down the supply chain is to immediately demand a share of the margin created—that is to say, a further reduction to their prices.
This is not the first or an isolated example in the dairy industry. In response to a similar situation in 2002, my noble friend Lord Whitty, when he was Minister of Agriculture, set up the Dairy Industry Supply Chain Forum to encourage relationships through the supply chain. That was 10 years ago. It is disappointing that the dairy industry has not improved over that time. The problems persist.
In response to the EU dairy package, the Minister of State in another place seeks a voluntary code, through Dairy UK, between processors and their suppliers. Indeed, in reply last Wednesday to a question from the noble Baroness, Lady Parminter, the Minister—the noble Lord, Lord Taylor of Holbeach—confirmed the situation. My understanding is that the issues covered are rather limited and unlikely to solve the problems. The Minister says that, without voluntary agreement, he will legislate, but my understanding is that that is not believed. He should legislate. This amendment gives him two years to make it work. If after a review we find that the situation has not improved—and we have seen no evidence over many years of any improvement—the OFT will be able to take effective action, highlighted by the experiences of the adjudicator.
I have highlighted the situation in the dairy industry. I am told that similar problems occur in other sectors. The amendment seeks to give the adjudicator and the OFT wide scope to make an effective code of practice work throughout the supply chain. I beg to move.
Lord Cameron of Dillington
My Lords, I first declare my interest as a farmer. I put my name to the amendment because it is important that we remain as flexible and light on our feet as possible in changing circumstances in this area. The effectiveness of the groceries code adjudicator is dependent on the effectiveness of the code. Both are equally important. It is surprising that while the adjudicator and his role are continually under review in Clauses 15 and 16, the review of the code is not given such emphasis.
Clause 13 in its simplicity is not sufficient. It sets out what the adjudicator could do but does not give me any confidence that anything will happen. It is important that as the adjudicator gains more experience, and as all the players inevitably try to push the rules to the limit, we should be able to review their roles and the rules involved. Circumstances change. The rules of rugby change from year to year and from time to time. The rules of Parliament relating to MPs’ and Peers’ expenses change. There are always new problems to be dealt with and overcome. We need to ensure that we can overcome the shortcomings in a structural way—hence subsection (2) of the proposed new clause.
The noble Lord, Lord Grantchester, mentioned the problems of the dairy industry. I do not know whether any review of the dairy code in the light of these recent developments would necessitate change, but the matter would certainly be worth looking at. It is vital that the groceries supply code of practice is not set in concrete. The amendment represents the necessary Kango hammer to free it.
Lord Whitty
My Lords, my Amendment 31 is in this group. I apologise to the Minister and the House that I was only a passive presence at Second Reading, and even more passive in Committee, despite my long-standing interest in the subject. I wish the Bill well and I am glad that the Government brought it forward.
I will resist the temptation to give my Second Reading speech now. I will say two things. First, as my noble friend Lord Grantchester said, it is 10 years since I started grappling with this issue and urging the noble Baroness’s predecessors, the competition authorities, to take this seriously. We have had the code since then and this begins to give it serious teeth.
Since I left office as a Minister I have also been a consumer champion. Occasionally I was leant on to say that it was not in the interests of consumers to have a go at the supermarkets by means of the groceries code. Supermarkets have made a very impressive contribution to consumer benefit, in terms of choice, price and convenience. However, it is not in the interests of consumers, even in the medium term, for part of the supply chain to be wiped out, or for supply at the retail end to be restricted in terms of competition if that is done by a large-scale operator. Consumers have benefited from supermarket activity, but they would not benefit from the supermarkets overstretching their ability to control the market.
It is also true, in defence of supermarkets, that it is not only they who could abuse their power in the supply chain and engage in the kind of activity that they are accused of, and which my noble friend and others referred to earlier in our debates on the Bill. As we know with the current situation of milk production, there is a question mark over the behaviour not only of supermarkets but also of large milk processors. My amendment does not seek immediately to broaden the scope of the code but it suggests that, were Amendments 2 and 26 adopted—in other words, were there to be a review—it may well be that it is not just the large retailers that should be included within the code’s provisions. In those circumstances the Minister would not have to wait another 10 years for primary legislation to extend the code and the adjudicator’s powers but, in the light of the reviews required by the other two amendments in this group, would be able by order to extend the provisions of the code to other large operators within the supply chain. That would be beneficial to the small suppliers; it would also give some clarity and restraint to those who were tempted to overuse their monopsonistic or oligopsonistic powers within the food chain. It would be an improvement to this Bill if the possibility of so doing were included in the primary legislation at this stage, rather than have to come back to it in a few years’ time.
Baroness Wilcox
My Lords, I understand that the noble Lord, Lord Grantchester, is eager to see a living code that will be responsive to the adjudicator’s experience of the groceries market. Other noble Lords have said they feel the same way, and I understand those concerns. I would like to discuss the noble Lord’s specific amendments but shall first address the issue of principle at stake here.
The adjudicator should clearly be responsive to needs within the industry, not only by prioritisation but by clarifying the code through advice and guidance. The adjudicator should also be able to use their front-line position to raise issues with the competition authorities, which are responsible for the groceries supply order and the groceries code contained within it.
As the noble Lord, Lord Grantchester, has said, the specifics of the dairy industry are being considered elsewhere in government. The adjudicator is not intended to address every problem in the sector, and the adjudicator’s role is clearly limited to the relationship between retailers and their suppliers under the groceries code.
Nevertheless, proposals in this grouping go beyond this natural evolution of the code’s interpretation, and risk undermining the basis for the code itself. Those involved in ensuring that this Bill reached Parliament—campaigners, Select Committee members or Ministers—have emphasised that the justification for this Bill lies in a rigorous market investigation and a finding by the independent competition authorities. This justification would be severely undermined if changes to the code were made without proper process through the competition authorities.
This principle goes beyond the issue of the groceries market and concerns the competition regime as a whole. It is a fundamental principle of the competition regime that remedying competition problems should be addressed by the independent and expert competition authorities, rather than directly by Ministers or Parliament. Oversight of these remedies is likewise the responsibility of the independent competition authorities.
This was at the core of the reforms introduced by the previous Government in the Enterprise Act 2002, which removed Ministers from competition decisions. As the then Secretary of State said at that Bill’s Second Reading:
“The Bill therefore provides that, in the vast majority of cases, with the exception of national security cases only, decisions will be taken by independent competition authorities, free from political interference”.—[Official Report, Commons, 10/4/02; col. 45.]
This principle is continued in the Government’s further reforms set out in the current Enterprise and Regulatory Reform Bill. Although the competition authorities are rightly accountable to Parliament for their overall performance, this is quite different from Ministers or Parliament debating or overseeing particular remedies.
In the case of the code, this means that responsibility for oversight of the code lies with the Office of Fair Trading under Section 162 of the Enterprise Act, not with the adjudicator, as Amendment 26 would have it, nor with the Secretary of State or Parliament, as Amendment 2 sets out. Equally, it is for the competition authorities to decide whether or not to amend the code—not, as the noble Lord, Lord Whitty proposes, the Secretary of State.
I remind noble Lords that the adjudicator has a statutory duty to make recommendations to the OFT if he or she thinks the code should be changed. This provides a flexible way for issues to be escalated whenever needed and therefore contributes to a truly living code, while respecting the existing structure of the Enterprise Act.
Lord Knight of Weymouth
I am struggling with the Minister’s argument that the amendment in my name and the names of other noble Lords jeopardises the independence of the decision-making. All we are seeking to do in Amendment 2 is have a review by the Office of Fair Trading. There is no presumption about what the outcome of the review would be; we are just suggesting that there should be a review. And in Amendment 26 all that is being suggested is a slight change in emphasis. I respectfully suggest to the noble Baroness that it ought to be a happy compromise for the adjudicator to report annually on the effectiveness of the code. If the adjudicator independently thinks that the code is working fine, he or she should say so. If he or she thinks that there is a problem, he or she should say so, every year.
Baroness Wilcox
I hope that I have not been too wordy in my response. It is just that there was a real point of principle here. I felt it was worth going over the ground to make sure I had made it clear that we did not feel that these amendments were relevant at this time. I repeat that responsibility for oversight of the code lies with the Office of Fair Trading under Section 162 of the Enterprise Act, not with the adjudicator, as Amendment 26 would have it, nor with the Secretary of State or Parliament, as Amendment 2 seems to set out. Equally, it is for the competition authorities to decide whether to amend the code, not the Secretary of State, as the noble Lord, Lord Whitty, proposed. I hope that I have clarified the Government’s position.
Lord Whitty
We accept that the primacy of the competition authorities in these amendments could be clearer and that the precise wording may not be appropriate. Can the Minister not agree to take away these amendments and write them in such a way that makes the competition authorities’ role clear while establishing the principle of a review and the fact that that review might recommend an extension of the code? That is a point of substance. I take the point of maintaining the role of the competition authorities but a relatively minor amendment from the Minister at a later stage might help.
Baroness Wilcox
I am always nervous arguing with the noble Lord, Lord Whitty, given his experience as a Minister and the fact that he was head of the National Consumer Council, a role that I also held. I know the breadth of his knowledge on this subject, which is why I took such a long time to give my answer. This is as far as I can go. I hope that when the noble Lord reads in Hansard that the Bill already requires the adjudicator to recommend changes to the OFT, he will see that I have covered most of his worries and that he will withdraw his amendment.
Lord Grantchester
My Lords, we agree that the code is a responsibility for the OFT—that is not in dispute—but we believe that the Minister is getting involved in the EU dairy package between the processors and the dairy farmers. We think that makes her reasons for not accepting the amendment slightly disingenuous. It may be that at Third Reading we can further refine this amendment so that her officials are as happy with it as we are, but we wish to enshrine in the Bill a review, and one that looks into the possibility of an extension of the code throughout the supply chain. I thank the noble Lord, Lord Cameron, and my noble friend Lord Whitty for their support. I do not hear a large volume of support behind the Minister so I beg leave to test the opinion of the House.
Lord Knight of Weymouth
Lord Knight of Weymouth
My Lords, the amendment in my name and that of my noble friend Lord Grantchester relates to the role of Parliament in respect of the new office of the groceries code adjudicator. In pushing the amendment which we discussed in Committee and bringing it before the House today, we do so, believe it or not, in the spirit of the coalition agreement. I remind noble Lords that the coalition agreement stated:
“We will strengthen the powers of Select Committees to scrutinise major public appointments”.
In Committee, I reminded noble Lords that that followed manifesto commitments from both the Conservative Party and the Liberal Democrats at the election.
Since we met in Committee, a letter from the noble Baroness’s ministerial colleague, Norman Lamb, to my colleague in the other place, Ian Murray, has to some extent further clarified the Government’s position. Mr Lamb writes that,
“the Government believes that posts which should be subject to pre-appointment hearings will generally be senior non-executive roles which either: play a key role in regulating Government; play a key role in protecting and safeguarding the public’s rights and interests particularly in relation to the actions and decisions of Government; or where it is vital for the reputation and credibility of the public body in question that the post holder, and is seen to be, independent of Ministers and Government”.
I think that the Government need to reflect on whether the BIS and EFRA Select Committees should have a role in confirming the appointment of the groceries code adjudicator, given what the Government are saying. The new office that we are establishing in the Bill is important. It is something which has to have a certain reputation and credibility, and which has to be independent of Ministers and government. I think that this office passes the tests that Mr Lamb sets out in his letter to Mr Murray, although I know that the Minister himself does not agree. He goes on to say:
“The Government does not consider that the groceries code adjudicator, though very important to the groceries sector, would fall within these categories”.
I think that the Government need to reflect on this. I am not going to push this to a vote today, because this is the sort of concession that the Government should want to make to the other place as it is their Select Committees that will have a role in confirming the appointment. However, I would strongly advise, if the Minister is willing to take advice, that this amendment is entirely in the spirit and wording not only of what the coalition agreement, her party’s manifesto commitment and her coalition partner’s manifesto say, but of what, in effect, at least one of the tests that Mr Lamb sets out in his letter to Ian Murray says. I therefore beg to move, for the sake of the debate.
Lord Borrie
My Lords, I support my Front-Bench spokesman who has just introduced this amendment. I hope I am right in thinking—the Minister will no doubt correct me if I am wrong—that the Bill currently going through the other place requires that the head of the proposed Competition and Markets Authority should be appointed by a Minister with the approval of the appropriate departmental committee. If that is so, and I am glad to think that it will be so, it emphasises the point that the Minister made in relation to the last amendment—namely the need to firmly establish the competition authorities’ independence of Ministers. She kindly said that this followed the Enterprise Act of the previous Government in their efforts to emphasise the independence of the competition authorities. It seems to me unduly subtle to say that the head of the Competition and Markets Authority, which is to be created shortly, is of a higher calibre of significance and importance than the groceries adjudicator. It is true that the groceries adjudicator’s role is narrower than that of the Competition and Markets Authority but, none the less, it is significant in its field. Indeed, the Government’s whole introduction of the Groceries Code Adjudicator Bill is based on the notion that, in a certain area of significance to the consuming public—supermarkets—the independence to be achieved by the appointment of this adjudicator is of some importance. I therefore hope that the Minister will agree with my noble friend who has introduced this amendment.
Lord Cameron of Dillington
My Lords, I am not so certain about this amendment—in fact, I think that I oppose it. If your Lordships have ever been involved in the appointment of a public post you will know that the criteria are very strict and there are many hurdles to be jumped, with independent assessors sticking strictly to the criteria and two or three interviews. I therefore think that this extra hurdle is an unnecessary piece of red tape. I know that it is common practice in the United States, for instance, to throw candidates for this sort of posts to the wolves before they have even got their feet under the table—the wolves, by the way, are the Select Committee—but I think that this is unnecessary. We want someone who is rational, methodical and good at making judgments in a legal or semi-legal context. We do not necessarily want someone who is used to the hurly-burly of political life and who might have to understand that when an MP is being rude to him he does not mean it. He is either showing off or trying to make a name for himself and just getting carried away.
I am opposed to the amendment. Perhaps that is simply because I do not have a particularly high opinion of MPs’ ability to take the right sort of decisions in this instance. It is better to leave it up to the usual channels to appoint a valid candidate who will really be able to do a good job.
Baroness Wilcox
My Lords, before I get any further I would like to thank the noble Lord, Lord Cameron, for supporting me, and I will of course respond to the noble Lord, Lord Knight, as well. First, however, I would like to respond to the noble Lord, Lord Borrie, by saying that the role he mentioned is much more significant to the economy as a whole; whereas this role, as he acknowledges, is much more specific, and as such we do not feel that the same type of scrutiny is required. I say to the noble Lord, Lord Knight, that I still feel that it would be inappropriate to lay down in primary legislation a requirement for Select Committee oversight. The procedure for pre-appointment scrutiny was clearly set out in the document published at the time of the previous Government and involves discussion between the Secretary of State and the chair of the relevant Select Committee, not primary legislation. As for whether the adjudicator is a significant enough office to warrant pre-appointment scrutiny, I consider that, despite its importance to the groceries sector, it is not significant enough according to the criteria set out by this Government. However, as any scrutiny would ultimately take place through a committee in the other place, I am sure that if the other place feels strongly enough on this topic then there will be further discussion on the issue at a future stage there. For the moment, I ask the noble Lord to withdraw his amendment.
Lord Knight of Weymouth
My Lords, the noble Lord, Lord Cameron, clearly has a relatively low opinion of MPs, which may be shared by others. I would not wish to test that for one moment. The Minister is probably right that it is up to the other place to try to assert the reputation of Members of Parliament, perhaps by shifting on this issue. The noble Baroness said that it is not general practice to set out Select Committee oversight in primary legislation. I am comfortable enough with that. If her ministerial colleague Norman Lamb is happy, when the Bill reaches the other place, to stand up and say, “Let’s please not put this in primary legislation, but we will refer it to the relevant Select Committees for confirmation”, that will do me. If the noble Baroness does not want this to be in primary legislation, that is fine. On the basis that the proposal lives to fight another day elsewhere, I beg leave to withdraw my amendment.
Lord Browne of Ladyton
Lord Browne of Ladyton
My Lords, the effect of this group of amendments is to anticipate the passing into law of the Enterprise and Regulatory Reform Bill, which my noble friend Lord Borrie referred to in the previous debate and the provisions of which will combine the competition authority with the Office of Fair Trading. Those two bodies will be merged to create the Competition and Markets Authority. In Committee I spoke to a similar group of amendments but I did not press them too hard because I anticipated that I would be met with an argument that those amendments were premature, the Enterprise and Regulatory Reform Bill being at the early stages of its passage through Parliament. I was not disappointed because the noble Baroness explained in reply that that was exactly her position. I refer noble Lords to col. 99 of the Official Report of the first day in Committee.
The Government’s opposition to this group of amendments was one not of principle but of timing. The noble Baroness pointed out that as the Enterprise and Regulatory Reform Bill had not yet received a Third Reading in the other place—indeed, I think that it only goes into Committee tomorrow in the other place—it would be presumptuous of the Government to accept an amendment at this stage, and that she or another Minister would table similar if not identical amendments at a later stage once the Enterprise and Regulatory Reform Bill had matured and crystallised sufficiently for such amendments not to be presumptuous.
Baroness Wilcox
My Lords, on the amendments tabled by the noble Lord, Lord Browne, I appreciate that the Competition and Markets Authority, when established, is likely to take on the functions of the OFT and the Competition Commission that are relevant to the adjudicator. The Bill will eventually need to be amended to reflect this. We were very grateful for the noble Lord’s understanding attitude in Committee and suggested that these amendments should be considered at a later stage of the Bill.
Last week, the Enterprise and Regulatory Reform Bill passed through Committee in the House of Commons but is still some way from enactment. For this reason, the Government believe that these amendments are still somewhat premature. Furthermore, I ask noble Lords to note that Clause 58 of the Enterprise and Regulatory Reform Bill includes a power to make consequential amendments to enactments, including enactments made in the same Session as that Bill. Even if this Bill were not amended during its passage to refer to the Competition and Markets Authority in place of the OFT and the Competition Commission, that power could later be used to bring it into line following enactment. Today the noble Lord has asked why the same approach is not taken on every Bill. The answer is that each Bill is different and the Government will consider what approach to take on a case-by-case basis. In this case, where it is relatively easy to amend either Bill at a later stage, the Government have decided to amend it at that later stage and I therefore ask the noble Lord to withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am grateful to the Minister for responding to my amendments in what I suspect is the only way that she could. I am reminded of an experience that I had when I was a young solicitor with a client who had a dreadful drink problem. On one occasion I met him in the cells of the local sheriff’s court, and he had a summons for being drunk and incapable and a summons for breach of the peace. I asked him how he was pleading and he said not guilty. I said, “What’s the defence?”, and he said, “As far as breach of the peace is concerned, I was so drunk that I couldn’t speak, so I could not have been shouting and swearing. I am an alcoholic”. I said, “What about the drunk and incapable?”. He said, “I’m teetotal. I don’t drink”. I said, “These defences would appear to be inconsistent”. He said, “But you’re a young man at the beginning of his legal career. You will learn that two separate cases have two separate defences”. I am struck that to some degree my life has come full circle.
I do not intend to press this to the vote at this stage, but I hope that at some point the amendment, along with the position that the Minister has been put into in trying to defend these contradictory positions, may encourage those who draft legislation to be a wee bit more consistent. I beg leave to withdraw the amendment.
Lord Whitty
“(3) If a trade association or other third party refers a dispute to arbitration, the Adjudicator may—
(a) accept appointment as arbiter;(b) appoint another person to arbitrate;(c) dismiss the dispute referred as trivial or vexatious or providing insufficient prima facie evidence.”
Lord Whitty
My Lords, the amendment goes back to the basic problem about the relations within the food supply chain between the supermarkets and small and medium-sized suppliers and all the attempts to enforce the code and its predecessors without statutory backing. Whether we like it or not, there is an atmosphere of apprehension, anxiety and fear among small suppliers to supermarkets, and a feeling that if they raise problems with the supermarkets under the code, they are in danger of retaliatory action at some later stage—their contracts will be ended, curtailed or put on to a less beneficial basis.
I am aware that this was discussed in Committee and indeed there have been discussions about it since it was first raised, but Clause 2 still appears to allow disputes to be referred to the adjudicator only by the supplier themselves or, alternatively, by the large retailer. My amendment would explicitly allow a case to be referred to the adjudicator by a third party—an appropriate trade association or a farming union—and this would relate to issues that covered more than one supplier, or perhaps only one supplier but where there were general implications of the outcome of that particular case. The amendment would allow third- party initiation by a trade association or farming union but possibly also other third parties that were appropriate—for example, an agricultural charity.
This would not be an open-ended requirement. As with the large retailer, the adjudicator would not have to take the case under this amendment. While Clause 2 requires the adjudicator to take a case from the supplier, although not the large retailer, my amendment would give the adjudicator sufficient grounds for not taking it, on the grounds either of it being trivial or vexatious or because of a lack of prima facie evidence. The argument that this would be used against the supermarkets on spurious grounds by campaigners who were opposed to supermarket activity in unrelated fields would not be a good reason for rejecting the amendment. It would relate to genuine supplier problems but it would protect the supplier, the farmer and the small business from the fear of being retaliated against at a later stage. It would support that supplier if the NFU or trade association took up the case.
I appreciate that the Minister may not like the wording—her officials rarely do—but this must be something on which she could go a little further than she did in Committee to assure us that third parties could take such cases. Only that, I feel, would put an end to the apprehension and the fear among small and not so small suppliers, which are at a serious disadvantage with supermarkets. They would be protected under this code and other legislation. I beg to move.
Lord Browne of Ladyton
My Lords, I will speak to the amendment standing in my name, which seeks to insert a mechanism for ensuring the independence and the qualifications of an arbitrator appointed under the code by reference to the provisions of this Bill. It generates, I would argue, a valuable opportunity for the Minister to explain a very complex part of this legislation, which, without an explanation in the Official Report of our deliberations, I fear may not be understood by those who come to apply, or seek to apply, the provisions of this Bill in relation to the code.
As we have already heard, this is a unique piece of legislation, because the basis of it is a code that is owned by the Competition Commission. If the code is repealed, then all this legislation becomes redundant. I embarked on the amendment of this particular part of the Bill because of my then limited understanding of both the arbitration legislation as it applied in England and Wales and the Arbitration (Scotland) Act 2010, which has been passed by the Scottish Parliament and, in part, now applies to Scotland, but which is not yet fully commenced. I was unsure how all these things interacted, but I was certain that at some stage it would be necessary for the Government to make it perfectly clear that the provisions of that legislation, which were carefully debated and thought through both in this Parliament and the Scottish Parliament, and were designed to generate an independent and properly qualified process of arbitration, would properly be applied to this legislation when enacted and to the processes that it was creating. The more I got into it, the more I began to appreciate just how important that was.
With the leave of the House, I will take a few minutes to explain some of this complexity but will leave it to the Minister to explain how all this works. In my discussions with the noble Baroness and her Bill team, both of whom have been extraordinarily generous with their time and in explaining this, we have between us uncovered areas in which this Bill and the code could be improved. I have not endeavoured to do that in this particular amendment, and have removed other amendments that I proposed, because I am confident that at some stage in the progress of this Bill the Government will themselves bring forward some amendments that deal with those issues that have now been uncovered.
This amendment, on plain reading, concerns the qualifications and appointment conditions for an arbitrator under the Bill and has had the benefit of shining a spotlight on a particularly unclear and potentially confusing part of the Bill. To understand how this Bill works, one has to understand the interaction of the arbitration provisions in the Bill with the existing arbitration laws in England, Wales and Northern Ireland, and also with the arbitration provisions in the code itself. It is not easy to follow all this. We are not helped by the fact that the Explanatory Notes compound this lack of clarity rather than resolving it. In particular, paragraph 30 states that the provisions of the Arbitration Act 1996 will “broadly” apply and that,
“the Arbitration (Scotland) Act 2010 will broadly have a similar effect in applying the Scottish Arbitration Rules, except so far as this would be inconsistent”,
with the groceries supply order or the Bill. That was not intended to be clear. It is intended just to report the position which is quite difficult to work out.
Baroness Wilcox
My Lords, I thank the noble Lord, Lord Whitty, and the noble Lord, Lord Browne, for these amendments. Regarding the amendment tabled by the noble Lord, Lord Whitty, for reasons I shall explain, we do not believe it should be possible for third parties to refer disputes to arbitration. Clause 2 simply supplements the arbitration provisions in the groceries supply order 2009. Article 11 of the order does not allow a trade association or other third party to refer a dispute to arbitration so, if we provided that in the Bill, we would be departing from the order. In any event, we do not think that it is right that a third party should be able to refer a dispute to arbitration. A dispute is between a retailer and a supplier, not with a third party. If a supplier seeks compensation or some other remedy for its own benefit, it should come forward to submit the dispute to arbitration itself and on a named basis. This is consistent with the normal way in which disputes between two parties are resolved. Any other approach would risk unfairness to the retailer concerned. However, a trade association or other third party will be able to complain to the adjudicator if it considers that a retailer has breached the code. The adjudicator could then take that information into account in deciding whether to commence an investigation. That is how third parties can get involved. There is a distinction between arbitrations, which must be between retailers and suppliers, and investigations, where the adjudicator will be able to consider information from any source, including trade associations.
The remainder of my remarks are now directed more to the amendment of the noble Lord, Lord Browne, concerning the process for appointing an arbitrator, and to explaining why his amendment is not necessary. As I say, Clause 2 supplements the 2009 order. Because the order and the Bill provide for arbitration between retailers and suppliers, the arbitrations will be statutory arbitrations for the purposes of the Arbitration Act 1996 for England, Wales and Northern Ireland and of the Arbitration (Scotland) Act 2010. In the latter case, Clause 21(6) applies the provisions of the 2010 Act, pending that Act coming into force in relation to arbitrations under the Bill.
Section 94 of the Arbitration Act 1996 applies the provisions of Part I of that Act to every statutory arbitration, but this is subject to the adaptations and exclusions in Sections 95 to 98 of that Act. Also, the provisions of Part I will not apply to the extent that they are inconsistent with the groceries supply order 2009 or with the Bill; that is why I used the word “broadly” in referring to Section 94 in Committee. In Scotland, the effect of Section 16 of the Arbitration (Scotland) Act 2010 is similar in applying the Scottish arbitration rules set out in Schedule 1 to that Act to arbitrations under the 2009 order and the Bill. Again, there are certain exceptions set out in Section 16 and, again, the Scottish arbitration rules will not apply to the extent that they are inconsistent with the groceries supply order or the Bill; that is also why I used the word “broadly” in referring to Section 16 in Committee.
I will briefly give a couple of examples of inconsistency. The mechanism for the appointment of an arbitrator in Clause 2 of the Bill and provisions in Article 11(7) of the order for the payment of the arbitrator’s costs will each take precedence over provisions in the Arbitration Act 1996 and the Scottish arbitration rules about appointment and costs. I should also explain at this point that Article 11(6) of the order provides for the arbitration to be conducted in accordance with the rules of the Chartered Institute of Arbitrators or any other dispute resolution body nominated by the appointed arbitrator. The rules of the relevant dispute resolution body and/or provisions of Part I of the Arbitration Act 1996 and the Scottish arbitration rules will protect the parties against the risks of the arbitration being carried out by an arbitrator who is not capable, impartial and fair. I refer in particular to Sections 24, 33 and 68 of the Arbitration Act 1996 and to rules 8, 10, 12, 24 and 68 of the Scottish arbitration rules.
In addition, it is worth noting that the adjudicator, as a public authority, must act reasonably and respect the right of the parties to a fair trial in appointing any arbitrator. Those duties will also act as a safeguard against the appointment of an arbitrator who is not capable, impartial, independent and fair. All that means that the amendment tabled by the noble Lord, Lord Browne, is not necessary.
Lord Whitty
My Lords, I thank the Minister for making clear the distinction between a complaint leading to an investigation and one leading to arbitration. However, I still think that there should be a means whereby someone could represent a supplier through the arbitration process as well as triggering an investigation. This may not be the appropriate clause to amend in that respect. The Minister made it clear that we would have to amend the code in order to do that, which I accept.
However, the net effect is that in this Act, the code and all its operations, we have not solved the basic imbalance of power to enable individual suppliers to have the confidence to take a case under this code. Until we do that, this will be only a limited protection, which is welcome in itself and for the teeth that this Act will give them. But it does not address all the fears and apprehensions of farmers and small businesses who are reliant on supermarket orders that they will be treated absolutely fairly.
I suspect that the Minister’s colleagues will get this amendment back in another place, probably from her own side. Therefore, this is not a closed case but, for now, I beg leave to withdraw the amendment.
Lord Howard of Rising
“( ) In deciding whether to carry out an investigation, the Adjudicator may consider only one or both of the following—
(a) information provided by a supplier;(b) information that is publicly available.”
Lord Howard of Rising
My Lords, in moving Amendment 8, I shall speak also to Amendments 19 and 20. Before so doing, I declare interests both as a farmer and a supplier to supermarkets. I still cannot get my mind around why there should have been a change from the original drafting of the Bill, which limited complaints to those directly concerned in a transaction. My amendment seeks to do so, so that only those concerned with the business could complain. I can only think that the people who changed this have absolutely no connection with reality or commerce because there is bound to be some form of malicious or frivolous complaint. Anybody who doubts that has only to look at the world around us, where they cannot even fix LIBOR without doing it how it should not be done.
With something that is so open to abuse, it is only right that there has to be some form of corrective mechanism. Indeed, in the Bill there is the ability for the arbitrator to ask for costs from those who put in malicious complaints. Amendment 19 obliges the arbitrator to seek costs. He does not have to seek all of his costs, it is discretionary. Nevertheless, it would act as a deterrent to those who wish to behave badly if it was a certainty that they would have to pay for it. Amendment 20 emphasises that deterrent by asking the adjudicator to include actions that he takes so that it can be seen that he is dealing with those who make irresponsible complaints. This is a very important and necessary amendment to the Bill. I beg to move.
Lord Razzall
My Lords, the problem with the amendment of the noble Lord, Lord Howard of Rising, is that when we drill down, the real reason why the previous regime did not work is because a lot of farmers are very nervous and want to preserve their anonymity. That is why the regime, which I know the noble Lords, Lord Howard of Rising and Lord Borrie, and the noble Viscount, rather wish had been maintained, did not actually work in practice. Farmers were afraid that were they to complain and lose their anonymity, they would be victimised by the 10 major supermarkets. That is the reason we want to have this Bill. The amendment would go to the heart of the Bill and that is why it should be rejected.
Lord Cameron of Dillington
My Lords, I too am not convinced by any of these amendments, and I support the noble Lord, Lord Razzall, in that. The amendment undermines the point of the Bill and the adjudicator; there is currently an imbalance between the power of the various parties involved in the food supply chain which the Bill tries to redress. Thus, to tie the hands of the adjudicator in this way is not particularly helpful. After all, if we are trying to minimise spurious and vexatious complaints, is it best to limit the complaints to the supplier who may have been personally affected, or is it best to have their grievance or grievances assessed and filtered by a trade association and others, who might be able to point out what is reasonable and what is not? That, of course, is quite apart from the point about anonymity raised by the noble Lord, Lord Razzall.
I am afraid that I cannot support Amendments 19 and 20. The whole point of the Bill is to defend the little man against the power and possible bullying tactics of the big man. The whole point of the groceries code is that legal redress is too costly to risk, even if one thinks one has a case and does not have to succumb to the threat of delisting or other bullying tactics. I like the word “may” in Clause 10 because it deals with time wasters and those who are trying it on, but I strongly object to “must” in Amendments 19 and 20, which would undermine the flexibility of the adjudicator and thus much of the point of the Bill.
Lord Plumb
My Lords, I rise for the first time after something like an hour and a half of debate. I am very concerned at the way it has gone so far. I declare an interest as a farmer. In the course of the debate, I thought about the 2,500 farmers who were in Central Hall last week. Every one of them would have difficulty understanding what we have been talking about. We have rightly been talking about legal aspects of the Bill, because they have to be right and clear. However, what concerns the farmer at the moment, as a supplier of goods, is simply fairness in the marketplace. Therefore, farmers believe someone should be appointed to see that that is achieved.
That person—I presume that it will be a team—will have to take responsibility for dealing with issues not only fairly but correctly and with full understanding of what the job is about. They are not there to be involved in competition but to deal with investigation of the market that exists, or of the market that should be. The other day in Central Hall, the Minister held up a pint of milk and a bottle of water to illustrate the difference in price—56p as against 83p. A lot of questions must be asked. Surely it goes without saying that something has to be done and someone must be appointed.
If the person who is appointed finds unfairness on the other side, let it be so. That is their role and responsibility in this field. I do not agree with the amendments in this group, tabled by my noble friend Lord Howard. This amendment would leave the Bill in a similar form to the draft Bill that we saw in May 2011. Nothing has changed, and we are trying to bring about changes in the interests of the industry with which we are concerned.
The amendment would seriously narrow the sources of evidence that the adjudicator could use in launching an investigation into a possible breach of the code. That would be of considerable concern. The powers need to be broadened to allow credible evidence from any person who is prepared to come forward with a legitimate reason for asking the adjudicator to take responsibility and deal with an issue. All organisations, including charities, will have to be able to provide evidence of a breach of the code. This is a crucial element in safeguarding the adjudicator’s duty to protect the identity of the complainants. Therefore it is essential that the investigatory powers in the Bill are safeguarded but not complicated by cumbersome rules that could delay the process of ensuring a fairer functioning supply chain.
Lord Whitty
My Lords, I will be brief because the noble Lord, Lord Plumb, has spelt it out. It would be extraordinary if Amendment 8 were accepted and carried by this House. I accepted with some reluctance the noble Baroness’s indication that it would not be possible for third parties such as farming associations or unions to bring cases. I can understand that, but the idea that they should be cut out of providing information or that the adjudicator should be constrained from looking at that information and considering it before making his or her judgment seems extraordinary. I hope that the Minister will reject Amendment 8. It would tie the adjudicator’s hands and be unfair to the complaining supplier.
Viscount Eccles
My Lords, following on from the noble Lord, Lord Whitty, I do not understand,
“information that is publicly available”
as stopping anybody doing anything. The only thing a trade association, for example, has to do is to make its report on an alleged breach of the code public; it does not have to quote the names of companies. It cannot just go to the adjudicator with verbal information. It has to take the trouble to find out where the problems are.
I have huge sympathy with the immense consternation that is going on among dairy farmers. It is an extremely uncomfortable process. If the NFU has reason to believe that the code is not being observed, there is a case for it to collect as much evidence as it wishes from its members, who stay anonymous, and put its report about these breaches of the code into the public arena, presenting it at the same time to the adjudicator. That is a tremendous protection to both the public and the adjudicator; otherwise we shall all be left with a suspicion that what is happening is rumour and hearsay. It seems tremendously important that people’s reasons for doubting whether the code is being adhered to become public.
Lord Borrie
The noble Viscount, Lord Eccles, seems to have forgotten that the whole requirement in this Bill is that the investigation can properly go ahead only if there is a reasonable suspicion on behalf of the adjudicator that an investigation is required. That is the essential requirement in the Bill and I do not think it appropriate, for many of the reasons mentioned by the noble Lords, Lord Plumb and Lord Whitty, and others, that it has been so difficult up to now because of the difference in bargaining power between the suppliers and the retailers. In addition to the requirements that are already in this clause, there is no need to establish that the information should be made public, for example by the NFU.
Lord Knight of Weymouth
My Lords, I was ready to give an impassioned speech to try to persuade the noble Lord, Lord Howard of Rising, that he was wrong, but I think we have heard enough really good arguments from all sides of the House, so I will not delay the House by doing so. I will simply use the opportunity to thank the National Farmers’ Union, the Food and Drink Federation and the Federation of Small Businesses for their robust position on this, in saying that we should oppose these amendments.
Baroness Wilcox
My Lords, the question of who should be able to complain to the adjudicator has been discussed extensively: in consultation, at pre-legislative scrutiny, at Second Reading and in Committee. Along with most noble Lords who have spoken on this issue, the Government consider that the adjudicator should be able to consider evidence from any relevant source when deciding whether to commence an investigation.
The ability of the adjudicator to consider evidence from any source has been described by supplier groups as essential to the adjudicator’s operation. Furthermore, it simply makes sense. If the adjudicator has reasonable grounds to suspect a breach of the code, he or she should be able to initiate an investigation, no matter where the information came from.
My noble friend Lord Howard of Rising has explained that his concerns are motivated in part by the possibility of vexatious or malicious complaints and that is the issue behind Amendments 19 and 20. The Government certainly have some sympathy with this concern. No one wants to see the adjudicator’s time wasted or businesses put under a burden due to vexatious complaints. However, it is important that in the wording used we take into account what is customary as well as the need not to scare off legitimate complainants. As I said in Committee, this is intended to be a strong test directed at irresponsible complaints rather than simply erroneous or weak ones. I note also that the discretionary power to recover costs currently applies to the recovery of costs from both retailers and complainants. There seem to be few grounds for strengthening the requirement on one side without similarly strengthening it on the other. In either case the Government consider that the discretion provided by the word “may” allows the adjudicator to treat each case on its merits. The Government therefore consider that the Bill as it stands provides a necessary deterrent against vexatious complaints. The adjudicator can consider imposing costs on a complainant whose complaint is vexatious or wholly without merit but we do not think it should be mandatory or near-mandatory.
Regarding the amendment to produce an additional annual report, that would be an unnecessarily burdensome piece of bureaucracy. In paragraph 15 of Schedule 1 the adjudicator is already required to keep proper accounts and prepare a statement of accounts each year. These accounts would need to include any costs recovered from retailers or complainants. The application of the power to recover costs could be included in the annual report prepared under Clause 14. I therefore ask the noble Lord to consider withdrawing his amendment.
Lord Howard of Rising
I thank the Minister for her remarks and all other noble Lords who have spoken. I just want to point out that it is normal that there is an imbalance between the person paying and the person receiving the money. Why there should be protection in this case I do not know, even though it would be to my own personal benefit. Amendments 19 and 20 come into effect only if the system of complaints is being abused. I cannot see that charging those who have committed the abuse for the cost they have incurred can in any way be unfair. Indeed, it is unfair the other way because it is the people about whom they are complaining who have to pay all the costs. That said, I will not pursue the matter further and I beg leave to withdraw the amendment.
Baroness Wilcox
Baroness Wilcox
My Lords, in Committee my noble friend Lady Byford raised an important question about when the adjudicator should pay travel expenses, which received a great deal of support from the Committee. She asked whether the 10-mile threshold on paying travel expenses was appropriate in rural areas, given that in such areas public transport is often very limited. This amendment is in both our names but the spirit of the amendment is all hers. I am merely speaking to it on her behalf as for personal reasons she cannot be here today. Rather than basing travel expenses on distance or time, we have simply specified that if the adjudicator requires a person to attend a particular place, the adjudicator must pay all that person’s travel expenses. I am grateful to the noble Baroness for bringing this issue to my attention and I hope that noble Lords are happy with this solution, which should benefit all those required to give evidence, particularly in rural areas. I beg to move.
Lord Plumb
My Lords, I congratulate my noble friend the Minister on what she has just said. I know that her noble friend Lady Byford will be thrilled to hear the news—in fact, she had already assumed that that would be the answer that she would get. For that reason, I thank the Minister for accepting the amendment. It is extremely important and will be recognised as such as time passes.
Lord Browne of Ladyton
“(c) the reasons for the findings and any action taken or proposed”
Lord Browne of Ladyton
My Lords, Clauses 4 to 10 govern how the adjudicator should conduct investigations and carry out his further powers of enforcement following investigations. Amendment 10 would amend Clause 5, which is the second of those clauses which relate to the publication of reports following investigations. The clause requires the adjudicator to publish a report, which is appropriate. Subsection (2) sets out what the report must specify as a minimum. The amendment would add to that minimum requirement the requirement for a statement of reasons for any finding made by the adjudicator and any action taken or proposed to be taken by him. I moved a similar amendment on the first day in Committee at col. 119 of the Official Report, where I set out the arguments for a requirement for reasons in a report in these circumstances. I do not intend to rehearse those arguments other than to say that it is my firm belief that, if reasons are set out, such a requirement would reduce rather than increase the possibility of challenge at a later date. In the absence of reasons, my experience is that people challenge to find out reasons.
This is consistent with my whole approach to the Bill—I say this for the benefit of the noble Lord, Lord Plumb, who has not had the opportunity to hear me speak in support of the Bill or of its objectives. I have in the past expressed my strong support for the Bill and the mechanism that it creates. My purpose in seeking to amend the legislation is to try to make it clearer, and to make it work more effectively and in a way in which those who need to have confidence in it can do so. I understand the necessity of the legislation, which has to be put at the heart of a relationship which is otherwise deeply unfair and potentially operates to the disadvantage of smaller suppliers. It is helpful to have this opportunity to make it clear that that is my objective. If I am seen to be unduly technical or legal about some of the amendments, I reassure noble Lords that they are all designed to make the legislation work better and to give the Minister the opportunity to explain the necessarily complicated process of how it will work. It may not have been immediately obvious to everybody that there was clarity in the Minister’s response to the amendment that I proposed earlier. I commend her for that, because it will enable those who need to read the reports of our debates to understand the mechanism much better.
When I moved the amendment in Committee, I was grateful for the support of the noble Viscount, Lord Eccles, and my noble friend Lord Borrie. I was grateful, too, for the implied support of the Minister, who said that she thought that it was reasonable that the report should give reasons. She offered to speak to me further about it. I have taken advantage of that opportunity and have had a conversation also with her Bill team, whose help in advancing some of my intentions in relation to the Bill I have referred to. The result of that is a changed amendment which I hope is more felicitously worded than that which I proposed in Committee. I commend the amendment to the House and beg to move.
Lord Howard of Rising
My Lords, I speak to Amendment 11, which is grouped with Amendment 10, the sensible amendment of the noble Lord, Lord Browne. This amendment would seek the inclusion of comments made by the retailer to the adjudicator, and it seems to me only reasonable that both sides of the argument are included where a report is issued. The industry is particularly sensitive to public reputation and it would be unfair if it was not allowed to make its case at the same time as being criticised.
Viscount Eccles
My Lords, I do not wish to repeat the arguments made in Committee but I support these two amendments.
Lord Browne of Ladyton
My Lords, before the Minister speaks I should perhaps indicate—for the purpose of the record—that I also support the amendment of the noble Lord, Lord Howard of Rising. I think it is entirely consistent with what is fair in relation to the conduct of this process.
Baroness Wilcox
My Lords, as I said in Committee, the reports that the adjudicator must publish at the end of each investigation are a vital part of his or her accountability, and an important way of keeping retailers, suppliers and consumers informed of his or her work. While I can understand the intention behind the amendment of my noble friend Lord Howard of Rising, I am not sure that it is necessary. If a retailer wishes to make a public comment on the report, it will be free to do so by issuing a press release or publishing a statement on its website. For this to be included as an annexe to the report itself would appear somewhat unusual, particularly as there would—due to confidentiality—be less possibility of a similar statement from any suppliers.
Furthermore, we think it important that the report is clearly the adjudicator’s report and the adjudicator’s alone. The report should be fair and impartial and should not be coloured by commentary from a retailer with which the adjudicator may or may not agree. As I say, the retailer will be free to make its own statement, and similarly the adjudicator will have no right to have his or her comments on that statement included in it. I therefore ask the noble Lord not to press that amendment.
To move on to the amendment of the noble Lord, Lord Browne, I said two weeks ago that this was interesting and reasonable—he repeated my words exactly—and upon further consideration I am happy to say that my opinion has not changed. It is eminently sensible to require the adjudicator’s investigation reports to contain the reasons for the decisions made, and I am therefore happy to accept that amendment.
Lord Browne of Ladyton
My Lords, I am overwhelmed by the scale of my success this afternoon. I suspect I may retire from the lists now. This will be a day that I will never repeat. I thank the noble Baroness for her consistent approach in this case. I thank her and her Bill team once again for their co-operation and engagement with me in an attempt to try and make this amendment work better, and it does. I think that we have, between us, improved the Bill.
Lord Knight of Weymouth
Lord Knight of Weymouth
My Lords, we consider Amendments 15 and 18 to be consequential to Amendment 11A and therefore, if the House passes Amendment 11A, it should be aware that it would also be voting to pass Amendments 15 and 18. I am grateful to the noble Lords, Lord Curry and Lord Cameron, for their support for those two amendments. Amendment 11A specifies that the adjudicator has the power to fine in any circumstances that he or she sees fit as soon as Clause 6 is commenced. That is, it gives the right to fine from day one. It therefore follows that Amendment 15 to Clause 9, which deletes those powers being introduced by order of the Secretary of State, and Amendment 18, which deletes Schedule 3 detailing the order-making process by the Secretary of State, should also be agreed to.
The question of whether the adjudicator should have the power to fine from day one concerns what makes an effective regulator. We have seen regulatory failure in recent times in respect of banks—much as I applaud the action of the FSA in exposing and then fining Barclays over the LIBOR scandal.
How much better would it have been if we had had an effective Press Complaints Commission? Perhaps the grotesque scandal of phone hacking could have been prevented if there had been a regulator with more teeth than just the ability to name and shame. Clearly, the powerful forces of the media have not feared their regulator or the threat of a statutory regulator with real power.
I welcome the Government’s conversion to the principle that the adjudicator may need the power to fine. They listened to the Select Committees, and that is good, but this is not a wholescale Damascene conversion. If they are coming back down the road, it is with no great conviction, as they are not offering those powers from day one of the operation of the adjudicator.
Of course, that should be no great surprise, as it is arguable that the Bill is full of lukewarm commitment. There is no sign of wanting to keep the code alive and updated as circumstances change, as we have discovered. The Bill to establish the adjudicator includes the power to abolish the office by ministerial diktat, as we will debate later today. The concession to allow complaints by third parties was also given in response to the Select Committee, but along with a clause to allow the Government to change their mind back again by another order. The charge of foot-dragging is reasonable.
If the Government were truly listening to the Defra and BIS Select Committees in the other place, the power to fine would be available from inception. The Government said in response to the Select Committee's recommendation:
“If there is evidence of significant non-compliance with the Groceries Code and the existing regime seems not to be sufficiently effective, there is the prospect of a swift introduction of financial penalties, without the need for primary legislation”.
That is their main argument for the way the Bill is currently constructed. The key phrase here is “swift introduction”. Even with the concessions on adjudicator guidance that we will debate shortly, it will still take a long time.
As things currently stand, first, the adjudicator will get up and running and run investigations following complaints. Then, when a significant breach is found, the retailer is named and shamed. It is hard to see that taking less than a year. Then, after a reasonable period, more complaints and another investigation, there may still be significant non-compliance. That will take another year. The adjudicator then decides to use that as evidence of the need for powers to fine and recommends accordingly to the Secretary of State. I find it hard to believe that the decision to fine in principle would then take less than three months for the Secretary of State to consider. Then there will be a consultation on that decision in principle for it to be confirmed and the process of moving orders through Parliament to begin. That will take not less than six months. Then, the adjudicator has the powers and can launch another investigation following a further complaint and then use the powers to fine.
No one can seriously believe that all that can be done sooner than three years after the adjudicator was established. So much for swift introduction. The National Farmers’ Union has always supported fines, but now appears to concede reserve powers because it does not want to delay the Bill. I respect its concern. We have listened carefully to it throughout, but if we decide today to improve the Bill by allowing what others, such as the Federation of Small Businesses, still want, there need be no delay. The FSB has e-mailed me to say:
“We remain concerned that without the ability to impose significant financial penalties, the Adjudicator will find it difficult to be fully effective. While powers contained within the Bill, particularly the ability to name and shame, are important, we believe that the Adjudicator will need a full range of penalties available to it as soon as it is set up to ensure that it is able to deal with the complaints it may face”.
I also refer your Lordships to the campaign on this Bill led by ActionAid, which includes an extraordinary alliance of organisations, as diverse as the FSB, the Country Land and Business Association, Unite the Union, the World Wildlife Fund, WSPA, Friends of the Earth, the Church of England and the Campaign to Protect Rural England—not necessarily normal bedfellows as a group. They say that Parliament should ensure that the adjudicator can,
“launch investigations on the basis of credible evidence provided by third parties, such as business associations, NGOs, trade unions and MPs”.
They add that they should be able to do this from day one. The Government have already agreed in Amendments 16 and 23 that the adjudicator may upon appointment begin drafting guidance on the use of fines, and that concession is welcome. However, that means that, unless the Government decide to dig in their heels and change the Bill back in the Commons, if your Lordships’ House is minded to agree these amendments now there need be no delay. On this side of the House, we are absolutely committed to this Bill making rapid progress. That is why we took it quickly through Committee in the Moses Room, with an extended day; that is why we are progressing relatively quickly today; and that is why we have delivered on our side to the commitment to conclude Lords’ consideration of all stages of the Bill by the Summer Recess.
I would like to add one more thing—on listening. As we have heard from the noble Lord, Lord Plumb, and my noble friend Lord Grantchester, feelings are running high in the dairy sector about how exploited liquid milk producers are. When discussing this crisis with these producers, I tried to reassure them that Parliament was listening and legislating through this Bill, but too many have given up on us and do not believe that we will make any difference. Without the power to fine from day one, they may be right and another chance to rebuild trust in this Parliament will be lost. However, I am pleased that some retailers are listening to these producers, including some supermarkets. I take this opportunity to mention a welcome initiative by Sainsbury’s. In April, the farmers who supply Sainsbury’s milk voted to move to an industry-leading cost of production-based supply model. Following their first pricing review of dairy costs, they increased the price they pay farmers for milk by 0.26p to 30.56p per litre from 1 July. That is a marginal amount, but it is welcome and I am happy to pay tribute to the fact that there are some supermarkets that want to make progress.
Not all large retailers are acting voluntarily, however, so we need to push them down the road of responsibility. It all comes down to whether the adjudicator should grow teeth or be born with them. We are in the process of bringing a guard dog into the world to protect the groceries supply code. Currently, our hound will be able to patrol the perimeter, to sniff out and investigate intruders or potential intruders. The beast will be able to bark if it finds anything, in the hope that someone will notice or that the intruders will think someone will notice and therefore voluntarily back off. However, if the intruders persist, they will do so in the knowledge that the dog has no teeth; it is all bark and no bite, all name and shame and no fines. I hope our guard dog never has cause to bite, but I do want potential intruders to worry that it might and that it can take a chunk out of their profits straight away—not in the future if we decide later perhaps that it needs teeth. We need effective regulation of overmighty vested interests. Retailers making multibillion-pound profits are very mighty indeed. Their suppliers need protection from an effective regulator, and that regulator needs the power to fine from the start.
Baroness Randerson
My Lords, I am surprised at the noble Lord’s ferocity on this given the record of the previous Government, which although well-intentioned was hardly decisive and swift on this issue. I think his judgment that it would take three years to bring in fines is very speculative. However, I am sympathetic to his argument. Certainly, I have been listening very carefully to the idea that we need fines from the start.
For that reason, I am very pleased to see Amendments 16 and 23 from the Government in this group, which will ensure that financial penalties can be brought in quickly. Bearing in mind the Government’s philosophy, which is light-touch regulation, I can see that this fits in with that philosophy.
Lord Cameron of Dillington
My Lords, I put my name to Amendment 15 because I am very much in favour of the immediate application of financial penalties where, after due process, a clear breach of the code has emerged. I do not believe that merely naming and shaming will have any effect at all. Supermarkets know that, in the short term, their customers shop with them largely because they are local. Why would the supermarkets still be chasing a further 44,000,000 square feet of retail space in a recession if they did not believe that? They need more retail space nearer to more customers.
Shoppers stick to their habitual supermarkets either because they are local, as I said, or because they get to know where things are on the shelves and find it much easier to shop that way. It seems that very few supermarket customers actually make shopping decisions based on ethical or moral grounds. There are one or two but they are very few. I suspect that some supermarket staff believe that any publicity is good publicity, so I do not believe that naming and shaming will work. Supermarkets have to feel the effects of their misbehaviour in their pockets, or at least to know that they could.
Clause 9(1) seems to be merely a delaying tactic, which will put off the much-needed effects of this Bill for yet another year or so—maybe three, as the noble Lord, Lord Knight, said—until the Secretary of State grips the issue. I believe we should try to grip the issue now and that the introduction of an effective adjudicator has been delayed long enough. Frankly, there is no point in having an adjudicator unless he or she has the powers to be effective. Of course, we all hope that if they have such effective powers, those will in itself be enough to make it unnecessary for them to be used. However, the powers must be effective, and I do not believe that they will be without the ability to fine.
Lord Borrie
My Lords, I am delighted to follow the noble Lord, Lord Cameron. He has made a clear case and, of course, my noble friend on the Front Bench, Lord Knight of Weymouth, made a very powerful case, for a power to fine from day one—in other words, under the Bill itself—without having to wait for some subsequent statutory instrument which may come into force some year or so later. My noble friend Lord Knight made the powerful point that the Government’s commitment to this is lukewarm. Yes, we have the Bill—that is something and it is important; the Government have indicated that it is important—but then they draw back. They draw back from the possibility, among other weapons to be used by the adjudicator, of a fine.
Who might be subject to a fine? We are talking about powerful businesses. Not any supermarket, but only the 10 most powerful supermarkets in the country could possibly be subject to the Bill. Will they be frightened off doing what some of them have done up to now—which is why we have the Bill in the first place—by the other powers that are mentioned; naming and shaming and so on? I do not think so. Mind you, they may not, because of their power, be terribly put out by a substantial fine, but fines can be very effective as a deterrent and, after all, that is what we are mainly concerned about: not the actual imposition of a fine, two fines, or whatever, but the deterrent value of a fine. To have that deterrent value from now, from the moment when the Bill becomes law, rather than at some distant point in the future, is what makes a real difference, it seems to me. I trust that we may succeed in getting the Government to agree to this change.
The Lord Bishop of Newcastle
My Lords, I, too, would prefer to have fines in the Bill from the outset, because I believe, like many noble Lords, that that is the most effective way of enforcing the groceries supply code and also that it will prevent the transfer of excessive risk down the supply chain. Nevertheless, like us all, I do not want to delay the Bill any longer than is necessary; I want to get it implemented as soon as possible. I am anxious that, if this power were to be given from day one, it would mean the creation of a rather complicated appeals system which could delay the passing and implementation of the Bill even further and for some considerable time. I would like to be assured about that, if any noble Lord can do so. I wonder whether naming and shaming is the crucial issue for the moment, providing, of course, that retailers are not to be given a statutory right of appeal. I would rather get on with this as soon as possible, even though my own preference would be to have fines in the Bill from day one.
Lord Plumb
My Lords, I have been very impressed with what I have heard. I did not expect that there would be many in this House who would press for immediate action. I can see the point very clearly—what the right reverend Prelate has just said is absolutely right—but I would like the Minister to say whether, if there was a delay in the powers being implemented, it would complicate things and make it a much more complicated Bill. I see no reason for that, but it is a question that needs to be answered. If it would, can the Minister say, or give us a guesstimate as to how long it would be before those powers are implemented?
Lord Whitty
I, too, support this amendment. It seems to me that this clause as it stands, combined with Schedule 3 and the possible orders under it, the nature of which we do not yet know, could seriously constrain the nature and instances of the financial penalties which the adjudicator felt able to impose.
There are difficulties here. If I look at other regulators, adjudicators or ombudsmen, a delay has rarely awaited the Secretary of State before the provisions for their powers came into practice. I do not see any particular argument why that should be the case here, either immediately, in terms of the year or so’s delay in giving the powers, or in how the powers are exercised in broad terms.
I was going to widen the debate, and I shall still mention this point: financial penalties are one thing—the “fines”, as we normally call them—but quite often the most obviously appropriate remedy would actually be compensation to the supplier that had been disadvantaged by the behaviour and practices of the retailer. I have an amendment following this group that deals with that issue, but it deals with it rather crudely. I have now read the Committee proceedings on this, which indicate the complexity of writing in compensation in the way that I am proposing, and I will therefore not be moving that amendment. However, there ought also to be some process whereby financial penalties are augmented by the ability of the arbiter or the adjudicator to refer the possibility of compensation to appropriate authorities.
In reality, naming and shaming is not enough. Although I agree with the noble Baroness, Lady Randerson, that it can be important for the reputation of the company, fines are even more important in terms of that reputation. At the end of the day, though, the organisation that has been disadvantaged is the small business, the farmer or whoever it is who has been at the receiving end of the abuse. Somehow within this regulation and code there ought to be an ability for the adjudicator to recommend, possibly under the powers of recommendation, that the issue of potential compensation is referred to the appropriate legal authorities. That is missing at the moment, although it could be included within the recommendations.
The point here is that we should not be placing undue time delays or undue constraints on the ability of the adjudicator to impose sufficient redress. If we removed Schedule 3 and altered Clause 9, we would be able to put the Bill into operation as rapidly as possible and establish a more equitable balance within the supply chain.
The Duke of Montrose
Is part of the purpose of the adjudicator that the disadvantaged person should not be identified? If that is so, how do they go about talking about compensation?
Lord Whitty
The person is not necessarily unidentified; that depends on the supplier. I know that those arguments were made in Committee and I accept that it would not be for the adjudicator to impose compensation or the level of it themselves. However, it ought to be open to the adjudicator to be able to say, “It looks as if a supplier or a number of suppliers have been disadvantaged by this practice and the issue should be referred, effectively, to the courts”. That could be part of the recommendatory powers. That is not the central issue on this group of amendments, though; they are really to remove the constraints on the Secretary of State and allow the adjudicator to have a whole range of potential financial sanctions.
Lord Howard of Rising
My Lords, contrary to what has been said by some this afternoon, naming and shaming is a genuine deterrent. In a cut-throat, highly competitive business such as this—reading the results of supermarket chains shows how very quickly they can go downhill from having made substantial profits—naming and shaming is a real deterrent. I also hope that the Minister will remember that the only person who actually pays those fines in the end is the consumer.
Baroness Wilcox
My Lords, I do not want anyone to think we are lukewarm. We introduced this Bill as a priority and did so as soon as possible in this Session. Ever since we started discussing the establishment of an adjudicator, people have been concerned to know whether the adjudicator will have teeth. Central to that discussion has been financial penalties: should they be available at all, should they be a reserve power and how easy should they be to introduce? We are discussing now whether they should be introduced from the beginning. These are of course important questions.
We have carefully considered the sanctions available to the adjudicator and are convinced that this is indeed a Bill with teeth. The wide information-gathering powers, the ability to recover costs from retailers and the ability to raise a levy in a way that causes offenders to pay more all mean that no retailer will want to risk breaching the code. These aspects all ensure that those who breach the code will face a real cost.
However, more important is the sanction of “name and shame”, or the requirement to publish information as it is more properly known. I can assure you, as someone who has worked in this sector directly supplying supermarkets, that this will be an important deterrent, for reputation is extremely important to our biggest retailers. My noble friend Lord Howard of Rising has just spoken from his own experience in support of this. No retailer will want to be publicly named and shamed as having breached the code or having been found against for an action that does not appear to be fair or right. Every customer who goes into that shop will know that this has happened. Furthermore, every retailer will know that financial penalties are in reserve and that, with the amendments the Government tabled last week, they can be brought in very swiftly. Clearly, all retailers will want to avoid this.
I have shown that the adjudicator has teeth. I have shown that the existing powers and sanctions are sufficient to hold retailers to account and give them a clear incentive to obey the code. However, that is not enough. It is not sufficient to show that introducing fines from the outset is not necessary, since people could justly say that we might as well give the adjudicator the power just in case. However, if the power to impose financial penalties is granted, it is very likely to be used. Obviously, each case will be treated on its facts but enforcement authorities will tend, over time, to use the full range of sanctions available to them. That is why I would like to set out why the Government believe that introducing financial penalties from the outset is not only unnecessary but actively undesirable. The reasons for this are twofold. The first concerns proportionality and the second concerns culture.
We must remember that this is a very difficult time for business and our economy is going through a troubled period. Although regulation is sometimes necessary, we must strive to ensure that it is proportionate, so as not to impose unnecessary costs on business. We must also remember that the large supermarkets do a great deal of good for our country, as was confirmed by the Competition Commission in its report. As well as providing employment, their fierce competition has provided unprecedented choice for consumers and driven down food prices in recent years. Currently, with many ordinary families feeling the pinch of both wage freezes and inflation, the big supermarkets’ contribution to keeping prices down is particularly important. The fact that they have to compete with each other publicly, for us all to see, is equally important and another reason why being named and shamed in the middle of all this is not going to please any supermarket group.
Of course, the Competition Commission also found problems in the use of buyer power with respect to suppliers—that is why we are introducing this Bill. However, this is a sector that is fundamentally working well, and that is why we should strive to regulate it in as moderate a way as possible, unless and until it is shown that this is not effective. If compliance with the code can be achieved through “naming and shaming”, that will be far better than imposing fines, the cost of which might ultimately be borne by the consumer anyway.
The second reason for preferring a regime without fines concerns the culture that we are trying to create. The issue of culture was discussed very helpfully in Committee by the right reverend prelate the Bishop of Wakefield and is something I would like to return to. The goal of this Bill, and of the great majority of us in this Chamber, is to encourage retailers to comply with the code. It is not to punish them—that helps no one. It is to make sure they treat their suppliers fairly. The question is how best to encourage that culture of compliance.
The Government believe that the best way is through a proportionate, regulatory regime, focusing on advice, guidance, investigations and name and shame, backed by the threat of financial penalties in reserve. In such a way, the retailers will be encouraged to comply with the code. A punitive, adversarial culture, such as that which would be created by financial penalties, could also work—but much more slowly and at a much higher cost.
I ask noble Lords whether they would prefer that the adjudicator carries out four investigations a year, in each one identifying breaches of the code and correcting them, or that he or she carries out just one, imposes a financial penalty and then gets bogged down by a lengthy court battle as the retailers fight appeal after appeal? Make no mistake, if fines are needed, they will be brought in. The Government are very clear on this. The amendments I have tabled, which noble Lords will be discussing shortly, demonstrate our intent. By removing the double layer of consultation and by allowing the adjudicator to publish guidance on fining prior to being given the power to impose fines, we have ensured that fines can be brought in swiftly if necessary. However, we should first give the more moderate regime a chance.
One might expect the suppliers would push for the retailers to face the maximum penalty. That is their right. However, they have also acknowledged the need to be proportionate. I cite the briefing of the British Brands Group, which has said that fines are “not essential” and of the NFU, which has said that it will not be arguing for the Bill to be amended to allow fines from the outset, provided the Government’s amendments to streamline the process are accepted. If the suppliers are being so measured, should not the Government and Parliament also take a proportionate approach and decide on the most proportionate remedy that will be best for both the country and the economy as a whole?
This is already a Bill with teeth. I therefore ask the noble Lord to withdraw his amendment.
Lord Knight of Weymouth
My Lords, there we have it. The Minister started off by saying she was not lukewarm but then spoke with passion as to why the supermarkets should not be fined right now. That was lukewarm about fining supermarkets if ever I heard it. I am grateful to noble Lords who have spoken in this debate, all of whom, with the notable exception of the noble Lord, Lord Howard of Rising, supported fining in principle. I would urge the noble Baroness, Lady Randerson, and her party to vote with their principles rather than with the lame excuses that they have been given. I say to the right reverend prelate the Bishop of Newcastle that the Bill itself sets out how the powers to fine would be introduced, and it is perfectly clear that allowing the powers to fine from day one would not delay the passage of the Bill and the establishment of the adjudicator. However, if we do not pass this amendment, the adjudicator will begin without the powers that he wants and without the teeth that we need as the threat to make sure that people abide by this code. I would like to test the opinion of the House.
Lord Howard of Rising
“(2) A large retailer, subject to any enforcement measure set out in this section, may appeal against those measures to the Competition Appeals Tribunal.
(3) If the Adjudicator requires information to be published, the large retailer may appeal to the Competition Appeals Tribunal—
(a) prior to any information being published; or(b) following the publication of any information.”
Lord Howard of Rising
Both this amendment and Amendment 14 deal with appeals. The Minister was gracious enough in Committee to say that she would look at this and she produced a forceful argument in a letter to the noble Lord, Lord Borrie, pointing out the benefits of appealing to the High Court rather than to the Competition Appeal Tribunal. If one accepts her arguments, that still leaves open the question of the ability to appeal. If there is a financial penalty, it is all right to appeal. If there is a recommendation, there is no need to appeal. That leaves publishing information where the only remedy is a judicial review, which seems cumbersome, expensive and would involve delay, which, from debates in Committee, I know that the Minister thinks is unacceptable and undesirable. It would be only fair to have the right of appeal against naming and shaming, which, after all, can be more expensive to a supermarket than a financial penalty. That is to say, the damage to reputation can be considerably greater than a fine. If one is allowed to appeal on a financial penalty, there should surely be a right to appeal on something which could be an even greater punishment and more expensive. I beg to move.
Lord Plumb
My Lords, I can assure you that my noble friend Lord Howard really is a noble friend, although in this respect we disagree on the way forward. His amendment suggests that enforcement measures taken by an adjudicator, including naming and shaming, will be subject to the right to appeal to an appeals tribunal. This would surely lead to sclerosis of the adjudicator’s operations and the appeal could become bogged down in an attempt to enforce the groceries code. As we have already heard in the debate so far, there are avenues for retailers if they believe a decision is unfair, such as judicial review. This is the case with the Food Standards Agency. It could refuse to take remedial action, and a Competition Appeal Tribunal is available for making those decisions, such as with the OFT or the commission. I said earlier and I repeat: the adjudicator will not make competition decisions. The job is to investigate whether the groceries code is coupled with fair play in the marketplace. I therefore do not support this amendment.
Lord Browne of Ladyton
My Lords, out of consistency I support the noble Lord, Lord Howard of Rising, in Amendment 14. I said in Committee that my view was that the appeals processes, the potential of judicial review which has been generated by this Bill and the existing law are unnecessarily complicated and could be greatly clarified. I do not think that the issues at stake in relation to a decision such as naming and shaming are of anything other than the order in which it is guaranteed that a large retailer will test by judicial review whether or not that decision is appropriate. I expect—and we should anticipate—that these issues will be of such moment to large retailers that they will deploy their legal resources in a way that guarantees a degree of review of any decision. Had the noble Baroness been minded to accept Amendment 11 proposed by the noble Lord, Lord Howard of Rising, I would not have felt it necessary to support this amendment, which introduces to the Bill what I consider to be not only an element of fairness, but one of reality. Had the noble Baroness been minded to allow or require the adjudicator to publish with any report of an investigation the response of a large retailer and make it public, then I would have thought that this would have been sufficient. In the absence of that, a large retailer will want to be vindicated and we will get litigation. It would be better contained inside the process. I know this is not a position supported by most people who broadly take my view of this legislation, but I support it.
Lord Borrie
My Lords, if there is a “naming and shaming” proposal from the adjudicator, according to Clause 8 he or she has got to give written notice specifying,
“what information is to be published … how it must be published… and… the time by which it must be published”.
Clearly, there has to be a response to that. While it is not called an “appeal”, none the less, because notice has to be given by the adjudicator as to what he intends and the supermarket can respond to that, there is a time factor, and there is in effect an opportunity for the supermarket to say further things that it wants to say.
The common-law rule of natural justice, which we all know about, is that everybody has a right to be heard before some decision is made which may be adverse to them. The rule of natural justice as I have always understood it is that you only have an opportunity to be heard once. You cannot call upon some right of appeal under that rule, because that would be giving you the right to be heard twice, and that is not the position. Of course, there is always judicial review but that is, I admit, limited in that you have to show something seriously wrong with the decision, and that no reasonable person would have made such a decision. It is fair enough that anybody should have a right of judicial review to have that checked, but no case for an appeal has been made out. The whole set-up of the adjudicator is meant to be fairly speedy and so on. Subject to the points I have mentioned—you have to be given advance notice about naming and shaming, and you have a right to respond to that—there is no call for any more than that.
Baroness Wilcox
My Lords, the question of appeals is important and I can fully understand the desire of my noble friends Lord Howard of Rising and Lord Eccles to return to it at this stage of the Bill. However, although we have considered the matter carefully, the Government’s position remains unchanged.
Financial penalties clearly deserve a full merits right of appeal and the Bill provides for this. However, the other sanctions, including the requirement to publish information, have no direct legal consequence against a retailer. A recommendation is just that and is not binding, and a requirement to publish is essentially simply about distributing and sharing information which will, in all likelihood, be in the adjudicator’s investigation report. For this reason, therefore, judicial review is sufficient.
Although a judicial review will not normally involve a reconsideration of all the factual evidence, it could consider whether the adjudicator had reached a decision which was not supported by the facts, or had taken into account irrelevant facts or had failed to take account of relevant facts. I draw a comparison with the Financial Services Authority. Under the terms of the Financial Services Bill currently proceeding through this House, the FSA—or, in future, the Financial Conduct Authority—may issue public warning notices about a specific firm. Before making such a notice, it must give the firm the opportunity to comment, but there is no right of appeal before publication. Issuing a public warning notice in this way is, given the potential impact on reputation of the financial services firm in question, similar in consequence to our requirement to publish information which also has the benefit of warning those who deal with a retailer that they have been found in breach of the code. The requirement to give the firm the opportunity to comment is similar to that provided in Clause 5(4) of this Bill. This is similar to what the noble Lord, Lord Borrie, has also said on this point.
Furthermore, as I said in Committee, a full right of appeal, requiring the repetition of a detailed fact-finding exercise, could seriously delay the requirement to publish and so substantially diminish its impact. In particular, we expect a full merits appeal of this kind normally to take significantly more time than a judicial review because it involves a reconsideration of all the facts. Taking these matters into account, the Government consider that a full right of appeal is needed only against financial penalties, and that otherwise the possibility of judicial review by the court would be sufficient.
On whether appeals should be in the CAT or the High Court, this is a finely balanced question and I have written to Peers on this matter already. We do not think it would be wrong for either the CAT or the High Court to hear such appeals, nor do we think there is likely to be a significant difference in speed. However, on consideration, we do not think using the CAT would make the best use of its expertise, which is, of course, in competition matters. This is because, although introduced on competition grounds, the context of the adjudicator’s functions concerns contractual and commercial relationships between retailers and suppliers. The expertise needed to address these practices can be found in the High Court, or the Court of Session in Scotland. We do not think that the particular specialist expertise of the CAT is needed in order to consider the adjudicator’s decisions.
A further practical issue is whether, if the CAT were to hear appeals against financial penalties, appeals against costs or judicial reviews of all decisions of the adjudicator were also to be referred to the CAT. To the extent any appeals or reviews remained in the High Court, one could see two separate appeals or reviews on related subjects being taken forward in different fora at the same time. On the other hand, if they all took place in the CAT, this could lead to the CAT making rulings on matters even further from its core competition remit. That is a difficulty which is avoided by the Bill as we have it now. Therefore, in conclusion, we consider that appeals should most appropriately be to the High Court. I therefore ask the noble Lords to consider withdrawing their amendments.
Lord Howard of Rising
I thank the Minister for her remarks. I accept that the High Court would be as good a place as the Competition Appeal Tribunal. However, if an appeal is acceptable for a financial penalty, surely an appeal should also be acceptable for naming and shaming. It seems to me that fair play is the objective of this Bill, so surely there should be fair play in the application of the code by the adjudicator. Fair play surely would mean the right of appeal if someone thinks that the adjudicator has got it wrong.
I am grateful to the noble Lord, Lord Browne, for his support and I endorse his comment that, if there is to be no right of appeal, there should be an opportunity for the retailers’ arguments to be included with any report produced by the adjudicator. Having made those points, to which I hope that the Minister will listen, I beg leave to withdraw the amendment.
Baroness Wilcox
Baroness Wilcox
My Lords, the question of financial penalties has been central to our deliberations on the Bill. It is, as we have heard today, an important question. The Government have consistently stated their view that financial penalties should be a reserve power, but that it should be possible to bring them in quickly if they prove to be necessary. At Second Reading and in Committee a number of noble Lords, including the noble Lords, Lord Knight, Lord Grantchester, Lord Razzall and Lord Teverson, and the noble Baronesses, Lady Byford and Lady Randerson, and others, expressed the view that the Bill as drafted did not achieve this. Noble Lords indicated that the process for introducing fines was unnecessarily slow and bureaucratic and that it should be simplified. After careful consideration, I agree that noble Lords were right that the process was too slow. The Government have therefore decided to bring forward these amendments.
The amendments draw on the inspiration of the noble Lords, Lord Knight and Lord Grantchester, in that they allow the adjudicator to publish guidance on how it would use financial penalties in advance of the Secretary of State making the order that would confer that power. This means that if the power is granted it can be used straight away, without the need for further consultation, provided that the adjudicator has already published the necessary guidance under Clause 12. To accompany the amendment to Clause 12, we have deleted paragraphs 4 and 5 of Schedule 3.
I would also like to touch on the need for the Secretary of State to consult before introducing financial penalties, an issue which the noble Lords, Lord Razzall and Lord Teverson, raised in Committee. We think that this provision needs to be retained as it would be inappropriate to introduce such a significant change with no consultation. However, my officials have examined the Bill and advised that this consultation could, if desired, take place simultaneously with a triennial review by the Secretary of State. That would further streamline the process if the introduction of fines were being considered at a similar time to a triennial review, although I remind noble Lords that an order under Clause 9 and Schedule 3 does not have to await a triennial review.
We have, as I say, also deleted paragraphs 4 and 5 of Schedule 3 to accompany the amendments to Clause 12. This means that fines could be introduced within six months of the need being identified. All it will require is a three-month consultation and an affirmative order. These amendments have been supported by three of the major supplier organisations: the NFU, the Food and Drink Federation and the British Brands Group. I hope that noble Lords agree that these amendments will significantly streamline the introduction of fines and that they are able to give them their support. I beg to move.
Lord Knight of Weymouth
My Lords, I am grateful to the noble Baroness for the concession which results from our debate in Committee. I would also like to take this opportunity to ask again the question that her noble friend Lord Plumb asked in the previous debate. Assuming that the adjudicator has consulted on the guidance around using the powers to fine, how long will it take, once the Secretary of State has made the decision, for these powers to be introduced?
Baroness Wilcox
I am delighted to answer the noble Lord’s question. Fines can be introduced within six months or so of the need being identified. I thought that I had just said that but I am very happy to repeat it.
Lord Howard of Rising
Lord Howard of Rising
My Lords, this group of amendments is aimed at making it compulsory for the adjudicator to give advice to those seeking it from him. At the moment, there is no obligation. There is a strong argument that he should give advice. The opposing argument has been that he might get involved in frivolous requests if it is compulsory, and that that would mean unnecessary expense. A solution to that would be to make it compulsory to give advice to the large retailers which have to live by this code. They pay his expenses, so they are unlikely to incur unnecessary expense. Perhaps the Minister will consider this point and come back to us at Third Reading. I beg to move.
Lord True
My Lords, I intervened briefly in Grand Committee to support my noble friend on part of the amendments in this group. I think that he has already implied the following point in what he said. Clause 12(3) states:
“The Adjudicator may publish guidance about … steps that large retailers need to take in order to comply with the Groceries Code”.
I believe that the adjudicator must give such guidance; otherwise the position would be nonsensical. In Committee I gave the possible example of my local authority publishing a parking order but not putting up signs to say during which hours the parking scheme would operate and with people having to apply to find out that information.
With respect to my noble friend, I think that his amendments are probably rather widely drafted. Looking at the phrase, “may publish guidance about any other matter relating to the groceries code”, I can understand why my noble friend on the Front Bench might want to resist it. However, it might be a fruitful course, between now and Third Reading, if the Government thought about the more confined area to which my noble friend referred. It would seem to offend against natural justice not to tell people the steps they must take to comply with a code which could lead to their being fined, named and shamed or whatever. I hope the Minister will consider that specific point which arises from my noble friend’s Amendment 22 in this group.
Baroness Wilcox
My Lords, I have sympathy for the spirit of all three amendments. On Amendments 21 and 22, we certainly consider that an important role of the adjudicator will be to provide advice and guidance. That is why we have included these clauses. It is clearly better if the adjudicator can encourage compliance with the code through light-touch means, such as advice, rather than by enforcing it after a breach has been committed through sanctions. However, as I think my noble friend Lord Howard of Rising would concede, we cannot make these provisions mandatory. The adjudicator must be able to prioritise his or her workload and cannot be required to give advice in all circumstances to any of the 10 retailers or thousands of suppliers who might have a question. Even limiting the “must” to the retailers, could be open to abuse by one retailer at the expense of others.
I ask noble Lords to keep in mind here that the adjudicator will be a public authority and will be required to act reasonably in responding to requests for advice. In that context, some discretion for the adjudicator is appropriate. Equally, while guidance is crucial, I would emphasise that the adjudicator is already required under Clause 12(1), to publish guidance about how he or she will carry out his or her core operations. It would not be meaningful to have a mandatory requirement for the adjudicator to publish guidance on “any other matter relating to the groceries code”. Again, there has to be some flexibility for the adjudicator.
On the other hand, the Government certainly consider that the adjudicator would normally answer reasonable requests, and should normally provide advice where this would aid in the core objective of encouraging compliance with the code. Similarly, sufficient guidance should be provided to ensure that retailers and suppliers have the clarity they need to interact effectively with the adjudicator. This is similar to the expectation that we would have of a local authority. If the adjudicator was not acting appropriately in giving advice and guidance, I am sure that the Secretary of State would take steps to remedy this by issuing guidance to the adjudicator under Clause 15(8). The adjudicator has a statutory obligation to take account of such guidance in carrying out his or her functions, which I hope offers some reassurance to my noble friend Lord Howard.
On Amendment 24, although again I can sympathise with the principle behind the amendment, I do not consider it necessary. This is because the Bill, in Clause 12(4), already requires the adjudicator to consult any persons whom he or she thinks appropriate before publishing guidance. In the vast majority of circumstances this would include the retailers. In the unlikely event that the adjudicator did not consult the retailers before publishing guidance, in a case where it was clear that he or she should have done so, there would be the possibility of judicial review. The adjudicator will be very aware of this, meaning that Amendment 24 is not necessary. I would, therefore, ask the noble Lord to withdraw his amendment.
Lord Howard of Rising
My Lords, I thank the noble Baroness for her remarks, disappointing as they are. Of course, the point is that it is always the adjudicator who chooses what advice to give whereas there may be some area that is in doubt which the large retailers would like to know about. Perhaps they will be comforted by the Minister’s remarks, and by the fact that any future Secretary of State will be able to read in Hansard what is expected and call the adjudicator to order. In the mean time, I beg leave to withdraw my amendment.
Baroness Wilcox
“( ) If the Secretary of State makes an order under section 9 authorising the Adjudicator to impose financial penalties, the Adjudicator must publish guidance about the criteria that the Adjudicator intends to adopt in deciding the amount of a penalty (and this requirement can be satisfied by guidance published before the order is made).”
Baroness Wilcox
“( ) The Secretary of State must lay a copy of the report before Parliament.”
Baroness Wilcox
My Lords, I would like to propose government Amendment 28. I am sure that noble Lords will agree, whatever their perspective on the adjudicator, that it would be appropriate and helpful for a copy of his or her annual report to be laid before Parliament. This should improve scrutiny of the adjudicator both here and in the other place. I hope that noble Lords will welcome this, whether they look forward to taking the opportunity of the report being laid to bury the adjudicator or to praise him. I therefore beg to move.
Lord Knight of Weymouth
My Lords, I am going to mark this one down as a victory for us as we moved a very similar amendment in Committee. I would not want my noble friend Lord Browne to think that he had got two and I had not got any at all, so I am very grateful to the Minister.
Lord Knight of Weymouth
“( ) An order under subsection (2)(a) or (b) is subject to the super-affirmative procedure (see Schedule (Super-Affirmative Procedure)).”
Lord Knight of Weymouth
My Lords, in moving Amendment 30, I shall also speak to Amendments 43 and 44. As we interpret the letter that I referred to earlier from the Minister’s friend in the other place, Norman Lamb, to Ian Murray, regarding Select Committee confirmations of the appointment of the adjudicator, it did not show in a good light the Government’s esteem or priority with regard to the adjudicator. However, unlike the Government, we think that this is a significant new public body doing a very important role that people have long campaigned for, not just in the countryside but across the supermarket supply chain.
We therefore think that the process by which this body could be got rid of should mirror what we came up with in this House in the Public Bodies Act. Noble Lords will remember that when the Public Bodies Bill first started here it was not a great piece of legislation, with widespread use of Henry VIII powers, and the relevant committees of this House tore it to shreds. As a result, I am pleased to say the Government listened and we had a much improved Bill by the time it left this House, including introducing the super-affirmative procedure—which we have merely replicated in Amendment 44—for getting rid of public bodies that were listed in that Act. I am simply proposing that we should use the same process for the groceries code adjudicator. It is entirely logical. I suspect that the Minister will resist this amendment, although I would be delighted if she did not. Could she confirm in her reply that it is a cross-government policy that the super-affirmative procedure is particular to the Public Bodies Act and as new public bodies are created by the Government, they will use the affirmative procedure and not the super-affirmative procedure? If that is now cross-government policy, it would be helpful for your Lordships’ House to know, so if the Minister could help in that respect, if not by agreeing to the amendment, that would be wonderful. I beg to move.
Lord Cameron of Dillington
My Lords, I am all in favour of sunset clauses for quangos and for posts that are created. I believe it is right that such posts and bodies should be reviewed from time to time to see whether they are fulfilling their purpose or their effectiveness. However, it is also right that they should be reviewed under a proper procedure and consultation with all the relevant parties including Parliament, in spite of my perhaps slightly rude remarks about professional politicians earlier. Clause 16(2) provides for a very inexplicit kind of review for the Secretary of State to carry out. It does not say anything about what sort of review this is. Are we talking about the Secretary of State’s kitchen cabinet or the Treasury? What sort of review is this? Something definitely needs to be clarified. I believe that Amendment 44, albeit with its rather longwinded, legalistic caveats, is probably as good as one can get in terms of clarification. However, I will wait and hear what the Minister has to say about this.
Baroness Wilcox
My Lords, I fully understand the sentiments behind these amendments. All three parties have expressed their agreement that an adjudicator is needed, and the Government have no wish to enable the abolition of the adjudicator without proper parliamentary scrutiny. I remind noble Lords that the intention of Clause 16 is to bring the Bill into line with the broader policy on sunsetting and review, and the need to ensure that regulations and regulators can be removed once there is no longer a need for them. It does not indicate intent to abolish the adjudicator or transfer their functions, but is simply standard practice.
The noble Lord, Lord Knight, suggested that the Government intended to set a precedent for the abolition of new public bodies by affirmative order. It may be the case that it is appropriate to require the abolition of some public bodies by super-affirmative order, but one must consider this on a case-by-case basis, depending on the nature of the body or office. In the case of the adjudicator, first, the adjudicator will not be a “body” in the usual sense of the word but an officeholder, with only a small number of staff who will be seconded rather than directly employed. The adjudicator’s powers will extend to only one area of the economy: the groceries sector. Furthermore, he or she will have a tightly defined role: to enforce the groceries code.
Furthermore, as I said in Committee, the Delegated Powers and Regulatory Reform Committee scrutinised the Bill carefully. The committee is dedicated to the inspection of the procedures for delegated powers, and the Government take its recommendations very seriously. Given the purpose of the Bill and its specificity regarding the functions of the adjudicator, the committee decided that the affirmative procedure would be satisfactory and proportionate in this case.
I thank noble Lords for drawing our attention to the important issue of parliamentary scrutiny. However, one must also consider the issues of parliamentary time and efficiency. The investment of resources required for the super-affirmative procedure would not be proportionate to the functions of the adjudicator. In accordance with the recommendations of the Delegated Powers and Regulatory Reform Committee, we are satisfied that the affirmative procedure is the most appropriate.
The noble Lord, Lord Cameron, asked about the Secretary of State’s review. It is referred to in Clause 15 and would require full consultation with retailers, suppliers and other stakeholders. Finally, the noble Lord, Lord Knight, indicated the importance of listening to committees of the House during the passage of the Public Bodies Bill. We are listening to the relevant committees on this Bill. Given these explanations, I hope that noble Lords will feel satisfied and will not press their amendments.
Lord Knight of Weymouth
My Lords, that was a brief but interesting debate. I am most grateful to the noble Lord, Lord Cameron, for his support. The comments of the Minister are now on the record—another demonstration of a somewhat lukewarm view of this body. I do regard it as a body rather than an officeholder. The super-affirmative procedure was used in respect of the Commission for Rural Communities, which was largely an office of the rural advocate. This is one of the many examples in the Bill of where the super-affirmative procedure is used.
This will be a very powerful body—much more powerful than some of the bodies that are being abolished using the super-affirmative procedure. The Minister talked on some occasions about the power of name and shame. On others, when it was convenient, naming and shaming was described as a less powerful ability. I disagree with her. However, given the oddity of the Bill—as my noble friend Lord Browne set out, the Government could get rid of the code without even coming to Parliament—I will not press this, because if they chose to do that without even the “by your leave” of Parliament, we would have a referee without any rules and it would be a straightforward matter to get rid of the post. I am happy to withdraw my amendment.
Lord True
My Lords, I have taken the unusual step of tabling an amendment to transpose two clauses—the effect of which I will come to shortly—to draw the attention of the House to a point that I was not able to raise at Second Reading because I was on local authority business. It was discussed briefly in Grand Committee, but proceedings were curtailed. I do not intend to detain the House long on the matter, but it gives rise to important issues.
I refer to the manner of writing sub-headings in italics, “How does the Adjudicator arbitrate disputes? … How does the Adjudicator carry out investigations?”,
and so on. This is a new way of writing Bills which is reminiscent of the “frequently asked questions” pages on government websites. I tried to use one such page on the HMRC site the other day and was very glad after 10 minutes of struggling to get through to a nice lady who was able to help me.
I was told, first, that there was no discussion with the House about the new way of writing Bill sub-headings. When I asked the House authorities, they said that it had not been discussed and, since the drafting of the Bill was the responsibility of the noble Lord in charge—in this case, a Minister of the Crown—it would not fall within the terms of reference of the Procedure Committee of your Lordships’ House. The Public Bill Office confirmed that it was not possible to amend such sub-headings. My noble friend circulated a very helpful note to noble Lords demonstrating that the Government can contrive to amend the sub-headings in response to issues that are raised in Parliament. That is by grace and favour of the Executive, not by the will or desire of Parliament.
I am suspicious of these sub-headings for several reasons. The first argument put to us is that they are in plain English. I do not think that many of them are. On page 2, line 3, the heading is, “How does the Adjudicator carry out investigations and enforce their findings?”. That is 11 words, whereas “Investigation and enforcement”—which was the old way of doing things and is what is meant—is three words. On line 11 of page 4, the heading is, “What advice, guidance and recommendations does the Adjudicator give?”. That is nine words. Once the sub-heading would have been, “Advice and guidance”. That would be plain English. There are many other examples in the Bill, but I will not take the House through them.
Once we start changing the way in which legislation is written, whatever our good intentions there is the risk, in an area where Parliament has little direct control, that we will tend towards more descriptive writing. Noble Lords will remember that in the late 1990s we had rather more exciting titles to legislation, with “stakeholders” starting to appear in the gracious Speech. There is a risk that value judgments could interpose.
If the sub-headings are intended to be plain English traffic lights or signals to help the public find key matters in Bills, Parliament ought to have some responsibility for them. In Committee, I gave the example of the sub-heading, “How is the Adjudicator supervised?”, which covers the issue of abolition that noble Lords have just discussed. If you are slipping through these sub-headings, you would not find it. Who decides to highlight these things? There are clear difficulties.
Before Clause 14 there is the sub-heading, “What are the Adjudicator’s reporting requirements?”. Again, if a member of the public were accessing the Bill by means of these signposts, they would go to the sub-heading, but the text covers only Clause 14, which concerns the annual report that the adjudicator must publish. However, there are many other reporting requirements on the adjudicator in the Bill. The noble Lord, Lord Browne of Ladyton, won a victory in respect of one of the reports that the adjudicator has to present. The sub-heading goes much wider than the subject of the annual report covered in Clause 14. A real plain English heading for Clause 14 would be the good old, “Annual report”. Why not choose that? Why have this new and potentially misleading wording? I realise that these matters may be beyond my noble friend the Minister, who has been incredibly helpful in responding to them, so I hope that the powers-that-be will think again about the misleading effect that some of these sub-headings might have, or the incomplete information that might be given.
I will not repeat the arguments I gave in Committee about logical inconsistency. I understand that my noble friend has responded positively in relation to the sub-heading on line 1 of page 9: “Will this law mean other changes to the law?”. This is logical nonsense. When the Act comes into effect, the amendments to other legislation will already be law, so the sub-heading is totally illogical. I understand from my noble friend that it is proposed to rethink that. In Committee we discussed the sub-heading on line 3 of page 8: “How is the Adjudicator funded?”. However, the clauses covered, Clause 19 and 20, both speak in terms of how the adjudicator “may” be funded; for example:
“The Adjudicator may require … a levy”,
or:
“The Secretary of State may make grants”.
The new-style sub-heading is illogical because it uses “is” and gets into “may”/“must” arguments.
I agree with the Government that we should keep the law as plain as possible, using short, simple English. The more words you use, the more risk there is of inconsistency. The confusion that can be caused by the placing of headings is illustrated by my amendment, which proposes that Clause 17 should be moved to below Clause 18 because both clauses relate to the handling of information by the adjudicator and the sub-heading is: “How does the Adjudicator handle information?”. I understand that my noble friend has an answer to that.
I will bring my remarks to a conclusion, but we seem to be straying into unnecessary territory. If the Government—the masters of plain English—wish to give the public new signposts to find their way around legislation, let us not complicate the face of legislation; why not have a separate, short document, which may be available electronically? If people wanted to find out what the adjudicator’s reporting requirements were, you could have brief references to Clause 5, Clause 14 and so on, and people could be signposted around the Bill. The way it is done now just leads you to one clause, which gives an incomplete answer.
If this well meaning approach is intended to go forward, for it to be really accessible it should be done separately, not on the face of legislation. If Parliament is not going to be able to amend these sub-headings—and it never has been able to—we should leave the Bill absolutely simple, which would not risk any question of executive value judgments or misleading placement of sub-headings. The pursuit of plain English guidance could be done in a short companion to the legislation, if that is required. The more we go to electronic access to legislation, the more these kinds of sub-headings will become important.
I hope that my noble friend is going to give a favourable response on the sub-headings that will justify the points that I have made. Obviously I do not intend to press this matter to a Division but it affects both Houses of Parliament, and it is reasonable to bring it to the attention of Parliament, given that this is the first Bill in which this new manner of writing legislation has arisen. I beg to move.
Lord Howard of Rising
My Lords, I support my noble friend. While he was speaking, I looked through these new italicised sub-headings and was rather entertained. The first one is “How does the Adjudicator arbitrate disputes?”, and the next word down is “Arbitration”. The second sub-heading is “How does the Adjudicator carry out investigations and enforce their findings?”, and the next word down is “Investigations”. The third sub-heading is “What advice, guidance and recommendations does the Adjudicator give?”, and the next word down is “Advice”. Surely if anything is superfluous, these things are.
Lord Knight of Weymouth
My Lords, as I indicated in Committee, I think the noble Lord, Lord True, has a point. At Second Reading I said that I did not find these “folksy” headings—as the noble Baroness, Lady Byford, called them—offensive. I think they are fine, but the noble Lord, Lord True, is right that we here in Parliament should have the ability to amend them. He made mention of the responsibility of the Bill Minister in respect of these headings; of course there are also Private Members’ Bills, where you have to trust the individual parliamentarian to get it right. You could have a campaigning parliamentarian bringing forward Private Member’s legislation who would use the fact that Parliament cannot amend these sub-headings to say some quite odd things.
As the noble Lord, Lord True, says, if we are going to go down this road, the Government and the parliamentary authorities need to give some consideration to how we in Parliament can have some say over these sub-headings and not just leave it to informal chats with whoever is responsible for the Bill.
The Duke of Montrose
If the Government feel that they need these interrogatory questions put in print, are the Explanatory Notes not also available online, along with the Bill? Could these questions not be laid out in the Explanatory Notes rather than in the Bill itself?
Baroness Wilcox
My Lords, I thank the noble Lord, Lord True, for bringing forward this interesting amendment. While we cannot support this specific amendment, I am able to take into account the noble Lord’s broader points about ensuring that sub-headings are accurate and clear.
First, italicised sub-headings in themselves are not a recent innovation. For example, the Slave Trade Act 1873 groups its clauses using italicised sub-headings such as “Seizure of Slave Ships” and “Bounties”. Although the approach to the precise wording of these italicised sub-headings may have changed, the Government have always striven to write in a way that communicates meaning as clearly as possible to the audience of the day. I have placed a note about this in the Library of both Houses.
Turning to the noble Lord’s specific amendment, I believe that Clause 17 should remain under the sub-heading “How is the Adjudicator supervised?”, because the purpose behind allowing the Secretary of State to require information from the adjudicator is to allow him to supervise the adjudicator through triennial reviews. This is quite separate from the vital issue of how the adjudicator should ensure that it upholds confidentiality when handling information, even though it is clear from Clause 17(2) that there is some relationship between these issues.
However, I have been able to take into account the noble Lord’s points concerning the wording of sub-headings. I have raised these concerns with the Public Bill Office, which has agreed to change “How is the Adjudicator funded?” to “How may the Adjudicator be funded?”, and “Will this law mean other changes to the law?” to “Amendments and transition”.
I hope that the noble Lord is content with these changes, and I am sure that the process of considering the amendments and discussing them for this Bill will help ensure careful drafting of similar headings in future Bills. I therefore beg the noble Lord to withdraw his amendment.
Lord True
I thank my noble friend for that response. Rather like the noble Lord, Lord Browne, I should not be churlish when I have a minor victory, as he put it. I do not really see it that way, although I am very grateful for the gracious response of my noble friend the Minister.
The reality is that this style of writing, with question marks, et cetera, is new; it is intended to be new, and when a Government or an Executive make such a change from the traditional, rather arid way of wording these things, it must be construed to be intended to have an effect. That will arouse the interest of other people. I said in Grand Committee, rather fancifully perhaps, that the courts might look at whether this was part of the intention. As the courts, like Parliament, never look at these sub-headings I think that is extremely unlikely. In the course of this debate I believe I have demonstrated that the sub-heading “What are the Adjudicator’s reporting requirements?” above Clause 14 is also nonsense because it does not cover the reports on investigations and so on. I hope my noble friend will take that point to colleagues, because the powers-that-be need to think carefully about this approach.
I am grateful to my noble friend Lord Howard and the noble Lord, Lord Knight of Weymouth, who spoke in this debate. I am interested in the point that the noble Lord, Lord Knight, raised about Private Members’ legislation. It had not occurred to me but it is a significant point. I am also grateful for the support from my noble friend the Duke of Montrose, who made a very sensible suggestion that this signposting could be done to the side of the legislation. In the electronic age it might be much more helpful to do it via the Explanatory Notes or an introduction to the Explanatory Notes. The powers-that-be may want to consider that. I do not wish to detain the House so without more ado I thank the Minister and I beg leave to withdraw my amendment.
Lord Browne of Ladyton
Lord Browne of Ladyton
My Lords, if this regime is to work in the way in which all parties in this House intend it to work, suppliers will have to have complete confidence in the confidentiality of their communications with the adjudicator. One can envisage a reluctance from small suppliers, who will see the possibility that they will lose future contracts, from communicating with the adjudicator if they do not think that he and his staff will respect that confidentiality. The purpose of these amendments directed to Clause 17, which deals with the adjudicator’s obligation of confidentiality, is to toughen that obligation up. These five amendments do that in two ways. Two of them extend the obligation of confidentiality beyond the adjudicator to his or her deputy and staff. Two of them remove “may” and make the obligation of confidentiality overtly mandatory and not potentially discretionary by replacing it with “must”, although I am prepared to accept as a matter of law the point that the Minister made when she responded to a similar amendment in Committee. The fifth and last amendment creates a criminal offence for a breach of confidentiality. I will speak to them by reference to the Minister’s responses to similar amendments when we discussed this in Committee.
In relation to extending the obligation beyond the adjudicator to the deputy adjudicator and his or her staff, the Minister’s response was that she was confident that that obligation was already extended beyond the adjudicator. As the Minister and others who were there will remember, we were pressed for time on that day because we had a joint ambition to conclude the Committee stage by a particular time. I am inviting the Minister to go beyond a simple expression of confidence and to explain the mechanism that makes her so confident that the obligation on the adjudicator applies also to the deputy adjudicator and the staff of the adjudicator’s office when it is not spelled out in the Bill.
As far as replacing “may not” with “must not” in terms of respecting confidentiality is concerned, we have already discovered today that in the positive “may” and “must” are not interchangeable. But I am told that “may not” and “must not” have the same force, which I think is right as a matter of law. That is the expression the Minister used; I do not claim credit for it. It occurs to me that if we are legislating for the public and both words mean the same, if we mean “must not” why do we not say “must not”? If we are endeavouring to encourage a degree of confidence in this role on the part of people who are deeply vulnerable then we should say “must not” if we mean “must not”.
Finally, and this is a much more important point, there is a lacuna in this Bill that the obligation of confidentiality is not backed up by any sanctions for breach. We are all aware of the vulnerability of electronic communication and therefore the probability that almost every public office will leak. Something will get out. There is no sanction for a breach in this Bill because the Minister told me that she is confident that the adjudicator and his staff will respect confidentiality. In my time in Government I worked in five different departments and I had confidence in all of them that they would not leak and that they would respect confidentiality. I might find it difficult retrospectively to find evidence that that confidence was well placed.
The Minister went on to say that if a person suffers damage from a breach, then there is the potential for that person to claim damages from the adjudicator or to seek an injunction to prevent a disclosure. But it will be too late if it is leaked. The injunction will mean nothing. In any event, unless one gets a super-injunction, as we have discovered in this country, the very fact that one is seeking an injunction always reveals or at least points to the information. It is very doubtful that any of the people whom we are seeking to protect by this legislation will be in a position to get a super-injunction, not that we would want them to, so they are left with damages.
I envisage this sort of situation. I am a supplier to one of these great monoliths, one of the 10 supermarket chains that we are seeking to regulate by this. I supply them with whatever—fresh strawberries or something; it does not matter. I have a complaint. I tell the adjudicator. The adjudicator says, “There is something in this complaint. In fact, this reveals a very important issue. I am going to take this all the way”. It leaks to my retailer that I was the cause of this complaint. It has caused them a lot of embarrassment and probably cost them a lot of money. I do not get another contract. I challenge anybody to tell me how I will convince any court against the battery of lawyers I will face if I choose to sue Tesco or Asda or any of the 10 retailers—I should not name them; it does not matter who it is—that the damage that I suffered was a direct result of the fact that I complained to the adjudicator. It will be impossible, so there needs to be a sanction. The Minister in her response to me in an earlier debate implicitly accepted that there needs to be a sanction. There is no sanction. Injunction does not fit the bill and it is fanciful to think that small suppliers—everybody is small compared to these supermarkets—will be able to take on the challenge of proving in an action against the adjudicator that it was the adjudicator’s negligence in allowing the confidentiality to be breached that caused the loss.
The Bill needs to impose a criminal sanction to toughen up the confidentiality obligation to the maximum effect. I am supported in this because there are many other pieces of legislation in which this device is used. I have uncovered two but I am sure that researchers would uncover many more. I already know the answer to that so the Minister does not need to deploy the answer that she deployed against me earlier. They are different pieces of legislation so these are different sets of circumstances that require different responses. I am a great believer in consistency. If we can impose a criminal offence on, for example, the legal aid authorities if they breach confidentiality then we should impose the potential for criminal offence on the adjudicator and his staff. I beg to move.
Baroness Wilcox
My Lords, the adjudicator’s obligation to maintain strict standards of confidentiality is integral to the Bill. I therefore thank the noble Lord, Lord Browne, for his careful consideration of how we can make these standards exacting.
As I said in Committee, the Government are confident that the deputy adjudicator and people acting on behalf of the adjudicator would be bound by the duty of confidentiality as set out in the Bill. The deputy and the individuals acting for the adjudicator have no functions which are independent of the adjudicator and can only carry out the adjudicator’s functions. In doing so, they will be subject to the same restrictions as the adjudicator. If a person acting on behalf of the adjudicator breaches Clause 18, normal agency principles will make that a breach of Clause 18 by the adjudicator. Additionally, we are convinced that the words “may not” and “must not” have the same force and meaning here.
The noble Lord has raised the issue of plain English with regard to the amendments. We are confident that the Bill has the correct legal sense as it stands. Although it would not be wrong to use “must not”, we believe that “may not” is slightly better here. The words “may not” in their context here are clearly intended to be prohibitive. If they were permissive, it would mean that the adjudicator was allowed not to make unauthorised disclosures, which would not make sense. If further clarification were needed, the words “prohibitions contained in this section” are used in Clause 18(5).
The noble Lord has also suggested that the creation of a criminal offence is needed to discourage breaches of confidentiality. This seems unnecessary, as the adjudicator will be a public authority and be expected to take his or her statutory duties very seriously.
Perhaps I might also remind noble Lords that Schedule 1 provides for the Secretary of State to,
“dismiss the person if satisfied that the person is unable, unwilling or unfit to perform his or her functions”.
Serious breaches of confidentiality, either personally or from those working for him, have the potential to satisfy these requirements. We therefore believe that the threat of dismissal will be a sufficient deterrent, if indeed a deterrent is needed.
There are therefore ample reasons for the adjudicator and those working for the adjudicator to take care over confidentiality. I agree that strict confidentiality requirements will be essential if the adjudicator is truly to eradicate the climate of fear that we are aiming to address in the Bill. The Government are confident that the Bill provides for these requirements as it stands. I therefore ask the noble Lord to withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am grateful to the Minister for the care that she has again taken to address these issues having previously thought that she had seen me off in Grand Committee. I am pleased that we now have further clarity about the basis for her confidence in relation to the extension of the obligation to the deputy adjudicator and his staff—that is helpful. I maintain the position that, if “must not” and “may not” mean the same thing, “must not” is preferable, particularly when you are trying to build confidence among people who are in a weakened position—if they were not in a weakened position, we would not be doing this. I am disappointed, however, in the Minister’s failure to appreciate that there needs to a sanction for a breach of confidentiality which does not imply the dismissal of the adjudicator himself, because that, too, is about building confidence. If people see that a criminal offence will have been committed if their confidentiality is breached, their confidence in the legislation will be increased. I hope that the Minister’s confidence that there will be no leaks is well placed. I will regret it, as much as she will, if she is wrong. I just think that, in this internet age that we live in, it is fanciful to imagine that we are capable of creating an organisation that is leak-proof. However, I have been seen off on this occasion and I shall not come back. I beg leave to withdraw the amendment.
Lord Howard of Rising
( ) The Adjudicator may require the payment of a levy only if an order made by the Secretary of State is in force setting out the amount of the levy and authorising the Adjudicator to do so.”
Lord Howard of Rising
My Lords, the amendment would allow large retailers to be consulted when the levy is set. It seems only reasonable, if they are paying the bill, for them to have some voice. The amendment would not oblige the adjudicator to listen to them, but they may make some points which are worth while and even suggest that he take more money than he is asking—who knows?
I also have Amendment 41 in this group. While I accepted the points that the Minister made in Committee about not wanting to create bureaucracy and making sure things were easily handled, I suggested before I withdrew the amendment that any surplus funds at the end of one year should be used in the next year. I think that this might be acceptable to Her Majesty's Government and would be grateful if the Minister could confirm it.
Lord Razzall
My Lords, I shall speak to Amendment 39, which is in my name. It is of fundamental importance in relation to the levy funding, because Clause 19(5) indicates that the amount of a levy should be the same for all retailers. We have all received considerable lobbying, particularly from Waitrose, which feels that this is rather unfair and that the amount of the levy should be adjusted so that the retailers which have been penalised or named and shamed the most should pay a higher levy than those which have been penalised less. Waitrose, having taken this line of argument, obviously thinks that it is likely to offend and be named and shamed less than other retailers. It is a straightforward amendment, simply reflecting what I would regard as common sense: that when the amount of the levy is adjusted each year, the people who have been named and shamed the most should pay the most in the next levy.
Lord Teverson
My Lords, I support my noble friend’s amendment. It seems to me natural justice that when retailers have to pay a levy, the levy should be related to their culpability, the nuisance and aggravation that they have caused and their contraventions of the code. It is absolutely right that the levy should reflect that and that, in the case of those organisations which have not crossed the adjudicator’s desk, an invoice should not cross theirs either.
Lord Knight of Weymouth
My Lords, I am supportive of all the amendments in this group. I suspect that a concession is coming the way of the Liberal Democrat Benches. While I have disagreed with virtually everything that the noble Lord, Lord Howard of Rising, has said on this Bill, he has made a valuable contribution to it and I think that he has got a point here. A graceful concession from the Minister on this one, too, would be wonderful.
Baroness Wilcox
My Lords, the amendments tabled by my noble friends Lord Howard of Rising and Lord Eccles are ones that we have discussed before. As I said in Committee, the Government’s intention to fund the adjudicator via a levy is clearly set out in the Bill and in previous policy statements, so I see no need to require an order to be made first.
Regarding the suggestion of consultation on any increase of the levy, my worry is that this would add unnecessary bureaucracy and inflexibility. The adjudicator’s workload will vary depending on the number of complaints received. In some years, it may have very few, in which case the levy needed would be small. In other years, it may carry out major investigations requiring considerable resources, and I remain convinced that the safeguard of requiring the Secretary of State’s approval is the best way to balance flexibility and accountability.
On the subject of flexibility, my noble friends have also tabled an amendment regarding the returning of any unused funds to the retailers. While I believe that “may” adds helpful flexibility, I can assure them that any unused funds would certainly be taken into account when calculating the size of the next levy, so that no more was raised from the retailers than was absolutely necessary. I would therefore ask the noble Lords to withdraw those amendments.
With regards to the amendments tabled by the noble Lords, Lord Razzall and Lord Teverson, and the noble Baroness, Lady Randerson, in Committee, I indicated that the Government were sympathetic to an amendment along these lines. The Government have always stated that the intention should be that as soon as he or she has sufficient experience, the adjudicator should move to a differential levy. After consideration, it therefore seemed unnecessarily bureaucratic to require an order to be passed before this could be done and I am grateful to the noble Lords for bringing forward this amendment.
The fact that individual levies would still need to be approved by the Secretary of State will provide an adequate safeguard against abuse. Furthermore, the ways in which the levy can be raised are clearly specified. The levy must be the same for each retailer or else based on criteria broadly intended to reflect the expense and time the adjudicator expects to spend in dealing with matters relating to each retailer. It could not, for example, be proportional to turnover as that would not fit these specifications.
Noble Lords have said that they wish to see a system in which those who behave badly pay more. The Government concur with this sentiment and I am therefore happy to accept this amendment.
Lord Howard of Rising
I am grateful to my noble friend for indicating that the surplus in one year would be set off against the next year. I am completely gobsmacked at getting some support from the noble Lord, Lord Knight. I beg leave to withdraw the amendment.
Lord Razzall
Lord Razzall
I would like to thank the noble Baroness for her gracious acceptance of this amendment. I beg to move.
Lord Razzall
Olympic Games: Security
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Office (Lord Henley)
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 another place. It is as follows:
“Mr Speaker, since I updated the House on Olympic security last week there have been several allegations in the media, and I want to deal with each of them.
First, it was reported that Ministers knew there would be a shortfall in security staff last year. This is untrue. HMIC reported, at my request, on LOCOG’s security preparations last September, and it recommended several measures. HMIC reported again in February and concluded that LOCOG had plans in place to deliver the required number of security personnel. Neither HMIC report identified specific problems with G4S scheduling.
Secondly, it was reported that the Minister for Crime and Security had attended meetings in which he was told there was a security staff shortage. In fact, G4S repeatedly assured us that they would overshoot their targets. As I told the House on Thursday, G4S only told the Government that they would be unable to meet their contractual obligations last Wednesday and we took immediate action.
Thirdly, it was reported that we must have known about the shortfall because the military was put on standby in April. This is also not the case. Seven thousand five hundred troops have been part of the security plans since December. A further 1,000 were on standby in the event of flooding or other such civil emergencies, and we placed a further 2,000 on standby as a precaution in case the threat level increased. The 3,500 troops whose deployment I announced last Thursday are a direct response to the failure of G4S to meet its contractual obligations. A further contingency will remain.
The Government have strengthened the oversight of the security planning operation since we came to office. I would like to go through, briefly, what has happened since the bid for the Games in 2005.
From the beginning, the organisers planned to use private sector personnel for venue security. LOCOG confirmed they would be using private sector security personnel well before the 2008 Beijing Olympics. LOCOG started the procurement process for security personnel in April 2010.
When we entered government in May 2010 we instigated a comprehensive review of Olympic safety and security planning overseen by the then Security Minister the noble Baroness, Lady Neville-Jones.
That audit and review identified a shortfall in LOCOG’s venue security budget, which we addressed in the Comprehensive Spending Review, but we recognised that with a project of this size and scale, even this additional funding might not ensure the level of security we needed. So I also asked for outside assurance of LOCOG’s venue security planning.
In 2011, I commissioned Her Majesty’s Inspectorate of Constabulary to carry out an inspection of LOCOG’s venue security plans. As I have already said, this led to several recommendations that were acted upon by the Home Office, the police and LOCOG.
LOCOG and the Home Office monitored delivery throughout the following months. G4S assured LOCOG and the Government continuously that it would be able to deliver its contractual obligations, but on Wednesday 11 July, following the difficulties with scheduling which the company has acknowledged, G4S notified LOCOG and the Government that it would not be able to provide the numbers of security personnel specified in its contract.
I want to be clear that this was the first time that G4S admitted to any Minister that it would not be able to deliver the numbers of security personnel that it had promised. We acted immediately to make further contingency arrangements by agreeing the deployment of 3,500 further troops. That brings the total military contribution to the Games to 17,000, including personnel from all three services.
G4S has failed to deliver its contractual obligations, but we have the finest military personnel in the world—troops who are willing, ready and able to step in when their country calls—and we can be sure of their professionalism in helping to deliver a safe and secure Olympic Games”.
My Lords, that concludes the Statement.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister for coming to the House this evening to repeat the Statement.
I have listened carefully to the Statement and in it the Home Secretary says that following a report from HMIC in February 2012, LOCOG and the Home Office monitored delivery throughout the following months. How was that done? What were those checks and monitoring systems that the Government put in place to ensure that security personnel were being trained and would be in the right places at the right times? Did the Home Office and LOCOG fail in their monitoring, or did the Government and LOCOG just hand over the entire security operation to G4S with no checks or monitoring other than a government Minister sitting in meetings listening to false assurances from G4S?
I noted what the Home Secretary said in her Statement about the Minister, James Brokenshire, not receiving information about security staff shortages. So what was the purpose of James Brokenshire attending those meetings? What happened at those meetings? Did LOCOG and the government Ministers just sit there and listen to assurances from G4S that it was on target and everything was okay? Did anyone ask for evidence that that was the case?
Did the Government say, “Is everything going to plan and on time?”. Did G4S say, “Yes”, and did the Government just say, “That’s okay”? If the Home Secretary’s Statement, repeated in your Lordships’ House, that the Home Office and LOCOG weremonitoring delivery, is accurate, it is hard to understand the Home Secretary’s Statement, when she says later:
“I want to be clear that this”—
that is, Wednesday 11 July—
“was the first time that G4S admitted to any Minister that it would not be able to deliver the numbers of security personnel that it had promised”.
It is essential that we know about the monitoring arrangements to which the Home Secretary refers in her Statement. Will the Government publish the minutes or notes of the meetings that James Brokenshire attended on behalf of the Home Office? Can we have an assurance that that is not the usual way that the Government do business with business partners?
When the Home Secretary was asked earlier whether she could confirm the exact number of security staff that G4S would provide for the Games, she appeared unable to do so. I have been given a transcript of what she said in the House of Commons. She said:
“They are, they are, we are, continuing to accredit personnel for G4S and they are continuing to schedule personnel for the Olympic games and the precise balance of the numbers … they will be providing … will become clear over the next few days. But this is, this is, well, I suggest to Honourable Members opposite that they actually look at the statements that have been made by G4S about how they are dealing with this issue and what the problem is and the suggestion that somehow … this is a problem for us is not the case”.
What number of personnel is G4S now saying that it will be able to provide for the Games? What action are the Government taking to ensure that we can all have confidence in the training, support, management and adjustable arrangements for security staff to be in the right place at the right time?
Can the Government assure your Lordships’ House that the shortfall of security staff now being provided by G4S will not result in any additional cost to the public purse? I am greatly relieved that contingency plans were in place, although, obviously, government failures to identify the problem meant that they are having to be used very late in the day. I have great confidence in our Armed Forces—more than in G4S or the Government—but are the Government satisfied with the accommodation arrangements being provided for the Armed Forces, as this is being done at very short notice? I have received a number of reports—I would be happy to receive assurances that they are not correct—of soldiers having to be put up in shopping centres, school gyms and hurriedly constructed large shed-type accommodation. What will be the costs of those and who will meet them?
The Government have assured the Armed Forces that they will not be out of pocket for any family holidays or events that they have booked. That is small consolation for a soldier who has been in Afghanistan and now sees his leave cancelled to undertake security arrangements for the Olympics. Can you imagine how much he would enjoy being with family and friends? Who is meeting those costs?
There is great pride in London hosting the Olympics, and we all want it to be a fantastic experience for everyone who attends and takes part, but the Government really have to get their act together.
Lord Henley
My Lords, I agree with the noble Baroness in her final remarks. I think that all of us want to ensure that this will be a great experience for all those not only taking part in but attending the Olympics. Across all parties, on all sides of this House and another place, we want to ensure that. We also want to ensure that we deal with security matters in the most appropriate manner. That is why I can give the noble Baroness an assurance, as I did in repeating the Statement, that we increased the amount of money available for security after reviews that took place just over a year ago. That was the right thing to do, and we made sure that we have the right plans in place. When these problems arose, as the noble Baroness should have acknowledged, our contingency plans came into effect very well, and there were ways to deal with these matters.
If I may, I will deal with the questions that the noble Baroness put to me one by one. She first asked how we were monitoring these matters. I could run through an extensive list of meetings that Ministers—both the Home Secretary and my honourable friend Mr Brokenshire—had with LOCOG and G4S, but I shall not delay the House at this stage by detailing every meeting, all of which I have listed here. I assure her that we can make public in due course how many meetings there were and when they took place. I will take advice as to whether minutes of those meetings can be made available, but I shall not answer that question for the moment.
I can say that G4S provided detailed data—as it should; that is part of the contractual arrangements—and detailed assurances. As my right honourable friend made clear in her Statement, it was only on 11 July, last week, that G4S admitted that the programme was not on track. I do not think that noble Lords opposite should try to suggest that there is some conspiracy going on. There has been, I will not say a cock-up, but let us say a failure of management, which was not quite what it should have been. I do not know whether the noble Baroness heard the comments made by the chairman of G4S this morning on the radio, but that became apparent from them.
The noble Baroness then asked what numbers G4S will be able to provide. Again, I cannot give her the exact number at this stage. It will depend on how many complete the training and make it through the accreditation process. G4S cannot yet provide a precise answer, but that is no different from other sporting events—although I appreciate that this is a much bigger sporting event—that take place regularly. Sporting events of this sort obviously have to be dealt with by firms of this sort because there is no way that the Government could do it on our own.
On the costs to the public purse, G4S has confirmed that it will meet any extra costs associated with the military deployment, including accommodation and compensating soldiers for any lost leave. On the noble Baroness’s last point, again, I cannot precisely answer what accommodation will be provided for the additional soldiers, but we will ensure that they are accommodated in the most appropriate manner. I can give the categoric assurance that none will be out of pocket in any way and there will not be any extra cost to the public purse, because that will be met by G4S.
Lord Higgins
My Lords, does my noble friend agree that the important thing now is to plan for the immediate future rather than to look further forward? Who is now in overall charge of the security operation? Is a single individual in charge for both those recruited by G4S and the troops who are now being brought in? Secondly, there are reports that the computer to be used to allocate people to their posts was not working properly. Is it working now? Finally, there have been questions whether those recruited have the necessary language qualifications. Is that a problem or not?
Lord Henley
My Lords, working backwards through my noble friend’s questions, if people do not have the appropriate language skills, they will not get accreditation to work. I cannot comment on whether the computer has not been working at the moment but I will make inquiries and let my noble friend know. As for who is in charge of the overall security operation, obviously, in the end, my right honourable friend the Home Secretary is in overall charge and that will cascade down through all the usual people below her. The Armed Forces will report to their individual officers, but others will be involved in the process working out. G4S employees will obviously be a responsibility for G4S, but they must be properly accredited before they begin to work on such matters.
Lord Elystan-Morgan
My Lords, I raise two questions of a legalistic nature. First, when the contract was placed with G4S, how many other bodies, agencies or companies were in any way shortlisted for consideration? Secondly, the Minister has assured the House that G4S intends to compensate in full any losses suffered. Is that a term of the contract? Was it a penal clause or is it an aspiration on the part of G4S?
Lord Henley
My Lords, I do not have the details of the contract in front of me, but I can once again give the assurance that G4S has made it quite clear that it will meet the extra costs resulting from the errors that it has made. I can categorically assure the noble Lord that there were others who bid, but I am not in a position at this stage to say who they were.
Lord Prescott
My Lords, this is the third time in eight days that Parliament has received assurances from this Government that the security of the Olympic Games will not be compromised. The Government’s desperation in drafting in not only the Armed Forces but now the police is an indication of the total failure of the private companies involved to deliver on their contractual requirements to ensure Olympic security. Have the Government investigated the question I raised with the Minister during the Statement last Thursday regarding the fact that there are other companies almost bound to collapse and not provide their contractual requirements on fire security matters? Can the Minister tell me?
The desperation involved in drafting in the armed services clearly shows that the Holy Trinity of the Government, LOCOG and G4S has contributed to the failure to provide proper security for the great experience of the Olympics to which the Minister refers. Will the Government reconsider the possibility, particularly with regard to G4S and the police, of the intention to privatise our police forces? G4S is already negotiating for both the West Midlands and Surrey police forces. Will the Minister support the police authority in the Surrey area, which has cancelled its G4S contract, and will he encourage the West Midlands authority to do the same? When will he recognise that public service cannot be replaced by private service?
Lord Henley
My Lords, the noble Lord overstates his case, and overstates it rather badly. There is no question of privatising the police force, as he claims, although obviously there are certain parts of police work that can be done by private sector companies. That does not mean we are privatising the police force, which is a separate issue and nothing to do with what is happening here.
We are talking today about the security of the Olympics and different bits of security that will be carried out by different people. As the noble Lord knows perfectly well, private companies are always brought in to provide most of the basic security at any major sporting event in terms of checking bags and checking people as they go in. This is what happens at Wembley, at test matches, at Wimbledon and on many other occasions. The Olympics are no different, except they are bigger.
We entered into a competitive process with a number of companies—G4S won and it has not delivered as it should have done. We have made this clear today and in earlier Statements. We have appropriate contingency plans in place to make sure that if G4S failed in part of its job we could meet our obligations to have an appropriately secure Olympics. That is what we are going to have, so I think the noble Lord going on a rant of this sort is not helpful and does not do any good. We had made sure that we have answered all relevant questions—that is what we hope to do to as well as providing a properly secure Olympics.
Lord Dannatt
My Lords, I am sure that the Members of this House want to see a safe and secure Games, and that the last-minute increase in the size of the Armed Forces participation in the security operation will help to guarantee this. It is sad that we have had to have these sharp discussions in advance of the Olympics, attracting negative publicity, but that is life. I am sure the Minister would agree that there should be an investigation after the Games as to how we got into this position. Not wishing to prejudge that, I would like to place it on record, as the Minister did in his Statement, that when the Games were awarded to London in 2005 it was said that they would be civilian-run. However, that defies recent history about very large sporting events such as other Olympic Games. Was it not complacent of the Government of the day not to have planned from the outset for considerable use of the military, which has experience of dealing with large numbers of people and of using a clear chain of command, and might well have prevented the situation that we find ourselves in now?
Lord Henley
My Lords, I am very grateful to the noble Lord for his words, particularly when he says that we should not at this stage be making negative comments about the Games. We want them to be a good set of Games—we want them to be secure, but not to be seen as “the security Games”. I am also grateful for his comments about what happened at earlier stages when we were not in government in terms of the original plans for the Games and how they were set up.
It is quite right that we are making use of contingency plans to bring in extra military service personnel to help out on some aspects of the Games, and that earlier on we brought in an extra 5,000 specialists from the Armed Forces to address security matters that only they could ever have dealt with, as we see from HMS “Ocean”, moored in the Thames, and other things that the private sector obviously cannot produce. We are talking here about providing some extra military personnel to deal with the problems created by the issues that G4S had. I am grateful to the noble Lord for his comments.
Baroness Hamwee
My Lords, can the Minister assure the House that adequate training will be available, given that so many individuals will be coming to the job so late, and that the right training will be given to people designated to particular jobs? There was an unfortunate item on the news last night when a young man who was said to have been put forward by G4S—I think it was more than he was set up than put forward—indicated his difficulties with language.
As a more general and principled question, will the G4S contract be published? Before I am told that it is commercial and in confidence, I raise the point that both parties to a contract can agree to vary that sort of clause and perhaps G4S can be persuaded that it would be in the public interest, in both senses of the word, that the contract should be published.
Lord Henley
My Lords, I can give my noble friend an assurance that everyone doing a job involving security will have adequate training and we shall make sure that people who do not have adequate training will not be accredited.
Regarding whether the G4S contract will be published, that might be a matter for both parties to consider after the event, so let us leave it until then. It might be that G4S wishes to publish it, or that some sort of post-mortem, as my noble friend is suggesting, might be appropriate after these Games. I do not think it is proper that we should create fears that are not necessarily there at this stage.
Baroness Billingham
My Lords, we are where we are, and I entirely agree with the Minister that this is not the time for looking retrospectively and trying to find out what happened. However, the fact of the matter is that every week, every day and almost every hour we hear things that are completely disconcerting to the general public and to the people who are going to be involved in the Games, both participants and spectators. The role of the Government should always be the safety of those people and it has to be their priority. I am sure that the more the general public read, the more they are losing confidence and faith in what the Home Secretary has been doing. Heaven knows how we got ourselves into this predicament. I do not want to put it too worryingly, but it looks as if we are almost in a national security crisis and I want to know how bad it has got to be before the Minister does something about that. Every single thing that we have heard today indicates that the security we have always promised to the people coming to watch these Games is not going to be in place. So what is the Minister’s next move—we want to know?
Lord Henley
My Lords, again, I suspect that the noble Baroness is exaggerating by saying that every day there is some new problem. There were problems last week and over the weekend there were further press reports that have now been dealt with by my right honourable friend in her Answer, where she made it quite clear that most of them are completely untrue. Although I appreciate that not many have been doing it in this House, when I listened to the debate in another place there was a great deal of unnecessary point-scoring on questions of security. It is very dangerous of the party opposite. I can assure the House that we take security as the absolute top priority but we do not want to turn these Games into the security Games. We want to ensure that there is appropriate protection of individuals, and that will happen. That is why we have reacted as we did and why we set up the contingency plans that we have. They have come into effect as a result of the failures of G4S.
Lord Glentoran
My Lords, I was part of the Bill team that worked with Tessa Jowell for several years, from the first time that we brought the Bill through all the way up until the election. We worked together to make sure that these Games were delivered by the British Parliament as a cross-party project. Up until today or yesterday, that has been so and I beg noble Lords not to start nitpicking on cross-party points.
Lord Henley
My Lords, I am very grateful for what my noble friend said, particularly about Tessa Jowell and all the work that she has done for the Olympics ever since she put that bid in some time back in 2002, or whenever it started. The point that she made, which again I think my noble friend will be aware of, is that this is not the time to start trying to point-score on a political basis, as has been happening. We want to ensure that we have a good and successful Games, and that they are secure Games. However, we do not want security to dominate them so that they become a security Games. We want a good, successful Games that everyone will enjoy.
Baroness Tonge
My Lords, could the Minister persuade our Government to talk to the Government of Israel about transferring, as a good-will gesture, the G4S personnel who are currently guarding—rather brutally—the illegal settlements in the Occupied Territories of Palestine? Could he persuade them to transfer those people, thus making the Games a great experience for Palestinians as well as for Londoners?
Lord Henley
My Lords, I do not think that is a point that I need to respond to.
Lord Mackenzie of Framwellgate
My Lords, in asking this question I declare an interest that is in the Lords register. Is the Minister aware of the advanced technical means of securing large perimeter areas by means such as radar, which obviously reduce the manpower required for these purposes? Is he aware that some 18 months ago an approach was made to the Olympic security authorities by a company that secured Sydney harbour in Australia? Presentations were given and considerable interest was shown by those who received the presentation but, unfortunately, there does not appear to have been any follow-up by those in charge of security at the Olympic authorities.
Lord Henley
My Lords, I agree with the noble Lord that technology can obviously always play a very important part in security but it would be a very rash and foolish Government who relied only on technology. In the end, one needs to have feet on the ground and to have people there who are properly trained and accredited to do the right job.
Lord Patten
My Lords, in declaring my interest as a member of the advisory board of the British Olympic Association, whose foremost concern is for the training, welfare, health and, above all, security of British athletes, I congratulate my right honourable friend the Secretary of State for the Home Office very warmly on the action that she has taken. Is my noble friend the Minister convinced, looking forward not back at any post-mortem that might happen, that in the next few weeks—and indeed more than that—the chief executive and top management team of LOCOG have the capacity and capability to be good customers of the security that they are paying for and commissioning? They are in the front line, and have been for many years, in commissioning the security that we have had. Secondly, I also ask my noble friend for an absolute assurance that as the Olympic Games morph and transmogrify into the Paralympic Games there will be no diminution whatever in the level of security provided during the Paralympics as compared to the Olympics, because soft targets are easy targets.
Lord Henley
My Lords, I give an assurance to my noble friend that we will maintain security at whatever is the appropriate level on the advice that we receive from those who have an interest in security matters. It is therefore unlikely to be relaxed as the Olympics morph, as my noble friend put it, into the Paralympics. As regards the assurances that he would like from me personally about LOCOG, I have not been involved in any discussions with the officials and management of LOCOG but my right honourable friend the Secretary of State has, as has my honourable friend Mr James Brokenshire. I think they could give assurances to my noble friend that they are satisfied that it will ensure that we maintain the right level of security.
Lord Addington
My Lords, does my noble friend agree that this is probably the biggest mistake we have had in the preparation of the Games so far? Will he assure the House, and indeed Parliament, that when we review everything to try to get the soft legacy, which will probably be the biggest part of the legacy of this, we will get a full review of what happened, when and why, so that we can study it at leisure? There should not be any point-scoring now and we should make sure that we learn what has actually happened and ensure that the next Games or event does not repeat these mistakes. Let it make its new ones.
Lord Henley
My Lords, I think my noble friend was at the same meeting as me when a number of potential Olympic ambassadors were briefed, and he will then remember that the Secretary of State for Culture, Olympics, Media and Sport said that, however well things went, there were likely to be mistakes. That is in the nature of things and we will look at those mistakes afterwards and ensure that we resolve them so that they do not happen again. My noble friend asks that we ensure that we do not have any further mistakes the next time we have the Olympics. I appreciate that there are one or two Members of this House who might remember the previous Olympics back in 1948. I do not and I am not sure that I will be around for the next time.
Lord Henley
I appreciate that my noble friend is now saying that there will be the Commonwealth Games in Scotland in two years’ time. I am sure that the Scottish Government will be taking all possible advice on these matters and will learn as much as they can from any possible mistakes that may or may not have happened.
Finance Bill
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, as noble Lords are well aware, when this Government came into power they inherited the largest peacetime deficit in our history. We are doing everything possible to get the economy moving and to deal with the enormous debts we inherited. Last week’s Fiscal Sustainability Report by the Office for Budget Responsibility highlighted the importance of the Government’s plans to ensure the long-term sustainability of the public finances. Our consolidation plans build on last year’s public sector pensions deal, which the OBR has identified as instrumental in preventing further increases in public sector net debt over the long term.
This Bill implements further reforms to improve the state of the economy. Despite the challenging economic backdrop, we remain committed to supporting growth. The Bill introduces a number of changes to encourage growth in our economy and help businesses of all sizes. The Government have clearly set out their ambition to have the most competitive tax system in the G20. The competitiveness of our tax system diminished over the last decade, as our competitors cut their corporation tax rates. We have taken action to address this. Clauses 5 and 6 make further cuts to the main rate of corporation tax, to a rate of 23% next year. This will be followed by a further cut in the Finance Bill of 2013. A cut in the main rate of corporation tax benefits businesses right across the country. As the CBI said:
“The additional cut in the headline rate of corporation tax will help make the UK a more attractive place for companies to invest, do business and create jobs”.
The Bill also introduces new controlled foreign companies rules designed to improve the UK’s tax competitiveness. These reforms will ensure that this is done in a way that reflects modern, global business practices, significantly reducing the compliance burdens of business. As my right honourable friend the Chancellor said in his Budget Statement, this reform,
“will stop global firms leaving Britain, as they were, and encourage them to start coming here”.—[Official Report, Commons, 21/3/12; col. 802.]
WPP and other major companies have recently announced that they are considering a return to the UK, or that they will move their tax domicile into the UK.
Alongside these reforms, the Bill also introduces a patent box to encourage innovative activity in the UK, but competitiveness is not only about the corporation tax rate. We had been told that the 50p rate of income tax was damaging to our competitiveness and that it would not raise revenue. Indeed, the HMRC report, published alongside the Budget, sets out that the 50p rate is distortive, is damaging to international competitiveness and is an economically inefficient way of raising revenue. In short, the 50p rate has failed. The analysis by HMRC shows that the yield would be, at best, £1 billion and, at worst, may raise nothing at all. This is because the behavioural response has been substantially larger than expected. The 50p rate has damaged the UK’s competitiveness at the very time we must do all we can to improve it. That is why we will reduce the additional rate to 45p from next year. As the CBI said:
“Reducing the 50p income tax rate will send a clear signal that Britain is open for business”.
We want to make the UK the best place in Europe to start, finance and grow a business. That is why the Bill introduces measures to enable greater investment in our small and medium-sized companies. The increases to thresholds and better targeting of the enterprise investment scheme and venture capital trusts in Clauses 39 and 40 will allow businesses to raise equity more easily. The Bill also establishes the new seed enterprise investment scheme to encourage investment into new, early-stage companies by providing tax relief of 50% to investors.
The Bill also provides for individuals. The increase in the personal allowance in Clause 3 will set the value at £8,105 from 6 April this year and we have announced a further increase of £1,100 next year, the largest ever increase in cash terms. The Government are taking 2 million people out of income tax and providing a tax cut to 24 million people. This is a major step towards our commitment to raising the personal allowance to £10,000 by the end of this Parliament.
The Bill also makes changes to the age-related allowances that support our objective to make the tax system simpler and easier for people to understand, but no pensioners will be worse off in cash terms as a result of these changes and this year our triple lock will see the basic state pension increase by over £275. This is £127 more than the previous Government’s plans.
This Government are responsive to the concerns of working families and businesses about the cost of living and the challenges of running a business. That is why we have deferred the fuel duty rise, so that road users are paying 10p a litre less in taxation than they would be doing had Labour still been in power. As RAC Foundation director Professor Stephen Glaister said:
“This is good news for drivers and good news for the country”.
As noble Lords know, this Government have also had to make difficult decisions so that we can tackle the deficit. This includes withdrawing child benefit from households earning more than £50,000. This is a fair way to make savings. We are also taking steps to ensure that the wealthy pay their fair share. The Budget package ensures that the wealthiest will pay five times more than the cost of reducing the additional rate of income tax. The introduction of a new higher rate of stamp duty land tax at 7% on properties sold for more than £2 million will raise over £1 billion in the next five years. The new stamp duty land tax enveloping entry charge rate of 15% will deter those seeking to put their high-value property into corporate structures to avoid tax. The introduction of the UK-Switzerland agreement will ensure that we address the tax loss from those who put their money into Swiss banks to evade tax, and we are tackling tax avoidance with measures in the Bill raising over £1 billion in total.
We will also raise revenue from those sectors that are better able to pay. The increase in the bank levy in Clause 209 will ensure that that the levy will raise around £10 billion from banks over the course of this Parliament, yield that is helping to ensure that we can reduce the deficit, which in turn ensures the stable, low interest rates that are of such benefit to our economy.
The Government are committed to greater consultation on tax policy changes. Most of the measures in the Bill were announced at Budget 2011 and have been subject to extensive consultation. We published more than 400 pages of draft legislation for comment in December and received more than 450 comments. This consultation has ensured better legislation with fewer changes required.
The Bill sets out changes to improve our competitiveness, encourage investment and support our businesses through the recovery. Of course, we always said that recovery would be choppy. In fact, last year the independent Office for Budget Responsibility revealed that the underlying damage to the economy, and our challenge in repairing it, was much greater that anyone had thought. However, we are doing everything possible to confront Britain’s problems, get the economy moving and deal with the enormous debts we inherited. The Bill builds on the progress that the Government have made to date to help families, help business and support economic growth, and I commend it to the House.
Baroness Kramer
My Lords, because of the way in which legislation progresses through the Commons and through this House, I feel that all of us present tonight have discussed all the issues contained in the Bill on numerous occasions. I have to confess to a small temptation just to say, “Please refer to speeches I made earlier”. It means that I shall be brief and just hit on the few issues that I wish to highlight.
To me, the most important measure in the Bill is the raising of the starting threshold for income tax to £8,105 this year and to more than £9,000 next year. Two million low-income earners will have been taken out of paying income tax altogether by this and previous lifts in the threshold and, as the Minister said, some 24 million middle and low-earning income tax payers will have seen their income tax bills reduced by about £330. This has to be right. It moves us well on the way to a starting threshold of £10,000, as set out in the coalition agreement. As a Liberal Democrat, I see it as a significant move towards a threshold that, in essence, starts above the minimum wage, with the notion that there is a relationship between earnings on the minimum wage and the point at which income tax starts. I believe that that has to be right as a major incentive into work and a major measure to tackle long-term poverty.
Cutting taxes significantly at the bottom end of the earnings spectrum is now pretty much taken for granted as the right thing to do across all the parties. I only have a short memory, but I remember all the debates not long ago when this looked pretty revolutionary. The Labour Party chose not to do it in what were considered to be times of plenty, so the fact that it is now being achieved in times of austerity will, I hope, embed this type of philosophy across all the things that we do, no matter which party we come from, as we look at taxation in the future. This is one of the most progressive tax strategies that Governments have adopted in recent years. It has the character of a permanent change and to me is far more effective than the one-off one-year VAT cut that has sometimes been proposed by Labour—which, interestingly, would help the richest members of our community the most.
The Bill also continues to strengthen support for business. I am particularly pleased with the increased incentives for small businesses, new start-ups and entrepreneurs. However, I ask the Government to look at extending the enhanced capital allowances regime to small businesses more widely than just to those in the enterprise zones. I am a member of the All-Party Parliamentary Group on Rebalancing the British Economy, an excellent group that I recommend to the House. Of all the evidence that the group has heard, I have been most struck by that given by Brompton Bicycles, a firm that sells a conventional product but is successful in large part because its manufacturing processes are at the cutting edge of technology. UK small businesses desperately need to accelerate their adoption of new manufacturing technologies to compete and grow. They may not be high-tech in their products, but to be high-tech in their manufacturing tends to make them much more competitive and effective. Incentives to invest in these new processes for small businesses are crucial and I encourage the Government to put this high on their agenda.
The tax avoidance measures in the Bill are very welcome and, I would say, long overdue. Stamp duty has been a particular concern of mine because avoidance by the wealthy is so unfair to the ordinary house buyer. The Bill clamps down on some schemes that use domestic corporate structures to avoid stamp duty, though, in my reading it has not yet eliminated what I would call the Cayman Islands problem—the number of properties that are now already in Cayman Islands trusts or will be put into them in future, avoiding not just stamp duty but also capital gains and inheritance tax. I hope that the Government will make a move on that very soon because it remains a significant loophole and a real sore to every taxpayer who pays up on stamp duty.
Economic growth overshadows all fiscal and economic debates. I am therefore pleased that the Funding for Lending scheme was launched last week by the Treasury and the Bank of England. However, it strikes me as extraordinary that the Treasury and the Bank of England have had to set up a scheme in such a way that banks can get discounted loans only by actually maintaining or increasing lending. That tells you that that they have responded to just about nothing else. To me, that underscores the argument for banking reform, which, hopefully, will be a major occupation for this House after Christmas.
This is a sensible Bill that has been produced in difficult times and I very much hope that we will see it pass.
Lord Browne of Belmont
My Lords, I spoke in this debate last year to express my concern that, despite numerous statements by the Prime Minister before and since the general election about the importance of recognising marriage in the tax system, nothing has happened. It is a great sadness to me that, one year on, that is still the case.
Let us be very clear: the commitment to recognise marriage was in the Conservative manifesto and made it into the coalition agreement, so it is not a policy that has been dropped because of the coalition. The Liberal Democrats have formally been given the right to abstain and, in embracing the coalition agreement, have consented to this. This should ensure a majority adequate to secure the passage of the measure, given that not only Conservative Members of another place will vote for the proposal. There is therefore no reason why the Government should not action their commitment and every reason why they must.
Of course I understand that the coalition agreement pertains to the period 2010-15, so I am not suggesting that the Government have reneged on their commitment. What I am saying is that, given the importance of this commitment, it is a great shame that it has not been given greater priority. Moreover, because of developments since 2010 and the time that it will take to introduce a transferable allowance, I consider that it is now imperative that the introduction of the allowance be made a top priority for 2013.
UK residents find themselves in a relatively unusual position. Only 20.9% of people living in OECD member states are subject to individual taxation without spousal allowances or credits. Most of these live in just two countries—the United Kingdom and Mexico. Among highly developed large economies, the UK is alone in operating a tax system that ignores spousal obligations.
Given that we fail to recognise marriage in the tax system, it is hardly surprising that many married couples in the UK are treated less well than they would be in other developed countries, on average. When the commitment to recognise marriage in the tax system through a transferable allowance was made in 2010, the latest available figures demonstrated that the tax burden on a one-earner married couple with two children and on average wage was 33% greater than the OECD average. Consequently, UK residents faced a greater disincentive to marriage than did most people living in the developed OECD world.
That is of importance for two reasons. The first is child development. The social science evidence is very clear: marriage provides a much more stable environment for child development than cohabitation, so there is no public policy merit in making it harder for people to marry here than in other developed countries. This is hugely important, because the evidence also shows clearly that children raised in stable two-parent homes do much better on average, according to every relevant benchmark, than children raised in single-parent homes. I do not say this to criticise in any way single parents, who for the most part do an excellent job in what sometimes are extremely difficult circumstances, and I believe that they deserve our full support. Rather, I say it because we need to ensure that public policy does not make it more difficult for couples who want to marry to do so in the UK than in other developed OECD countries. If we do not make this change, “broken Britain” should come as no surprise to us.
The second reason is choice. In approaching choice, I am aware that some people find the idea that fiscal policy has anything to do with marriage ridiculous. They assert that people get married for love and they give the impression that any reference to fiscal consideration in the context of marriage is somehow crass and insensitive. These people, who usually in my experience are very well off, make the basic mistake of confusing two different decisions. As I said in last year’s debate, of course people do not fall in love for fiscal reasons. However, when they fall in love and decide that they want to be together, they face a choice: do they marry or cohabit? It is in making that decision that fiscal considerations are very real, particularly if you are on a low to modest income. Statistics demonstrate that 90% of young people aspire to marry, so why then is the marriage rate at an all-time low and the cohabitation rate at an all-time high? Clearly, people have not stopped falling in love and deciding that they want to be together.
I do not want to suggest for a minute that increasing cohabitation is just, or even primarily, the result of fiscal policy—undoubtedly there are other significant cultural factors—but I suggest that fiscal policy is a contributory factor for the evident disconnect between the aspiration to marry and the level of marriages. The fact is that people in the UK fall in love and decide that they want to be together in a context where the option of marrying is more difficult than it is for most people living in the developed OECD world.
Bringing ourselves into line with international best practice and recognising marriage in the tax system will help to make it no more difficult for those who aspire to marry in the UK to do so than is the case for most OECD residents. Moreover, I contend that the case for recognising marriage in the tax system is even stronger today than it was in 2010. Analysis of the latest OECD figures carried out by CARE and presented in Taxation of Families 2010/11 reveals that a one-earner married couple with two children and an average wage now face a tax burden that is 52% greater than the OECD average, a significant increase on the 33% figure for 2010.
This deeply disturbing deterioration impels us to delay no longer the introduction of the transferable allowance. The Prime Minister, who has talked so much about supporting marriage, cannot allow a situation to develop in which the tax disincentives to marriage increase significantly under his premiership. He must ensure that, at least in terms of fiscal policy, it is no more difficult for couples to marry in the UK than it is across the OECD on average.
Before I conclude, I wish to touch on the extremely important subject of Her Majesty’s Revenue and Customs and the IT changes that will need to be implemented in order for the transferable allowance to be given effect. It has been suggested that it could take a year or more for HMRC to make the necessary changes. In the light of this, there are five key questions for the Minister.
First, has the Treasury asked HMRC to assess how long it will take to make the requisite IT changes to introduce the transferable allowance? Secondly, if the answer to the above question is yes, how long did HMRC estimate and, if the answer is no, will the Minister urgently ask them to make an estimate? Thirdly, has the Treasury instructed HMRC to start making the necessary IT changes to facilitate the introduction of the transferable allowance? Fourthly, if the answer to the third question is no, will he urgently ask HMRC to begin making the necessary IT changes? Fifthly, when do the Government intend to bring forward legislation to formally introduce the transferable allowance?
I look forward to the Minister’s reply. If he does not have all the information to hand today, I would be most grateful if he would write to me and place a copy of the letter in the House of Lords Library.
Lord Flight
My Lords, I will say a little about small business and the EIS. The Minister stressed the importance of small businesses in his speech, and I think everybody across all shades of party opinion knows that small business can provide extra employment and boost the economy, and that the proportion of GDP and employment it represents continues to grow.
The EIS has been a considerable success and raised some £12 billion of high-risk equity for small businesses. It was interesting that the French Government sent a delegation over to the UK to look at why the EIS had worked so much better in the UK than the French scheme had in France, even though, on the face of it, the French scheme looked to be more generous. I also make the point that equity is just as important as debt—small businesses cannot, and should not, view bank borrowing as a substitute for equity. As a buffer for survival, equity is absolutely necessary.
At this point, I declare an interest, which is duly in the register, as chairman of the EIS Association, the not-for-profit trade body representing the various professionals involved in promoting and creating EIS offerings. My colleagues from the EIS Association have had an extremely constructive dialogue with HMRC and I pay tribute to the good will and constructive actions of particular individuals in trying to address some of the issues that need addressing, which the Finance Bill does to some extent. I was extremely pleased that the Government listened to the proposals to widen the coverage of the EIS and deal with the follow-on situation of small companies that had survived and grown a bit but needed some more equity capital. It was a pity that the Government were obliged to delay getting EU state aid clearance, as I do not see that these sorts of measures are any of the business of the EU. I am very pleased that the Government did listen and have addressed that.
I am therefore a little disappointed in respect of two big areas in the Finance Bill. The first is the limiting of loss relief to £50,000, or 25% of annual income, which changes the risk-reward nature of EIS investment. In a way, the Government have given with one hand, by widening the parameters, but taken back with the other hand with that measure. Given that small company investment is extremely high-risk, what the loss is going to be with small companies that fail is a material consideration. I know there is some amelioration of that in that losses can be spread over two years for tax purposes, but I feel that this was slightly a political measure and not really thought through in terms of its impact. For all those who invested under EISs in the past on the basis of loss relief, it is also retrospective in that it is being changed after they took the decision to invest based on the then risk/reward parameters.
A minor point is that the list of qualifying investments has been looked at from the negative side but not from the positive side. I cannot see why nursing homes and hotels are not qualifying investments. As the record shows, neither is an area where people make instant profits and both are socially useful. There is a case for reviewing the rules on a positive side.
The second point is perhaps the most material. The EISA has had constructive discussions with the Treasury for some time on measures to stop what I think we and the Government have viewed as abuse of the EIS, where the basic objectives, which we all understand, are being rather used for tax schemes and getting around the rules. Everybody in the industry broadly understands what those abuses are and is pretty constructive about dealing with them. This has led to the new rules in the Finance Bill that create Section 178A of the Income Tax Act 2007. It introduces new disqualifying arrangements which apply to VCTs and the new SEISs as well as EISs. These include test conditions A and B, and if either is met the arrangement is disqualified. I shall read condition A because I get very upset that the drafting of a law in this area can be so entirely opaque:
“Condition A … is that as a result of the money raised by the relevant issue being employed for the purpose of the relevant business activity, the whole or the majority of the amount raised is, in the course of the arrangements, paid to or for the benefit of a party or parties to the arrangements or a person or persons connected with such a party”.
I am afraid it is extremely opaque. I think I know what it is getting at: that where an EIS-qualifying company is to some extent fronting for a larger company that is underwriting its business risk, it is clearly not cricket. I wish that things such as that could be drafted in a way that is a little clearer and more straightforward.
The second condition, condition B, outlaws where a part of business venture, not otherwise qualifying, would qualify. For example, if, say, old people’s homes do not qualify, you separate out a restaurant in the old people’s home which would qualify. Candidly, I cannot particularly see the harm in that if it is employing people and providing a service. It would again be helpful if what the condition means were clear, but I question whether it is of much economic use.
The even bigger issue is that the new arrangements include a process for advanced assurance guidelines by HMRC. This is a form of pre-clearance. In the light of those very opaque conditions A and B, it is almost necessary in order for people to know whether an EIS proposition is okay. It is therefore helpful, but my first point is that it will require HMRC to be adequately resourced to provide and assess these pre-clearances. If not, there will be delays in the funding that small business badly needs.
I believe the initial draft of the Revenue’s guidance notes have, for some reason, been fairly widely circulated, which was not intended. As the notes stand, they are capable of being interpreted in an extremely unhelpful way. Most people know the issues that these guidelines are getting at but, on the face of it, the wording could unintentionally disqualify a range of businesses, especially developing, building, owning and operating solar, wind and other energy projects benefiting from ROCs. Typical characteristics of such investments are: that the majority of the investment comes from one or other EIS fund or VCT; where the business is a start-up; the customer servicing and maintenance function has to be outsourced initially because the business cannot afford to do it itself; and if there are any major engineering or other capital costs, they need to be outsourced to a third party until the business is large enough to be able to afford them. The guidelines include these four characteristics as disqualifying the business for an advanced clearance guideline under something called VCM21035. I cannot believe that it is the Government’s intention to disqualify, in particular, start-ups. It does not mean that these investments are automatically disqualified for EIS relief, but they are disqualified for this new advanced clearance. Of course, the new advanced clearance will, in practice, become an effective prerequisite in that no one is going to invest in an EIS proposition unless it has an advanced clearance under the new arrangements. The guidelines do not say, but could usefully do so, that—notwithstanding the specific guidelines—if the promoters believe the business is not abusive they should explain when they apply for advanced clearance. I think that is particularly relevant to the point I just made about start-up companies in the solar industry.
I also understand that the objectives of most of the fairly extensive clauses in the guidance notes go quite a lot further than what is in the Bill, which I do not think is necessarily intended. The guidance would be much more practical and helpful if it gave illustrations of the things that it seeks to disqualify. As the guidance stands, it would be much more practical for EIS funds to invest in follow-on situations and to avoid start-up seed capital. Again, this is entirely at odds with the objective of the new SEISs.
I hope the guidance notes will be reviewed and refined. At present, they will cause too much uncertainty and lead to a reduction in the flow of EIS funds to perfectly reasonable propositions. The essence of the point is that VCM21035 sets out where HMRC will decline to give advance assurance. At present, as I have just said, this is well beyond the new disqualifying principles within the Act. It also gives HMRC too much discretion to pick and choose whether or not companies get advance clearance. I am sure it is not the Government’s intention to disqualify start-ups from being largely funded by VCTs and EIS funds, nor to disqualify companies which in their early stage need a certain amount of outsourcing.
Finally, another issue that delays the flow of EIS funding is MiFID. Advisers need to be ever more protective if they are to promote EISs to their clients. It is not just a question of their clients signing to say they are a sophisticated investor; the adviser needs to write a paper saying why he considers the client to be a suitable investor for something as high-risk as the EIS. The bottom line is that, other than the most sophisticated advisers, most give up and say, “Well, we’re really not attached to this area. It is too difficult and too risky”. To the extent to which we can have any flexibility under MiFID, it is necessary to make it easier for intermediaries and financial advisers to be able to promote EIS investments.
Lord Davies of Oldham
My Lords, the noble Baroness, Lady Kramer, probably expressed what we are all likely to feel about this debate. We have had in the House a series of economic debates and questions and many opportunities to consider the Budget and its ramifications over quite a considerable period. That may just account for tonight’s fairly limited attendance in consideration of the Finance Bill. Of course, we all recognise the limitations of this House in considering the Bill, but there is no doubt that in the context of the developing economic situation and the Government’s actions over the past few months, it feels as though it has been with us for a very long time indeed. This is not, however, the Bill which the Chancellor introduced. The outstanding feature of this Finance Bill is that it was trailed from the Treasury before the speech was made; the kind of approach which back in 1946 caused a Chancellor to be dismissed for speaking out of turn. These days, of course, trailing things is looked upon as a high political art form, though a great deal of what was trailed then did not turn out to be reality.
We had not been very long into discussions on the Finance Bill before the Government began to exercise a dizzying series of U-turns, whether it was on hot food, static caravans, improvements to listed buildings or charitable donations. All were changes which the Government then dressed up as the result of consultation, when in fact the proposals in the Budget were repudiated by a Chancellor who was fast losing confidence in his own decision taking. The result is that we will have from the Minister a paean of praise to the wisdom of the Government for the way they have handled the economy, with ne’er a mention in his speech of where the resources are meant to come from to fill the gaps which these subsequent concessions have caused in the revenue. We thought many of these original measures were misconceived; the Government have merely spread consternation by their rethinking of the position. The other characteristic of all Treasury Ministers—and the noble Lord, Lord Sassoon, enjoys his part in that role—is that they appear to address everything to deal with the nation in terms of the Finance Bill being concerned with business, taxation and how the country pays its way.
Those are important considerations. They ought to be a substantial part, and inevitably are, of every Budget. But where is the concern about the society that the Bill will impact upon? Where is the concern about social justice? Apart from the phrases about us being “all in this together”, where is the evidence? The Minister indicates that giving a substantial tax concession to millionaires—not mentioning, of course, that the Cabinet consists largely of millionaires—is merely a reflection of the fact that the tax does not raise too much. Of course, there is no consideration at all of the impact upon the nation of a Government asking it to take the deprivations that occur in this Budget: the loss of benefits and the onslaught on vulnerable people in our society. There is no consideration at all that giving a concession to millionaires creates a symbol of a totally unfair approach to government. Is it therefore not surprising that the Government are losing their credibility among the nation, as is clearly evidenced every time the Prime Minister loses control of his arguments at Question Time in the other place?
I understand what the noble Baroness, Lady Kramer, says about taking low-paid people out of income tax. Of course that is to be welcomed. However, she must also recognise that the major priority enjoined by all those who are concerned about the state of British society—and a number of other western societies as well—is that some tackling was necessary during the years when we were in Government of the excessive degree of child poverty, which was a stain upon our society and measure of the unfairnesses which our society metes out. Children, after all, are not responsible for the state they are in, but everybody recognises the crippling disadvantages of being born and trapped in poverty. The Government, of course, are ensuring that that trap becomes even more vicelike in its control through the significant reductions in benefits. We know what that means for children in poverty.
Of course, it may be that some concession was made to lower-paid workers, but it certainly was not made to pensioners. The Government have abandoned their commitment to the age-related allowance for pensioners in line with inflation, and introduced their granny tax.
We have argued that this Budget is so manifestly unfair and inappropriate that the unfairness is being felt throughout society. It is also utterly and totally ineffective. I do not have detailed questions to ask the noble Lord; that is just as well, as I hope that he would be able to restrain his winding-up speech to reasonable limits and he has a great deal to respond to from the noble Lord, Lord Flight—and, indeed, from the noble Lord, Lord Browne of Belmont.
However, I add one caveat to the noble Lord, Lord Browne: we have got to be somewhat judicious in this House when we are commenting on and playing our part in making laws which apply to those who are a generation or two behind us. Their mores are different. That is not to say that we do not recognise that so many value marriage; that is why weddings take place with great panache all the time. I imagine that many noble Lords in this House enjoy, as I do myself, a situation where my marriage is reaching almost 50 years; so I am certainly not going to be against marriage. But I am counselling against giving advice to a generation which has got a different approach to the way in which it expresses its commitments between man and woman. We would all recognise that a decade or so ago expression particularly on the Conservative Benches of this House on issues of equality for homosexuals was totally different from the perspective with which the Conservative Party responds today. I am not so sure about its entire membership in this House but certainly its agreed policy as regards its Members of Parliament. I have slight anxiety about dictating to a younger generation what the incentives should be with regard to their social relationships.
I have one question for the Minister: what is his response to the International Monetary Fund’s announcement today that growth will be 0.6% lower than the Government and the OBR have forecast for this year and will be 0.6% lower next year? The Government are left with the prospect of 0.2% growth this year. What an emergence from a double-dip recession that represents. Even the following year, only 1.6% growth is forecast. Therefore, both years will be manifestly below the average for advanced countries of 1.9% growth.
We are falling further behind in terms of growth and there will be a reduction in our resources. That is why the Government are in such difficulty with regard to their Budget, and why there are such privations on the least well off in our society. Ordinary people are feeling the pinch. There was not a word from the Minister or a single word in this Finance Bill about anything to do with unemployment and scarcely anything to do with employment. One million young people are unemployed. Is the Minister suggesting that they are responsible for that? Have the Government not got some responsibility for tackling those issues? I ask: what in this Bill relates to those issues? There is nothing. After all, if there had been anything, I am sure that the noble Lord would have referred to the issue but, of course, he did not.
We have a Finance Bill which partially reflects the total incompetence of this Government and their dizzying U-turns over the Budget proposals. The Budget is inherently and manifestly unfair, which leads to the nation rejecting and being critical of those who introduced it.
This recession was made in Downing Street. If the Chancellor concentrated rather less on his main bête noir—the Shadow Chancellor, Ed Balls—and a little more on the real economy, we might see a rather better approach to the crisis that this nation is in. It is absolutely clear that part of this is driven by the fundamental beliefs of the Chancellor and those who support him. They are using what is undoubtedly a crisis with regard to public finances to indulge in their commitment to create the smaller state—to reduce welfare and care for those in need. They did it in the 1930s and they are doing it in the second decade of the 21st century. It did not get us out of recession in the 1930s and will not now. The proof is already there. Meanwhile, it is the ordinary citizen of this country who pays the price.
Lord Sassoon
My Lords, as I respond to this debate on the Finance Bill, I thank the dedicated band of noble Lords for contributing to this short and, what was until the last intervention, rather focused debate, before the noble Lord, Lord Davies of Oldham, went off in many different directions. This year’s Finance Bill follows an unprecedented degree of consultation and engagement, and implements many of the changes announced at the Budget. I say to the noble Lord, Lord Davies of Oldham, that there were some 200 measures in the Budget and on three of them, after consultation, we made appropriate changes. Therefore, I think that his characterisation of the Budget-making process, and the changes since, is way off the mark.
First, I will address one or two of the specific points raised before returning to the bigger picture. I start by thanking my noble friend Lady Kramer for pointing out what the noble Lord, Lord Davies of Oldham, seems not to recognise—that we are now engaged in the most progressive tax strategy of any Government in recent years. I completely agree with her. Not only is that the case but it is demonstrably the case. No previous Government have put distributional tables into the Budget document so that it is completely clear where the majority of the pain is falling, which is on those with the broadest shoulders in the top percentiles of the income distribution. I can assure my noble friend that as we carry on the progress on these many issues, we will make sure that we are very alive to loopholes. On stamp duty, for example, there are clearly questions, with possible ways of doing sub-sales avoidance and so on.
My noble friend mentions one offshore financial centre. I think that the agreement with Switzerland, which I referred to in my opening speech, shows that we will work tirelessly to take all appropriate action on that front. The noble Lord, Lord Browne of Belmont, makes a powerful case in relation to marriage. I would not go as far as the noble Lord, Lord Davies of Oldham, in rebutting that case. The coalition agreement commitment remains in place. We keep that commitment, as we do all taxes, under review. The noble Lord would not expect me to say any more this evening, but he has put on the record very clearly his feelings on this matter.
As to the IT systems of HMRC for transferable allowances, again it is an area of questioning that has been raised in another place. There is nothing I can usefully add. We do not tend to give a running commentary on HMRC operational matters. If there is anything more I can do to shed light on the specific questions that the noble Lord, Lord Browne, raises, of course I will write. However, my strong feeling is—as I suspect he realises—that I will not be able to give him anything more on that, but he makes his points very clearly.
My noble friend Lord Flight made some very technical but important points around EIS and VCT schemes in particular. He made the important point that some £12 billion of equity has been raised. These schemes have been extremely successful. As I outlined in my opening speech, we want to expand them. At one point my noble friend characterised them as giving with one hand and taking with the other. We do not see it like that. We have consulted extensively on detailed rules. Many industry groups contributed to the consultation and strongly supported the complete package of changes. However, my noble friend made his point very clearly. We keep these matters under continual review and if there are ways of making the guidance clearer and more helpful, I am sure that his thoughts will be taken on board. I will draw them to the attention of relevant officials. I also take the general point about clearer English, which is something of which we need to be reminded on a regular basis.
The noble Lord, Lord Davies of Oldham, launched a quite extraordinary attack—with which I agreed on a number of matters. My principal point of agreement was with the statement at the end of his speech that this is a recession made in Downing Street. I completely agree. The structural deficit that caused the recession to be as deep and severe as it is came from the overspending in the six years up to the financial crisis of 2008, when the previous Government diverted from the plans they had been left by my right honourable friend the previous Chancellor but three, Kenneth Clarke, who left the nation’s finances in a fine state. If the previous Government had carried on with his plans for a few years more, things would not be in the state that they are.
Lord Davies of Oldham
Would the noble Lord extend the same criticism to all the other advanced countries that face exactly the same issues?
Lord Sassoon
My Lords, we were left with the largest structural deficit in the G20. We have brought it down from more than 11% to 8%, so we are making good progress—but the size of the task was bigger than in any other major economy.
Without rebutting the full litany and charge sheet—noble Lords would not thank me for keeping them much longer tonight—I absolutely rebut suggestions that we are insensitive to the societal and distributional effects of our measures. I explained the transparency with which we set out the effects of the Budget. It is those on the highest incomes who will pay most. The real results of what we are doing are the 800,000 new jobs that the private sector has created in the past two years. It is only by the private sector creating new jobs that we will be able to afford the better public services that the country needs and the lower taxes that we deserve. New jobs, falling unemployment and falling inflation are the things that the Government are concentrating on, and which the Budget continues to underpin.
Finally, the noble Lord, Lord Davies of Oldham, referred to today’s announcement by the IMF that downgraded global growth prospects. He was right to draw attention to it. The IMF forecast minus 0.3% growth for the eurozone this year. It forecast that the Italian economy will contract by 1.9% and the Spanish economy by 1.5%. It forecast that US growth would be only 2%, and it downgraded forecasts for emerging economy growth. It is in the face of those very strong headwinds that we have to carry on with our deficit reduction programme of tight fiscal discipline and loose money. I am very happy to talk about the 1930s. We do not have time to do it in detail, but tight fiscal discipline and loose money is precisely the prescription that caused a significant increase in growth through the 1930s.
In conclusion, this Government have taken difficult decisions to eliminate our structural current deficit over the coming four years and stimulate a private sector recovery. This strategy has been endorsed by the IMF, the OECD, the European Commission, ratings agencies and UK business organisations. We have always said that recovery would be choppy and our plans would necessarily incorporate a degree of flexibility. This Bill further delivers our commitment to improve our competitiveness, encourage investment and support our businesses, large and small. At the same time, it removes hundreds of thousands of individuals from income tax and helps reduce the cost of living for families across the country, and makes these changes in a way that is fairer and more consultative than any Finance Bill before. I commend this Bill to the House.
Baroness Stowell of Beeston
My Lords, even though we have concluded all the business on the Order Paper, we expect to receive a message from the Commons tonight. At the moment I cannot offer guidance on a specific time, so I therefore beg to move that the House do adjourn during pleasure until a time to be announced on the annunciator.