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Caroline Dinenage (Gosport) (Con)
1. What progress she has made in encouraging more children to take part in competitive sport.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
Before answering, may I record the congratulations of the whole House to everybody involved in London 2012?
Hugh Robertson
Wait a moment—the hon. Gentleman is being slightly tedious. I congratulate in particular the athletes of Team GB and ParalympicsGB. Moreover, I would particularly like to record, on behalf of everybody, our congratulations to the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) on her contribution to the project over many years. I also congratulate—I know that this will please you, Mr Speaker —Andy Murray on his win in New York on Monday.
Through the school games, we are encouraging all schools to offer their pupils the chance to play more competitive sport. More than 14,000 schools have so far signed up to participate and, in addition, 1,600 of our best young athletes had the chance to compete in and around the Olympic park in the inaugural national finals in May. The national governing bodies of sports will use the inspiration of the London 2012 games to encourage more young people to take up their sport. One example is hockey’s “Give it a Go” scheme, which has now attracted more than 20,000 people at more than 600 sites across the country.
Caroline Dinenage
I echo the Minister’s words: the Paralympics and the Olympic games showcased all that is great about this country.
On building the fantastic Olympians and Paralympians of the future, it is vital to invest in the infrastructure, skills and facilities that our young people need, particularly in schools. What are the Government doing to that end?
Hugh Robertson
Two things in particular. The new youth sports strategy, which has been announced and the figures for which will be announced in December, will involve an investment over the next four years to encourage sport governing bodies to make those precise investments. Separately, the Places People Play programme has now invested in improving more than 700 facilities up and down the country.
Mr Ben Bradshaw (Exeter) (Lab)
What prospect does the Minister, helped by his new Secretary of State, whom I welcome to her post, think he has of persuading the Education Secretary to reverse his disastrous decisions on school sport partnerships, on the two-hour target and on liberalising Labour’s very strict laws on disposing of school playing fields?
Hugh Robertson
The new youth sport strategy is precisely designed to address a problem that existed even under the old scheme—the difficulties in getting people out of school and into community clubs. Steps are being taken. There is no doubt that in some areas school sport partnerships were extraordinarily effective; in others, they were not. I think the consensus is that they were an expensive way of doing things. I note, from what the shadow Chancellor said to the TUC last week, that the Labour party is not making any spending commitments. There is an opportunity now to work together for a new system that I hope will deliver the improvements we all want in school sport.
Dame Tessa Jowell (Dulwich and West Norwood) (Lab)
I welcome the Secretary of State to her new position; she has one of the best jobs in Government. I congratulate the Organising Committee of the Olympic Games and Paralympic Games, the Olympic Delivery Authority, all the public servants across Government, the Government Olympic Executive, the city authorities and the thousands of people who gave their all to deliver a summer that the people of this country will never forget. A special congratulation goes, of course, to our Olympic and Paralympic athletes and to the games makers, who embodied the feeling of the people of this country that these were their games and that they mattered in the contribution to making them such a success. They really did belong to the people of our country.
In congratulating the Minister on his well-deserved promotion, I invite him to take forward one of the important means of delivering the success of the Olympics by continuing the commitment to cross-party working with a plan for sport that will survive for a decade. It should include more primary children playing sport in physical education, more children competing, and adults, throughout their lives, enjoying the pleasure of taking part in sport at all levels. A cross-party approach will guarantee stability. I commend that approach to the right hon. Gentleman.
Mr Speaker
We are extremely grateful to the right hon. Lady, whose courtesy is equalled only by her comprehensiveness.
Hugh Robertson
Following that, I suppose that we all ought to pay tribute to the right hon. Lady for her comprehensiveness in dealing with this project from the moment the bid was launched, through to delivery. Everybody across the House genuinely would like to recognise her contribution.
The right hon. Lady is right that one lesson from the success of Team GB and ParalympicsGB is the importance of a strategy that is not constantly altered. When I came to office, I called the problem that has constantly plagued the sports world short-term “initiativeitis”. It is our intention to continue with the approach that has served us so well for the Olympics and to ensure, as I am sure everybody in the House wants, that we deliver a tangible legacy from the events of this summer.
Katy Clark (North Ayrshire and Arran) (Lab)
2. What discussions she has had on sponsorship by Atos of the London 2012 Paralympics.
The Secretary of State for Culture, Media and Sport (Maria Miller)
The London Organising Committee of the Olympic Games and Paralympic Games was responsible for appointing domestic partners for the London 2012 games, and the International Paralympic Committee is responsible for international Paralympic partners. All the partners provide vital funding, without which the games simply could not happen. Atos has been a key technology provider for the Paralympic movement since 2002, and became the official worldwide information technology partner for the International Paralympic Committee in 2008.
Katy Clark
In contrast to the fantastic performances by the Paralympic athletes, the performance of Atos was slammed by the National Audit Office. The Secretary of State will be well aware of the anger that many disabled people feel towards Atos Healthcare because of its poor decision making and the high success rate of reconsiderations and appeals. Does she feel, in retrospect, that Atos has been an effective service provider and an appropriate sponsor of the Paralympics?
Maria Miller
The hon. Lady will know that without money from sponsors we cannot stage such games. The involvement of the sponsors enabled us to ensure that more countries than ever before competed in the Olympic and Paralympic games. I am sure that she welcomes that.
Sir Tony Baldry (Banbury) (Con)
I am sure that the whole House welcomes my right hon. Friend to her new position. Given her experience in the Department for Work and Pensions, does she agree that the key to all this is the work capability assessment? Is it not correct that the Government have accepted all the recommendations of Professor Harrington’s two reports on improving the work capability assessment? Is not a reasonable inference from the comments of members of the Labour party that it does not want people to be assessed to see whether they are able to work?
Maria Miller
My hon. Friend is drawing me back to my old job, but I will resist the temptation. He is right that this matter is well and truly in the sights of the Secretary of State for Work and Pensions, and I note his comments.
Dame Anne Begg (Aberdeen South) (Lab)
I, too, welcome the right hon. Lady to her new position. As she has already seen, her old position will follow her wherever she goes. I do not think that she will ever get away from that, because disability pervades all of society.
The Paralympics were a huge success and the Channel 4 coverage was wonderful. Does the right hon. Lady agree that it was particularly insensitive of Atos to sponsor not only the games but the lanyards, so that every Paralympian was forced to wear the name of Atos around their neck? Perhaps Atos had a perverse reason for doing that, because a much wider audience now knows how it has been treating disabled people in the work capability assessment.
Maria Miller
The hon. Lady will know that such decisions are made by organisations outside of Government. She is right to say that the Paralympics were a fantastic opportunity to change attitudes in this country, and I think that they achieved that. We need to keep that going. She is also right to say that former Ministers for Disabled People retain a deep and passionate interest in ensuring that the needs of disabled people are catered for, whichever Department they work in.
George Eustice (Camborne and Redruth) (Con)
3. When she expects the publication of the report by Lord Justice Leveson on the culture, practice and ethics of the press.
The Secretary of State for Culture, Media and Sport (Maria Miller)
I expect Lord Justice Leveson to deliver his report in the autumn.
George Eustice
I am grateful for that answer. During module 4, the final module of Lord Leveson’s inquiry, it became increasingly clear that the self-regulation of news content would work far more effectively if it were supported by some statutory underpinning. Given that the Government are already introducing statutory measures in areas such as defamation, will the Secretary of State confirm that the Government retain an open mind on further statutory regulation in that area?
Maria Miller
My hon. Friend is absolutely right. The reason we commissioned a report was to listen to what Lord Justice Leveson puts forward. We very much have an open mind and I would not want to pre-empt the inquiry by trying to second-guess its conclusions. Whatever we do in future, we need to ensure that we maintain freedom of expression, that we have a press that is suitably independent of government and politicians and that there are sufficient teeth in the sanctions that empower the system. It must command the confidence and respect of the public and the industry alike. We need to adhere to those important principles, but first and foremost we must receive the report.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Should Lord Justice Leveson call time on the last chance saloon and recommend a statutory underpinning for press self-regulation and a co-regulation model, what preparatory work have the Government done to prepare for such an option?
Maria Miller
The hon. Gentleman outlines some of the options that may be taken forward. What we have to do at this stage is ensure that the inquiry runs its course. Those both within and outside the House have noted in great detail the evidence that has been given, and we will need to look at the report in detail.
Mr Peter Bone (Wellingborough) (Con)
Does the new Secretary of State agree with the Prime Minister that successive Governments have got too close to the media? Does she also agree that this Government, like previous ones, are still leaking information to the press before statements are made to Parliament? Should that not end immediately?
Maria Miller
My hon. Friend is absolutely right. All Secretaries of State would want to ensure that the House is kept informed first and foremost. In you, Mr Speaker, we have somebody who we know keeps an eye on that very closely.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I add my warmest and sincerest congratulations to the right hon. Lady on her appointment as not only Secretary of State but Minister for Women and Equalities? I look forward to working with her on both issues.
The right hon. Lady takes on her role at a crucial time. The Leveson inquiry offers a historic opportunity to tackle the long-standing problems of the lack of a proper press complaints system and the concentration of media ownership. We saw from the Hillsborough independent panel report yesterday, 20 years before the Dowlers, the ugly spectacle of collusion between the police and some elements of the press, inflicting pain and misery on innocent people who were already suffering. Will she ask Lord Justice Leveson to examine the implications of that for the media and to take evidence from the panel and the families? When his report is published, will she convene cross-party talks so that we can ensure that we have a press that is strong because it is free and clean, and that we can all work together to achieve that?
Maria Miller
I thank the right hon. and learned Lady for her kind words and look forward to continuing to work with her on these issues and those of women and equality.
The right hon. and learned Lady is absolutely right that there are issues within Leveson that have clear read-across to the report that was released yesterday. However, at this time I want to ensure that we continue to focus first and foremost on the importance of getting it right for the families involved. We will examine the report in great detail to ensure that any necessary actions are taken so that we do not have the same scandalous situation again.
Chris Bryant (Rhondda) (Lab)
I, too, welcome the Secretary of State to her new job, but she has made one mistake already, because there is not to be one report by Leveson: there are meant to be two, and I believe that the second is the more important. It is to be on what actually happened at the News of the World. So far, Lord Justice Leveson and everybody else have rightly avoided the illegality, criminality and dodginess that went on between the police and the News of the World, for the simple reason that nobody wants to compromise criminal prosecutions. Will she ensure that, contrary to what Lord Leveson has been saying, he will produce a second report so that we know what went on?
Maria Miller
I will, of course, always look to the hon. Gentleman to keep me right on these things. He is absolutely right that there is a part two to the inquiry and, as I think we have already made clear, the Government will make a statement on part two when part one has concluded. It is important that we take these things at the proper pace and that we have time to consider the initial report before we consider further work.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
4. What recent estimate she has made of the financial contribution of the heritage sector to the tourism industry.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
Heritage tourism in the United Kingdom accounts for £4.3 billion in gross domestic product, rising to £7.4 billion if heritage green spaces are included. The London 2012 Olympic and Paralympic games and torch relay have provided a major opportunity to highlight our heritage assets.
Tristram Hunt
Given that, only a Government of such awesome incompetence as this one could follow up the Olympics, when the eyes of the world were on Britain, by abolishing the post of Minister for tourism and heritage. We know that the Tory party did not like Danny Boyle’s wonderfully progressive vision of British history, but did it really have to seek revenge by scrapping the post? Why will the Government not support our national heritage and tourism industry, rather than abandon it?
Hugh Robertson
That is the silliest question I have heard in two and half years. Let me make it absolutely clear that I loved the opening ceremony and that, far from the tourism Minister being abolished, he is standing before you.
Mr James Gray (North Wiltshire) (Con)
Does the Minister agree that the £122 million that the Government are about to spend on the so-called GREAT campaign, celebrating all that is great about Great Britain—including, in my case, the great adventurers and great climbers, which will launch in October—is extremely good value for money? How much does he expect the country to benefit from that £122 million investment in inward tourism, and how does he intend to monitor the return?
Hugh Robertson
We have used the GREAT campaign to try to drive incoming tourism into this country. The initial signs are that it has been a great success and that people are waking up once more to the delights of holidaying in this country. We are in consultation to ensure that the process rolls on, with further additions to the GREAT campaign.
Ms Margaret Ritchie (South Down) (SDLP)
Is the Minister aware that the Environment Minister in Northern Ireland recently commissioned an expert study that showed that heritage contributed substantially to the Northern Ireland economy? Does he agree that we must not only protect but invest in our heritage sector?
Stephen Mosley (City of Chester) (Con)
I totally agree with the Minister’s previous answer. Will he join me in congratulating my local council, Cheshire West and Chester, on its massive investment in renovating Chester’s Roman city walls, reversing years of neglect?
Hugh Robertson
Absolutely. The great thing about the torch relay was that it gave many places the opportunity to put their tourism assets on display, and I am absolutely delighted that my hon. Friend’s local council is acting in such a fashion.
Dan Jarvis (Barnsley Central) (Lab)
There is no doubt that London 2012 has been a fantastic achievement, demonstrating Britain’s unique character. Despite that success, there has been significant concern, especially outside London, that visitor numbers were below those that were predicted. Given that concern, given the Government’s recent commitment to increase the number of overseas visitors from 30 million today to 40 million by 2020 and given that at a time when they should be capitalising on the Olympic tourism legacy they have chosen, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) rightly mentioned, to cut the ministerial post focused on tourism and heritage, will the Minister explain how he will guarantee that every region benefits from UK tourism?
Hugh Robertson
This has to be one of the silliest points made for a very long time. We had a thoroughly excellent Minister, my hon. Friend the Member for Weston-super-Mare (John Penrose), who covered tourism, heritage and gambling. We now have a Minister who covers sport, tourism and gambling. I cannot remotely see that that is in any way a downgrade. There were three responsibilities before and there are three now—the maths are very simple.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
5. Whether she has discussed with the BBC Trust the potential effect on the BBC of an independent Scotland.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
I am in regular contact with the Culture and External Affairs Minister in the Scottish Government on a range of broadcasting matters. The Government encourage broadcasters to undertake production throughout the UK, but the future of individual BBC services and production in Scotland is a matter for the BBC and we do not seek to intervene.
Gregg McClymont
The separatists tell us that a separate Scotland could replicate the success of Danish TV. However, looking at prime-time Danish TV schedules for this evening, I see few zingers ready to wing their way across to the United Kingdom, although three top-class independent UK productions are featured. Does the Minister agree that Scotland is much better off as part of one of the most successful TV industries in the world?
Mr William Bain (Glasgow North East) (Lab)
10. Network commissions from the BBC in London constitute £80 million to £85 million of investment in the Scottish economy, make up 78% of revenue from independent production companies and help sustain 15,000 jobs in Scotland. Does the Minister share my concern that if Scotland separates from the rest of the United Kingdom significant damage could be done to that section of the Scottish economy?
Mr Vaizey
I certainly share the hon. Gentleman’s concern. Over the past few months I have been lucky enough to visit BBC Scotland’s headquarters and see the excellent work it does. May I record my gratitude to BBC Scotland for sending my children a photograph signed by Nina of “Nina and the Neurons”?
Pete Wishart (Perth and North Perthshire) (SNP)
It is with a great sigh of relief that we see the Minister is still at the Dispatch Box, and I welcome the new Secretary of State for Culture, Media and Sport. The threat to the BBC comes not from an independent Scotland but from what is happening with the cuts now. How can that be justified in Scotland, which is a nation, not a region of the BBC? Given that we are about to make the biggest decision in our nation’s history, is it right that the BBC has been cut to the absolute bone? People need to be informed and the issues debated.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
6. What discussions she has had with the Secretary of State for Education on the protection of school playing fields.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
School playing fields fall under the departmental responsibility of the Department for Education, but my Department is in regular contact with it over a range of issues relating to sport. For the first time, the Places People Play initiative has a specific programme for safeguarding and enhancing playing fields, and is operated in partnership with Fields in Trust.
Tom Blenkinsop
I thank the Minister for his reply, but does he agree that there is a lack of local accountability in the selling of academy school fields, which should be subject to the same protection as those belonging to maintained schools?
Hugh Robertson
In a sense, yes. After the Olympics, anybody who is interested in or involved with sport will want to ensure that those opportunities are available to as many people as possible. That said, the point of academies is that they enjoy freedom from central control and set their agenda as they wish. The issue is less about playing fields than about the provision of sports facilities. The key point is to build more 3G pitches, from which schools get 90 hours of use, as against four for an old grass pitch.
Damian Collins (Folkestone and Hythe) (Con)
Does the Minister agree that the quality of coaching and facilities is just as important as the amount of space available? In Folkestone, the state-of-the-art redevelopment of Cheriton road sports ground was possible only because of the sale of a redundant piece of playing field land in the vicinity.
Hugh Robertson
Absolutely. The key statistic is that on average a grass pitch provides four hours’ use a week, but that rises to 90 hours on a new 3G pitch. This is not a new process: 246 school playing fields were sold off under the previous Administration.
Neil Carmichael (Stroud) (Con)
7. What steps she is taking to build on the success of the London 2012 Olympics in local community sport.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
Through Places People Play, Sport England is investing £135 million in community sport facilities and local community sport, and to date over 700 community sport facilities have benefited from the programme. In addition, the new youth sport strategy includes funding to help local authorities improve sport provision and investment to enable schools to open up their sporting facilities for use by local communities.
Neil Carmichael
I thank the Minister for that reply. The Paralympics received a fantastic response, but can we extend those good things to ensure that wherever possible everybody has access to community sport—obviously with a focus on disabled people?
Hugh Robertson
That is absolutely the intention. Three initiatives are worth looking at in that respect. The new whole sport plans will include for the first time specific disability targets, as will Places People Play, and an inclusive opportunities fund is being run for the first time by Sport England to address exactly that issue.
Clive Efford (Eltham) (Lab)
The Government have set up a programme to encourage local sports clubs to engage young people and to get them involved in sports after school to create a sporting habit for life, but that will not work unless we have quality sports education in earlier years. In response to my right hon. Friend the Member for Exeter (Mr Bradshaw), the Minister said that the delivery of school sports partnerships was patchy, but that is not what he said before the general election, when he said that we should be building on school sports partnerships. Sadly, in the past two years, there has been a 40% drop in school sports partnerships and a 60% drop in hours spent outside the classroom by teachers organising sport, and the Government’s PE teacher release money is due to end in August 2013. Will he admit that cutting £162 million from school sports partnerships was a mistake, and will he join the Opposition in calling for the Secretary of State to re-ring-fence that money so that we can have a sporting legacy?
Mr Speaker
Order. We have got the question and we are grateful for it. Let us have the answer.
Hugh Robertson
All Members know why that happened, but the key issue is the deficit the Government inherited in 2010. It is absolutely pointless the hon. Gentleman whining unless the Opposition have another policy or are prepared to commit to restoring that money. The shadow Chancellor made it abundantly clear to the TUC last week that there will be no spending commitments of that sort, so it is utterly hypocritical to pursue this until you have an idea of how to put it right.
Mr Speaker
Order. I am sure the Minister is not accusing any individual hon. Member of behaving hypocritically. Will he clarify that he is not? He needs to make it clear.
Ann McKechin (Glasgow North) (Lab)
8. What steps her Department is taking to improve access to broadband.
The Secretary of State for Culture, Media and Sport (Maria Miller)
We are making good progress. Almost all areas have an agreed local broadband plan to deliver 90% superfast broadband and universal standard broadband coverage under our rural broadband programme. Five projects have completed procurement and we expect the remainder to have entered into contracts by next summer. Lead responsibility for rural broadband in Scotland lies with the Scottish Government, who have been allocated funding of over £100 million by my Department.
Ann McKechin
The Secretary of State will be aware that broadband coverage in Glasgow is, at 60%, well below the UK average, and that the recent application for superfast broadband was surprisingly rejected by her Department. Will she give me her personal assurance that she will work with the city council, the Scottish Government and other partners in Glasgow to ensure that it can benefit from superfast broadband, because without it Scotland’s economy will suffer?
Maria Miller
I share the hon. Lady’s concern to ensure that more people have access to faster broadband as soon as they can. That is why we will shortly announce funding for the first 10 super-connected cities. Bids from up to 27 second-tier cities are due by 17 September. Edinburgh will be among the first 10 cities to which funding will be allocated, and Glasgow can apply in the second round. I urge her, too, to work with the Scottish Government on these matters.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Suffolk county council will announce its decision in the next few weeks, but the exciting development of 4G roll-out by existing operators is welcome news. Will my right hon. Friend update the House on the progress that Ofcom is making on the other spectrum that will bring 4G nationally?
Maria Miller
My hon. Friend will be aware that we continue to work with the Commission to clarify state aid details prior to our being able to proceed with that part of our programme. We anticipate Commission approval in the autumn and will continue as rapidly as possible to ensure that we make the necessary progress. Our country needs better connectivity to ensure that we are competitive in future.
Helen Goodman (Bishop Auckland) (Lab)
May I add my congratulations to the right hon. Lady? The reshuffle was supposed to be the delivery reshuffle. At questions last week, the Prime Minister said he wanted the Department for Culture, Media and Sport to support the economy by focusing on broadband roll-out. Will the Minister assure the House that, by 2015, 90% of the country will have superfast broadband?
Maria Miller
The hon. Lady will know that the reshuffle has delivered some very fast changes. We had announcements last Friday on freeing up the roll-out of superfast broadband from some of the regulations and red tape preventing us from moving forward as fast as we need to. I hope that she will join me in encouraging her constituents and others to support our measures.
John Mann (Bassetlaw) (Lab)
9. How many facilities for heptathletes are planned for construction in the next four years.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
The honest answer to the hon. Gentleman’s question is none, because heptathlons generally take place in athletics stadiums, and the Olympic stadium will remain in use as an athletics venue as part of the sporting legacy of the London games and will host the London 2017 world athletics championships. In addition, Sport England is investing £30 million over the next three years to support new large-scale multi-sport facilities.
John Mann
There is one planned. Emily Race is the top 11-year-old heptathlete medal-winning prospect in the country, but she has to practise on a grass football field. If my area can put together two thirds of the money, will the Minister join me in twisting the appropriate arms to ensure that the national sports bodies find the other third, so that her and others’ dreams and ambitions can be realised?
Hugh Robertson
Particularly after the feats of Jessica Ennis earlier this summer, I am sure that everybody across the House will join me and the hon. Gentleman in wishing Emily Race all the best. The possibility of doing what he suggests through the Sport England fund is absolutely there, and I encourage him to make a bid.
John Glen (Salisbury) (Con)
11. What assessment she has made of Ofcom’s decision to allow Everything Everywhere to use the 4G spectrum from September 2012.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
I have made no assessment of Ofcom’s decision. The decision to allow the variation to Everything Everywhere’s licence to allow 4G services in its spectrum at 1,800 MHz is for Ofcom to make as the independent regulator.
John Glen
I thank the Minister for his reply, but would he not agree that in an era when consumers are taking out 18-month contracts, it is essential that Ofcom moves quickly to ensure that monopoly power does not become entrenched and consumers can benefit from genuine competition in the 4G spectrum?
Mr Vaizey
My hon. Friend is right about the importance of competition. Not only is EE, as we must learn to call it, about to roll out 4G services, but we are working with Ofcom to ensure that we can proceed with our auction as quickly as possible and bring 4G services to all mobile operators.
Mr Speaker
I remind the House that topical questions and answers are supposed, by convention, to be briefer.
Priti Patel (Witham) (Con)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for Culture, Media and Sport (Maria Miller)
The thoughts of everyone in the Chamber will be with the families of the 96 victims of the Hillsborough disaster. Before I turn to the distressing report published by the Hillsborough independent panel yesterday, I want to place on the record my sincere thanks to everyone involved in the organisation of the London Olympics and Paralympics.
As has been said, 2012 will be remembered as the best ever summer in our sporting history. At the start of the Olympics, Lord Coe said:
“These games will bring out the best in us”,
and our athletes answered that call. They did so through not only what they achieved but how they achieved it. They are incredible role models and they did the country proud. But they are not alone. The success of the games was due to thousands of businesses and organisations—
Mr Speaker
Order. I am sorry, but I must say to the Secretary of State that although I absolutely understand the spirit of her remarks, it is an abuse to use topical questions to make a statement. She must give a brief initial answer and then the supplementary will follow. That is the situation—always has been, always will be.
Maria Miller
Thank you, Mr Speaker.
I would like very briefly to note yesterday’s panel report on the Hillsborough disaster and say that our thoughts are with the families.
Priti Patel
I congratulate my right hon. Friend on coming to her new position and associate myself with her opening remarks.
Tourism supports 54,000 jobs in Essex and contributes more than £3 billion to our local economy. Will she join me in congratulating the tourism sector in Essex and attend the Visit Essex tourism conference on 14 November to see at first hand the excellent work done there and the contribution that these individuals make to our local economy?
Maria Miller
I thank my hon. Friend for that question. The Olympics also played their part in Essex, which hosted the mountain biking competition, at Hadleigh farm. The Government will continue to do everything they can to support tourism in Essex, and I hope to come along and see it for myself in the not-too-distant future.
Barbara Keeley (Worsley and Eccles South) (Lab)
T2. The all-party group on women’s sport and fitness wants to see our fantastic women athletes in the media, inspiring girls and women of all ages to take part in sport. However, outside the Olympics, women’s sport gets 5% of the media coverage and less than 1% of the commercial sponsorship. Do Ministers agree that this must change, and will DCMS Ministers work with the all-party group over the coming months to ensure that it does?
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
The answer to that is absolutely yes. We were trying—[Interruption.]
Mr Speaker
Order. I do not know what this chuntering from a sedentary position is about; all I know is that who answers the question is a matter for those on the Treasury Bench. Let us hear from the Minister.
Hugh Robertson
I would have thought that my answering was encouragingly non-gender specific.
We were trying to work this out earlier, but I have a suspicion that the first medal at London 2012, the first gold and, indeed, the last medal were all won by female athletes. They made a huge contribution, both to Team GB and to Paralympics GB. All of us absolutely want to do everything possible to build on that and use it to encourage more young women to get into sport.
John Pugh (Southport) (LD)
T4. What assessment have the Government made of problem gambling on the internet, given the prevalence of the advertising?
Hugh Robertson
It is absolutely our intention to tackle the issue by regulating gambling at the point of consumption. Proposals to that effect will be brought forward later this year.
Paul Blomfield (Sheffield Central) (Lab)
T3. I am sorry that the Minister responded to my hon. Friend the Member for Eltham (Clive Efford), the shadow Minister, by accusing him of whining for raising genuine concerns about school sport. Does he not accept that the cuts to the school sports partnership will seriously undermine the 14-to-25 strategy?
Hugh Robertson
Let me be clear about this. The point I am simply making is that hon. Members cannot criticise a policy if they do not have a policy, and the Opposition do not, at this moment, have a policy. [Interruption.] No, no; I think I heard the shadow Chancellor saying that there would be no restoration of funding and that the Opposition could not make wide-ranging funding commitments. If the Opposition do not have the money to restore the partnership, the better approach is to follow the advice very wisely offered by the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell), which is to ensure that we work together to deliver the improvements we all want to see in school sport and deliver a proper legacy from London 2012.
Andrew Bridgen (North West Leicestershire) (Con)
Will the Minister join me in congratulating Sir John Major on his foresight in setting up the national lottery and direct funding of sport, which is seen as a major contributory factor to our amazing Olympics success? Does that not show that a good Government can leave a legacy that can be enjoyed for generations, whereas a bad Government just leave debts that take generations to pay off?
Hugh Robertson
Absolutely, and it is noticeable that many of the legacy programmes from London 2012 are being run as a direct result of this Government’s decision to restore national lottery funding to the levels envisaged by Sir John Major. The figure was 13.7% when we took office; it is 20% now, and that is what is underpinning the legacy.
Naomi Long (Belfast East) (Alliance)
T5. In Northern Ireland we were immensely proud of the huge success enjoyed by Northern Ireland competitors in the recent Olympic and Paralympic games, including the rowing successes of Richard and Peter Chambers, and Alan Campbell. However, although officially they competed for Team GB and NI, it is all too frequently abbreviated to Team GB. Is there any prospect of the Government rebranding Team GB as Team UK, so that all four nations are fully reflected in the success?
Hugh Robertson
This is a question that is raised on many occasions by people from Northern Ireland. The honest answer is no, because the decision is outside the remit of Government. Athletes are selected by the British Olympic Association. The team is called Team GB for historic reasons that predate the events that led to the formation of Northern Ireland, and I see no sign of that changing in the near future.
Mr Alan Reid (Argyll and Bute) (LD)
Many parts of Argyll and Bute have no mobile phone coverage, which is bad for business and can make it difficult to get help in an emergency. Will the Government please tell us what plans they have to extend mobile phone coverage in Argyll and Bute?
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
I am delighted to be able to tell my hon. Friend that we have the mobile infrastructure project, which we are currently procuring and which is putting £150 million precisely into bringing mobile phone coverage to constituencies such as his.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
T6. Can the Minister for sport update the House on when the Government expert group on involving supporters in the governance of football will be convened?
Hugh Robertson
Yes; we are awaiting the findings of the Select Committee on Culture, Media and Sport. I pay tribute to its work on this issue, as I have on many occasions. As soon as we have the report back, we will announce the next steps.
Angie Bray (Ealing Central and Acton) (Con)
The Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), will recall a meeting to discuss the better regulation of DMOL, which organises channel listings for Freeview, at which he undertook to take a look at the matter. Will he update the House on any progress that has been made?
Dame Anne Begg (Aberdeen South) (Lab)
T7. Many of my constituents cannot even get moderately fast broadband. They are therefore desperate for the introduction of superfast broadband, but 2015 is too far away. Aberdeen will be bidding to become one of the superfast cities. Can the Secretary of State give us an assurance that the criteria will include not only ease of installation and density of population but factors such as the industries that will depend on having superfast broadband? Aberdeen is an important economic driver in the north-east of Scotland.
Maria Miller
The hon. Lady makes an important point, and I hope that she will join me in encouraging her local authorities to adopt the kind of deregulation of planning issues that will help to speed up the delivery of broadband and reduce the costs.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Ministers will be aware of the proposed changes to listed building consents. Can they give me an assurance that no radical changes to a listed building will take place without full consideration and positive consent having been obtained from a council, rather than following the absence of a response from a council?
Mr Vaizey
The previous Minister for heritage, my hon. Friend the Member for Weston-super-Mare (John Penrose), did an excellent job of consulting on this issue, and I pay tribute to the hard work that he has done to promote the heritage sector over the past two years. The consultation has now closed and we will consider the responses. The sentiments of my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) are well made.
John Mann (Bassetlaw) (Lab)
T8. The Football Association taskforce that I recently chaired highlighted a huge variation in the quality of stewarding at professional football matches. Will the Sports Minister pursue that issue with the football authorities, given the dangers inherent in that situation?
Mr Philip Hollobone (Kettering) (Con)
1. What discussions the Commission has had with the Parliamentary Works Directorate on the possibility of vacating the Palace of Westminster to facilitate the renewal of the fabric of the building and an overhaul of its essential facilities.
Michael Fabricant (Lichfield) (Con)
6. What assessment the Commission has made of the risk of exposure to asbestos in the Palace of Westminster; and if he will make a statement.
Pauline Latham (Mid Derbyshire) (Con)
8. What plans he has for the Palace of Westminster to close for refurbishment.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I reassure hon. Members that no decisions have been taken as yet. Such a project would be a major undertaking, and a final decision will not be taken for some time and would probably be a matter for both Houses. This will clearly require careful study and planning.
Most of the current Palace of Westminster dates from the mid-19th century, and much of the external structure and weatherproofing has been untouched since then. Many of the utilities and services inside the Palace date back 60 or 70 years. There is a major backlog of remedial work, including that involving asbestos, which is being professionally assessed and must be remediated in accordance with regulations.
In January this year the Commission appointed a study group to examine all the possibilities, including a temporary relocation of Parliament. The group was assisted by two Members from each House. The report of the study group is not yet finalised, but it is expected to be submitted to the Commission and the House Committee of the House of Lords at the end of next month.
Mr Speaker
The hon. Gentleman appeared to say all that without having to breathe. I am extremely impressed.
Mr Hollobone
The Palace of Westminster is a place of work for thousands of people, yet the fabric and facilities in many areas of the building date back to the 1840s. Clearly, the cost of bringing the building up to modern standards could be billions of pounds. When is the House of Commons Commission likely to get its first estimate of the total cost of doing up the building?
John Thurso
The hon. Gentleman makes an extremely good point. It is difficult at this stage to make a proper assessment of the cost, but we expect the report to contain an assessment of the various costs and, therefore, an indication of the best avenue to pursue. The Commission will ensure that it pursues the best value for money, which will involve a combination of the lowest-cost option and keeping Parliament functioning properly.
Michael Fabricant
If Parliament is to be decanted, may I make a shameless bid for it to be decanted to Birmingham? [Interruption.] Why not? It is our second city. Will my hon. Friend confirm that the cost of doing the works over 10 years would be considerably higher than the cost of decanting and doing the work over two or three years?
John Thurso
On my hon. Friend’s suggestion about Birmingham, I cannot possibly comment. In regard to the costs, it is my experience from my past life that a decant and a quick contract are often preferable to a series of contracts with no decant, but that is a matter for the study, and we must be led by the evidence that is produced. We will follow that properly.
Pauline Latham
I thank the hon. Gentleman for those answers. My concern is about decanting and its cost. Does he view the September sittings as a significant barrier to achieving the necessary repairs without completely closing Parliament? A contractor could be let in during the long summer period, and while I acknowledge what the hon. Gentleman said, this would be preferable to hon. Members.
John Thurso
The hon. Lady makes a good point about the September sittings. I have given evidence on the subject. Again, there is a balance to be struck between the cost of a day’s sitting and the advantage one might gain on a contract, but in this case we are into something of a quite different magnitude. There is already estimated to be £1 billion-worth of backlog, and these are not contracts of 10 or 11 weeks; they are seriously big contracts, so all options to ensure best value for the taxpayer and allow the Commission to make the right choice must be looked at.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
If the House of Commons Commission gets its skates on, we have a fantastic facility in Hackney in east London—the Emmedia centre. While it awaits a tenant, it could happily house Parliament while the work is done. There is a seven-minute shuttle to St Pancras, City airport on the doorstep, excellent transport links and it is 20 minutes to Westminster, so will the House of Commons Commission consider a temporary relocation of Parliament to “Eastminster”?
John Thurso
I am delighted to reassure the hon. Lady that at this stage, with the Commission not yet having received the report, all options can be placed on the table. However, the option that is ultimately chosen will follow best practice, best value and the best advice that we receive.
Mr David Winnick (Walsall North) (Lab)
It would be totally unacceptable for the House not to sit for three months, so I hope we will continue with September sittings. Does the hon. Gentleman accept that if the patching-up work is going to be very costly and possibly carry on for years, it would be far better to reach a brave decision and do the job properly from the start?
John Thurso
The hon. Gentleman makes a very good point. As I said, from my experience in another life, I have found that it is usually better to take two or more years and get the job done than to be inconvenienced and unable to work properly for 10 years. I stress, however, that we are at a very early stage; it is for the professional advice to be given first, and then for the Commission to make a decision in the light of that advice.
Ann Clwyd (Cynon Valley) (Lab)
I suggest that the hon. Gentleman’s answer on asbestos is much too complacent. It is incredible that we are being brought back here when every day I go into my office, I meet men in white coats—[Laughter]—wearing protective clothing and gas masks. We have staff wandering around in this building, yet we have reports on the dangers of asbestos here going back to 2005. I suggest that the hon. Gentleman should take this matter far more seriously.
Mr Speaker
I cannot imagine that the right hon. Lady keeps eccentric company; that is quite beyond my imagination.
John Thurso
I can assure the right hon. Lady that I take asbestos extremely seriously, as does the Commission; but more importantly, the Parliamentary Director of Estates does, too. Asbestos is not dangerous if undisturbed. All areas of the Palace have been properly surveyed. Where remedial action is taken, the work force operate within full health and safety dictates and do so as safely as possible. I am constantly reassured by the House authorities in this area. My answer was necessarily short, given that I had to answer three questions and given the orders for brevity issued from the Chair. I assure the right hon. Lady that this matter is taken extremely seriously.
Katy Clark (North Ayrshire and Arran) (Lab)
2. What plans he has to improve scrutiny of the Government by the House.
The Leader of the House of Commons (Mr Andrew Lansley)
As Leader of the House, I want to ensure that the public see the Government reporting to and being accountable to this House. As a Government, we have increased the number of ministerial statements in comparison with the previous Government; given more time for the Report stages of Bills; and published more Bills in draft for pre-legislative scrutiny. We are also encouraging public engagement in the House’s scrutiny, with public reading stage pilots and, as I have announced today, a new 10,000-signature threshold for e-petitions to trigger a Government response.
Katy Clark
I understand that the Government plan to introduce a business Committee by the end of 2013. Will the Leader of the House tell us how he views the proposal at this stage, and whether he thinks that such a Committee will improve scrutiny by giving Back Benchers more of a say in, for example, the timetabling of Bills and opportunities to vote on amendments?
Mr Lansley
As the House will know, I have the greatest admiration for the reforms introduced by my predecessor, including the creation of the Backbench Business Committee, which has provided substantial opportunities. The hon. Lady rightly drew attention to the Government’s commitment in the coalition programme, and I look forward to constructive discussions about it.
Mr Peter Bone (Wellingborough) (Con)
The Leader of the House could improve the quality of scrutiny immediately by making the post of Chairman of the Committee of Selection an elected post. Would it not be totally absurd if an independent Chairman of that Committee were replaced overnight by a former Whip?
Mr Lansley
Again, I pay tribute to my predecessor. The introduction of elections to membership of Select Committees represents a considerable step forward in terms of Members’ ability to determine the shape of decision making in the House. However, it is also important for the Committee of Selection to reflect the interests of the parties—
Mr Lansley
Both sides of the House have an interest in getting business through, as well as respecting the rights of Back Benchers.
David Wright (Telford) (Lab)
Could we get rid of Deputy Prime Minister’s Question Time, because he is hopeless, and introduce a format enabling Boris Johnson to come and give evidence to the House, because he clearly has more influence over Government policy?
Mr Lansley
I seem to recall that Labour Members wanted the time for Deputy Prime Minister’s questions to be extended.
Miss Anne McIntosh (Thirsk and Malton) (Con)
7. I welcome the Leader of the House to his new position. May I ask him to consider improving scrutiny of the Department for Environment, Food and Rural Affairs by extending the time allocated to oral questions to its Secretary of State?
Mr Lansley
I am aware of my hon. Friend’s interest in that issue. I think that the time available for DEFRA questions has proved adequate, and we have no plans to change it at present.
Paul Flynn (Newport West) (Lab)
It is two and a half years since the Wright reform of the election of Chairmen of Select Committees was introduced. At that time there were very few candidates for some of the posts, and in the case of one Committee there was only one candidate. Would this not be a suitable time for the existing Chairmen to resign, so that all Members, including new Members, could have a chance to have their turn, in order that the work of Select Committees could be refreshed?
Mr Lansley
I do not think that I would hold myself or my predecessor responsible for whether people put themselves forward. I think it is perfectly reasonable to give Members that opportunity. If they do not take it up, that is a matter for them.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I note what my right hon. Friend said earlier about responses to e-petitions with 10,000 signatures. Will he clarify that by telling us what time frame would be involved, and can he give us any more details?
Mr Lansley
I hope that it will be possible to respond rapidly to petitions with 10,000 signatures. I cannot tell the hon. Lady at this stage how quickly we will do it, but I hope that we will do it in a matter of weeks. I want members of the public to feel that they have a genuinely interactive relationship with scrutiny of the Government in the House, which involves direct responses to their use of the website and, indeed, to their e-mail addresses.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
3. Whether the Government plan to impose penalties on Ministers who fail to observe the House's expectations in regard to statements.
The Deputy Leader of the House of Commons (Tom Brake)
The Government are committed to making key policy announcements in Parliament, a principle that is set out clearly in the Ministerial Code. As the right hon. Gentleman will know, the House had an opportunity to debate the issue in December last year. The premise that specific penalties should be imposed by the House over and above those already available was considered and rejected during that debate.
Alun Michael
I congratulate the Deputy Leader of the House on delivering that reply with a straight face, but let us be honest: we all know that announcements should be made in this House first, but the temptation of a quick headline and some media coverage trumps virtue almost every time, especially within the walls of No. 10. Does the Deputy Leader of the House agree that Ministers need to know that there is a certain penalty for that, such as promotion to the Whips Office or being hung by their toenails from the Elizabeth Tower, in order to ensure that virtue prevails?
Tom Brake
I thank the right hon. Gentleman for that. He is an experienced and respected parliamentarian, and he will be aware of the range of measures available to put a Minister on the spot over any alleged failure to make the most important policy announcements to this House: urgent questions, Select Committee investigations, Prime Minister’s questions, points of order and raising matters in the Backbench Business Committee. I hope he agrees that that is an impressive list of effective sanctions against errant Ministers.
Mr James Gray (North Wiltshire) (Con)
The Government have increased the number of ministerial statements made to this House, and you, Mr Speaker, have increased the use of urgent questions to hold the Government to account, which is also welcome. However, it sometimes feels as if there is not much point in attending events such as the Budget debate or the Queen’s Speech debate, as one has read all about them in the previous Sunday’s newspapers, which shows that not enough is yet being done. Will the Government consider making use of Westminster Hall, or elsewhere, in order to have far more ministerial statements and, crucially, far more opportunities for Back Benchers to scrutinise what Ministers are up to?
Tom Brake
It is worth pointing out that over the recent period there have been 32 statements by the Prime Minister. We are making more statements per day than under the previous Government. I agree, however, that it would be a good idea to allow Westminster Hall to be used for oral statements, and the Leader of the House has expressed support for that.
Chris Bryant (Rhondda) (Lab)
In which case why, at 10 o’clock today, did the Minister for Universities and Science make an announcement on changing the immigration policy at a conference a long way from here?
Angela Smith (Penistone and Stocksbridge) (Lab)
The fact that we have both a new Leader and Deputy Leader of the House presents us with an excellent opportunity to establish higher standards in how the Government report matters of concern to this House. Will the Deputy Leader therefore take this opportunity to give a guarantee that the Government will report statements to this House before briefing the media?
Diana Johnson (Kingston upon Hull North) (Lab)
4. What plans he has for pre-legislative scrutiny of Government Bills.
The Leader of the House of Commons (Mr Andrew Lansley)
The Government are committed, wherever possible, to publishing legislation in draft with a view to pre-legislative scrutiny. We have published nine sets of draft measures so far this Session and will publish more as it progresses.
Diana Johnson
But given the right hon. Gentleman’s unfortunate experience with the Health and Social Care Bill, does he not agree that it would be best for all Government Bills to have extensive scrutiny before reaching the Floor of the House?
Mr Lansley
I think the hon. Lady and the House will recognise that it is not possible for all Bills to have pre-legislative scrutiny, but as I said, the Government have published a substantial number of such measures. When I was Secretary of State for Health, we published the Care and Support Bill in draft for pre-legislative scrutiny—I look forward to its commencement this autumn—and it has also been the subject of both consultation and a public reading stage.
Business of the House
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Mr Andrew Lansley)
The business for next week will be:
Monday 17 September—Second Reading of the Infrastructure (Financial Assistance) Bill.
Tuesday 18 September—Motion on the conference recess Adjournment, the format of which has been specified by the Backbench Business Committee. Colleagues will wish to be reminded that the House will meet at 11.30 am on this day.
The business for the week commencing 15 October will include:
Monday 15 October—Consideration in Committee and remaining stages of the Infrastructure (Financial Assistance) Bill.
Tuesday 16 October—Remaining stages of the Enterprise and Regulatory Reform Bill (day one).
Wednesday 17 October—Conclusion of remaining stages of the Enterprise and Regulatory Reform Bill.
Thursday 18 October—A debate on a motion relating to the disbandment of the 2nd Battalion, the Royal Regiment of Fusiliers, followed by a debate on a motion relating to the use of intercept evidence in courts and inquests. The subjects for these debates have been nominated by the Backbench Business Committee.
Friday 19 October—Private Members’ Bills.
The provisional business for the week commencing 22 October will include:
Monday 22 October—Second Reading of the Public Service Pensions Bill.
I should also like to inform the House that the business in Westminster Hall for 17 September and 18 October will be:
Monday 17 September—A debate on the e-petition relating to the west coast main line franchise decision.
Thursday 18 October—A general debate on community benefit for major infrastructure projects.
It is also my intention to provide time for a debate on Hillsborough, as announced by my right hon. Friend the Prime Minister during his statement yesterday.
Colleagues will also wish to know that my right hon. Friend the Chancellor of the Exchequer will deliver the autumn statement on Wednesday 5 December.
Ms Eagle
The whole House will be shocked and saddened by the murder in Libya of the US ambassador and three other members of the United States diplomatic staff. It will inevitably raise concerns about the safety and security of our own diplomats in Libya and elsewhere in the region. May we have an urgent statement from the Foreign Secretary on what action the Government are taking to protect Foreign Office staff in the region?
We welcome the publication yesterday of the Government’s papers on the Hillsborough disaster and the report by the Bishop of Liverpool—that was a process we began in government. As my right hon. Friend the Member for Doncaster North (Edward Miliband) said yesterday, those of us in the Opposition fully associate ourselves with the very welcome apology the Prime Minister made to the families and to the people of Liverpool.
The contents of the report are scandalous. There is shock and anger at the revelations that an opportunity to save the lives of so many was missed. There is shock and anger at the despicable and self-serving lies told about the fans’ behaviour on the day. There is disbelief that the truth has been concealed for 23 long years. I pay tribute to the families who have campaigned for justice for so long—without them yesterday would not have been as it was. I also pay tribute to the work of all Members of this House representing Merseyside seats and others who have campaigned for justice, including my right hon. Friend the Member for Leigh (Andy Burnham), and my hon. Friends the Members for Garston and Halewood (Maria Eagle) and for Liverpool, Walton (Steve Rotheram). Does the Leader of the House agree that this shows the value of Members of Parliament who represent and fight for the communities they serve?
Last night, the chief constable of South Yorkshire police said that it looked on the face of it as if some police officers had broken the law. This morning, the ex-chief constable of South Yorkshire, Richard Wells, said that it is “absolutely essential” to pursue prosecutions in the Hillsborough case. At the same time, one of those officers who appears to have been involved in orchestrating the cover up is currently a serving chief constable.
Yesterday, the House was united in its response. May I assure the Leader of the House that we stand ready to co-operate in any way that is helpful in finally achieving a just resolution? Will the Leader of the House explain what the Government’s course of action will now be to hold to account those who did wrong and deliver justice for the families, now that we finally have the truth? On setting aside the flawed coroners’ verdicts, will the Leader of the House arrange for the Attorney-General to make a statement before recess on the next steps? We welcome the fact that there was a statement yesterday and the commitment to a full debate in Government time. I note what the Leader of the House said in his statement, but many members will want to contribute to the debate, so could he be a little more forthcoming and update the House on when it will take place? I hope that it will take place on the Floor of this House and not in Westminster Hall.
The Chancellor has finally plucked up the courage to come to this House at the start of December to make his autumn statement. We know that the new Environment Secretary is a climate change sceptic, but the Chancellor clearly thinks the climate is warming because in his mind autumn now extends well into December. Given that this Government have decided that autumn now extends into December, can the Leader of the House assure us that the Prime Minister has no plans to cancel Christmas?
Yesterday, my right hon. Friend the Leader of the Opposition asked the Prime Minister about the Government’s target to cut debt by 2015. Given that borrowing is up 25% and that the Government are briefing that the Chancellor will abandon his debt target completely, will the Leader of the House arrange for the Chancellor to make an urgent statement in this House on whether the Government are still committed to the target?
The hon. Member for West Suffolk (Matthew Hancock) gave an interview to The Spectator this week in which he compared himself favourably to Churchill, Pitt and Disraeli. Now, we all share his joy at his appointment to ministerial office after striving so hard to be noticed, but it is not immediately apparent to me, or I suspect to anyone else, why the Under-Secretary of State for Skills thinks he has quite matched the achievements of some outstanding British Prime Ministers. Will the Leader of the House arrange for the hon. Gentleman to make a statement before the recess to enlighten us on his obvious powers?
Mr Lansley
I think we share across the House a sense of outrage at the attacks on US diplomatic staff in Libya. As the hon. Lady rightly says, the Foreign Secretary, who was in Cairo, responded and made clear the Government’s condolences to the US Government. The attacks of course remind us of the dangers our diplomatic staff run, which we know very well from other such incidents. I know that the Foreign Secretary, if he can, will update the House on how arrangements to secure our staff around the world are being pursued.
Having sat here yesterday and heard the report from the Hillsborough Independent Panel, I share the House’s sense of shock and outrage. From my point of view, as a former Secretary of State for Health, I know that people might not always be able to achieve the standard in professional and public service responsibilities that so many of us believe they would want, but it is shocking that some would go to such lengths to deny the truth, spread misinformation, not follow the evidence or the science and, in those circumstances, leave the families with no awareness of what the post-mortems genuinely meant or what the possibilities had been. I completely share the hon. Lady’s sense of shock that that occurred.
As the hon. Lady rightly said, what has happened is very much to the credit of the families and Members of this House. In response to her question, it does indicate the value of Members of Parliament, and I pay tribute to the way Members have pursued the issues over many years. It says something about the value of this House that we are not part of the establishment, and should not see ourselves as such; we are beyond it, with people being accountable to this House. We should use this House and its powers and privileges to deliver that sense of accountability. In following up the panel’s report, we must continue to make the House exactly that kind of forum for achieving that sense of accountability.
Clearly, Ministers and other authorities must follow up the panel’s report. I know that the Attorney-General will keep the House informed, as the Prime Minister made clear yesterday, and I will of course keep in close touch with him about keeping the House updated on whatever decisions he might reach. I have announced a debate, which will take place on the Floor of the House, and I am sure that, with the usual channels, we will expedite that so that it can take place as soon as possible, and talk about when the appropriate moment for the debate will be.
The hon. Lady asked about fiscal policy. I have to tell her that the Government’s fiscal policy is very clear, and it enables our plans to meet the targets. With regard to forecasts, the Office for Budget Responsibility’s forecast, for example, is due at the autumn statement, which I announced today will take place on 5 December.
I am in favour of Christmas. Oliver Cromwell, when Lord Privy Seal—an office I now have the privilege of holding—abolished Christmas but, although we are fond of precedent in this place, I have no plans or intentions to do the same.
Sir Peter Tapsell (Louth and Horncastle) (Con)
Although many tributes were paid to him last week when I was in my constituency, may I, as Father of the House, thank the previous Leader of the House, my right hon. Friend the Member for North West Hampshire (Sir George Young), for his service to the House? I have known every Leader of the House since Harry Crookshank in the 1950s, and to my mind my right hon. Friend ranks high among the best of them.
Mr Lansley
The Father of the House, once again, rightly and appropriately speaks on behalf of us all.
Natascha Engel (North East Derbyshire) (Lab)
May I add my voice to those who support the statement and campaign of the families affected by the Hillsborough disaster? The campaigners used the then-new e-petitions system to take their campaign to the House so that Members could bring forward yesterday’s statement. That points out the importance of e-petitions to the House.
I welcome the announcement that the 10,000-signature threshold will now trigger a response from the Government. Will the Leader of the House work with the Backbench Business Committee to ensure that every single instigator and signatory of an e-petition will eventually get some kind of response from us?
Mr Lansley
I enjoyed listening to the work of the Backbench Business Committee this week. I intend to work with the hon. Lady and Members across the House, including my colleagues in the Government, to ensure that those who give their time and energy to bringing issues before the House feel that they are responded to properly and timeously.
Mr Speaker
Order. A large number of right hon. and hon. Members are seeking to catch my eye, but it is highly unlikely that I shall be able to accommodate them all today. There is a statement on Afghanistan to follow and two debates under the auspices of the Backbench Business Committee. I seek to maximise the number of contributors, so there will be a premium on brevity from the Back Benches and Front Benches alike.
James Duddridge (Rochford and Southend East) (Con)
May we have a debate on the future of the Shoeburyness-to-Fenchurch Street line, which is currently under tender? Specifically, can the Government give my commuter constituents reassurance that good rolling stock will not be replaced with old, dirty rolling stock without air conditioning?
Mr Lansley
The choice of rolling stock is a matter for the franchisee, but it must meet the franchise conditions. The competition to which my hon. Friend refers is, of course, live, so I shall not make any further comment on the bids.
Mr John Denham (Southampton, Itchen) (Lab)
May we have an early debate on the marking of GCSE English exams this summer? It is clear that tens of thousands of young people went home in June, confident that they had done everything that their teachers and the examiners asked them to do, only to get devastating results in August. As Ofqual is accountable to the House, should we not have the chance to debate whether the damage being done to those young people’s careers far outweighs any impact of regrading in line with the January assessments?
Mr Lansley
I am sure that the right hon. Gentleman will have seen that the Education Committee is pursuing precisely those issues, and it is right that it should. The Secretary of State for Education was absolutely right to say that Ofqual is an independent regulator. He did not interfere with its decisions, and, frankly, the Welsh Education Minister is wrong in seeking to substitute his own judgment.
Mr David Burrowes (Enfield, Southgate) (Con)
May we have a debate on bigotry, which will enable the many hon. Members who hold a traditional view of marriage not to declare an interest?
Mr Lansley
I am in favour of marriage and I do not think we need to debate bigotry because in the House we seek to engage with all our affairs in a way that respects good language. If my hon. Friend is referring to the draft of a speech for the Deputy Prime Minister, I reassure him that the Deputy Prime Minister did not make the remarks and nor did he intend to.
Keith Vaz (Leicester East) (Lab)
May we have an urgent debate on the situation in Yemen? On Tuesday, the Yemeni Defence Minister narrowly escaped assassination and today 5,000 Yemenis have stormed the American embassy in Sana’a. The country is sliding into civil war. Please may we have an urgent statement?
Mr Lansley
The right hon. Gentleman has raised an issue that we all recognise is both urgent and increasingly difficult. I will, of course, talk to my colleagues at the Foreign and Commonwealth Office about it. I do not have knowledge of any immediate opportunity for debate, but I will talk to them about how they might further report to the House.
Mr John Leech (Manchester, Withington) (LD)
Yesterday I hosted a meeting for MPs about the ongoing humanitarian crisis in Syria. We heard numerous tales of aid not getting through to the people who really need it. When we return from the conference season, may we have a debate or statement on the effectiveness of aid and what changes need to be made to make sure that it is getting to the people who need it?
Mr Lansley
I will of course ask my colleagues how they might further report to the House. However, I remind hon. Members that the UK is the second largest bilateral donor to the Syrian people, and that it is helping to deliver emergency food aid to 80,000 people a month, shelter for 9,000 families, and urgent medical care for over 50,000 people affected by the fighting.
Kevin Brennan (Cardiff West) (Lab)
We do need to have the debate about GCSE marking that was requested. Why will not the Government and Ofqual listen to Mike Whiting, the Conservative cabinet member in Kent county council who said that regrading should take place? Do we not need an urgent debate in the House in Government time?
Mr Lansley
I will not repeat what I have said other than to say that my right hon. Friend the Secretary of State for Education is absolutely right to say that there was no political interference. Ofqual is an independent regulator, and we should respect its independence and its determination to maintain standards.
Bob Stewart (Beckenham) (Con)
Four incredibly brave women of the Special Operations Executive were murdered by the SS in Ravensbrück concentration camp on or shortly before 5 February 1945. Their names were Denise Bloch, Cecily Lefort, Lilian Rolfe and Violette Szabo, who was later awarded the George Cross. Former Member of Parliament, Nicholas Bennett, recently visited Ravensbrück and can find no obvious memorial to those real heroes. I am sure that my right hon. Friend, and all Members of this House, will join me in calling on the Government to rectify this situation.
Mr Lansley
My hon. Friend is right. The courage of the men and women of the Special Operations Executive was remarkable. Members of the House will recall that three years ago that courage was recognised with a memorial on the Albert embankment, including a statue of Violette Szabo. None the less, what my hon. Friend has said about Ravensbrück camp will no doubt have been noticed by the German embassy here.
Mark Durkan (Foyle) (SDLP)
When, and from whom, may we expect a statement indicating that the Honours Forfeiture Committee is going to look at the honours attached to the names of anyone who was implicated in the scandalous syndicate of deceit that was exposed yesterday? When it does so, will it also consider the case of Derek Wilford, who was clearly indicted by the Saville report?
Mr Lansley
If I may, I will ask colleagues with those responsibilities to write to the hon. Gentleman about those matters, and ask that I be informed about what the timetable is for considering them.
Mr James Gray (North Wiltshire) (Con)
The Backbench Business Committee has been an outstanding success, and I pay particular tribute to the hon. Member for North East Derbyshire (Natascha Engel) for her leadership in it. However, does the Leader of the House agree that an excessively large number of set-piece debates that used to take place in Government time are now held in Backbench Business Committee time? Is there now an opportunity to increase the amount of time given to Backbench Business Committee debates or, alternatively, to bring back Government-time debates for defence and other things?
Mr Lansley
I am grateful to my hon. Friend for his recognition of what a step forward the Backbench Business Committee is. We look forward to it continuing to do its work. As I understand it, part of the intention following the Wright Committee was that some of the debates that were scheduled in Government time should be treated as part of the responsibility of the Backbench Business Committee.
Richard Burden (Birmingham, Northfield) (Lab)
Will the Leader of the House ask the Foreign Secretary to come to the House before we rise for the recess to clarify the Government’s intentions if, as expected, the United Nations General Assembly is asked to vote before we reassemble on the admission of Palestine as a non-member state of the UN? Last year many hon. Members found it inexplicable, given the UK’s policies, that we should have abstained on the motion at the Security Council. At that time, the Foreign Secretary said that in the event of a motion at the UN General Assembly, different considerations would apply. As this matter could be resolved one way or the other before we reassemble, may we have a statement so that we can respond before the House rises?
Mr Lansley
The House will be aware of the Government’s view, which I think is widely shared, that the right route is to a two-state solution through negotiation. That will continue to be the Government’s approach. Indeed, depending on the events at the UN General Assembly, Her Majesty’s Government will be seeking to promote such a negotiated solution.
Robert Halfon (Harlow) (Con)
Has my right hon. Friend seen my early-day motion 489?
[That this House notes that the Charity Commission has formally recognised druids as a religion and granted them charitable status, even though they have just 300 members; questions why therefore the Charity Commission has not recognised the Christian Brethren church, which has 16,000 members and more than 300 churches across the country; further notes the extensive community and charitable outreach that the Brethren church does, which has significant public benefit; and finally calls on the Charity Commission to stop the discrimination against this Christian church and to have a level playing field for all religions.]
May we have a debate on the Charity Commission and the recognition of religious groups to find out why it recognises druids but does not recognise the Christian Brethren, who have 16,000 members and 300 churches across the country?
Mr Lansley
Yes, I have seen the early-day motion in my hon. Friend’s name. Of course, the Charity Commission is not a regulator of religion, and it should be explaining its responsibilities and doing so in a way that commands confidence.
Fiona O’Donnell (East Lothian) (Lab)
A high street payday loan broker in my constituency has been standing outside a primary school handing out balloons to children and leaflets asking whether they are struggling to afford a school uniform. May we have an urgent debate on effective regulation of this predatory sector?
Mr Lansley
I will, if I may, invite my hon. Friends from the Department for Education to respond on that issue, with which I confess I am not familiar.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
The ongoing saga of Post Office procurement is getting rather out of hand. There is still no information coming to sub-postmasters from the Post Office. If the Post Office loses the procurement bid, rural post offices will disappear. May we please have a statement or a debate in this House to discuss what is plan B should this go wrong?
Mr Lansley
I presume that my hon. Friend is talking about the vehicle excise duty contract. That is a live procurement and, as such, it would be incredibly difficult to have any kind of a debate about it. I assure him and the House that last year Government business passing through post offices increased in value, which it had not done for a number of years previously. I reiterate that, as I said last week, the post office local model is giving post offices additional possibilities and business opportunities, and I hope that that will continue.
Helen Goodman (Bishop Auckland) (Lab)
May I draw the Leader of the House’s attention to early-day motion 523?
[That this House deplores the decision of HSBC to close its branch located in Shildon, County Durham; notes that in light of this decision the town of Shildon, home to over 10,000 residents, will be left without any banking facilities meaning residents will be forced to travel several miles to get to their nearest bank; further notes that this decision is especially deplorable in light of the fact that HSBC made a pre-tax profit of £13.7 billion last year and paid their Chief Executive just under £8 million; and finally calls for HSBC to review urgently its decision to close its branch in Shildon.]
The disgraceful proposal to close the HSBC bank branch in Shildon will leave 10,000 people without any banking facilities at all. Will the Leader of the House make time for us to have a debate on how the banks treat ordinary people?
Mr Lansley
I have every sympathy with the hon. Lady. I remember that in my own constituency, some 10-plus years ago, branches of HSBC, Barclays and Lloyds shut down in villages. As the years have gone on, much of that closure programme has made it increasingly difficult for people to obtain cash and to undertake some of their business. I know that this concerns the House, and I will raise it with my colleagues. It may come up again when banking reform proposals come before the House.
Mark Pritchard (The Wrekin) (Con)
May we have an early debate on restoring public trust in the police? The majority of police are professional, hard-working and honest, but an increasing minority are not, and too often they are pensioned off after internal disciplinary procedures rather than going before the criminal courts, even when they are known to have committed a criminal act.
Mr Lansley
I think that that is one of the many reasons the whole House will have been shocked by the concerted effort, including by police officers, to misinform and mislead people about the nature of what happened at Hillsborough. This is, in a sense, part of a wider issue about culture. I hope that in discussions with my hon. Friends and the new Minister for Policing and Criminal Justice we may be able to address, together with the police service, further changes in culture. I would not say that there have not been substantial changes. I know personally many of those who feel that over the years there have been substantial changes in the right direction in the police service, but we must look critically at whether more can be done to make sure that there is a culture of openness, transparency and accountability.
Barry Gardiner (Brent North) (Lab)
The Leader of the House will recall from his previous position the importance of physical activity in promoting the health of the nation and programmes such as Move It that deliver it across the spectrum for thousands of young people. Will he therefore consider a debate on the Olympic legacy, particularly in relation to what that legacy can mean for the health of the nation?
Mr Lansley
Yes. I share the hon. Gentleman’s view. I hope there will be an opportunity for the House to debate not only the physical, economic and related legacies, but the legacy of promoting sport, which we will do through competitive games in schools, by extending the school games, by improving engagement with community sports clubs, and by promoting physical activity as well as competitive sport. That is what the Change4Life and Games4Life programmes have sought to do and will continue to do.
Rehman Chishti (Gillingham and Rainham) (Con)
Will the Leader of the House join me in paying tribute to all the athletes who took part in the British Transplant games, which were held in my constituency? Linked to that, may we have a debate on organ donation and transplants, which help save lives?
Mr Lansley
I will, of course, look at whether opportunities will emerge for a discussion about organ donation and I recognise that there is an ongoing debate in Wales about the character of the organ donation programme. I thank my hon. Friend for mentioning the Transplant games. Papworth and Addenbrooke’s hospitals in my constituency probably conduct more transplants in total than anywhere else in the country. I never fail to be amazed by what is achieved by those who provide transplant services.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Following on from the Business Secretary’s answer to an urgent question on Monday, may we have a debate about this country’s industrial policy? It is hugely important. It is about how we pay our way in the world, how we ensure that we have a robust tax base and how we will provide high-paying jobs in the future, so it deserves a major debate in this House.
Mr Lansley
The hon. Gentleman may wish to raise with his Front-Bench colleagues their choice of time for debates. What the Business Secretary said clearly is that not only are the Government focusing on an industrial strategy to deliver growth, but the range of measures and our ability to do so are increasing all the time.
Sarah Newton (Truro and Falmouth) (Con)
Yesterday the Department of Health announced the warm home scheme. May we have a debate on the wide range of measures that the Government are introducing to tackle fuel poverty, so that Members of this House can work with their communities to make sure that the people who most need the help get it this winter?
Mr Lansley
I am pleased that my colleagues at the Department of Health were able to follow up last year’s initiative of a warm homes healthy people fund and support local authorities and charities with further provision, which was announced earlier this year. It is all about taking practical steps to ensure that people who are vulnerable and frail can be supported by community action.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
May we have a debate on ever-increasing energy costs? It is clear that neither we as politicians nor the regulatory bodies are doing anything to protect our constituents. Will the Leader of the House look at what powers this House has to say to major energy companies, “As long as you are recording record profits and as long as you are awarding yourselves £1 million bonuses, you are not doing it at the expense of our constituents”?
Mr Lansley
The hon. Gentleman will recall how the Prime Minister, Deputy Prime Minister and Energy Secretary focused on the issue of energy costs more than a year ago. They, along with the regulator, Ofgem, have been focusing on how we can ensure that energy costs and opportunities for those who are at risk with regard to fuel costs are able to access the best possible price for energy.
Sir Tony Baldry (Banbury) (Con)
When pre-legislative scrutiny takes place on the draft Care and Support Bill, how will my right hon. Friend ensure that every Member of the House will be able to engage in the detail, rather than its being a Second Reading debate on a grander scale?
Mr Lansley
Our intention is that the pre-legislative scrutiny will be undertaken jointly between the two Houses—I hope that that is what will happen. As with any pre-legislative scrutiny, all Members of this House will have an opportunity to make representations about the Bill’s character to the Joint Committee.
Bill Esterson (Sefton Central) (Lab)
The GCSE fiasco is of major national significance. It affects the lives of thousands of young people in their ability to get apprenticeships and jobs and to go on to further study. We need a debate in this House and should not just leave it to the 11 members of the Education Committee. We owe it to the 376,000 young people who took their GCSEs this year to have a debate in this House.
Mr Lansley
If the hon. Gentleman feels strongly about that, he may wish to talk to his Front-Bench colleagues about how they choose to use Opposition time. I listened to my right hon. Friend the Education Secretary giving excellent answers when he gave evidence to the Education Committee, and I would think that that provides it with a very good basis for its own inquiry.
Iain Stewart (Milton Keynes South) (Con)
May we have an urgent debate on community health services? In Milton Keynes the strategic health authority has advised the primary care trust to progress with an NHS-only competitive procurement for our community health service. This goes against a strong local wish for a managed transfer and potentially undermines the innovation and benefit our integrated service is delivering.
Mr Lansley
My hon. Friend and his neighbour, my hon. Friend the Member for Milton Keynes North (Mark Lancaster), have discussed this and I had intended to meet him. I hope that this might be able to be pursued with my successor as Health Secretary. We are always clear where such changes take place that, while it is important to make progress, to do so quickly and to have a system that is viable, it is vital that it carries the confidence of the local decision makers—the council, the public and the clinical commissioners—in how we go forward.
Ms Margaret Ritchie (South Down) (SDLP)
Will the Leader of the House give an assurance that the annual debate on fish quota allocations will take place in this House later this year, in advance of the completion of the negotiations in Brussels?
Mr Lansley
I will, if I may, make an announcement on that in business questions at a later date.
Nadhim Zahawi (Stratford-on-Avon) (Con)
May we have a debate about donations to political parties and their influence? I and many colleagues are concerned about the unions that are calling for co-ordinated action to bring the country to its knees and the amount of money that they donate to the Opposition.
Mr Lansley
Yes, of course. As Leader of the House, I do not engage in any partisan activity, but it is important that all parties recognise on whose behalf we make representations to the House—we make them on behalf of our constituents. We should not do so, whether as individual Members or as parties, on the basis of outside vested interests, and that applies to the Labour party with regard to the trade unions.
Jonathan Ashworth (Leicester South) (Lab)
May we have a debate on tourism? Does the Leader of the House agree that the exciting discovery of what might be the remains of Richard III in a Leicester city car park has the potential hugely to benefit the city of Leicester in terms of tourism? Does he also agree that if those remains turn out to belong to Richard III, they should be laid to rest at Leicester cathedral?
Mr Lansley
I should probably not venture into the latter point, but I have followed this archaeological inquiry with great interest. It is an exciting potential discovery.
Mark Menzies (Fylde) (Con)
May we have a statement or a debate in the light of last night’s announcement of the proposed merger between BAE Systems and the European Aeronautic Defence and Space Company? BAE employs tens of thousands of people in the UK, is our biggest export manufacturer and is a company in which the UK Government hold a golden share.
Mr Lansley
I recall that development. Clearly, these are commercial matters for the companies concerned, but there will be matters of substantial public interest in relation not only to the Government as a customer, but to the Government holding a golden share. I will make sure that my colleagues are aware of the need, as I am sure they are, to report to the House when the time comes.
Valerie Vaz (Walsall South) (Lab)
The Government appear to be indulging in a mashup, as popularised by the television programme “Glee”. Last week, the Leader of the House told me that there was no variance in policy on Sunday trading pre and post-Olympics; yet the Secretary of State for Communities and Local Government has told The Daily Telegraph that he is willing to take a long, hard look at different trading patterns. May we have an urgent statement to clear up this mashup?
Mr Lansley
What I said last week was accurate and continues to be true. The fact that one is continuously looking at issues, as one does in government—I know that only too well—does not mean that one has changed one’s position.
Mr Marcus Jones (Nuneaton) (Con)
Many of my constituents who are members of trade unions are moderate people who do not think that the best way to lift this country out of recession is to cripple it with strikes. In view of the TUC’s comments this week and given that many strikes are held on the back of very low turnouts in strike ballots, will my right hon. Friend bring forward a debate on whether such a small minority of people should be able to hold the country to ransom at such a difficult time?
Mr Lansley
My hon. Friend makes a very good point. I was interested to see that only 27% of members of the National Union of Teachers voted in its ballot. It seems to be utterly wrong for the education of young people potentially to be prejudiced on the basis of a clear lack of participation among members of that union.
Ann Clwyd (Cynon Valley) (Lab)
The Leader of the House will know that the Health and Safety Executive has described asbestos as
“the single greatest cause of work-related deaths in the UK.”
Those of us who work in this building have a right to know, in detail, what is the situation with asbestos here. Please may we have a written statement so that we know precisely what is the situation, rather than having to rely on conversations with the men in white coats?
Mr Lansley
The right hon. Lady and the House will have heard what my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) said about that. He was entirely accurate. I do not need to be persuaded of the importance of ensuring that asbestos is dealt with properly and that people are not exposed to it. I have seen in friends of mine the consequences of exposure to asbestos and of mesothelioma. We will take every step to ensure the safety of Members, staff and visitors to the House.
Andrew Selous (South West Bedfordshire) (Con)
May we have an early debate on the charges that some GPs impose on their low-income patients in relation to their housing needs? I was shocked to learn that one of my constituents was charged £35 for such a letter, which is half of his weekly benefit. That is wrong.
Mr Lansley
My hon. Friend raises an important point. I will discuss it with my hon. Friends at the Department of Health and the Department for Work and Pensions and ensure that he receives a reply. GPs are not in a position to charge their patients for any NHS services or to provide private health care services directly to their patients. However, under their contracts and by agreement, there are a number of additional services that they can provide to their patients that are outside those that are provided by the NHS. I will, of course, ensure that he receives a reply.
Diana Johnson (Kingston upon Hull North) (Lab)
Given the concerns about the downgrading of school food standards and the influence of lobbying, may we have a debate on why Domino’s Pizza’s shareholders decided to donate £50,000 to the Education Secretary’s local Conservative association?
Mr Lansley
Well, I imagine it was because they think that my right hon. Friend is a first-rate Member of Parliament. I know that he would not, and am sure that he did not, allow that to influence any decision that he made. Opposition Members must recognise, as do Government Members, that it is important that the public support political parties, because otherwise they cannot exist, function or do their work. However, it is important that that does not cause any influence. Opposition Members should look to the beam in their own eye, because the trade unions not only provide the overwhelming majority of the Labour party’s money, but exert direct influence over its policy as a consequence.
Andrew Bridgen (North West Leicestershire) (Con)
In March this year, in response to a written question, the Department for Education stated that it was considering proposals to form military academies. May we have an urgent debate on the role that military academies might play in addressing issues such as low aspiration and low social mobility, particularly in deprived areas?
Mr Lansley
Yes, I will ask my hon. Friends to respond on that. The Government welcome the role of military cadet forces, which can help tremendously to engage young people. We recently announced a £10.5 million-plus expansion of school-based cadet forces, which will create a further 200 units by 2015. Of course, free schools and academies have the flexibility to extend such an ethos in their schools. I am sure that the Department for Education and the Government would welcome that.
David Wright (Telford) (Lab)
The coverage of the Olympics and Paralympics on television was outstanding and brought the country together. Can we have a debate on free-to-air sports productions for UK consumers? Many people feel locked out from being able to watch major sporting events, such as the Ryder cup and test match cricket, live. Can we look again at the events that are on the national register?
Mr Lansley
I am sorry, but I was not here throughout Culture, Media and Sport questions, so I do not know whether the hon. Gentleman had a chance to raise that issue. I endorse his view that the coverage of the Olympics and Paralympics was excellent. In particular, although I am not always able to do these things, the ability to watch any of the many Olympic sports that were happening at any given moment was excellent.
Jason McCartney (Colne Valley) (Con)
I am fighting to keep my local post offices open. That is why I support the campaign for the renewal of the Driver and Vehicle Licensing Agency services contract. May I add my name to the cause for a debate on the importance of the renewal of that contract and of other Government work to safeguard a strong post office network?
Mr Lansley
As my hon. Friend will have heard, I urge Members to look at the positive steps that are being taken and at the increase last year in the Government revenue at post offices. That particular contract is a live contract. It would not be appropriate for Ministers to comment during the course of a live contract, nor for there to be a debate about a contract during the course of its procurement.
Pete Wishart (Perth and North Perthshire) (SNP)
Will the Leader of the House do all he can to encourage the Labour Opposition to give us at least the topics of their Opposition day debates at the business statement prior to their taking place? I am not sure whether he is aware of what happened on Monday night. We had 20 minutes to prepare and submit an amendment to a Labour Opposition motion. That is totally unacceptable and is a gross discourtesy to the House, the Speaker and the officials. Will the Leader of the House get the Opposition to get their act together?
Mr Lansley
I read the hon. Gentleman’s point of order on that issue. In the spirit of the two Front Benches, I refer his question to the shadow Leader of the House to reply.
James Morris (Halesowen and Rowley Regis) (Con)
May we have a debate on the importance of new transport infrastructure in regions such as the west midlands, focusing on the potential for investment in new airport capacity in Birmingham and on high-speed rail, to continue the important work of rebalancing the British economy?
Mr Lansley
My hon. Friend will have a good opportunity to raise that important point and related issues in the debate on the Infrastructure (Financial Assistance) Bill on Monday. The Bill will enable us to do much more to provide such important infrastructure investment by using our credibility in the international money markets and the low cost of borrowing to drive forward long-term investment in infrastructure.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
At oral questions last week, the Minister for the Cabinet Office suggested that gaps in the Contracts Finder website in relation to contracts between Atos Origin and Atos Healthcare and the Government were due to contracts signed under the previous Government. On checking that, I found that at least three significant contracts, including one worth £200 million between the Department for International Development and Atos, are not listed. May we have a statement from the Minister for the Cabinet Office about the accuracy of that website, which he promotes constantly?
Mr Lansley
The hon. Gentleman will not be surprised to hear that I do not know whether what he says is true or what the position is. I will simply, if I may, refer the matter to my hon. Friends and ensure that he receives a response.
John Glen (Salisbury) (Con)
Dr Stuart Smallwood, the respected headmaster of Bishop Wordsworth’s school in Salisbury, wrote to me this week to express great concern that strike action has been approved by just over one in five members of the National Union of Teachers. Will my right hon. Friend urge the Education Secretary to bring forward legislation so that there is a minimum threshold before such disruptive action can take place?
Mr Lansley
My hon. Friend and the head teacher of the school in his constituency make an important point. From my conversations with leaders of trade unions over a number of years, I think that when they clearly do not have a compelling mandate for action, they should take that into consideration. I simply urge the teaching unions not to proceed with industrial action. It is not in the best interests of the children, and it is not justified by any grievance that they have brought forward.
Phil Wilson (Sedgefield) (Lab)
On 16 July, the then Secretary of State for Transport announced in a statement that a competition was to be launched to invite bids for new train stations. Since then, nothing has been heard. The competition could help Ferryhill in my constituency, which has been crying out for a new train station for years. May we have another statement on when exactly the competition will start and what the rules are, so that if possible, Ferryhill can get a bid together?
Mr Lansley
I was very impressed by the announcements that were made just before the summer on the future rail network, which were substantial and wide-ranging. I do not know the answer to that particular question, but I will ask my right hon. Friend the Secretary of State for Transport to respond.
Mr Peter Bone (Wellingborough) (Con)
May I congratulate the Leader of the House on how he has answered all these difficult questions? May I ask him a gentle and easy one? Will he confirm that, as is political convention, the only business on tomorrow’s Order Paper will be private Members’ Bills?
Paul Flynn (Newport West) (Lab)
Our colleagues in the New Zealand Parliament have just decided to bring their troops out of Afghanistan a year earlier than planned. The Parliaments of Canada and the Netherlands have already brought their troops home and they are safely back in their own countries. With the situation in Afghanistan getting worse than ever and a record number of NATO troops having been murdered by the Afghans whom they are training, arming and funding, must we not now react to public opinion, which is saying that for goodness’ sake, we must bring our troops out of harm’s way and away from a war that has become a mission impossible?
Mr Lansley
My right hon. Friend the International Development Secretary is in her place and will be making the quarterly statement on Afghanistan immediately following business questions. If the hon. Gentleman seeks to catch your eye, Mr Speaker, he may have an opportunity to raise that issue.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
May we have a debate on the future management of acute hospitals, particularly in London? I ask because there is now survey evidence showing that a significant number of members of the Royal College of Physicians would not recommend their hospital for the treatment of their friends and family.
Mr Lansley
The hon. Gentleman will recall that the Prime Minister and I have rightly emphasised the friends and family test. It involves both staff and patients being asked whether they would recommend their services. My colleagues at the Department of Health will continuously examine how we can improve acute hospital services. I have discussed the future hospital programme with the Royal College of Physicians, and what we are doing to modernise the NHS will absolutely address the issues that it raises. As it says, we should recognise that the increasing burden of ill health among older people, which is a consequence of increased life expectancy, should increasingly be managed through improvements to services in the community. That will mean that we can focus hospital services on patients who genuinely need to be in hospital.
Andrew Miller (Ellesmere Port and Neston) (Lab)
In the north-west of England, the four police authorities are merging some civilian parts of the Forensic Science Service’s functions with unseemly haste on the back of the closure of the FSS, before the system has been able to bed in. Will the Leader of the House organise an urgent debate on that important subject, as that appears to be happening before the police and crime commissioner elections? Will he ask the Home Secretary to publish any documents that give guidance to chief constables on the matter?
Mr Lansley
I will of course ask the Home Secretary about that, but it strikes me that the hon. Gentleman might seek to secure a debate on the Adjournment about it.
Katy Clark (North Ayrshire and Arran) (Lab)
On Monday, I attended the Delegated Legislation Committee on the criminal injuries compensation scheme. At the end of the debate the Minister in charge did not move the motion because of the level of opposition to the Government’s proposals to slash compensation for the victims of crime. May we now have a statement providing assurances that compensation will not be cut?
Mr Lansley
I think my colleagues at the Ministry of Justice will make a statement to the House in due course, but I will discuss with them when they might do that.
Afghanistan
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for International Development (Justine Greening)
With permission, Mr Speaker, I will present a quarterly review of our progress in Afghanistan, following the Prime Minister’s statement after the G8 and NATO summits in May. This statement represents the combined assessment of the Department for International Development, the Foreign and Commonwealth Office and the Ministry of Defence.
I begin by paying tribute to the brave men and women of our armed forces. As of today, 427 British troops have lost their lives since the conflict began in 2001, including 33 since the beginning of this year. They have made sacrifices that the House and the British people acknowledge with the utmost gratitude and admiration. We all recognise the considerable challenges that they continue to face in protecting Britain’s national security and that of the Afghan people.
I also join the Foreign Secretary in condemning the brutal and senseless attack on the US consulate in Benghazi yesterday. It only serves to highlight the risks that personnel face as they work for peace and stability in countries in transition. In Afghanistan, we have strict security regimes in place to keep UK officials safe, and of course our arrangements are kept under constant review.
We are in Afghanistan to protect our own national security by helping the Afghans take control of theirs. Our objectives in Afghanistan, which are shared by our international partners, the Afghan Government and the Afghan people, remain the same—an Afghan state that is able to maintain its own security and prevent the country from being used as a safe haven by international terrorists. In pursuit of that aim, we are helping the Afghans develop their national security forces, make progress towards a sustainable political settlement and build a viable Afghan state that can provide for its people.
Security transition remains on track, and in May the Afghan Government announced the third of five tranches of areas that will start the process. Once fully implemented, it will mean that all 34 provinces will have areas that have begun transition. Significantly, in tranche 3, Afghans will be taking lead security responsibility for 75% of the population, including in all three districts that make up Task Force Helmand, the UK’s area of operations.
Our training efforts are delivering tangible results. The Afghan national security forces are increasingly moving to the fore in delivering security, and their capability and confidence continues to improve. By mid-2013 we expect the Afghans to be in the security lead across the country. They are deploying in formed units, carrying out their own operations and planning complex security arrangements. After 2014 any residual insurgent threat will be tackled by capable Afghan forces trained and equipped to manage their own security effectively. Although the international security assistance force coalition continues to play a key role, it is right that it is increasingly a supporting one.
The increase in so-called insider threat attacks is of course concerning. We routinely assess and refine our force protection to meet mission requirements and to best ensure the personal safety of our forces. We are also working closely with ISAF and the Afghan Government to take concrete action to reduce as far as possible the potential for such incidents in the future. Developing the Afghan national security forces is a key part of our strategy. They have an essential role in providing long-term security and governance in Afghanistan. Partnering is not without risk, but it is essential to success. The incidents in question are not representative of the overwhelming majority of Afghan security forces, and in fact every day tens of thousands of coalition forces work successfully alongside their Afghan partners in a trusting relationship, without incident.
We continue to support an Afghan-led political process as the means to bring peace and stability to Afghanistan. We recognise that the way forward will be challenging, but we remain committed to supporting the Afghan Government’s efforts. We also recognise that security and stability in Afghanistan are in the mutual interest of all its neighbours, who have, in different ways, suffered as a result of Afghanistan’s instability during the past 20 years.
In November 2011, Afghanistan and its neighbours agreed to take forward regional dialogue and co-operation through the Istanbul process. As part of that process, the Foreign Secretary attended the Heart of Asia ministerial conference in Kabul on 14 June together with Foreign Ministers from the region and supporting countries. The final declaration reaffirmed participants’ support for sovereignty and regional co-operation. Participants also agreed to implement key confidence-building measures and the UK has offered to provide assistance to develop chambers of commerce, tackle the narcotics trade and support counter-terrorism and disaster management activities. We will continue to engage with that process and the lead regional countries.
Further highlighting the UK’s commitment to Afghanistan, the Prime Minister visited Kabul and Camp Bastion in mid-July. In Kabul, the Prime Minister participated in a trilateral meeting with President Karzai and Pakistani Prime Minister Ashraf on the common goal of security and stability in the region. Nevertheless, we know that transition to a stable, peaceful and prosperous Afghanistan will require significant economic growth and development as well as progress on security and an Afghan-led political settlement supported by its neighbours.
With that in mind, we continue to promote growth and to help to build up the private sector to provide opportunities for the Afghan people. For example, since the beginning of this year our assistance has provided more than 7,000 men and women in Helmand province with technical and vocational education and training, tailored to the needs of the local private sector, enabling them to get the jobs they need and to start their own businesses. More than 80% of those graduates are now employed, providing a better life for their families.
At the same time we continue to help the Afghan Government to increase tax revenues. In May, domestic revenue tax collection had increased to more than $2 billion, a 23% year-on-year increase and more than eight times the level of revenue collected in 2004-05 when UK support began. As the Select Committee on International Development’s recent report on tax in developing countries has rightly highlighted, increasing revenue generation is absolutely vital for countries such as Afghanistan to help to reduce their dependence on international assistance over time.
UK aid is helping Afghan civil society organisations and local communities to hold their Government to account. For example, through the Tawanmandi civil society programme, Afghan women’s organisations are raising awareness of the elimination of violence against women law, holding Government bodies to account for its implementation and supporting female victims. In addition, thanks to UK support, by the end of the year about 470 communities will be able to monitor Afghan Government public works programmes to ensure they deliver what they have promised.
As we progress towards full security transition at the end of 2014 it is vital that international assistance, including from the UK, continues to deliver such results so that ordinary Afghans can have faith in their Government to provide an alternative to the insurgency and a better life for their families. In previous statements, Members of this House have pointed out that Afghanistan faces an uncertain financial future that could put future peace and stability at risk. With that in mind, my predecessor led the UK delegation at the Tokyo conference in July. Partners committed $16 billion, or $4 billion per annum, through to 2015 to meet Afghanistan’s essential development needs. At that conference, the UK announced that we will provide development assistance to Afghanistan at the current levels of £178 million per annum up to 2017 and will continue to support Afghanistan right through the “transformation decade” from 2015 to 2024. Many other partners followed our lead and thanks to the efforts of the UK Government, the conference declaration commits the international community to meeting Afghanistan’s budget shortfall until at least 2017.
Our continued support, however, will require the Government of Afghanistan to implement the reform commitments set out in the Tokyo mutual accountability framework. The framework acknowledges the importance of better governance, economic growth and regional co-operation and calls on the Government of Afghanistan to deliver progress on elections, corruption, economic management and human rights. It includes a strong and specific focus on the rights of women as a prerequisite for peace and prosperity. At the request of the Afghan Government, the UK agreed to co-chair the first ministerial review of progress against the Tokyo commitments in 2014. We therefore intend to play a major role in holding the Afghan Government and partners to account for their commitments to each other.
Since Tokyo, the Afghan Government have taken steps to demonstrate their intent. On 26 July, President Karzai issued a far-reaching decree on tackling corruption. The decree sets out 164 specific and time-bound instructions for almost all Government ministries. We welcome the vision outlined in the decree and President Karzai’s personal commitment to the agenda. We now need to see the Government deliver and we will continue to support them as they take forward those reforms.
Taken as a package, the commitments made at Tokyo and NATO’s security-focused summit at Chicago in May send a powerful message to the Afghan people and the region that we are there for the long haul. They also send a clear message to the Taliban that they cannot wait us out and that now is the time to participate in a peaceful political process.
Afghanistan has enormous potential. The country’s vast mineral wealth could transform its long-term economic prospects and the UK Government are helping the Afghans to capitalise on that, accountably and transparently, for the benefit of their people. Local government institutions are beginning to have a transformative effect on the lives of urban and rural communities by delivering better public services and strengthening infrastructure, again supported by UK aid. With the right amount of international support in place and the commitment of the Afghan Government to take forward essential reforms, the Afghan people aspire to a peaceful and prosperous future, which will support the UK’s national security interests, too. I look forward to taking forward that work alongside my right hon. Friends from the Foreign and Commonwealth Office and the Ministry of Defence in the months and years ahead.
Mr Ivan Lewis (Bury South) (Lab)
I thank the Secretary of State for sending me a copy of her statement in advance. Let me take this opportunity to welcome her to one of the best jobs in government. I hope that she has had time to reflect on how privileged she is to lead a Government development agency that is a global leader in reducing poverty and earns widespread respect for our country around the world.
I also welcome the hon. Member for Hornsey and Wood Green (Lynne Featherstone) to this excellent Department and place on the record my appreciation and respect for the contribution the hon. Member for Eddisbury (Mr O'Brien) made to the Department for International Development—his is one of the sackings that will raise many questions among Members on the Government Benches.
Whatever political differences I have had with the right hon. Member for Sutton Coldfield (Mr Mitchell), nobody disputes his commitment to international development or the respect he earned across the sector during his period as Secretary of State. He is sitting next to the former Secretary of State for Health—the Government Front Bench today could be called “detox and retox”, as while the right hon. Member for Sutton Coldfield was detoxifying the Conservative brand, the right hon. Member for South Cambridgeshire (Mr Lansley) was retoxifying it—[Interruption.] I shall have plenty of time to mention the right hon. Member for Rutland and Melton (Mr Duncan). I am sure that the hon. Member for Hornsey and Wood Green has been sent to the Department in part to keep an eye on him.
I join the Secretary of State in condemning the attack on the US consulate in Benghazi yesterday and welcome her assurances about ensuring the necessary protection for UK personnel serving in Libya. This House overwhelmingly supports ISAF’s mission in Afghanistan and we are tremendously proud of the dedication and courage of our armed forces, aid workers and diplomats. We must always remember and pay tribute to those who have fallen and provide all necessary support to their loved ones left to grieve.
It is important to recognise on such occasions the significant progress being made in Afghanistan, where more children are attending school, access to health care is improving and the economy is growing, yet tremendous challenges remain. Afghanistan is one of the poorest and most fragile countries in the world, and progress on the millennium development goals is slow. There is serious concern at the escalation of “green-on-blue” attacks, which have led to too many fatalities, raise serious questions about the safety of our troops, and hamper the essential work that is being done to strengthen the capacity and professionalism of the Afghan national security forces.
As the Government have rightly said, the draw-down of troops must be gradual so that we do not have a cliff-edge withdrawal in 2014, and we must ensure that there is no erosion of the international community’s commitment to stability in Afghanistan when our forces depart. We have a long-term responsibility to ensure that the Afghan people shape the destiny of their country with the greater stability that is essential for much needed economic growth and the fight against poverty.
I have a number of questions for the Secretary of State. Political and institutional development in any country is a slow, long-term project, and a steady—rather than sharp—decline in funding is needed to avoid triggering a worse economic crisis than that already likely. The Tokyo conference in July this year was essential, and we welcome the $16 billion post-2014 funding agreement.
In that context, will the Secretary of State confirm that it remains Government policy that by next year 0.7% of gross national income will be spent on official development assistance, and that the Government will support the private Member’s Bill promoted by the hon. Member for Preston (Mark Hendrick), which would enshrine that commitment in law?
Will the Secretary of State expand on the specific mechanism used to ensure that the contribution of the international community is not lost through corruption but spent on the priorities outlined in Tokyo and at the NATO Chicago summit? Will she comment on the political process? The Afghan peace and reintegration programme was bolstered in June when the Helmand provincial peace council and representatives of the Afghan national security forces held a shura—the first of its kind in Helmand. As the Secretary of State will agree, a political settlement that brings together local populations with new authority structures is essential to guarantee lasting and local stability across Afghanistan. Will she provide an update on how and where the Government expect the Afghan peace and reintegration programme to develop?
The House will be aware that presidential elections will be held in Afghanistan in 2014, the conduct of which will be a significant measure of how far the country has come. What work is the Department doing with the Afghan authorities and the international community to ensure that the elections are safe, free and fair?
Although it was stated at the Bonn conference that the peace process would be “inclusive...regardless of gender”, there have been no specific commitments to involve women. What is being done to bring more women into the political process, and ensure that the voice of Afghan women and civil society is heard when shaping the country’s future? Members on both sides of the House will agree that there will be no peace and security in Afghanistan without a leading role for women.
Finally, in 34 “green-on-blue” attacks this year, 45 soldiers have been killed and 69 wounded. In the most recent incident on 29 August, an Afghan soldier shot dead three Australian soldiers at a base in the south-central province of Uruzgan. What protections have the Government put in place to protect our forces from such attacks, and what analysis has been done of their cause and potential solutions?
Justine Greening
I thank the hon. Gentleman for his kind words about my new role. He was right to pay tribute to the work of my hon. Friend the Member for Eddisbury (Mr O’Brien) and my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell). In their many years at the Department, they made a huge difference to the importance of UK policy, and that was recognised by the many people with whom I have already spoken about our agenda, including Dr Jim Yong Kim of the World Bank, whom I met yesterday for the first time.
The hon. Member for Bury South (Mr Lewis) mentioned funding and corruption,. If the international community is to match reform in Afghanistan with funding, as part of the Tokyo mutual accountability framework, we must ensure that every pound goes where it is intended. That effort, however, must be led by the Afghan Government, and President Karzai was right to announce wide-ranging steps to ensure that members of the Government, judiciary and Executive are transparent about their interests, and to ensure accountability for the delivery of public services at a local level. The Department supports such measures, and we are funding 35 advisers to work in 17 different departments to ensure effective delivery and so that the skills needed for successful delivery are developed over time.
I understand the rationale behind the hon. Gentleman’s question about the Afghan peace and reintegration process. It is an important issue, and if we are to achieve a sustainable political solution in Afghanistan all elements of Afghan society must join the dialogue on that. Early signs are encouraging, but there is a long way to go. The peace and reintegration process is a key part of that but, as the hon. Gentleman said, a start has been made. I will write to him with further details about anticipated further steps.
On the 2014 election, we are supporting the work of the Independent Election Commission, which has a vital role. The hon. Gentleman spoke about the challenges faced during the 2010 election, but that was the first democratic election in Afghanistan for 30 years, so of course there were challenges. From that base, however, I believe that real improvements have been made, and it is right for the Independent Election Commission to oversee the process of electoral reform. In 2014 I expect that elections will be better run, and I hope that a higher proportion of women will participate than in the first set of elections.
The hon. Gentleman mentioned the role of women in Afghanistan, and in spite of the progress that has been made, women in Afghanistan still face huge challenges every day. It was heartening to see women’s rights explicitly mentioned as part of the Tokyo agreement, and they are now enshrined in the Afghan constitution, which we wanted to see. The challenge, however, is in implementation and ensuring that those rights for women exist in reality. It was correct for the Tokyo agreement to refer specifically to women’s rights, and we must look to the medium and long term. For example, nearly half of children entering education are now female, and such key building blocks will enable women to take a more prominent role. Just under 30% of Members of the Afghan Parliament are women, and we must ensure that in the future, women have the education and training that will enable them to participate more fully in Afghan society than in the past.
I will conclude my comments—[Interruption.] How could I forget? I will not sit down without referring to our important 0.7% commitment. Britain has played a leading role in meeting that goal. The coalition agreement is explicit about that and about our intention to legislate, and we will stick to it.
Madam Deputy Speaker (Dawn Primarolo)
Order. A large number of Members wish to comment on the statement, which means that questions have to be brief. I will cut hon. Members off if they are not brief, and I will not be able to call anybody who arrived late to the statement.
Jeremy Lefroy (Stafford) (Con)
May I welcome the Secretary of State to her position? Is she satisfied that the Government of Afghanistan are doing everything necessary to deal with the Kabul bank corruption scandal?
Justine Greening
I believe that a lot of progress has been made. As my hon. Friend will be aware, prosecutions will take place, and the United Kingdom—together with Canada—is funding a forensic order that will provide an evidence base so that action can be taken.
Fiona O’Donnell (East Lothian) (Lab)
Eighty-seven per cent. of Afghan women experience at least one form of domestic abuse. In evidence to the Select Committee on International Development, we have heard calls for funding for counselling, hostels and legal services. Will the Secretary of State commit to funding those services directly so that UK aid can improve the lives of Afghan women?
Justine Greening
I have two things to say in reply to the hon. Lady. First, much of our support is delivered through the Afghan reconstruction trust fund, which supports women in the ways to which she referred. Secondly, women are playing more of a role in supporting women—for example, the number of women defence lawyers has risen from about three to 400. Those are the key ingredients we need if women’s rights are to be not just enshrined in the Afghanistan constitution but delivered on the ground. I recognise, as she does, that a huge amount of progress is still to be made. Afghanistan has come a long way, but it started from a low base, and we should be under no illusion—it has a long way to go. The role of our country, working with our international partners, and, critically, the Afghanistan Government, is key in ensuring that progress continues.
Richard Ottaway (Croydon South) (Con)
There is widespread agreement that a political surge is needed, with regional talks involving the Taliban and regional countries such as Pakistan, India and Russia, but, sadly, progress is very slow. With that in mind, has the Secretary of State had a chance to form a view on the Royal United Services Institute report that members of the Taliban are prepared to engage in talks?
Justine Greening
I shall certainly look closely at that report. On the Taliban, I refer my hon. Friend to my earlier comments that a sustainable political solution will involve the participation of all members of Afghan society. President Karzai has been very clear that he wants to engage with the Taliban, but he has three conditions: first, they must renounce violence; secondly, they must break their links with al-Qaeda; and, thirdly, they must recognise democracy and the fact that they should be part of the Afghanistan constitution.
The broader regional talks to which my hon. Friend refers are absolutely right. A safe and secure Afghanistan is absolutely in the interests of Pakistan. He mentioned Russia, but Iran was also at the Istanbul conference. That shows that regional countries understand that working towards a secure and stable Afghanistan is in everybody’s interests, including the UK’s.
Ann Clwyd (Cynon Valley) (Lab)
I welcome the Secretary of State to her new role and wish her the best of luck in it.
Hon. Members have spoken a lot about women in Afghanistan in the past few years, but we need more detail on what talks are going on to protect the considerable gains that have been achieved for them. I meet Afghan women MPs twice a year in Inter-Parliamentary Union delegations. I find it amazing that they feel too constrained to be able to speak freely with us because of the person leading the delegation, who is, of course, usually a man. We therefore need to know the detail of what is happening to ensure that the gains made for women are and will be protected. That is extremely important.
Justine Greening
I ask the right hon. Lady to take a careful look at the Tokyo mutual accountability framework, which includes discussions specifically on protecting women’s rights and, critically, delivering them on the ground—I will take a close personal interest in the matter.
The right hon. Lady asks for specifics. The mutual accountability framework includes ensuring the proper implementation of the elimination of violence against women law, which has been passed, and the national action plan for the women of Afghanistan. I understand that many people will listen to me and think, “Those are fine words, but what will actually happen on the ground?” The key point is that this is a process. The Tokyo conference was important because, for the very first time, it solidified in writing many of the reforms that we want the Afghan Government to take forward in return for the financing settlement, which sits alongside the reforms, and which will be delivered by the international community.
Monitoring and reviews will take place, and the UK will play a key role in them. We were asked by the Afghan Government to co-chair the first ministerial review in 2014, but, as I am sure the right hon. Lady knows, an officials’ review will take place next year. We will pay very close attention to the whole agenda.
Sir Bob Russell (Colchester) (LD)
The Secretary of State’s appreciation of Her Majesty’s armed forces will be welcomed in the garrison town of Colchester, home of 16 Air Assault Brigade. Will she give a progress report on the huge logistic achievement of the summer of 2008, when soldiers from Colchester were involved in the transportation of turbines to the Kajaki dam? What has happened since?
Justine Greening
The hon. Gentleman asks a very specific question and it might be better if I reply to him in writing after the statement. Suffice it to say that he is right to point out that our troops have played a critical role not just in combat but in supporting the Afghanistan Government to rebuild some of the infrastructure that the country will need. He mentioned a project in Helmand province. Alongside that, our troops have played key roles in helping with schools, health care and roads—if we are to have a thriving agriculture sector, farmers need to get their produce to market. All that work provided by our troops will be immensely powerful not just in protecting Afghanistan and in working with Afghanistan forces today, but in building the country we hope can be successful tomorrow.
Naomi Long (Belfast East) (Alliance)
I welcome the Secretary of State to her post. I also welcome her commitment to working with women in Afghanistan and her reflection on the importance of the role of women in peace-building and stability. Will she expand on what specific role the UK Government can play in supporting rural women in Afghanistan to ensure that they have access to education and financial independence, and to ensure that they are not only aware of their rights but able to exercise them?
Justine Greening
The hon. Lady will no doubt understand that a huge range of different activities are happening, and not just at national level—provincial and district plans are also in place. The district plans are very much locally driven, but we are providing assistance. As I have said, we are providing assistance at national level in Ministries to ensure that they are better placed in terms of their skills and capability to deliver at local level, but we need to see further progress. The Tokyo mutual accountability framework is the right one to enable us not only to agree what needs to be done, but to track it to ensure that it happens.
Pauline Latham (Mid Derbyshire) (Con)
I, too, welcome my right hon. Friend to her new position. I am sure she welcomes the fact that the representation of women in the Afghan National Assembly is 27%—it is 22% in the UK House of Commons—but there is only one female governor in Afghanistan. In addition, through the Commonwealth Parliamentary Association, I have met several Afghani women National Assembly Members who are concerned about their future, and who feel that they will go backwards when our support and troops come out. What will she do to ensure that they retain their position and that level of representation?
Justine Greening
My hon. Friend is right to flag up those understandable concerns. The NATO-led combat mission will come to an end by the end of 2014. One key outcome of the Chicago conference was that NATO now needs to consider post-2014 support. We need to ensure that the constitution, which enshrines women’s rights, works on the ground as well as on paper. That is incredibly important, and as I have said, I take a close personal interest in it.
Paul Flynn (Newport West) (Lab)
I notice that a motion contains the names of 425 of our brave soldiers killed in Afghanistan. Although it was put down last week, it is already out of date—it does not contain the names of the two fatalities since then or the names of the 2,000 of our soldiers who have returned broken in mind or body, and it cannot contain the names of the almost certain future deaths, such as those that followed the Falklands and Vietnam wars, when more soldiers took their lives after the war than died in combat. One Welsh soldier took his life this January. He is not recorded. How can we respect the self-deluding fiction in the report? It is another case of our brave soldiers—
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Gentleman has made his point, but I said that questions should be brief, however important.
Justine Greening
I think that many people across the country and the House believe that our troops are performing a vital role. It is the right thing to do not only for Afghanistan but for our country. The number of terrorist threats to the UK coming out of Afghanistan has already reduced substantially in recent years.
I take issue with the hon. Gentleman on another point. He referred to servicemen and women coming back battered and broken; I cannot remember the exact phrase.
Justine Greening
Broken in mind and spirit. The hon. Gentleman only had to watch some of the competitors at the Paralympics in recent weeks to see that they were amazing people who had done amazing things in the past and would continue to do amazing things in the future. We owe them our wholehearted support.
Mr John Baron (Basildon and Billericay) (Con)
For those of us who opposed our involvement in Afghanistan, it was obvious from the start that the Taliban would not be beaten, given the available resources, and that we were fighting the wrong enemy in the wrong country, given the differences between al-Qaeda and the Taliban. Yet the key stumbling block to a diplomatic solution remains the American refusal to conduct non-conditional talks with the Taliban. They will talk only if the Taliban lay down their arms and accept the constitution. This will not happen. Should the UK Government not be doing more to get the Americans to change their position? After all, we showed in Northern Ireland that it is possible to talk and fight at the same time.
Justine Greening
As we have made clear, we believe that the political process towards a sustainable peace should ultimately be led by the Afghan Government. I take my hon. Friend’s point about the Taliban, but it is worth reflecting that increasingly their attacks have been pushed to the fringes of Afghanistan society. In fact, 80% now take place in parts of Afghanistan where just 20% of the population live. So I believe that we are making progress, and I hope that over time growing numbers of Taliban fighters will choose to join the peaceful discussion on how to reach a political settlement and lay down their arms. Steps are being taken in Afghanistan to encourage that process to continue.
Heidi Alexander (Lewisham East) (Lab)
I congratulate the Secretary of State on her new role and welcome the commitment to women’s rights that she has articulated in her statement and answers. When the international troops withdraw from Afghanistan, the role of the Afghan national army and police force will take on increasing importance. What are she and her ministerial colleagues doing to ensure that the police and army are alive to issues of women’s rights and can enforce the law to which she referred many times, so that it becomes a reality on the ground, not just in the constitution?
Justine Greening
A lot of our work concerns not only combat but training, assistance and advice for the Afghan security forces and local police. That is one of the key routes to maintaining women’s rights. Although we often talk about the departure of British troops in the coming months, I should emphasise that we will retain a presence so that we can support and train the Afghan national security force to maintain security. As the hon. Lady will know, an academy will be set up next year to continue training the best and brightest Afghan soldiers to play that leadership role. That is one of the key things happening next year. Those building blocks will help maintain women’s rights. There is not one thing alone we can do to make the ultimate difference. It will involve a series of actions at all levels in Afghan society delivered by many different stakeholders. Over time, that will start to bring a change for the better. I believe that that change has already begun, however, as can be seen, for example, by the number of women elected to the Afghan Parliament in its first elections.
Sir Tony Baldry (Banbury) (Con)
As a trustee of a UK-based non-governmental organisation, Afghan Action, I welcome the Secretary of State’s statement. Would she be minded at a time convenient to her to meet representatives of UK-based NGOs, such as Afghan Action, Afghanaid and Turquoise Mountain, to discuss how, with our partners in Afghanistan, we can maximise our contribution to continued development there?
Justine Greening
I am pleased that my hon. Friend raises that point. In such a statement, it is often easy to fail to mention the huge amount of very important work done by NGOs, including some of those to which he referred. I have had the privilege of meeting some of the key NGOs involved in international aid, and I would be delighted to meet some of the organisations he has talked about. I will ensure that my office gets in touch with him to make that happen.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I welcome the Secretary of State to her new role and express my disappointment that she has left the position of Secretary of State for Transport, where she did such a sterling job. The AFP news agency reported this week that President Karzai had criticised the war on terror. He said that the war
“was not conducted and pursued as it should have been”
and that
“Afghan villages and homes were once again turned into a battlefield of a ruthless war inflicting irrecoverable losses in both human and material”
terms. Does she agree?
Justine Greening
We have made it clear why we believe it important to work with the Afghanistan Government to create a stable and secure Afghanistan. Obviously, people will have opinions on how action there is progressing, but the important thing is that we now look forward.
Finally, I am grateful for the hon. Gentleman’s opening comments. I was proud of what I achieved with my previous Department. And one of the most important bits of that, of course, was the electrification of the Welsh railways.
Roger Williams (Brecon and Radnorshire) (LD)
The Secretary of State was right to emphasise the concern in this country about the so-called insider threats, or “green-on-blue” attacks. As ISAF troops withdraw from combat action, what can be done to ensure the safety of our development workers and those of other nations?
Justine Greening
It is about ensuring that Afghanistan as a whole has a secure and orderly society, whether that involves helping to develop local Afghan police forces, supporting the Afghan national security forces nationally so that they have the capacity and capability to deliver security, or DFID working with departments, for example, to deliver a system of justice and rule of law on which people can rely. All those things will create an environment in which positive work can be best achieved. It is an overall support package that will make a difference. The work done by the organisations mentioned has been critical in supporting Afghan people on the ground as we go through the complex and huge process of helping to build a state that benefits everyone.
Diana Johnson (Kingston upon Hull North) (Lab)
I welcome the Secretary of State to her position and thank her for the work she did on the reduction of the Humber bridge tolls in her previous role.
In her statement, the Secretary of State talked about promoting growth and building up the private sector. What is being done to help women get into the workplace and perhaps start their own businesses?
Justine Greening
We are seeing an improvement, with more women going into employment, although there are still clear differences between men and women in Afghanistan in terms of pay and wages earned. A lot of support is being given, not just to get investment into Afghanistan at both the private sector and national levels, but to ensure help and advice in developing small and medium-sized enterprises, particularly in rural areas. Those are the sorts of routes that will ensure that more opportunities are opened up for women to participate.
In answer to the hon. Lady’s point about the Humber bridge, let me tell her that the very first picture I put up in my office was of the Greening toll buster beer that was brewed in my name after we reduced the tolls. I hope that I can deliver in this role as well as I hope I did in my last.
Nicola Blackwood (Oxford West and Abingdon) (Con)
I, too, welcome the Secretary of State to her new position and thank her for her warm support for women’s rights. Afghan women are not just victims; they, too, are brave campaigners for women’s rights, but that position comes at a cost. Many, such as Hanifa Safi, who was assassinated this summer, pay the ultimate price. Can my right hon. Friend say what steps she is taking to develop a plan to support women human rights defenders and assist the Afghan Government in protecting their female representatives, who face increasing threats?
Justine Greening
Clearly this is a real issue, and it has been raised by many parliamentarians across the House today. For the first time, women’s rights are now enshrined in the Afghan constitution. We are supporting many of the departments in Afghanistan that will play a key role in ensuring that those rights are respected and implemented on the ground. Having listened to the many questions asked today, I think this is an issue that I will want to pursue with perhaps a number of colleagues across the House, in order to tap into their clear knowledge and experience in this area over recent months and years. Indeed, I shall ensure that I get such a meeting organised.
Barry Gardiner (Brent North) (Lab)
I met a delegation of Afghan MPs this summer, and I think the Secretary of State is absolutely right to focus on women’s rights and the protection of women. Can she say what targets have been set, and what progress has been made towards meeting them, for reducing deaths in childbirth and infant mortality?
Justine Greening
I do not have those precise statistics with me, but clearly improving health care is critical. For example, we have moved from a position where very few children under the age of one had any kind of vaccine to one where a quarter are now vaccinated. There is now also much more support for women to ensure fewer deaths in childbirth. I shall write to the hon. Gentleman, and I thank him for the kind note he sent me on taking up this role. This is an area that I hope we can all focus on together.
Henry Smith (Crawley) (Con)
I, too, warmly welcome my right hon. Friend to her new role. What steps can the Government take to ensure that those nations that committed to supporting the future of Afghanistan, in Tokyo and in Chicago, stick to that commitment?
Justine Greening
We can make sure that we review progress against the Tokyo mutual accountability framework. The progress review will happen regularly. There are already a number of countries that, alongside Britain, have made clear financial commitments to continue to support Afghanistan, while a number of others are yet to confirm exactly what their contributions will be. We secured an overall agreement that £16 billion would be made available to support the Afghanistan Government as they go through their period of reform, and that is just between now and 2016. That is a substantial investment. There was also clear support for the sense that the next decade needs to be one in which Afghanistan will be truly transformed. I am sure that there will be further discussions about the funding needed beyond 2016 to support that.
Penny Mordaunt (Portsmouth North) (Con)
May I also congratulate the Secretary of State on her new role and thank her for the tribute she paid to our armed forces? That includes not just those who have lost their lives, but the many who have been injured. Does she agree that their sacrifice not only has enabled capacity building in law and order, democracy and governance to take place, but for the first time has enabled millions of children to access an education? That should give us great pride, as well as optimism for Afghanistan’s long-term future.
Justine Greening
My hon. Friend is absolutely right. One of the things that struck me in my first few days in this role is just how common some of the challenges we all face are. Education is the route for all of us to make the most of ourselves. That is why it is so important that children in Afghanistan should also have the chance to develop into the people they can be. Some 5.9 million children—nearly 6 million—are now attending school in Afghanistan, which is a huge, dramatic increase. Nearly 40% or so are now girls. Let us remember that under the Taliban none of them were girls and there were also far fewer children in school. If we are to see long-term progress, we have to enable people in Afghanistan, particularly children, to get the knowledge and skills to develop their country themselves. That is one of the most important things we are doing.
Andrew Jones (Harrogate and Knaresborough) (Con)
I thank my right hon. Friend for her statement. Please can she explain what role the UK is playing in improving governance in Afghanistan?
Justine Greening
Obviously we are playing a leading role in this area. The most important thing we are doing is supporting Afghan departments to be effective. We have funded advisers helping them not just to work on policy, but to do very straightforward tasks such as planning budgets, executing budgets and monitoring financial spend. All those things are relatively straightforward, but they are the key ingredients that need to be in place for public services to be delivered well. When public services are delivered well in Afghanistan, that will lead to increasing buy-in among the Afghan people, as they see their country moving in the right direction. If we can do that, it will create, I hope, a more virtuous circle, so that we see more and more development continuing in future.
Bob Stewart (Beckenham) (Con)
Post-2014 there are likely to be diplomats, military personnel and British contractors left in Afghanistan to help the country. When the planning is done, will my right hon. Friend the Secretary of State ensure that the post-2014 medical arrangements are good, particularly for casualty evacuation? It does not end when the military leave.
Justine Greening
I hope that I will be able to provide my hon. Friend with that assurance. I will pass on his concerns to my right hon. Friend the Defence Secretary, and perhaps he will then receive a fuller reply about the work that the Ministry of Defence is doing in that regard. My hon. Friend is absolutely right that we have to ensure that the safety of troops is paramount. That has been a focus for this Government, and that will continue going forward.
Rehman Chishti (Gillingham and Rainham) (Con)
Does the Secretary of State agree that the excellent work done to win over hearts and minds is undermined by the use of drone strikes in Afghanistan and Pakistan? Does she agree that that needs to change if we are to continue winning over the hearts and minds of the people of Afghanistan and the border region of Pakistan?
Justine Greening
My hon. Friend asks a complex question in many respects. Ultimately, the focus for this Government has principally been to provide support for security on the ground, in terms of both combat operations and helping the Afghan national security force build up capacity and capability. We are one of a number of international partners operating in Afghanistan, and we will continue those operations. NATO is looking at what the nature of those operations should be post combat, after 2014. I have no doubt that my hon. Friend’s question is an important one and that it will be reflected on by many people.
Points of Order
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Diana Johnson (Kingston upon Hull North) (Lab)
On a point of order, Madam Deputy Speaker. I seek your guidance on the way in which the Home Office parliamentary unit is refusing to deal with Members of Parliament. This week, my office contacted the unit to seek guidance as to which new Minister was dealing with a particular area, so that I could address a letter to the correct person. The unit refused to assist me. I then sought a copy of the Home Secretary’s speech to the Police Superintendents Association conference, as it was not on the website. Again, I was refused assistance. I also have three named-day questions for answer on 4 September that are still outstanding. The Table Office has advised me to contact the Home Office parliamentary unit, but in the light of the unit’s refusal to deal with me or my office this week, would Madam Deputy Speaker care to comment on whether that would be appropriate?
Madam Deputy Speaker (Dawn Primarolo)
The Deputy Leader of the House of Commons, the right hon. Member for Carshalton and Wallington (Tom Brake), is in his place, and he will have heard the hon. Lady’s point of order. I will ensure, with him, that the Leader of the House investigates the matter and reports back not only to Mr Speaker but directly to the hon. Lady on the rather strange circumstances that she is experiencing with the Home Office parliamentary unit.
Sir Bob Russell (Colchester) (LD)
On a point of order, Madam Deputy Speaker. Please could you discuss with Mr Speaker the possibility of the need for a guidance note for Members on the names of deceased persons being used to make a point? I refer to the publication of the names of all the fallen in Afghanistan, many of whom were my constituents. The only communication that I have ever had from the relatives of the deceased has expressed admiration for what their loved ones have done in Afghanistan, and I simply ask whether it is seemly that the names of the fallen should be used to make a point.
Madam Deputy Speaker
I must be frank with the hon. Gentleman on this matter. Rather than giving him a direct response today, I will take the matter to Mr Speaker so that he can reflect on it and decide whether there is a need for further action.
Chris Bryant (Rhondda) (Lab)
On a point of order, Madam Deputy Speaker. You will know that, before the general election, the Prime Minister promised that his Government would cut net migration to the tens of thousands. He used the phrase, “No ifs. No buts”. The former Immigration Minister, the right hon. Member for Ashford (Damian Green), said to the House on 9 July:
“A student who comes here for three years or more is as much of an immigrant as somebody who comes on a work visa for two years or more.”—[Official Report, 9 July 2012; Vol. 548, c. 4.]
Today, the Minister for Universities and Science has announced—not here in the House, but at a conference in Keele—that the Government have told the Office for National Statistics to
“better count students in immigration flows”.
That is clearly the first step towards statistically removing students from the Government’s net migration target. Madam Deputy Speaker, I do not expect you to comment on the chaos at the heart of the Government, or indeed on the fact that the new Immigration Minister, the hon. Member for Forest of Dean (Mr Harper) has already lost control of his own brief and policy, given that such announcements are being made by the Universities Minister. Can you confirm, however, that all announcements of that nature should be made to this House, so that Members on both sides of the House can criticise the Government if we think that they are doing something wrong? Can you also confirm that an urgent question, if sought, could be taken either tomorrow or on Monday?
Madam Deputy Speaker
The hon. Gentleman has put a great deal on the record that was not strictly a point of order. With regard to Ministers making new policy announcements, Mr Speaker has made it absolutely clear that when such announcements are to be made, it is the House of Commons that should hear them first. With regard to what the Government might decide to do in the next few days in relation to the business of the House, I am afraid that I am not able to comment, but I am sure that the hon. Gentleman will pursue the matter anyway.
Bill presented
Public Service Pensions Bill
Presented and First Reading (Standing Order No. 57)
Mr Chancellor of the Exchequer, supported by the Prime Minister, the Deputy Prime Minister, Secretary Theresa May, Secretary Philip Hammond, Secretary Jeremy Hunt, Secretary Michael Gove, Secretary Eric Pickles, Danny Alexander, Mr Francis Maude, Sajid Javid and Steve Webb, presented a Bill to make provision for public service pension schemes; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 70) with explanatory notes (Bill 70-EN).
Backbench Business
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Select Committee Inquiry (Aviation Strategy)
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I beg to move,
That this House notes the launch of the Transport Committee’s inquiry into the UK’s aviation strategy.
I should like to thank the Backbench Business Committee for this opportunity to launch the Transport Select Committee’s new inquiry into the Government’s aviation policy and for enabling us to bring our work to the attention of Members and the public.
Aviation is vital to the UK economy. The air transport sector has a turnover of approximately £26 billion and provides around 186,000 direct jobs in the UK. More than 500,000 jobs depend on the sector and an additional 170,000 come as a consequence of visitors arriving by air. Aviation feeds into our manufacturing, tourism and freight sectors. It also connects businesses to international markets and allows people to travel across the UK and abroad. The industry, however, also has an impact on the local environment around airports, and its carbon emissions have a global environmental effect.
John McDonnell (Hayes and Harlington) (Lab)
I welcome the inquiry. There is an abundance of inquiries at the moment, so we are all going to be busy. In past inquiries, the focus on emissions has centred on carbon dioxide, and not on the nitrogen oxides that are poisoning large numbers of my constituents and, if the third runway goes ahead, will poison 35,000 more. Will my hon. Friend ensure that the inquiry takes that matter into account?
Mrs Ellman
I thank my hon. Friend for his comments. The Committee will certainly be interested to hear representations on the specific issue that he has raised.
The Department for Transport has taken some time in producing its aviation strategy. The coalition rejected plans for a third runway at Heathrow in 2010, but in July this year the Government published their draft aviation policy framework for consultation. The Government say that their draft policy should make the best use of existing aviation capacity in the short term, while other long-term solutions to increase capacity are being developed.
The issue of hub status is particularly contentious. Two years after opposing plans to expand Heathrow, the Government’s draft aviation policy does not include a strategy for maintaining an aviation hub in the UK. Ensuring that the UK has an effective hub airport is important to encourage growth, maintain international connectivity and provide transport services on more marginal routes.
Iain Stewart (Milton Keynes South) (Con)
As a member of the Transport Select Committee, I am very much looking forward to working on this important inquiry. Will the hon. Lady confirm that the inquiry’s terms of reference will allow us to consider the interaction of aviation strategy with a high-speed rail network, so that we can explore other hub airport options rather than simply the binary choice between expanding Heathrow and building a Thames estuary airport?
Mrs Ellman
I can confirm that the terms of reference for the inquiry, which are now being published, will include the particular issue that the hon. Gentleman has raised.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I hear the hon. Lady’s comments on hub airports. I am sure that her inquiry will wish to reflect on the new Secretary of State’s announcement last week that an independent commission was being set up to look at all these proposals. I am sure that that will be within its terms of reference. The Government will very much welcome the Select Committee’s report, and we look forward to reading its findings. She will of course understand that, in welcoming it, we might not necessarily be able to give an unequivocal welcome to its findings.
Mrs Ellman
I welcome the Minister to his new position. My colleagues on the Transport Committee and I look forward to questioning him on this issue. He is correct to point out that the Prime Minister announced last week that an independent commission would be set up to look at these issues. However, that commission is not expected to produce its final report until 2015, so any decision based on its recommendations will be postponed until the next Parliament, at the earliest.
Julie Hilling (Bolton West) (Lab)
Does my hon. Friend agree that, as some airports have already reported that they are losing long-haul flights to hub airports on mainland Europe, there is some urgency in deciding our future aviation strategy, and that waiting until 2015 to make the decision when we know how long it takes to develop any new infrastructure seems like an enormously long time?
Mrs Ellman
I agree with my hon. Friend. Indeed, that is why the Transport Committee is about to launch its own inquiry.
Angie Bray (Ealing Central and Acton) (Con)
I, too, welcome the opportunities that come with this inquiry. Will the hon. Lady confirm that her inquiry will look seriously at the long-term best interests of London, which I suggest are not best served by a patch-and-mend attitude towards Heathrow, which, at best, will be able to squeeze in one more half-runway before it is completely out of room? We really need to look at the long-term best interests of London and the south-east.
Mrs Ellman
I hope the hon. Lady will note that the terms of reference of our inquiry make it very clear that the Committee will be interested in looking at all possibilities, so we look forward to hearing her thoughts on the issue.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The hon. Lady mentioned the commission that is being established by the Government. It will inevitably consider the Heathrow proposal, which is shovel ready, and other proposals such as for the Thames estuary airport, which is much less developed. Is she concerned that this inquiry must not only be objective but be seen to be objective, and that, therefore, it is up to the Government to spend some money on bringing forward the alternative proposals that they want considered during the inquiry—otherwise, it will not be an objective inquiry, but a fix for Heathrow?
Mrs Ellman
The hon. Gentleman makes an important point, and the Government should consider that in setting up their inquiry, as should the Chair and members of the inquiry when conducting their business.
Zac Goldsmith (Richmond Park) (Con)
Does the hon. Lady share my view that timing the review to conclude just a few weeks after the election is an extraordinarily cynical move by the Government? Will she join me in pressuring the Government to bring the review forward so that when it comes to either the local elections in 2014 or the general election in 2015, the voters will know what they are voting for?
Mrs Ellman
I thank the hon. Gentleman for his comments, but the responsibility for the decision lies with the Government. The Select Committee is a scrutiny committee, and we have decided that it is important to hold an inquiry now; that is why we are launching it today. We intend to report in the first part of 2013.
We will take a wide-ranging look at Government policy on aviation, including their current draft strategy, airport capacity and the issue of hub status. Although much of the current public discussion has focused on the issues of hub capacity and the south-east, the role of airports outside the south-east and their economic impacts, both nationally and in the region in which they are situated, are also important issues.
Tracey Crouch (Chatham and Aylesford) (Con)
The hon. Lady is generous with her time. Speaking as an MP who represents a Medway seat—one that will be directly affected by any proposals for a Thames estuary airport—I ask the hon. Lady to confirm that she will be willing to take oral evidence from members of the public who will be directly affected by any of the proposals?
Mrs Ellman
The Committee is calling for the submission of evidence and it will then decide who it sees as appropriate to invite to give oral evidence. We are asking for the most diverse possible evidence to be given, and we will consider it all very carefully.
It is important for Parliament to be involved in the aviation debate and to be able to assess the evidence on these key issues in the public interest. The Select Committee’s work should enable that to happen.
Mr Andy Slaughter (Hammersmith) (Lab)
All Members will welcome an independent inquiry, as I suspect we already know that the Government’s inquiry will opt for the third runway at Heathrow, and the Mayor of London’s inquiry will go for Boris island. We welcome the independence, but will my hon. Friend take on board the dismay felt in west London that after many years of uncertainty all three main parties were against the third runway, but that that consensus has now been overturned? The prospect of a third runway in the middle of London is not conscionable, so will my hon. Friend consider excluding it, as the Mayor’s inquiry does, from her inquiry?
Mrs Ellman
I thank my hon. Friend for his comments, but I have to confirm that the Committee has an open mind and that it will be willing—and, indeed, keen—to receive evidence on a diverse range of options, all of which will be considered.
The terms of reference for our inquiry will be published on our website today. We want to hear a wide range of views on the Government’s aviation policy, and we are asking a number of questions. I would like briefly to outline some of the issues on which we would like to receive evidence. I emphasise, however, that this is not an exclusive list.
We will consider what the objectives of Government policy on aviation should be. We want to hear about the benefits aviation brings to the UK economy and how important the issue of international aviation connectivity is to UK industry. We are also interested in hearing about where aviation should fit in the Government’s wider transport strategy, as well as about the impact of air passenger duty. Should there be a step change in aviation capacity? How should we make best use of existing capacity? The Government hope that their current strategy will make the best use of capacity in London, but are their current plans sufficient or appropriate? Are airports situated in the regions outside the south-east sufficiently supported, and do they have a proper place in the Government’s strategy?
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) and I had meetings this morning with representatives of Britain’s regional airports, which are advocating a differential for air passenger duty as a way of stimulating greater use of regional airports, taking the pressure off both London Heathrow and Gatwick. This is an interesting suggestion that has recently come forward. My hon. Friend mentioned air passenger duty; will this be an issue that her inquiry will look at?
Mrs Ellman
That issue will be considered, as the terms of reference for our inquiry specifically include it.
We would like to hear about how we could improve the passenger experience and operational resilience at UK airports. We invite views on the constraints of increasing UK aviation capacity and on environmental concerns.
Naomi Long (Belfast East) (Alliance)
I thank the hon. Lady for being so generous with her time. Air passenger duty is an issue that the Select Committee on Northern Ireland has looked at in respect of regional aviation. It is important to share that information, as we heard witness after witness presenting evidence on the impact of APD not just on aviation but on the growth of tourism in the UK generally and its impact on the wider economy.
Mrs Ellman
The Committee would be very interested to receive evidence along the lines that the hon. Lady mentions, given the importance of looking at the significance of aviation for economies—regional as well as national.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the hon. Lady and her Committee look into the historic reasons for the congestion in the south-east of England—namely, the signing of bilateral agreements between the UK and other countries that stipulated the use of only London airports as a point of access into the UK. It is interesting to note that people in Iceland want to be able to fly to Glasgow rather be forced to fly to London and then north again to Glasgow.
Mrs Ellman
The issues of international agreements and the decision-making powers of the aviation sector itself are highly relevant to our inquiry.
I have referred to environmental concerns, and the inquiry will address environmental issues. The aviation industry has a number of environmental impacts. The issue of noise can be particularly important to local residents, and we want to know whether this is being regulated appropriately. We will also consider the wider environmental impact of aviation and how the industry can reduce carbon emissions so that further growth can be sustainable. We want to consider the full range of options. We will, for instance, consider whether a new airport should be built in the Thames estuary, whether Heathrow should have a third runway, and, indeed, whether there are other options. We will approach those issues with an open mind, and will consider the evidence submitted to us.
Mr John Leech (Manchester, Withington) (LD)
What is interesting about the inquiry is that, in allowing for the possibility of a Thames estuary airport, it seems to be accepting that it is not a given that the only place where we can have a hub airport is Heathrow. On that basis, we should surely consider the possibility of expanding our regional airports, such as Manchester and Birmingham, and creating a further hub in one of the northern airports rather than always concentrating on the south of England.
Mrs Ellman
The Committee will consider the points made by the hon. Gentleman. We should be interested to hear evidence along those lines.
Margot James (Stourbridge) (Con)
Given the length of time involved in any solution that the Committee considers for the south-east, will the hon. Lady ensure that it hears representations from Birmingham business organisations, and also from Birmingham airport? A £40 million runway extension is expected to be completed at the airport by 2014, which will allow flights to various regional cities in China, Brazil, South Africa and many other countries with growing economies.
Mrs Ellman
I thank the hon. Lady for her comments, and, again, look forward to our receiving evidence along those lines.
We want the public to ensure that their voices are heard on this important issue. We aim to influence the Government during their policy development process with sensible but challenging recommendations, and to ensure that aviation policy is high on the agenda.
John McDonnell
To ensure that the public are engaged, will the Committee consider holding local meetings to discuss Heathrow?
Mrs Ellman
The Committee has not yet decided exactly how it will conduct itself, but that may be a possibility.
Aviation policy may be controversial, but it is a vital issue which must be addressed. I hope that the Committee’s inquiry will assist in the development of an appropriate policy.
Question put and agreed to.
Fuel Prices
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Dawn Primarolo)
Before I call the hon. Member for Harlow (Robert Halfon) to move the motion, I must inform Members that there will be a five-minute limit on all Back-Bench speeches. Depending on progress, it may be necessary to review that limit during the debate, but we will begin with a five-minute limit. I hope that the mover of the motion will bear that in mind.
Robert Halfon (Harlow) (Con)
I beg to move,
That this House notes the call for evidence by the Office of Fair Trading (OFT) on competition in the UK petrol and diesel market; however, believes that the OFT and Financial Services Authority should launch a full investigation into oil firms active in the UK; calls on the Government to consider the emergency steps being taken in other G20 countries to reduce fuel prices; notes, for example, the announcement by President Obama to strengthen federal supervision of the US oil market and to increase penalties for market manipulation, and the move by Germany and Austria to establish a new oil regulator with a remit to help stabilise the price of petrol in those countries; and further urges the OFT to note that the Federal Cartel Office in Germany is now investigating oil firms who are active in the UK following allegations of price fixing.
I want to make three points today. First, petrol and diesel have never been more expensive in real terms; secondly, oil companies are uncompetitive, and are not passing on cheaper fuel to motorists; and, thirdly, there is increasing evidence that dodgy speculators are rigging the market and forcing up the international price of oil.
I should begin by saying that today’s debate is happening partly because of the work of FairFuel UK, the hard work of Peter Carroll and Quentin Willson in giving a voice to thousands of motorists across the country—in the space of two weeks, they secured 27,000 signatures—The Sun’s Keep It Down campaign, and the work of the independent Petrol Retailers Association, led by Brian Madderson. Above all, however, it is happening thanks to the Backbench Business Committee, which has found time for fuel debates that have had a significant influence on Government policy, and the many Back Benchers who are here today and who have supported me, particularly my hon. Friend the Member for Cleethorpes (Martin Vickers), the hon. Member for Strangford (Jim Shannon), the leaders of Plaid Cymru and the Social Democratic and Labour party, and the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). [Hon. Members: “Western Isles!”] I did practise saying “Na h-Eileanan an Iar” in my office before the debate.
I also thank my hon. Friend the Member for Hexham (Guy Opperman), and many other Members who have been very active. As can be seen on the Order Paper, the motion was signed by more than 80 Members from all parties: this is not a party political issue, but an issue that affects every single one of us and every single one of our constituents.
First, let me say something about the cost of fuel. Of course, much of that cost is tax. We have had many debates on the subject, and I am pleased that the Government not only cut fuel tax last year, but cancelled two planned fuel duty rises. The price of petrol is 10p lower than it would have been if the last Government’s plans had been implemented. However, despite the fuel tax freeze, prices are still rising, and the Department for Energy and Climate Change says that in real terms fuel has never been more expensive.
Mr John Baron (Basildon and Billericay) (Con)
Will my hon. Friend give way?
Heather Wheeler
I thank my hon. Friend, and congratulate him and the Backbench Business Committee on securing the debate.
My constituents do not understand why fuel prices are still going up, given that we hear so often that the actual quote price has gone down enormously. Perhaps my hon. Friend will say something about that later in his speech.
Robert Halfon
My hon. Friend is a great campaigner against high petrol and diesel prices. Her constituents are very lucky indeed. She will hear me make exactly the same observations later.
Mr Baron
I congratulate my hon. Friend, and support his motion. He mentioned the freezing of fuel tax. May I suggest that the Government should think more about extending the freeze for the foreseeable future and, if necessary, taking funds from areas in which money is being spent unwisely? I am thinking of, for example, aid for India, a country that has its own aid programme. That would help many hard-pressed families and businesses up and down the country.
Robert Halfon
While I strongly believe that we should cut fuel duty as much as possible, I have to say that I am a passionate believer in overseas aid, and I am very proud that we have the overseas aid policies that we have.
Fiona O’Donnell (East Lothian) (Lab)
On a point of order, Madam Deputy Speaker. This is a vital debate, but the Minister was not present at the beginning of it. I wonder whether you could rule on whether or not that showed a lack of respect for Members and for the public at large.
Madam Deputy Speaker (Dawn Primarolo)
Fortunately the Minister is now present to hear the debate, so no further comment is required from me.
Robert Halfon
I must say that I was disappointed by the hon. Lady’s point of order. I made it clear at the outset that this was not a party political issue, and the Minister could not have done more—in his present post, and when he was the Minister responsible for apprenticeships—to show that he cares deeply about issues of this kind.
Madam Deputy Speaker (Dawn Primarolo)
I am sorry, but I could not see who the hon. Gentleman was in order to call him, because he had turned his back to me. May I remind Members that it is important for them to face the Chair? I could not recognise him from the back of his head, but I can now call Mr Lee Scott.
Mr Scott
I apologise, Madam Deputy Speaker, although some people do feel that that is my best side.
I congratulate my hon. Friend on securing the debate. Last weekend, I happened to have to drive up to Manchester, and I noticed on the M1 that there was a difference of some 12p between the price of petrol in Manchester and the price in London, although the dealership was the same. Surely there can be no explanation for that. Does my hon. Friend share my concern?
Robert Halfon
My hon. Friend is right, and I hope that he will agree with what I shall say later.
I believe that we need to cut taxes on fuel, but given that the oil market makes up nearly half the pump price, oil companies must bear their share of the responsibility. If Members do not believe me, they should listen to what was said by the former head of Tesco, Sir Terry Leahy:
“Filling up the family car has gone up 70% in two years, causing what was a steady recovery to go sideways.”
Yes, the eurozone is a problem, and so is the overhang of debt, but it is expensive energy that is really hurting people on low incomes and crushing our economic recovery.
Secondly, turning to the oil companies, data from the Department of Energy and Climate Change quarterly energy prices release show that there is now a three-week delay between a fall in oil prices and a drop in petrol prices at the pump. However, even accounting for that, a dossier from the website I founded, petrolpromise.com, proves that cheaper oil was not passed on to UK motorists for most of the last two years. That is true of April, July, September, October, November and December 2011, and March, April, and May 2012. That is nine out of the last 18 months.
Robert Halfon
I shall give way to both my hon. Friends in a moment.
In July 2011, oil prices fell by 5%, but petrol prices were unchanged. Then, in March this year, oil prices fell again by 5%, but petrol prices rose by 10%. Why? I shall now give way to my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries).
Nadine Dorries
I shall allow my hon. Friend to answer that, as he is doing so well so far. In my constituency, there are students who cannot take their places at Bedford college, in part because their families used to be two-car families so there was a second car to transport them around, whereas now lots of families are going down to having just one car, because the cost of petrol has increased so much. That is having a huge negative impact on families.
Robert Halfon
My hon. Friend is right, and I shall make the point in my concluding remarks that this issue is not just about economics. Although the economics of it is important, I have sought a debate on this subject because I believe it is about social justice, too, as high petrol prices are hurting the poorest far more than the rich.
Claire Perry
I am grateful to my hon. Friend for giving way again. May I point out that in rural constituencies such as mine the situation is particularly difficult because there is not sufficient competition among petrol stations to drive prices down, and we are very dependent on our cars as we do not have public transport options?
Robert Halfon
My hon. Friend hits the nail on the head. She is absolutely right, and that is why we need an Office of Fair Trading inquiry.
Robert Halfon
I shall make a little progress, if I may.
Returning to the point I was making, when the oil price rises, it is a different story. In December last year, oil prices rose by a fraction, and the fuel price at the pumps instantly rose faster and higher. No market is perfect, but the question for oil wholesalers to answer is this: why are they always benefiting, rather than smaller forecourts or the consumer? It is not just motorists who are being crushed; small retailers are being crushed, too.
In January, independent retailers gave the OFT evidence proving that there is anticompetitive pricing, and that 300 smaller forecourts are being forced out of business every year, leading to petrol deserts in some towns. The fact is that most smaller petrol stations are forced to buy from just a few large oil companies, and at massively higher prices than their “own brand” stations down the road.
Mr Marcus Jones
My hon. Friend is making an important point. Does he agree that it is telling that whereas in 1991 there were 19,247 petrol forecourts in this country, as of last year that figure had fallen to 8,480, despite the fact that the number of cars on British roads had risen by 10 million?
Robert Halfon
The situation my hon. Friend describes is tragic, because when rural communities in particular lose their petrol station, they do not just lose a petrol station: they lose a vital community asset. May I give special thanks to my hon. Friend, too, as were it not for him and the Backbench Business Committee, of which he is a member, we would not be debating this issue today?
John Thurso
On two occasions, the OFT has looked into garages in Caithness for precisely the reasons my hon. Friend has set out. On both occasions, it found that it is not the small local garages that are at fault; rather, it is the distribution centre and the link between them and the oil companies. I am therefore delighted that my hon. Friend has secured this debate, and I hope we will now finally get to the heart of the problem.
Robert Halfon
I entirely agree with my hon. Friend. The point he makes highlights why it is so important that all of us give evidence to the OFT in order to try to force an inquiry.
Mr Jim Cunningham (Coventry South) (Lab)
I am one of the signatories to the hon. Gentleman’s motion. Indeed, last year I raised the oil price issue as I had been down in Cornwall the year before and I noticed that oil tankers were lined up. I am glad we are going to look into these cartels—if there are cartels—and the fixing of oil prices. More importantly, high oil prices feed through in that they lead to people’s cost of living rising, such as through increased bus fares or food prices because of higher transport costs.
Robert Halfon
I am grateful to the hon. Gentleman for that intervention, and for supporting the motion. As he rightly says, this affects every man and woman in the country. Those who do not use cars may well travel on buses, and bus fares have gone up because the price of diesel has gone up. He is precisely right, therefore.
Robert Halfon
I am going to make a little more progress.
Returning to the point I was making, slowly the smaller firms are squeezed out of business. Then, the “own brand” stations put their prices up. This is exactly the same kind of anticompetitive stranglehold that breweries have over pubs, as we have heard in this House.
In my constituency of Harlow, some garages are charging 140p for petrol and 144p for diesel, which is a full 10p more expensive than the cheapest forecourts in the UK. The same complaint was made in Germany about five oil wholesalers who are active in the UK. Germany’s Federal Cartel Office—Bundeskartellamt—acted quickly, and opened a criminal investigation. Why cannot we do that here in Britain, too? Austria has actively started regulating its fuel markets, and the AA has noted the impact of that in respect of keeping fuel prices down. If the oil companies have nothing to hide, they could opt for open-book accounting, and be much more transparent.
Duncan Hames (Chippenham) (LD)
I congratulate the hon. Gentleman on securing the debate. Has he noticed the practice of retail outlets to offer cut-price fuel two days a week, which they sometimes do while also offering fuel at a higher price than only a week ago? This kind of excessive volatility in oil prices seems deliberately designed to confuse motorists so as to make it as hard as possible for them to shop around for the cheapest fuel.
Madam Deputy Speaker (Dawn Primarolo)
Order. Many Members are trying to intervene, and many of them are not on the list of speakers. There are also lots of Members on that list, however, and they may not get to speak if this opening contribution takes too long. I hope the hon. Member for Harlow bears that in mind.
Robert Halfon
May I therefore ask those who want to intervene but who are not on the list of speakers to make brief interventions, and those who are due to speak not to intervene?
We have established that fuel is more expensive than ever, and not only because of tax, but because of anticompetitiveness in the oil market, and we have seen that cheaper oil is not being passed on to motorists. Thirdly, there is the allegation of price-fixing. This means that, even if oil companies were doing the right thing, hedge funds and speculators are rigging the price of oil to keep it artificially high.
Many academics and financial journalists have said that is happening. In a groundbreaking article in The Daily Telegraph, Rowena Mason showed how oil price “benchmarks” are unregulated and—like LIBOR—are vulnerable to manipulation. The petrolpromise.com dossier shows that the Consumer Federation of America has raised the same concerns, as have Deutsche Bank, professors at the Massachusetts Institute of Technology, Maryland university and the London School of Economics. Bloomberg has investigated how banks are buying up strategic stocks of oil and hoarding them on ships at sea, or in underground silos.
A whistleblower who trades the oil futures market has contacted petrolpromise.com and given us a detailed statement about how the market is rigged. He says:
“I trade the oil market on a daily basis, and every day the price is manipulated—not just the daily benchmark price but the calendar spreads that make up a large part of the daily volume. All through July, for example, there has been a massive buying-pressure on oil futures for August and September 2012. Both were trading at around a $0.5c to $1 dollar premium. This gives a false impression of the market and inflates the price of the nearby oil price”.
He goes on to say:
“One part of the problem is a lack of market transparency. In the oil futures market, huge volumes are offered and then withdrawn without trading…There is no reason for this behaviour other than to distort market prices.”
He also says that
“unlike stocks and shares where large holdings have to be declared, in the oil market nobody knows where the money is coming from”.
He continues:
“Prices are particularly manipulated at the close of business, when ‘markers’ are set on an average of trades in the last three minutes of the trading session. Every day, around these times, I see that the structure of the market is being moved to bring prices in line with the trading books of whoever is manipulating the market…This is in order to fix the price and make sure a profit is shown on their books.”
It is a long statement, but I wanted to put the key parts of it on the record.
Robert Halfon
Given what Madam Deputy Speaker said, I will take one more intervention.
Mr Robert Buckland (South Swindon) (Con)
I pay tribute to my hon. Friend for his long campaign, which I fully support. Residents and businesses in my constituency are bemused by a system that is not a free market, because it is not open and transparent. Until we get that transparency that he is so clearly adumbrating, we will not genuinely achieve success for those we represent.
Robert Halfon
My hon. Friend is exactly right; the key issue is transparency. That is why I am asking, as are all the MPs who have signed today’s motion, for an investigation not just by the OFT, but by the Financial Services Authority as well. Last year, President Obama saw the same problems in America and he took action against rogue traders and banks, bringing in tough penalties, including prison, for people convicted of illegal market manipulation. We should do that in Britain, too.
In conclusion, it would be churlish of me not to welcome the modest steps taken by the OFT. I am grateful that it has agreed to hold an inquiry into whether there should be an inquiry, although I note that when I first wrote to the OFT earlier in the year it was less interested. Its chief executive wrote to me saying that
“even where we are able to investigate an issue, we may not necessarily do so, as we prioritise our work according to available resources”.
That was Sir Humphrey’s way of saying no. However, I am pleased that the OFT is inching towards a full investigation. My hope is that this debate will allow MPs to tell the OFT what is happening in their patch and what problems residents are facing. The FSA has agreed to meet the whistleblowers, so that will happen in due course, and I urge it to take further action.
My questions to the Minister are as follows: will he write to the OFT and the FSA setting out his concerns and reflecting what Members say this afternoon? Will he investigate the issue of anticompetitive pricing and how oil wholesalers are bankrupting retailers? Will he look at why some towns, such as Harlow, seem to be stuck with stubbornly higher fuel prices than everywhere else? Some of this debate is technical, but we should not forget that this is not about the economy; I am here today because I believe in social justice and I believe that the high petrol and diesel prices hurt the poor far more than they do the rich.
Robert Halfon
I am sorry but I am not going to give way, as I have almost come to the end of my remarks.
Ours is a great car economy, but high petrol prices are creating a poverty trap, adding to Britain’s dole queues. The Office for National Statistics says that fuel prices are regressive, hitting the poorest Brits the hardest. RAC figures show that an ordinary Harlow worker is paying a tenth of their income just to fill up the family car. The Government define fuel poverty as applying to someone who spends a tenth of their income on fuel, so motorists in Harlow and across the country are facing fuel poverty. I urge the House to support the motion, and I shall end by saying that in my constituency, and no doubt across the country, the question is not whether someone can afford to have a car, but whether they can afford not to have one.
Naomi Long (Belfast East) (Alliance)
I am pleased to be able to participate in today’s debate on this important issue affecting all our constituents. From my perspective it is also timely, because recent reports have confirmed, again, that petrol and diesel prices in Northern Ireland are the highest in the UK and among the highest in Europe. The impact of this on Northern Ireland’s consumers, families and businesses is compounded by the fact that Northern Ireland has a greater dependence on road travel than other regions, because of its high level of rurality—35% compared with the 12% average for the rest of the UK as a whole—and restricted access to public transport outside urban centres. That factor was mentioned by the hon. Member for Devizes (Claire Perry).
The high prices have a significant impact on local households, on businesses and on our national competitiveness. In addition, high prices and high differentials in the level of duty on fuel between the Republic of Ireland and Northern Ireland, in particular, provide an additional incentive for fuel laundering, smuggling and stretching, which deny the Exchequer income and carry significant enforcement and policing costs. Therefore, having affordable and transparent fuel pricing is a vital component of tackling those issues.
On the impact on business and growth, I had the opportunity during the recess to meet representatives of the Freight Transport Association in Northern Ireland, and I was able again to hear at first hand about the detrimental impact that the high and rising cost of fuel is having on its members and on the wider economy. One plant hire company in my constituency told me that it was keen to expand its business and take on new staff, and could see opportunities for doing so even in this difficult economic climate, but the effect of inflated fuel prices on its business has meant that fuel has now overtaken wages as a proportion of business costs and that its ability to expand has been constrained.
Jake Berry (Rossendale and Darwen) (Con)
One of my constituents is following this debate and has just tweeted me to say that they spend £4,600 a year on diesel, £1,000 on insurance and £240 on road tax, so going to work costs them £5,840. She is considering giving up work because of the excessive price of fuel. The lady’s Twitter handle is “knot_weed”. Does the hon. Lady accept that that is difficult both for businesses and their employees?
Naomi Long
It is incredibly difficult and it is one of the stumbling blocks we will face as we try to get people out of unemployment and back into work. The cost of travel to work is a significant factor. In Northern Ireland, where the cost of car insurance is also higher than in the rest of the UK, the problem is further compounded.
I hope that the OFT investigation will particularly examine the elevated price of fuel in Northern Ireland and the reasons behind that, as it is hurting business and families, and it is hindering growth.
Mark Pawsey (Rugby) (Con)
The hon. Lady refers to the OFT investigation. Will she praise its chief executive for his courage in taking on the might of the oil companies in dealing with this very important issue?
Naomi Long
Courage is always commendable, wherever it is found, and I hope that the OFT is not only courageous but successful in its investigations.
In the limited time available to me today I do not wish to reiterate points that have already been made. I concur with most of what I have heard today, not least what has been said about the immediate response at the pumps when oil prices rise but the tardy response when they fall. That is a matter that frustrates. However, I wish to focus my attention on particular aspects of the market: supermarket pricing policy and its impact on consumers. I wish to state at the outset that my focus on this issue is not to suggest that supermarkets are responsible for all the ills of the market. They are not the worst retailers in all cases; many offer lower prices to consumers than other petrol and diesel retailers. However, the variation in supermarket pricing strategy and the prices on the forecourts are further examples of the lack of transparency in pricing more generally.
Mr William Cash (Stone) (Con)
Does the hon. Lady also agree with FairFuelUK’s central campaign that the 3p fuel duty rise, which was deferred from August, should not come into effect on 1 January 2013 as planned? Some of us voted recently for such an approach during consideration of the Finance Bill.
Naomi Long
I do agree with that. I also wish to point out that the price variation between petrol stations in a single constituency can sometimes completely outstrip the fuel duty, yet it often gets less attention. I wish to focus on that in my next remarks.
Over the past year, I have been monitoring the price of fuel in my constituency and in the adjoining constituencies of Strangford and North Down. I have become increasingly concerned that people in my constituency get a poor deal on petrol prices compared with those in surrounding towns such as Newtownards and Bangor, where the price of petrol and diesel can be 6p a litre cheaper. One of the reasons for that differential is the impact of supermarkets on local pricing. Although they account for only 4% of Northern Ireland forecourts, their market share is about 25%. Supermarkets such as Asda operate a quasi-national pricing policy, but others do not and that can lead to significant anomalies in the pricing between stores in the same chain, and also in the prices offered at other local retailers as a consequence.
Naomi Long
No, because I want to finish my point, if I may. Asda does not have a national price policy, but it does have a national cap on prices, with the flexibility to reduce the price by 2p where competition is particularly fierce. However, many of the other supermarket retailers have no such constraint. Although people assume that if they purchase petrol at any Tesco or Sainsbury’s petrol station they will get the same deal—they therefore fail to shop around—that is simply not the case.
I will cite one example. At the Tesco petrol station in east Belfast, the price of petrol can be anything from 4p to 6p a litre more than at a Tesco petrol station in Bangor or Newtownards, which are about 9 miles away. In both those towns, the reduced price offered is almost certainly due to the fact that the Asda supermarkets in those towns offer petrol forecourt services, which Tesco responds to. Tesco competes with the local prices in the area but feels under no obligation to offer consumers the best value price for the commodity they are trying to purchase, which I think is wrong. The price differential is significant and has been monitored by the Consumer Council for Northern Ireland, following a meeting between my colleagues and the council earlier this year. Two petrol stations owned by the same supermarket chain and less than 9 miles apart, when monitored over four months, showed a variation of 4p to 5p a litre for petrol and 5p to 6p a litre for diesel.
The justification that the petrol stations are responding to local competition is no comfort whatsoever to consumers who might have to pay £3 more to fill up at one when they could fill up for much less at another site owned by the same supermarket down the road, but they would not necessarily be aware of that. I reiterate that the focus on supermarkets is not simply to suggest that they are responsible for the problem, but it shows the lack of transparency—the opaqueness—in how petrol prices on the forecourts are reached and the lack of choice that consumers then have in making their decisions. I want transparency and openness, I support the motion, and I commend the hon. Member for Harlow (Robert Halfon) for bringing the matter before the House.
Roger Williams (Brecon and Radnorshire) (LD)
I hope to speak in the dairy industry debate in Westminster Hall later and so apologise to hon. Members if I have to leave this debate early. I would like to say a few words on behalf of rural areas, and, indeed, very rural areas, where fuel prices are of the utmost importance, because not only is there a lack of public transport but access to retail services, health services and education is over long distances and takes a great deal of fuel. I congratulate my hon. Friend the hon. Member for Harlow (Robert Halfon) on securing the debate. He has given me some information indicating that in my constituency petrol is sold at up to 142p a litre and diesel is sold at up to 149p a litre. I am not surprised, because some of our independent retailers operate in very remote areas, and we are very pleased that they have persisted in doing so.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
My hon. Friend’s constituency is very close to mine. Does he share my concern about the pace of closures of small outlets that service local villages, which is obviously putting pressure on local constituents?
Roger Williams
My hon. Friend is quite right, and I will come to that point in a moment. Certainly, petrol stations such as the community shop and petrol station in Llanbadarn Fynydd, which is at least 10 miles away from any other facility, and the one operated by Mr Tay in Ystradfellte are important facilities for very rural communities. A number of supermarkets have recently opened in my constituency; we were Tesco-free for many years, but Tesco has now come to Llandrindod Wells and to Ystradgynlais.
Glyn Davies (Montgomeryshire) (Con)
I thank my hon. Friend and colleague from Powys for giving way and allowing me to associate myself with the fantastic speech made by my hon. Friend the Member for Harlow (Robert Halfon) and the work he has done. I hope that my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) will agree that this has a particular resonance for rural areas not only because of the points he has raised about higher prices and the difficulty in reaching services, but because they are low-wage areas and so the part of the weekly budget that has to go on fuel is much higher. We are talking about social justice, and we want social justice for rural areas as well.
Roger Williams
My hon. Friend makes an important point about the affordability of fuel in rural areas. Indeed, Morrisons has just opened a supermarket and petrol forecourt in Brecon; it has reduced prices, and my constituents welcome that. My main purpose in speaking today is to make the point that we still need independent retailers, because it is only their presence that keeps the supermarkets honest. If the supermarkets had a monopoly in rural areas, they would certainly increase their prices.
Roger Williams
I am sorry, but I do not have time to give way.
I am kept informed of issues relating to petrol distribution, and indeed to retail, by Mr Skinner from Glanusk services in Sennybridge. He is an independent supplier of fuel to his community, and he is fiercely independent. He has provided huge service to his area. I remember that the winter before last, during the very cold period, when tankers were unable to access houses, Mr Skinner was selling heating oil in drums. He is really a saviour for the area. He tells me that the distributors who supply him with petrol and diesel are declining in number as one operator takes over another, which is taking competition out of the distribution system. In those circumstances, the independent supplier of petrol and diesel finds it very hard to get a competitive price so that he can remain in business. When this inquiry takes place, my representations will be on behalf of those independent retailers in very remote areas, because we need them in the countryside in order to maintain competition and ensure that the supermarkets do not take advantage of a monopoly position and make fuel unaffordable for my constituents and those in other rural areas.
Madam Deputy Speaker (Dawn Primarolo)
Order. A large number of Members still wish to participate in the debate, which is due to end at 3.30 pm. I am therefore reducing the time limit to four minutes, and if necessary I will reduce it further. The more interventions there are, the slower progress we make. Those wishing to speak who intervene will find themselves moving down the list. I hope that Members will bear that in mind.
Fiona O’Donnell (East Lothian) (Lab)
I will bear that in mind, Madam Deputy Speaker. I want to begin by thanking the hon. Member for Harlow (Robert Halfon) for giving everyone in the Chamber, on both sides, the opportunity to stand up for hard-pressed motorists in our constituencies who are struggling with the increase in fuel prices at the pumps. It is clear to all that there are people who are gaining by manipulating markets and that consumers are not seeing the benefit when oil prices fall. We must also be clear that the OFT has announced not an inquiry at this stage, but a call for evidence. I am sure that everyone in the House will want their constituents and local businesses to get in touch with the OFT and present an overwhelming case for an inquiry so that we can see some progress.
The hon. Member for Harlow said that this is not a party political issue, but I have to say that I do not think we see the issue in isolation. Thanks to the opportunity he has given us today, a large number of my constituents have been in touch, and not many of them said, “The only problem in my life is the price of fuel at the pumps.” We also have the problem of rising food prices.
Fiona O'Donnell
I will not, because I want as many Members as possible to be able to contribute to the debate, as you have suggested, Madam Deputy Speaker.
It is also about rising food prices, which rose by 4.6% between March last year and March this year, and rising energy prices. The Prime Minister promised to take action to stop excessive rises in energy prices. I have asked him questions about both food inflation and energy prices, but we have not seen any action from the Government, so I hope that the hon. Gentleman will be more successful in convincing the Prime Minister to do something to bring down petrol prices.
Today’s debate is not just about the speculators and the oil companies that are making money off the backs of our constituents; it is about those individuals who are struggling to find work and, increasingly, having to travel further to do so. I want to talk about one of my constituents who has been in touch, a 40-year-old single man. He has been in work all his days, apart from a 16-week period when he could not find work. He is currently having to make a 48-mile round trip each day to get to work. That is taking a third of his salary, which leaves him unable to buy clothes; he told me that he has not bought any new clothes for at least three years. It also means that he is struggling even to put food on the table. The Government have to take some responsibility because their economic policy is hurting people and making it much more difficult to cope with rising prices.
I want to touch briefly on a policy that is also impacting on poorer motorists, who, as the hon. Member for Harlow rightly said, are suffering more than anyone else. I understand why we incentivise people to buy more environmentally friendly cars—that is absolutely the right thing to do—but the poorest motorists struggle to come up with the money to buy a car that allows them to benefit from the policy.
In conclusion, I again congratulate the hon. Gentleman. I hope he will be able to convince the Government to act on fixed pricing.
Andrew Bingham (High Peak) (Con)
Chancellors of all persuasions have increased tax on fuel for many years, and that is why we have the highest fuel taxes in Europe and the second highest in the world. The last Government embraced that tendency with enthusiasm by introducing 12 increases in fuel duty. This Government, however, have done more than any other to help the motorist, by voiding two years’ worth of the last Government’s tax increases. I also welcome the Chancellor’s deferral of the August rise earlier this year, which many of us wanted.
Across the country, businesses and individuals have been hit by fuel costs. When the price of oil goes up time after time, so does the petrol price, yet when the oil price comes down, the petrol price remains steadfastly where it is. This weekend, prices came within about 3p of a record high.
On top of that, there is a discrepancy between rural and urban areas. Fuel is about 133p a litre at the pumps this week; in High Peak, it is as much as 144p a litre—a 10% premium.
Julian Sturdy
I thank my hon. Friend for giving way. Do not oil companies and supermarkets often sell fuel at inflated prices in rural areas to offset the cost of production and the lower prices in urban areas? That is having a huge impact on retailers as well.
Andrew Bingham
Absolutely. Unfortunately, rural residents like me have been beaten into submission and pay high fuel prices.
Furthermore, cars are more vital to people living in rural areas than to those living in urban areas. Many Members will not know the small village of Edale in my constituency, although the walkers and ramblers among them will. My hon. Friend the Member for Hexham (Guy Opperman) set off from Edale on his charity walk of the Pennine way earlier this year.
Mr Rob Wilson
Is my hon. Friend as disappointed as I am about the contribution of the hon. Member for East Lothian (Fiona O’Donnell)? She complained about the Minister being late, yet few of her colleagues have bothered to turn up for what she described as a very important debate.
Andrew Bingham
I completely agree. A couple of days ago, I was in the Chamber for the Opposition day debate about universal credit. The Opposition made great play of the fact that there were more Members on their Benches than ours, so let us turn it back on them: many Government Members are here because we care about the motorist and the cost of fuel.
I return to the people in the rural areas of High Peak. The residents of Edale face a 14-mile round trip to a post office. They have to go 10 miles for a doctor or dentist. All those journeys have to be made using their own transport. In rural areas, a car is a necessity, not a luxury. If we add all those journeys together over a year, the extra fuel costs can amount to as much as £400 to do the 2,000 miles that people in urban areas do not have to do. Those rural residents travel further and pay higher prices at the pumps.
Andrew Percy (Brigg and Goole) (Con)
Is it not also true that in rural northern England the problem is compounded by the fact that our average salaries are so much lower?
Andrew Bingham
My hon. Friend makes an excellent point with brevity, and I appreciate that.
We hear about deprivation in different parts of society. There is a thing called rural deprivation. Yes, I am lucky to represent and live in a beautiful area, but we pay for that through higher fuel costs and our increased reliance on fuel. Lots of other rural communities up and down the country suffer the same misfortune.
We are lucky that our Government are in power, because we are 10p a litre better off than we would be if the Labour party were still in government. However, we pay more in rural areas. The difference goes to the oil companies, not necessarily the Chancellor of the Exchequer. I believe that the Government are doing everything they can to keep fuel prices down, but it is time that the oil companies started to play their part and did what they could. We need to make motoring affordable. I welcome the call by the Office of Fair Trading for information on the UK petrol and diesel market; I hope that it will shed enough light to inspire a full investigation. We need open and transparent oil trading.
Graham Jones (Hyndburn) (Lab)
Is the hon. Gentleman suggesting that markets do not work?
Andrew Bingham
Far from it; the market would work perfectly if we could see a little more of how it works. The issue is about ensuring that there are fair petrol prices and that when the oil price comes down, so does the petrol price.
Mrs Bingham complains that I do not take her anywhere expensive any more, but last week I took her to a petrol station in High Peak. [Laughter.] I spoil her.
In the interests of brevity, I will conclude. I hope that the action of the OFT will lead to an investigation into fuel prices. I hope that it will do it quickly and fairly and that the oil companies will react and do what we are doing as a Government to help to get the prices down. They should do that quickly to help hard-working families in High Peak and across the country and to help get the economy going, enabling people to put fuel in their cars and live their lives as they wish.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
We are facing higher fuel prices in real terms, as the hon. Member for Harro—sorry, the hon. Member for Harlow (Robert Halfon) said; I have as much difficulty in pronouncing the name of his constituency as he does in pronouncing the name of mine.
I draw the Chamber’s attention to a debate here on 7 February 2011, when I said that prices in my constituency were a shocking £1.45 a litre. Now they are between £1.52 and £1.59 for diesel, with petrol typically about 4p a litre less. Those prices take into account the 5p rural fuel derogation. I make this plea to the Government: in the modern day, a 5p derogation is not enough. We might have to go to Europe and ask for a larger one.
I point out to the hon. Member for East Lothian (Fiona O'Donnell), who was particularly partisan, that when I asked for a larger derogation in the last Parliament, I was told by the Labour Government that the introduction of such a derogation would mean that people travelled to the islands to buy fuel that would still have been more expensive. I did not follow the logic then and I do not now.
Mr Alan Reid (Argyll and Bute) (LD)
The hon. Gentleman is right. We raised the rural fuel issue with the last Government, but nothing was done. This Government have introduced the rural fuel derogation. Like the hon. Gentleman, I would like it to increase. Will he support a campaign to see the derogation extended to remote parts of the mainland, such as the Kintyre peninsula?
Mr MacNeil
The hon. Gentleman makes a great point, and a serious one, about rural places in mainland Scotland. Places such as Argyll, Caithness, Sutherland and Lochaber, which I must not forget as I worked there, would benefit from the extension and increase of the derogation.
It is interesting that, as the motion states, other countries, from the United States of America to Austria and Germany, are regulating. Ultimately, we will have to do the same in the United Kingdom before the economy is totally strangled. Whether it is the fault of the companies, the distributors, the speculators or the retailers, we need to get the issue sorted for the good of the economy. Indeed, retailers would be quite pleased to have greater regulation or transparency, especially as they are sometimes tied to long-term contracts with distributors, which makes it difficult for them to shop around and means that the price of fuel cannot be brought down in marginal areas.
Transparency might be the answer, but we must bear it in mind that in some areas and markets prices can go up if the seller is reluctant to give discounts to certain buyers. For that reason, regulation must be taken seriously before the economy is strangled. We cannot leave the foot pressing harder and harder on the jugular in the neck of the economy.
John McDonnell (Hayes and Harlington) (Lab)
I apologise for intervening and then leaving, but I am going to meet a group of people with disabilities. This is not just about fuel in the tank but about meeting people’s heating costs. The heating costs of someone who is elderly or has disabilities are always higher. Now, yet again, many people are having to choose between heating and eating. That is why we need to control these prices.
Mr MacNeil
My constituency has the highest rate of fuel poverty in the UK, so I know that the hon. Gentleman is absolutely correct, and I am grateful for his intervention. People are having to make these choices when they get up on a winter’s day, especially the elderly and vulnerable.
This is a poll tax on jobs and on economic activity. The TaxPayers Alliance has produced work that shows that in many places, of £30 paid at the till, £18 goes in tax. That is in line with my own research. In the case of a litre costing £1.50, 58p is tax and 28p is VAT. A total of 83p was paid in tax, but it will be more, and my constituency has the highest tax per litre in the UK.
We must look at what is happening in the supply chain when fuel goes from the refinery to the distributors and then leaves the depot and arrives at the retail forecourts. The best estimate that I can work out from rumours is that in my area, having left the depots, it is going to retailers at about £1.20 or £1.25 per litre excluding VAT. With VAT, it comes to about £1.50, and the rest is the retailer’s margin, which is usually 5p, 6p or 7p. My figures are approximate but they give an idea of what is going on. I can best ascertain that the pre-tax cost of a litre is about 65p.
The Government have promised to bring in a fuel duty stabiliser, and I encourage them to do so. That is what the Scottish National party called it; they could call it a fair fuel regulator, or whatever. That would control spikes in fuel prices, alleviating uncertainty and helping businesses to plan in an uncertain world.
High fuel prices hit the poorest most, and they hit jobs and families. They hit rural constituencies and island constituencies. We cannot constantly come back to this Chamber with the same complaints year after year, Government after Government. I could not tell the House how many speeches I have made about this, but there have been many over the past seven years. There has been some progress in recent years with the rural fuel derogation, and I am thankful for that, but more has to be done. It is the job of Parliament and of Government to solve the country’s problems. We need regulation and we need to bring in the fair fuel stabiliser for the hard-pressed motorists, workers and families of this country.
George Freeman (Mid Norfolk) (Con)
I shall follow your strictures, Madam Deputy Speaker, by keeping my foot to the pedal and not taking interventions.
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his dogged, determined and diligent campaigning on social justice issues. Harlow is lucky to have him, and so are we in this House. This is a key issue because it goes to the heart of the cost of living, it undermines growth and economic recovery, and it raises important issues to do with market failure and regulation. I welcome the news that the review will look into the lack of competition at the pumps and strongly support my hon. Friend’s call for an investigation into the oil market.
I want to focus my comments on the pressures facing my constituents and the rural economy generally. Some garages in Mid Norfolk are currently charging £1.40 for fuel, and in the past that has risen to £1.45. The cheapest fuel in Britain today is £1.32 and the average is £1.38. Rural communities are paying more for their fuel. As others have said more eloquently, rural communities are dependent on cars for travel; there is little or no alternative. A car is not a luxury. Many of my constituents, whose average income is £18,000, have to run two cars to maintain a family. This affects the whole community—not only families and commuters but pensioners, those who depend on public transport and have to recoup the cost, and the public sector. As my hon. Friend said, this goes to the heart of social justice in serving the most vulnerable in rural and marginal areas.
Inflation is another factor. The market is not working, and that is deeply inflationary. The rural economy, particularly food and farming—our biggest manufacturing sector—is being damaged, and that is hugely significant in terms of our economic recovery. I draw Members’ attention to the Norfolk food and farming festival that is taking place here today. For anyone who has not had a chance to pop over and celebrate our produce, I ask them please to do so.
Recent data show that when the last fuel rise took place, traffic levels generally fell by 1% while in rural areas they fell by 5%. That highlights the degree to which rural areas are particularly sensitive to, and dependent on, fuel prices. There is nothing progressive socially about condemning poor families to live in isolated rural communities unable to play their part in society, and nothing progressive economically about penalising the car usage of those in rural and marginal areas. The rural economy, particularly in East Anglia, has the opportunity to drive and lead a more sustainable model of economic growth, with small businesses back in the countryside and less commuting, but that will not happen unless we support the oil of the economy, which is fuel.
I welcome the many measures that the Government have taken. They have frozen fuel duty, invested more than £4.5 billion in relief and petrol is now 10p cheaper, saving families more than £159 on average every year. I also welcome the fair fuel stabiliser. There are no simple answers. The truth is that the previous Government bequeathed us a horrible legacy of debt and a dependency on the fuel levy, and pennies at the pump in relief cost the Treasury billions, which undermines our effort on the deficit and puts at risk our low interest rates.
I hope that the Minister will acknowledge the real impact of this pernicious tax on the most vulnerable, particularly in rural and isolated areas; explore all and any options for targeting relief at those who need it most; take this opportunity to confirm the excellent initiative on the fair fuel stabiliser; and put the Government’s and his formidable political weight behind this call for an inquiry into the serious allegations of market rigging that have been highlighted, commendably, by my hon. Friend.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I also congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate and will begin where he finished—on the issue of fuel poverty. When we talk about fuel poverty in this House—we have done so for many years—we usually consider it in terms of household energy bills, but from what I have heard this afternoon, many are facing the same problems as those experienced in my constituency, where a low-wage economy in a rural area means that people are having to spend more on fuel for their family car. As has been said, people who have to use their car in a rural area such as mine and elsewhere are being driven into fuel poverty. People are even being driven to the point of wondering—we have heard this once already—whether they can continue to go to work and afford to run their car, because they have a 30, 40 or 50-mile round trip every day to work. That is becoming less viable for some households.
There is no doubt that something is happening in the marketplace. I, like Members from all parties in this House, wrote to the Chancellor to say, “Please do not impose the 3p fuel duty in August,” but what did we witness anyway? A standard note produced by the House of Commons Library shows that the price of fuel at the pumps increased by 3p. Something is happening. No matter what we do—if we reduce the duty, for example—something happens. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) mentioned the rural fuel derogation. I strongly suspect that, despite the 5p reduction, prices still went up, so the 5p fall was wiped out entirely. Manipulation is going on in the marketplace.
Mr MacNeil
I am grateful to the hon. Gentleman for raising that point. The price of fuel went down and up in a certain way, as if to disguise what was happening, so it was difficult to get to the bottom of what was going on because fuel is not tied to a regulator.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. On interventions, it is not fair for Members who have already spoken to use up the time of others. A lot of Members want to get in and we ought not to be so generous.
Mr Brown
Thank you, Mr Deputy Speaker—I will not let the hon. Member for Na h-Eileanan an Iar get back in again. The door is closed. He is right, however: whether something is disguised or manipulated, it is happening.
I do not want to have a go at the hon. Member for High Peak (Andrew Bingham)—he is a decent guy—but let me put the record straight for him. On 11 occasions over nine years, the previous Government either froze or cancelled the fuel duty increase that had been in the Budget. We are all battling to put this right.
As oil prices increase, so do the costs of heating oil and liquefied petroleum gas. The last peak in pump prices was back in the summer of 2008, and at that time the price of fuel at the pumps was driven by crude oil at a price of $140 per barrel. Last week, according to The Daily Telegraph—not my favourite read—the price of crude oil was $113.49 per barrel, so we are a long way off the $140 per barrel that resulted in the peak in prices during the summer of 2008. There is manipulation. I do not think that there is any doubt about that.
I say again to the hon. Member for Harlow and others that I want VAT to be reduced from 20% back to 17.5%. The increase to 20% put fuel prices up by 3p or 3.5p a litre, which is the highest increase under the coalition Government. A reduction in VAT would help, but we must be wary to ensure that the oil companies do not try to squeeze the prices a little more and recover that money.
I am delighted that the Office of Fair Trading will look into this matter. I was surprised when it wrote to me two weeks ago to say that it would do so because of the representations that I and others had made. I say to colleagues in this House, let us not hold our breath, because the OFT’s previous work, especially in the more rural locations in Scotland, came up with nothing. We need answers about what is going on in our communities and about what consumers and our constituents are being faced with. We therefore need the evidence to go to the OFT and for it to have a robust inquiry to put the matter right.
George Eustice (Camborne and Redruth) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing this debate and on his tireless work on this subject.
This matter is incredibly important to many of our constituents, not least in areas such as Cornwall. Many people have spoken about the problems that rural areas face, but the problem is not just the rurality of such areas, but the fact that they are peripheral and a long way from the markets. Cornish businesses have to transport their goods some 300 miles just to get to London, which involves a huge additional cost. The 38% increase in the fuel price since 2007 has had a massive impact.
I associate myself with the comments of my hon. Friend the Member for High Peak (Andrew Bingham) in which he congratulated the Government on what they have done on this issue. They have not introduced any of the tax rises that had been planned and, as a result, fuel prices are supposedly 10p lower than they would have been. However, there is no point in cutting taxes if the money that is saved ends up not in the pockets of our constituents, but in the pockets of the people who are rigging the fuel market.
Penny Mordaunt (Portsmouth North) (Con)
As well as the practical hardships that my hon. Friend has touched on, does he agree that what gets up our constituents’ noses is that while they have been working harder, making sacrifices and helping each other out to get the economy back on track, these people might have set out to rip them off?
George Eustice
That is absolutely right. I was going to say that one of the great indictments is that prices are always quick to rise, but very slow to fall when the markets go the other way, as my hon. Friend the Member for Harlow pointed out in his opening remarks.
I was interested in the proposal of the former Secretary of State for Transport, my right hon. Friend the Member for Putney (Justine Greening), for a transparent wholesale price tracking system, through which the major fuel distributors would voluntarily make clear the basis on which they calculate their prices and demonstrate the link between the prices that they charge at the pump and the wholesale market price.
I am concerned about the impact of supermarkets dominating the market in local areas by reducing their prices to snuff out other retailers and, once they have the pitch to themselves, putting the prices back up. Hon. Members have spoken about the disparities between different areas. Cornwall has lost all its Jet garages, which have been taken over by Texaco. The already limited choice of retailers has become more limited.
The biggest scandal is the allegation of price fixing. I welcome the OFT’s call for evidence. It should follow that through with an investigation. As a Conservative, I have no problem with markets when they work properly. In fact, I think that speculation has a role to play. The futures markets have a role to play in helping businesses manage risk. However, my hon. Friend the Member for Harlow gave evidence that there might be significant rigging of the market, with certain futures being placed and then withdrawn for no reason and a total lack of transparency about who holds those futures, which is a real problem. As Conservatives, we will object if there has been market rigging in the way that we saw with LIBOR. For that reason, I believe that the OFT should follow through its call for evidence with a full-scale investigation.
Mr Iain McKenzie (Inverclyde) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing this important debate. Many of my constituents have contacted me on the subject of fuel prices over the past few months, and they are extremely concerned, because there is no doubt that high fuel prices are hitting them hard at a time when their families are being squeezed by higher food, gas and electricity prices.
In fact the situation is even worse in my constituency, because one large retail outlet has a near-monopoly, which means that petrol can cost drivers in my area an average of between 3p and 5p a litre more than it does people in our neighbouring constituencies. That is tending to drive business and customers out of Inverclyde and into neighbouring areas in search of cheaper fuel to fill up their tanks.
Bizarrely, that large retail outlet, Tesco, tells my constituents that if they spend between £80 and £100 in the store they will receive a voucher giving them between 3p and 5p off a litre of petrol. How generous of it, and how astute at the same time—it is winning both ways. How is it that someone can shop in the store and get 5p off at the pump, but not pull into the petrol station and receive the same price? It makes me wonder at what price Tesco is receiving its petrol. We have to examine the whole supply chain by which fuel reaches our pumps, because at each step of the way people are making large profits.
Inverclyde could not be described as a rural constituency, but as far as such retailers are concerned we are a captive constituency. When the oil prices go up we see an almost instant increase at the pumps, but when oil prices go down it seems to take for ever for the price to get lower, if it does at all. Along with my constituents, I therefore welcome the debate so that we can hold the fuel retailers to account and have them justify not only the high price of fuel but their sluggish reductions to fuel prices.
I must point out that it is not only the big, bad oil companies and fuel retailers that are hiking up the price of petrol. The Government are also adding to the cost. They hiked up VAT to 20% and applied it to fuel, and we know that high fuel tax hits the poorest in our society who need their cars the most, either to get to work or to visit people. It is not big businesses but hard-working families who pay that money, and those families are finding it increasingly expensive to fill up their cars. High fuel prices are having a devastating effect on my community, and a cut in fuel duty would stimulate growth and create jobs.
Only the other day I was told that a staggering 30% of lorries carrying goods from Scotland to the south-east are from outside the UK, and so have the privilege of being able to fill up with cheap diesel and petrol from the continent. If the Government are really serious about making an instant impact at the pumps, they should take the first step and cut VAT on fuel.
Jake Berry (Rossendale and Darwen) (Con)
I start by paying tribute to my hon. Friend the Member for Harlow (Robert Halfon) for securing the debate. It is my privilege to speak in it. I read his allegations in The Sun today about the manipulation of oil prices. A lot of us have been outraged by the alleged manipulation of LIBOR, but the manipulation of fuel prices will have much more of an effect on our constituents. They feel the pain that it causes every single week when they fill up their car.
I want to focus on the local market in my constituency of Rossendale and Darwen. I spoke about it last June and in my view it was then and remains a broken market. Rossendale is near the town of Bury and Darwen is near the town of Bolton, so, to provide a comparison, I visited petrol stations in both places. At its peak, there was a 5p difference in fuel costs between Bury and Rossendale and between Bolton and Darwen. Rossendale and Darwen are both ribbon developments, like so many of the Lancashire industrial towns along the river valley, so someone who lives in either place is forced to commute long distances because of the nature of our community.
At this point, I want to pay special tribute to my local paper, the Rossendale Free Press—I hope it will publicise this speech, of course. With me, earlier this summer, it launched a “Rip off at the pumps” campaign. This is a positive example I can give to colleagues of where they can lead and affect the price of petrol or diesel in their own patch. We took the price at our local Tesco and compared it with the price at the Asda in Bury, and, as I said, there was a 5p difference. We called on people who lived locally not to buy their fuel at Tesco until that price was brought down. I personally met representatives of Tesco here in Westminster and asked how they arrived at that price. They told me that they drew a 3 mile geographical line around the Tesco store in Rawtenstall and used prices in that area as a comparison and basis for theirs, but what they did not say was that the only other major petrol retailer with which they were comparing their prices was also Tesco. They were both fixing and making the price in one market, which is why I think that the market is broken.
Earlier today, I checked the price difference again following the campaign run by me and the Rossendale Free Press. Petrol in Asda is Pilsworth is now £1.37.7 a litre, whereas at the Tesco in Rawtenstall it is £1.37.9. We have taken the difference down from 5p to less than half a pence. That is something positive that we can all do as Members of this House. We should not suffer discrimination at our petrol pumps for living in a rural community and we should do something about it. I hope that by running their own “Rip off at the pumps” campaigns, hon. Members can bring prices down in their area.
Jake Berry
I am sorry, but I will not.
The Government have taken action. People who have to put fuel in their van to go to work or in their car to go to school feel the squeeze at the pumps and I pay tribute to my right hon. Friend the Chancellor for freezing the fuel duty rise and saving everyone 10p a litre, putting the fuel back in our economy so that people can go to work.
Justin Tomlinson (North Swindon) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon), who has a fantastic track record of leading on this extremely important issue. This is yet another debate in which I am pleased to support him. I am also proud to be a member of the FairFuel UK and PetrolPromise campaigns, which are bringing this issue to the forefront.
Petrol prices have been increasing for decades under the twin pressure of rises in fuel duty and oil prices. The previous Labour Government hiked fuel duty 12 times in 13 years and it always amazes me that the Opposition are in such denial about that. They were very quick to take credit when they increased spending on public services, so they should also take credit for how they paid for it. With uncertainty in the middle east and limited resources, global oil prices will continue to rise. Together, those factors have stretched motorists to breaking point, so that many of them are priced out of their cars and businesses struggle with additional costs.
I welcome the Government’s move to scrap Labour’s further six planned rises and the modest but welcome 1p cut in fuel duty. Fuel is about 10p cheaper than it would have been had the former plans gone through, which more than covers any changes under VAT.
I accept that the wrecked economy we inherited means that money is tight and that we cannot just wave a magic wand. I surveyed the good people of my constituency, however, and asked them what their priority would be if they were Chancellor and suddenly inherited some money to play with. The choices were VAT, income tax, inheritance tax, capital gains tax, corporation tax or fuel duty. Fuel duty was by far the most popular, by a significant distance. I asked residents why that was the case, and I will use the Government’s changes to income tax thresholds to illustrate my point. The changes to income tax were welcomed because they took 2 million people out of paying tax altogether and benefited 24 million others. However, people could not say how much they had benefited personally, but the one tax they could describe was the cost of fuel, which is a clearly displayed, tangible cost. If we do one thing to kick-start and boost consumer confidence, it should be to cut fuel duty. My plea to the Chancellor is this: as and when he finds the money, a cut in fuel duty should be the No. 1 priority to boost the economy.
Duncan Hames
My constituent, Michael Hudston, campaigns assertively on this issue and he is acutely aware of how much tax he pays. When he fills up at the pump, he pays an effective rate of tax of 146%. Interestingly, three years ago it was as high as 200%, which demonstrates the point my hon. Friend was making, which is that, so far, tax changes have not made the situation worse in the way alleged by Labour Members.
Justin Tomlinson
I thank my hon. Friend and agree with his comments. I remember that on the day of the 1997 general election—not a particularly happy memory for the Conservative party—I paid 57p a litre to fill my car.
My hon. Friend the Member for Harlow presented evidence about how the oil industry is acting, and how it is quick to pass on any rise in oil prices but slow to pass on cuts, and all parties are united in the belief that much needs to be done. The statistic given was that for every 10p fall in the wholesale price, an average of 7p is passed on to the consumer. I therefore welcome the decision by the Office of Fair Trading to investigate the actions of the oil market. All local residents will be keen to know whether they are being defrauded and ripped off, which I think we all suspect is the case.
We must accept that we will not see cuts to fuel duty in the short term, and that world oil prices will continue to rise. As demand grows and resources are limited, pressure will increase and we must look at the alternatives. I welcome the fact that in my constituency, Honda UK, in conjunction with BOC, has taken advantage of Government grants and created the first open-access hydrogen refuelling station. My hon. Friend the Member for South Swindon (Mr Buckland) and I lobbied hard to ensure that that remains in place. The key for those alternatives is the availability of refuelling infrastructure for all the different resources. We must invest in those alternatives so that we can deal with the pressures that I have mentioned.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to drop the time limit to three minutes in order to get everybody in. If anybody intervenes again, somebody will drop off the end of the list, and I am trying not to let that happen.
David Mowat (Warrington South) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing this debate; he has been redoubtable on this important subject. Fuel prices are indeed regressive, and it is therefore important to look at the evidence for the issues that the OFT is to consider. I am pleased that the OFT will consider this matter, and that the previous Secretary of State for Transport asked for more transparency in the wholesale market. Markets need to be seen to be working by being transparent.
Let me return to the previous OFT review on this issue in 1998. It concluded that the market was not rigged, with the possible exception of the Scottish highlands and islands, which have particular issues about clear market share and so on. Since the 1998 report, the structure of the market has changed and oil companies have become much less dominant. The retail market is now 40% supermarkets, 30% oil companies, and 30% independent—the oil companies have left the retail market. There are seven refineries in this country—possibly now six because the one at Coryton has closed—and the oil industry, as understood in this debate, owns two of them.
Let us look at the evidence. We have heard about postcode pricing, and it is true that there are differences in prices. Hon. Members have also said that the fact that oil prices are the same demonstrates that the market is rigged, and we must choose which of those two problems is greater. If prices are the same, it is arguably a perfect market. Perhaps it is true that prices go up more quickly than they come down, but the OFT must look at the evidence.
The counter-evidence on the cartel is that oil companies are leaving UK. If there is a cartel, it is not a very good one—it does not appear to have been done well. Further counter-evidence is that the refinery and retail margin in the UK is among the lowest in Europe. That is odd. Hon. Members have mentioned regulation in Germany, but Germany has a higher retail and refinery margin than the UK, as have Spain, Sweden, Italy and others.
If Members have evidence of a cartel, they must put it before the criminal authorities. A cartel is a criminal offence and directors can go to prison. We should not use the word lightly.
Mr Marcus Jones (Nuneaton) (Con)
I congratulate my hon. Friend the Member for Harlow (Robert Halfon), who is a doughty campaigner on fuel prices. He should be thanked by the general public throughout the country for that. The problem is dear to many of my constituents’ hearts for a number of reasons, and like most right hon. and hon. Members I have had postbags full of correspondence from my constituents—not just in the last few weeks, but for many months.
I wholeheartedly support the motion and concur with many of the views that hon. Members have expressed today. We urgently need an investigation by the Financial Services Authority and the Office of Fair Trading. That is the will not only of hon. Members who have signed the motion, but of the public, so strongly do they feel. Oil companies and traders come up with all sorts of reasons why what hon. Members have said today is not true, and say that they are urban myths, but neither hon. Members nor the public are convinced by their arguments.
I should like to mention one or two unanswered questions that hon. Members have not mentioned. They mentioned the differential. In my constituency, which is probably one of the most urban county constituencies in the country, there is a differential of between 9p and 10p from one side to the other—a distance of five or six miles—which is astounding.
Twenty years ago, many of us chose to buy diesel cars because diesel was far cheaper than petrol. All of a sudden, the cost of diesel seems to have accelerated and outstripped the cost of petrol—on average, diesel is currently about 5p a litre more expensive. There must be a reason for that, and we need an answer.
I am short of time and have not mentioned most of the things I wanted to mention, but I implore the Minister to continue to pursue this issue. Please do not let the regulators off the hook, and please urge them to put a solution in place. We need a proper investigation—with teeth—that has an outcome for our constituents.
Richard Fuller (Bedford) (Con)
My hon. Friend the Member for Harlow (Robert Halfon) is the driver’s friend. For many years, people who drive cars doubted whether any Member of the House—particularly Labour Members—favoured what they did in their daily lives, so it must be a tremendous joy for them to have my hon. Friend in the House. He is not just the driver’s friend: as we have seen today, he is a friend of families on low incomes, of business, of growth, and of people who live in towns and the country alike. This issue affects us all, so I add my voice to his, and to those who have congratulated him on securing this debate.
Like my hon. Friend the Member for Rossendale and Darwen (Jake Berry), who mentioned his local newspaper, I would like to congratulate my local newspaper, Times and Citizen, in Bedfordshire, which has been running a campaign supporting fairer fuel prices in my local town since the beginning of this year. People are incredulous that local petrol prices can vary so much between communities. One of my constituents, Tipu Zaman, said:
“I travel to Stevenage every day and have not bought petrol in Bedford for around seven months. On the way there and back I pass about four or five petrol stations and all of them charge less than the stations in Bedford.”
How can that be true?
It is important to recognise that the campaign of my hon. Friend the Member for Harlow has already made progress by having the OFT start to look for evidence to support an investigation. There has been much speculation about the potential manipulation of the markets. I would be shocked if those markets had been rigged, but let us not forget that only a few months ago we were all shocked at allegations of rigging in the LIBOR market. To restore people’s trust in markets, it is important that the OFT investigates.
I ask the Minister to talk with his colleagues about another matter that my hon. Friend the Member for Warrington South (David Mowat) mentioned. The issue of competition has changed since 1998. One of the issues, seen in groceries as well, is a shift in power from retail choice to logistics strength—large supermarket chains using their logistics strength to move into new markets and reduce competition. That is an important issue for the OFT to investigate.
Finally, will the Minister also learn lessons from the US experience? The Federal Trade Commission writes on its website:
“Oil and gasoline are commodities that are critical to American consumers, so the Federal Trade Commission devotes significant resources to make sure that these markets remain competitive, using all the powers at its disposal to protect consumers from anticompetitive conduct”.
Will he ensure that the Government show that they understand the importance of this issue?
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
It is a pleasure to take part in a debate on an issue that is important to motorists, families and businesses across the country, as the hon. Member for Bedford (Richard Fuller) just said. I congratulate the hon. Member for Harlow (Robert Halfon), who has worked assiduously on this issue and, as he said, built enough support across the House to get this debate through the Backbench Business Committee, and I congratulate the latter on allowing it to happen. I also welcome the Minister to his place. This is, I think, his first appearance at the Dispatch Box in his new role, although we have faced each other three times in a different capacity over the past week or so.
Families’ and businesses’ budgets are facing unprecedented pressures, as set out by the hon. Members for Harlow and for Bedford, but, as my hon. Friend the Member for East Lothian (Fiona O'Donnell) said, other issues, such as energy bills and rail fares, are also adding to them. As a result, people are struggling to keep their head above the water. The cost of fuel is one such pressure. As the hon. Member for Mid Norfolk (George Freeman) pointed out, that has an effect on the wider economy too.
For all those reasons, the OFT’s decision to issue a call for information on the UK petrol and diesel sector is welcome. I pay tribute to the hon. Member for Harlow, because he made the point, as too did my hon. Friend the Member for Dumfries and Galloway (Mr Brown), that were it not for the continual representation here, we probably would not have got to that stage—it certainly was not the message the hon. Gentleman was getting from the OFT earlier in the year.
There is a sense that when the price of oil rises, the cost of fuel is not far behind, but when the price of oil falls, reductions in fuel costs do not appear to follow on so quickly. As the OFT said,
“pump price may be failing to rise and fall in a way that reflects the underlying movements in crude oil prices”.
That is at the centre of this debate and explains the level of concern expressed across the House.
As the hon. Member for Harlow detailed, the media reported this morning that a City whistleblower has alleged that the oil market is rigged with daily price manipulations. The hon. Member for Rossendale and Darwen (Jake Berry) made the point very well that the alleged manipulation, if true, would have had a much greater direct impact on our constituents than some other instances of manipulation that quite rightly caused concern. We need a fuel market that works in the interests of motorists, small businesses and local communities, but there are genuine concerns that that is not what we have.
The OFT’s announcement is welcome, although I note that it is not the announcement of an inquiry. As the hon. Member for High Peak (Andrew Bingham) made clear, what has been announced is a pre-inquiry inquiry, which probably should lead to inquiry, as I hope it will, because there is a good case for one. The OFT has committed to publishing a summary of its findings in 2013 and will outline the next steps at that point. As hon. Members will know, if a full inquiry is to be held, it may take many months if not years, with no firm conclusions necessarily reached until that point. We have to face the fact that there is a widespread feeling that in the meantime motorists will continue to get a raw deal and face mounting pressure at the pump.
The hon. Members for Camborne and Redruth (George Eustice) and for Warrington South (David Mowat) referred to the previous Transport Secretary saying that she wanted to look at tracking the price that oil companies pay and how the reductions are passed on at the pump. That is something she said in her previous role, but when the Library contacted the Department for Transport yesterday to see what progress had been made, it was advised that nothing would happen until the OFT had reported its findings at the very earliest. If an OFT inquiry does flow from the call for evidence, that could take a considerable time, so perhaps the Minister can enlighten us as to why the Department cannot do that work now. Indeed, I am not clear why that should be the case, because those issues could be tracked now. I therefore hope that the Minister will respond to that point, which is a matter of concern for Members in all parts of the House.
As the hon. Member for Belfast East (Naomi Long) and my hon. Friend the Member for Dumfries and Galloway made clear, along with many Government Members, those living in remote areas face particular pressures. By and large, prices in remote parts of the country are higher than in urban areas, as the OFT reports. There is also less choice, leading to less competition and difficult decisions being made. As my hon. Friend said, in some cases people may be deciding that it is not even worth going to work, because of the costs associated with making those journeys. Rural motorists often have far further to travel to fill up their tanks. High prices in remote areas also have a severe impact on the road haulage industry. The OFT noted the generally detrimental impact of high fuel costs on the standard of living in remote areas.
In November last year, the Chief Secretary to the Treasury announced a pilot scheme to cut the price of fuel for some of the UK’s island communities in the Northern and Western Isles of Scotland, to come into effect in March this year. Although that might be welcome—even though it came into effect 18 months after the Chief Secretary had said it would happen within a few months—towards the end of February, shortly before the scheme was to be introduced, the price at the pumps on Orkney and Shetland increased by 5p per litre. I know that the right hon. Member for Orkney and Shetland (Mr Carmichael) is unable to take part in these debates because of his Government position, but at the time he made it clear through his local newspapers that it was a strange coincidence that prices should go up shortly before the scheme was introduced. That adds weight to the concerns expressed about the possible level of manipulation. It is vital that the OFT gets to the bottom of that, because those concerns are deep-seated, particularly at a time of economic pressure for so many people.
The hon. Member for Brecon and Radnorshire (Roger Williams) made some points about independent retailers—I will not attempt to pronounce the name of the village where the filling station he referred to is. That is also an issue in urban areas, as I know from my constituency. Unlike the hon. Member for High Peak, I have not quite reached the point of taking my wife out to a petrol station—I am not sure I am that brave—but over a year ago I was contacted by an independent retailer operating in my constituency. The company’s main concern was that it was unable to compete with large supermarkets, which have the ability to use petrol prices as loss leaders and, further, manipulate prices in those areas. My hon. Friend the Member for Inverclyde (Mr McKenzie) made that point in relation to the situation in his constituency, as opposed to neighbouring constituencies, as did the hon. Member for Rossendale and Darwen.
A further complaint by that company was about the practices of oil firms and the impact on smaller retailers. That complaint has in large part been supported by the findings of the International Organisation of Securities Commissions, a body that has, as the OFT noted, highlighted many areas of concern, including the way in which oil prices are reported. The OFT expressed its concern that if oil prices are being inflated, that could be
“leading to higher pump prices because wholesale road fuels prices may be based on the prices reported by oil price reporting agencies.”
That is another important aspect of this debate.
I am sorry to have to report that the local petrol retailer in my constituency that contacted me a year ago is no longer operating, and its situation is not unique. That is happening to many others as well. My constituency is largely urban and suburban, and the number of empty petrol retail outlets has increased massively. Some, ironically, are now being used as car-washes. There has also been a reduction in the opportunities available to people and an increase in the dominance of some of the big companies. All those factors underline the importance of making the case to the OFT that it needs to get to grips with this issue as quickly as possible. It must collect and analyse the evidence in order to make a decision on whether there should be a full inquiry.
Earlier this week, the president of the AA, Edmund King, expressed his concern about the high price of petrol at this time of year. He made the point that although increases are normally lower and pump prices come down at this time of year, we have seen an increase of about 10p since July even though there has been no appreciable increase in the price of oil. That is despite the Government’s introducing a fair fuel stabiliser. My reading of the Red Book tells me that it was introduced at a level of $75 a barrel equivalent. If that is correct, it has not made a difference, and the suggestion that the stabiliser was the answer to the problem has not been borne out. Perhaps this is because of other market manipulations that have been at the heart of the debate, and if so, that too lends weight to the case for the inquiry to happen as soon as possible. We need to get to the bottom of these issues, so that other Government interventions that could make a difference can be introduced rather than being offset by other changes and behaviours that are inherent in the market.
We have had an informed and interesting debate this afternoon. Members on both sides of the House have expressed the concerns raised by their constituents. This vital issue has a significant impact on their standard of living, and even on their ability to go about their daily business. The information in Members’ speeches showed the strength of feeling across the House. Motorists are feeling the squeeze. Families and businesses are feeling the pinch. That is why it is essential that any manipulation, collusion or shady practices in the market are properly exposed, and the OFT has a duty to get on and do that as soon as possible.
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
The House has long known that I am energy personified, and I am delighted that the Prime Minister has now recognised that fact and given me this important new role. I am equally delighted to speak on these matters from the Dispatch Box for the first time, although, as the shadow Minister, the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), said, he and I have already met in debates in Westminster Hall and in Committee.
Several hon. Members have rightly paid tribute to my hon. Friend the Member for Harlow (Robert Halfon). My hon. Friends the Members for Bedford (Richard Fuller), for Nuneaton (Mr Jones) and for Camborne and Redruth (George Eustice) have all made the point that he has done the House a great service in allowing us to have an important debate on an important issue, which affects so many of our constituents.
Fuel is of fundamental significance to consumers, and it is in our mutual interest to ensure that motorists and businesses are confident that they are being treated fairly and that, when the cost of crude oil comes down, reductions are passed on transparently and without unnecessary delay. This Government have eased the burden on motorists by £5.5 billion by not implementing the policies of the previous Government. I do not want to make this debate an unnecessarily partisan one—although my emphasis is on the word “unnecessarily”. The truth is that, had we put in place the previous Government’s plans, prices would be higher.
The shadow Minister pointed out, with typical decency, that we have also put in place the rural fuel duty rebate scheme, which is cutting the price of fuel in very remote communities by 5p a litre. The Government will continue to monitor the effectiveness of that scheme and, obviously, if there is more to say on that matter, I will come to the House and say it.
Hon. Members on both sides of the House have pointed out that the retail price of fuel is affected by a wide range of factors, including crude prices, tax and duty, the exchange rate, and the cost of refining and bringing the product to market. In the end, the effect on consumers is a profound one, and it is because I share the view of my hon. Friend the Member for Harlow and others that this is a matter of social justice that I am delighted that we shall have eased the burden on motorists by approximately £5.5 billion between 2011 and 2013. Average pump prices could be approximately 10p a litre lower than if we had implemented the previous Government’s so-called fuel duty escalator in 2011-12.
The petrol and diesel retail market in the UK is subject to the same legal constraints and the same framework governing competition and trading standards that relate to businesses in general. Price differences in different areas are likely to reflect local supply and demand, and may differ depending on fuel transportation costs and different retail business models, as my hon. Friend the Member for Bedford, among others, has said.
Oil prices rose this year owing to international developments such as uncertainty in the middle east and north Africa, and continued growth in demand. The Wheatley review and the International Organisation of Securities Commissions are looking at these matters, as the House will know. The House will also know that the UK works with the G20 to enhance transparency in the oil market, as recommended by many contributors to the debate. In the end, as my hon. Friend the Member for Warrington South (David Mowat) said, this is at least as much—and arguably more—about retail practice as it is about the oil industry. The oil price is, of course, set by global markets. The key causes of high prices this year are well understood.
Steve Baker (Wycombe) (Con)
Many Members have talked about the volatility of oil prices and the functioning of the markets. There is a correlation between the volatility of oil prices and US Federal Reserve monetary policy. Before the end of Bretton Woods, there was hardly any volatility in the oil price; it has been introduced only subsequently. If there is a secular trend in oil prices at all—priced in, say, gold, which happens to be a scarce commodity—it is downwards. I do not think we are paying enough attention to the US exporting both inflation and volatility through US Federal Reserve monetary policy.
Mr Hayes
That is a typically incisive and insightful contribution from my hon. Friend. I will say a little more about volatility, but the House will have heard his argument. It seems to me to be as impressive as his arguments usually are, and I shall certainly give further consideration to the matter.
In the spirit of being open-minded—this is, of course, an immensely open-minded Government—let me mention the Wheatley review into LIBOR, which is considering whether benchmarks or indices in other markets also need to be looked at. It will, of course, include this market and it aims to publish its conclusions by the end of September. I look forward, too, to the recommendations from the International Organisation of Securities Commissions, and the Government will consider how to take those forward in the G20 and how to implement them in the UK to ensure oil price benchmarks are not open to manipulation. As a result of this debate, however, and of the arguments made by my hon. Friends and others, I will write to the Financial Services Authority about the concerns raised here today. There is no point in our having these sorts of debates if they do not inform and inspire Government policy. In the case of this Minister, they will do just that.
It is absolutely right that we enhance transparency in the oil and commodity markets. The Government continue work to improve the functioning of the global market and to reduce price volatility through engaging with key oil-producing countries to promote investment in oil production and responsible behaviour in the market—the matter raised by my hon. Friend the Member for Wycombe (Steve Baker) a few moments ago. To that end, we have also championed a new charter for the International Energy Forum, and we will continue to monitor closely the impact of initiatives being taken in several other G20 countries, including Germany and Austria, to improve fuel price transparency.
Demand is another issue, and reducing the UK’s long-term dependency on oil and petroleum products is a Government priority. This includes developing ultra-low-carbon vehicles, high-speed rail networks and renewable heat incentives. We are working within the G20 to reduce oil demand globally—for example, through the work to reduce fossil fuel subsidies. At the same time, it is important to ensure that the market is well supplied, and we are working with the International Energy Agency, including on post-Libya stock release.
The Office of Fair Trading call for evidence is central to our considerations today. I encourage all Members to submit evidence to the OFT, and I know that many who have spoken in the debate will do just that. Of course we must not intervene until that call for evidence is complete. My Department believes that changes in the price of crude are indeed passed on to the pumps, although, as is clear from the data, there is a considerable time lag. There is certainly a case for greater transparency, about which, as my hon. Friend the Member for Harlow will know, the OFT has specifically asked for evidence.
In summary—this is not my final summary, Mr Deputy Speaker, but merely my preliminary summary: I did not want to dampen the enthusiasm with which my speech was being met—I strongly welcome the OFT’s decision to call for more information about the way in which the petrol retail market works.
As has been said, the OFT has said that it will consider whether reductions in the price of crude oil are being reflected in falling pump prices; whether the practices of supermarkets, which have been mentioned by a number of Members today, and major oil companies may be making it more difficult for independent retailers to compete with them—I shall say more about that in a moment; whether there is a lack of competition between fuel retailers in some remote communities in the UK; and whether the concern about price co-ordination and the structure of road fuels markets that has been expressed by other national competition authorities is relevant in the UK. That is a first step, and reflects the fact that, to date—as was pointed out by my hon. Friend the Member for Warrington South—no clear evidence has yet been provided to demonstrate that there is reason for concern about competition in the market. Nevertheless, the inquiry is welcome: I want to make that absolutely clear.
I ask my hon. Friend the Member for Harlow, and other Members with an interest in the subject, to engage with the OFT’s study—I have no doubt that my hon. Friend was going to do so anyway, but I wanted to place that on the record—and to participate fully, as my Department will: I commit myself today to ensuring that that happens. What is important at this stage is for Members or their constituents who have evidence relevant to the scope of the OFT's call for information to make it available before 17 October.
As I have said, my Department’s analysis shows that changes in the wholesale price of crude, both increases and decreases, are passed on, but I shall nevertheless ask my officials to look at the matter again and revisit their analysis, as a direct result of the debate and my hon. Friend’s wider contribution to discussions on this subject.
The important issue of what might be called “fuel deserts” was also raised today. The OFT is seeking evidence relating to the decline in the number of independent petrol stations and the rise of hypermarkets. That too has been mentioned by a number of Members, including my hon. Friend the Member for Warrington South and my hon. Friend the Member for Bedford. The Government have taken tough action in the past to address the potential of local monopolies. For example, this summer, following an OFT investigation, Shell gave undertakings to sell a number of its petrol stations because of concerns of this kind.
Some Members mentioned the problems of rurality. The hon. Member for Inverclyde (Mr McKenzie) and my hon. Friend the Member for Camborne and Redruth (George Eustice) represent rural constituencies, and I am quite deeply affected by the problems myself. I know from my own experience in Lincolnshire that rural communities can be disadvantaged when the number of petrol retailers falls and journeys to obtain petrol and diesel become longer. I will also ask my officials to look at the relationship between storage capacity and the declining number of retailers; the picture is mixed because of the size of tanks that are kept in different places, but I am interested in the issue.
Independent petrol stations are often located in more rural areas, and can provide a valuable service for local communities. As was mentioned by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), there is concern about the effect on rural resilience in the event of further closures of such petrol stations. As I said earlier, the OFT has signalled that it is seeking evidence relating to the decline in the number of independent petrol stations and the rise of the hypermarket retailers, to which the hon. Gentleman and others referred. I particularly thank my hon. Friend the Member for High Peak (Andrew Bingham) for emphasising the effect that that has on his constituents. I must make it clear again that the Government have not been reluctant to take action in the past, and would be happy to do so again if the evidence legitimised such action.
Earlier this year, my Department commissioned a study of the retail market for road fuels, to develop further our evidence base on the size and shape of the market and our knowledge of the impact of the structural change to the market over recent years. I will write to interested Members with details of the findings in due course and share them with the OFT. That is what it says in my script, but I will do more than that: I will write to all Members of the House, because I know that all Members are interested in these matters. We will keep the whole House fully informed of the steps the Government are taking.
As a result of the arguments my hon. Friend the Member for Harlow has made today, I will also instruct my officials to ensure that this study should include detailed analysis of how far people have to travel to reach their nearest petrol station, and how this has changed over time. He may count that as a significant victory for him and a tribute to the work he has done.
In conclusion—
Tom Greatrex
While the Minister is in the mood to instruct his officials to do various things in response to this debate, may I reiterate my point about the work the previous Transport Secretary said would happen, but which it appears the Department is now saying will not happen until after an OFT inquiry? Will the Minister look into that, and see whether it could happen sooner rather than later?
Mr Hayes
I thought that was the best point among many that the shadow Minister made in his speech. The OFT plans to report in January 2013. As the hon. Gentleman knows, it is looking specifically at the issue of transparency, and we want to feed its findings into our work. I will certainly take a look at the timing issue he describes, however, to make sure we are acting in a coherent and consistent way.
Mr MacNeil
I am grateful to the hon. Gentleman. Will he consider increasing the rural fuel derogation and extending the rural areas that are covered by it, not only in Scotland but in Wales and England?
Mr Hayes
Given what I have said about my credentials in respect of rurality, the hon. Gentleman can be absolutely convinced that my concern for rural areas in England, Scotland and the rest of our United Kingdom will be at the very heart of all I do.
I again thank my hon. Friend the Member for Harlow for securing this debate, and in response to his three core points I say the following. First, petrol prices are high, but had we implemented the previous Government’s policies, they could have been 10p per litre higher, and we have taken location-specific action through the rural duty rebate scheme.
Secondly, DECC analysis shows that changes in the price of crude are passed on at the pump—although there is a significant time delay. The Government are keen to establish whether there is evidence to the contrary, however, and we will revisit our analysis. The OFT will also look at this, and I encourage those with evidence to give to submit it before the due date.
Thirdly, price transparency is important to build consumer confidence. In the call for information, the OFT noted that DECC and the Department for Transport have been in discussions with the fuel industry on possible ways to improve information on fuel prices, and we have agreed to await publication of the OFT’s findings before taking further steps. Let there be no mistake, however: I shall make sure that coherence informs our approach to that cross-departmental work.
The Government take seriously the potential for manipulation of reported price benchmarks and look forward to the International Organisation of Securities Commissions recommendations. We will consider how to take them forward in the G20 and how to implement them in the UK, to ensure that oil price benchmarks are not open to manipulation. As I have said, I will write to the Financial Services Authority to express Members’ concerns. I encourage my hon. Friend and others in this House to work constructively with the OFT and await the result of its call for information. As has been said, at this stage the OFT has not ruled out a more detailed market study. This first step of the call for information will enable the OFT to take a view on potential market concerns and the need for further work. The OFT will publish early next year, alongside recommendations for action by others to support fair and open competition in the market.
Let me end by saying that energy is vital for growth, as fuel provides the power for our economy. However, this is also about the effect on consumers—it is indeed about social justice. In my job, as the people’s Minister from the people’s party—the party of Wilberforce, Shaftesbury and Disraeli—the people’s concerns for social justice will motivate, inspire and inform all I do, in this matter and in others.
Martin Vickers (Cleethorpes) (Con)
I am not sure whether I can match the excitement generated by the Minister but, in concluding this debate, I, too, join in the congratulations to my hon. Friend the Member for Harlow (Robert Halfon), who has certainly made his name—he is now known nationwide as “Mr Fair Fuel”. It is a pleasure to serve as his deputy on the all-party group on fair fuel for motorists and hauliers.
This has been a good debate, with every speaker highlighting the impact on their constituents. Without doubt, the cost of living is, along with the other economic issues of jobs and growth, the No. 1 concern of our constituents. There is a widespread view that the tax and duty on petrol is way too high, and that it is unfair, particularly as it falls disproportionately on hard-working families, especially in rural areas, as has frequently been mentioned. People know that the Government are particularly keen to help and support them and, having heard the Minister’s comments, I am confident that that is the case. As my hon. Friend the Member for Camborne and Redruth (George Eustice) and others have said, the Government are particularly alert to the problems affecting hard-working families. It has been said numerous times but it cannot be said too often that petrol is 10p a litre cheaper now than it would have been had the Chancellor not acted.
It is worth mentioning that in my constituency many hundreds of people work in the oil industry at the refineries in Immingham and along the Humber bank, and the industry is vital to the local economy. Nevertheless, the public remain understandably cynical about, and suspicious of, what they see: vast profits; volatility in markets; and the results of falls in oil prices not being quite as dramatic as those of increases. My hon. Friend the Member for Rossendale and Darwen (Jake Berry) referred to a broken market, and my constituents, who live within walking distance of a refinery and often find that they get a better deal by driving many miles to save a few pence a litre, can testify to that.
It is a long time—14 years, I believe—since the OFT last investigated the sector, and I thank the Petrol Retailers Association for bringing that to my attention. Clearly, another investigation is urgently needed. As my hon. Friend the Member for Harlow has pointed out on a number of occasions, other G20 nations are taking regulatory action and we need to ask ourselves why we are so far behind. While we push for a full investigation, I also want to give my support to the call for evidence. I encourage, as the Minister did, all Members to submit evidence.
Our constituents rightly expect the discrepancies in costs that flow from oilfields and platforms to be immediately reflected at the pump. While we are seeking the how and why, what should concern us more than anything—we have heard evidence of this in the debate—is the burden that this cost places on the average person and on the average business, and on their ability to contribute positively to the economy.
Jason McCartney
As one of the signatories to the motion, I praise my hon. Friend the Member for Harlow (Robert Halfon) for securing the debate. Does my hon. Friend the Member for Cleethorpes (Martin Vickers) agree with me, and with many of our fair fuel and petrol price campaigners, that Governments can do nothing more at the moment to help hard-pressed families, commuters and small businesses than cutting fuel duty and that oil companies can do nothing more to support our economy at this tough time than acting fairly and transparently in the way they price their products?
Martin Vickers
I agree entirely. My hon. Friend, as always, gets right to the heart of the matter.
My hon. Friend the Member for Mid Norfolk (George Freeman) gave a particularly good analysis of the impact on rural economies. As other hon. Members have said, many of our constituents in rural areas now have to drive much further to fill up as a result of the drastic reduction in the number of petrol forecourts, particularly in the independent sector. It is worth pointing out that we should not blame the independent operators. They are local businessmen seeking to make a decent living. These fuel prices are affecting the average person every day of their lives in a negative way. The more that goes in tax, the less there is to spend and boost the local economy. I was pleased to hear the Minister speak about being robust and that he is not reluctant to take further action and would be prepared to revisit the many issues raised if new evidence is brought forward, which is encouraging.
We have had an exceptionally good debate. The root cause of the problem might be market manipulation, and it might not. Despite allegations one way or the other, our constituents deserve the real answers. In summary, I fully support the OFT’s moves so far but believe that, along with the FSA, a full, independent and transparent investigation is needed. As I have said, the unfair price of fuel at the pumps is not the fault of the independent forecourts, which have seen high rates of closure over the years; it is possibly the outcome of price fixing by the people involved in the oil market. Our country cannot survive these continued price hikes. They damage individuals and business. It is good to see cross-party support for the motion.
Question put and agreed to.
Resolved,
That this House notes the call for evidence by the Office of Fair Trading (OFT) on competition in the UK petrol and diesel market; however, believes that the OFT and Financial Services Authority should launch a full investigation into oil firms active in the UK; calls on the Government to consider the emergency steps being taken in other G20 countries to reduce fuel prices; notes, for example, the announcement by President Obama to strengthen federal supervision of the US oil market and to increase penalties for market manipulation, and the move by Germany and Austria to establish a new oil regulator with a remit to help stabilise the price of petrol in those countries; and further urges the OFT to note that the Federal Cartel Office in Germany is now investigating oil firms who are active in the UK following allegations of price fixing.
Tax Avoidance and Evasion
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Michael Meacher (Oldham West and Royton) (Lab)
I beg to move,
That this House has considered the matter of tax avoidance and tax evasion.
I would first like to thank very sincerely the Backbench Business Committee for giving me the opportunity to raise this issue for debate. Tax avoidance and evasion is a cancer in Britain’s society today. The Prime Minister was right to condemn it as morally wrong and the Chancellor was right to condemn it as morally repugnant. The problem is that the Government’s actions to deal with it have been feeble and do not match those words, if indeed they are not downright evasive, as I shall show.
The extent of tax avoidance and evasion is much disputed, but even the Government admit that, along with uncollected taxes, it reached £42 billion a year in 2009, which is equal to one third of the entire UK budget deficit. Spread over the past six years, it amounted to £228 billion. The Tax Justice Network believes that the true figure might be up to three times higher. For the purposes of this debate and this argument, let us accept the Government’s figure at the moment—it is certainly big enough.
Mr Meacher
I am always ready to give way to the hon. Gentleman on these issues.
Steve Baker
I congratulate the right hon. Gentleman on securing the debate; it was an honour to join him in bidding for it.
I wanted to check where the right hon. Gentleman was getting his figures from. I am looking at the 2011 tax gap document from Her Majesty’s Revenue and Customs. It gives a figure of £35 billion for 2009-10. Where did he get the figure of £42 billion from?
Mr Meacher
I got it from the same source. I thought that the figure for 2008-09 was £42 billion. I shall write to the hon. Gentleman later. The average over the period is, I think, £38 billion and I am sure that the level reached £42 billion.
The Exchequer Secretary to the Treasury (Mr David Gauke)
To be helpful, I should say that I think the right hon. Gentleman is citing the 2008-09 number, while my hon. Friend is citing the 2009-10 number.
Mr Meacher
I thank the Minister for that helpful intervention. Once again, I find myself at one with the hon. Member for Wycombe (Steve Baker).
The haemorrhaging of tax revenues on the scale that I have described matters a great deal. First, and obviously, it is deeply unjust because tax avoidance and evasion are heavily concentrated among the big corporations and the mega-rich. If they pay hugely less than their real liabilities, that must mean that, for any given expenditure, those on average and low incomes have to pay more. That is always unjust, but it is particularly unjust at a time of prolonged austerity.
Secondly, there is the obvious point that if tax avoidance were cut sharply, many of the Government’s cuts in public spending and benefits would not be necessary and, I think, could not be justified. Thirdly, the tax avoidance industry—I do not exaggerate in saying that it is a parasite on the body politic—would be rendered largely obsolete.
The fact that City lawyers and accountants are paid vast sums to get round and neutralise what Parliament plainly intended in its Finance Bills is an open sore that would infect any democratic and fair society. The fact that they are allowed to do it makes monkeys of the Government. The fourth, and very important, point is that if most tax avoidance were stopped—I realise that it will never stop completely—companies would be forced to compete not on the basis of who was best at abusing tax law but on the quality of their goods and services. The benefit for the British economy would be substantial.
What has been the Government’s response? Tomorrow is the last day of the Government’s consultation on what they call their general anti-abuse rule, or GAAR, for tax. The background to that repays some examination. The Government commissioned the Aaronson group—Graham Aaronson is a prominent lawyer—to advise on the construction of such a rule. The group reported last November, I think. Extraordinarily, the report states right at the start that a broad anti-tax-avoidance rule is not necessary or desirable; it should apply only in the most extreme cases, so that for the overwhelming majority of cases circumventing taxes should continue as before.
I should point out that Aaronson has only ever represented companies or persons against HMRC; he has always acted pro the tax avoidance industry and never pro tax. Appointing him is rather like putting a poacher in charge of the grouse moors. Aaronson chose as his adviser Lord Hoffman, the man who killed the Ramsay principle—the general anti-tax-avoidance principle, or GANTIP—in the Westmoreland Investments case in 2001. The Government’s two key advisers on anti-tax-avoidance measures were carefully chosen in the sure knowledge that they would never recommend any such action. Thus, of course, it has proved. The Aaronson report recommended that if a general anti-abuse rule were accepted at all, Her Majesty’s Revenue and Customs should be obliged to consult and get the approval of a tribunal before it could be used against any particular person or company. In other words, the Government’s official tax collection agency should have to get permission from an external body before it could exercise its legal powers. That is an extraordinary proposal. However, it gets worse. The Aaronson group proposed that the tribunal should have three members—fair enough—of whom two should be from the tax avoidance industry. That makes it an open and shut case: the general anti-abuse rule will certainly gather dust on the shelf.
Caroline Lucas (Brighton, Pavilion) (Green)
The right hon. Gentleman is making a compelling case to suggest that the Government are not fully enthused about this kind of idea. Will he give me a sense of where his Front Benchers stand on the matter? I absolutely support his views, but I would love to know whether they are behind him.
Mr Meacher
We have our representative on the Front Bench who will speak about that, but I will come to what I think should be done.
The Government have said that they will accept the Aaronson proposals in full—what a surprise! So the Prime Minister’s boast that he was cracking down on aggressive tax avoidance turns out to be nothing more than a paper aeroplane job devised in the certain knowledge that it will never fly.
After this tragic-comic charade, what will Government’s Bill, scheduled for next year, achieve? If it is used at all, other than as a fig leaf to cover the Chancellor’s nakedness on this issue, I think that it will be drawn extremely narrowly to include only the most egregious and extreme cases of tax abuse. It will exclude national insurance and VAT, which are a pretty large part of the tax system, and will not even regard the shifting of income, profit or gain from one tax category to another in order to gain a tax advantage as being within the definition of tax avoidance. I ask you, Mr Deputy Speaker! Indeed, the fact that the Government’s own economic impact assessment for the proposed general anti-abuse rule states that it will have little or no measurable impact makes it absolutely clear that the anti-abuse rule is just a massive white elephant.
Anas Sarwar (Glasgow Central) (Lab)
I congratulate my right hon. Friend on securing this important debate. He is rightly making a powerful case about tax avoidance in the UK, but does he recognise that it is also a global problem? Recent OECD statistics show that the amount of tax avoidance that takes place in developing countries is three times as much as the global aid budget, and the Government’s recent legislation on controlled foreign companies makes it easier for companies to avoid paying tax in developing countries.
Mr Meacher
I agree. That is a question to which the Minister should reply. What concerns me is that this Government, out of those in all the western countries, particularly those in the EU and the OECD, have been dragging their feet the most on this issue.
Why are the Government introducing this measure? That can only be a matter of conjecture, but I suspect, as does the Association of Revenue and Customs, which represents senior officials at HMRC, that its real purpose is to stop almost nothing while allowing the vast amount of tax avoidance that it will never address to be deemed ethically and technically acceptable when of course it is nothing of the kind—in other words, to move the goalposts even further towards expanding the boundaries of so-called legitimate tax avoidance. I hope that the Minister will convince me and the House that that is not so, but that is certainly how many people read it.
Turning to the point raised by the hon. Member for Brighton, Pavilion (Caroline Lucas), what should be done in place of this mealy-mouthed Government measure? First and foremost, we need a general anti-tax avoidance principle—GANTIP—enshrined in statute. That would allow HMRC to declare null and void any scheme whose primary purpose was an artificial contrivance to avoid tax rather than to act as a genuine economic transaction. I think that most people in this country would agree that that is an extremely fair and reasonable proposition.
That is exactly what my private Member’s Bill, the General Anti Tax-Avoidance Principle Bill, would do. It is due to receive its Second Reading tomorrow and I expect the Government Whips to give it a fair run. It was prepared and drafted by Richard Murphy, one of the founding members of the Tax Justice Network and, I can say without any exaggeration, one of the country’s leading tax accountants. It would overturn the rule in the so-called Duke of Westminster case in 1936, which has underpinned the tax avoidance activities of the accounting, legal and banking professions ever since for three quarters of a century. In effect, there is an economic test at the core of my Bill that can be applied if, having taken into account all the relevant circumstances relating to the economic substance of a transaction, it appears that tax is not being paid by the right person, in the right amount, in the right place, at the right time, or at all
GANTIP is crucial, but other measures are also needed and I will address them briefly. The Government should seek an international financial standard that requires country-by-country reporting by transnational corporations in order to block the immense loophole of transfer pricing. The European Union savings tax directive, which the UK Government have repeatedly tried to water down, should be strengthened to include offshore trusts, which are a favourite tool of the tax-cheating industry. The non-dom rule was introduced in 1799—it is somewhat anachronistic—and the UK is now the only country in the world, apart from Ireland, I think, that does not tax worldwide earnings. It should be abolished.
A much tougher line should be taken on closing down UK tax havens. The UK Crown dependencies hold some $7 trillion of US bank deposits and probably dodge some £30 billion of tax. The Cayman Islands have just 30,000 inhabitants, but they are home to 457,000 shell companies. We should adopt the rule that unless such territories provide full and automatic information on all such funds that can be taxed, any transactions with such tax havens should be declared illegal.
In conclusion, I do not often agree with the Prime Minister and the Chancellor, but tax avoidance is morally wrong and morally repugnant. It is high time that we had in this country a Government whose actions show that they actually believe and support that.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am going to introduce a 10-minute limit, so we should get everybody in.
Steve Baker (Wycombe) (Con)
I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on securing this debate. He has introduced it with the highest standards and in the finest traditions of the House. I know that he feels he is on the moral high ground, and in many ways he is. I hope that the whole House will join me in wishing him the speediest of recoveries from his injuries.
On evasion, Parliament is absolutely entitled to expect the law to be obeyed and its will must be expressed in law. If people are able to behave lawfully but other than in accordance with the spirit of the House, the law should be changed, which is a point that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has made on numerous occasions. I am prepared to accept the possibility that I am the only Member who does not know the tax code from one end to the other. I see that you are nodding, Mr Deputy Speaker, so perhaps I am alone in that regard.
About 12 years ago, when I worked as a software engineer servicing HMRC, I recall setting up electronic checking for certain pay-as-you-earn, end-of-year returns. It simply was not possible to submit a valid expenses and benefits return in 2001. We had to go to some lengths to persuade HMRC that it had to change its rules if it was to have an internally valid submission. Since then, the tax code has lengthened infamously. I may be alone in not understanding the tax code, but it appears that in some instances, HMRC has not understood it either.
My first point is that Parliament’s will must be expressed clearly in the law and that people should obey it. I object to the most complex tax avoidance schemes for two reasons. First, as was set out by the right hon. Member for Oldham West and Royton, if people are setting up sophisticated schemes to avoid the clearly expressed will of Parliament, they are shifting the tax burden on to others who are less able to pay. I agree with him about that.
My second reason was not given by the right hon. Gentleman. My most profound objection is that people quit the moral high ground when they engage in such schemes. They make it more difficult for those of us who believe that low taxes are in the general interest to make our case. They open the door to another industry—not merely the tax avoidance industry—that uses the complexity in our tax system, its opaqueness and its openness to various interpretations to construct a case that discredits not only our tax system, but the rule of law. For those two reasons, I object to the sophisticated schemes that we all know so well.
I will move on to the scale and the breakdown of the tax gap. We had an exchange earlier about the figures. The total tax gap in 2009-10 was £35 billion. Of that, £5 billion or 14% was due to avoidance and £2 billion due to error. The remaining categories were broadly equal. Criminal attacks, evasion and the hidden economy all involve breaches of the law and ought to be pursued in the usual way. I am grateful to the Minister for acknowledging that. The other three categories were a failure to take reasonable care at £4 billion; non-payment, which includes insolvency, at £4 billion; and legal interpretation at £5 billion. Although those figures sound large, we need to bear it in mind that avoidance and legal interpretation, which is a potential source of avoidance, make up £10 billion of the total of £35 billion stated by HMRC.
Caroline Lucas
I share the hon. Gentleman’s opposition to the level of tax evasion and avoidance. Does he agree that it is therefore regrettable that his Government are cutting the number of people working at HMRC by about 7,000? The very people who could be chasing after tax avoidance and evasion are being sacked by his Government and we therefore do not have the resources to go after it. Is that not the worst kind of false economy?
Steve Baker
To return to my earlier remarks, having serviced HMRC as a technical consultant on and off for a very long time, I could give the hon. Lady lengthy examples of enormous waste, partly through people not being given adequate skills. I will not bore her with the technical details, but a job that I could have done in about two days with software was going to be done over the course of six months by a team of 20. That kind of nonsense has to stop. They were doing something by hand that ought to have been done using software. The level of work that people were doing was almost degrading. People must be upskilled so that such nonsense can be brought to an end. I therefore support the Government in their drive to increase efficiency at HMRC.
We all know why tax avoidance happens: people desire to pay less tax. The Government know that. Through forms of tax avoidance that are barely worthy of the name, such as individual savings accounts and pensions, the Government have always deliberately incentivised certain behaviours by creating tax breaks. That is not really the subject of the debate. I mention it only to demonstrate that we all understand that everybody would like to pay less tax. I would be grateful if the Minister confirmed for anybody who is watching, listening to or reading this debate by what mechanism they can make voluntary payments to the Treasury, not because I wish to make one, but because I think that it ought to be established how one could make a voluntary payment if one so wished.
The heart of this debate is the question of altruism. My feeling is that Members of all parties often feel that people constructing sophisticated avoidance schemes are insufficiently altruistic. There is a wide range of perspectives on that. Rarely in this country do we hear the cry, “All tax is theft”, but at one extreme there is the rather childish hysteria of objectivism, which totally rejects all altruism, and at the other there is the altruism of the state collective.
As it happens, I believe that having the state collective as the basis of all altruism is extremely dangerous. I am a great believer in individual altruism, so I say to the wealthy that they should not only pay their taxes as Parliament intends but be altruistic and engage in philanthropy wherever they can. Let us win the moral high ground for lower taxes so that people can give more voluntarily and demonstrate that voluntary individual altruism is a better basis for society than coercion. I believe that liberty is the proper context for all virtue. There is very little virtue in obedience to an inescapable authority or in simply submitting to the pay-as-you-earn tax system, but there is a great deal of virtue in someone making their fortune and choosing to give it away.
There seems to be a suggestion inherent in the debate that people who are wealthy have in some sense done something wrong. If somebody in business has at every step created value for other people without force or fraud, they are justly wealthy. If people believe that wealth has been obtained by criminal acts of force or fraud, criminal prosecutions should be pursued. If people are wealthy because they have made a just profit and created value for society, they should be applauded. If we are to have a free, just and prosperous society, we must reconcile ourselves to the notion that profit is a social good.
An enormous amount of damage is done by misinformation. The Tax Justice Network, which was mentioned earlier, has been discredited in another report, and we could go to and fro arguing about who is right and who is wrong, but it is important that people do not discredit the tax system unnecessarily.
My next point is about the rule of law and the general anti-avoidance rule. I initially ranted about that to the Attorney-General, and he related a case—I cannot recall which right now—indicating that there is a long-standing tradition of HMRC being able to interpret the law in a particular way in order to apply Parliament’s will. I am extremely sceptical of anything that allows the law to be applied retrospectively so that people cannot predict how their actions will be interpreted.
Having visited sub-Saharan Africa, Egypt and Pakistan since my election, I am absolutely convinced that the primary reason for poverty in those places is that they lack the rule of law. We interfere with the rule of law at our peril, and if we are really serious about the prosperity of the poorest, we must ensure that it continues to be possible in our country to invest capital productively to raise real wages. That requires certainty and the rule of law.
What, then, is to be done? I will not even be able to attempt in one minute and 50 seconds to enter into evidence the 2020 Tax Commission’s report on the single income tax, but I encourage the Minister to proceed with radical tax simplification. I believe that much of what we are discussing could be dealt with if taxes were both simpler and lower. At this stage, with the mess that we have been handed, it seems to me that there is no chance of low taxes before the election. I would be astonished if the Government were able to deliver them. However, I encourage them to do everything possible to simplify taxes so that they can be applied equally to all and we can end the discrediting of the law and Parliament that happens when people engage in schemes that are obviously mendacious. I am grateful to the right hon. Member for Oldham West and Royton for securing the debate and hope that we will have a productive exchange of views.
Margaret Hodge (Barking) (Lab)
I, too, congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing the debate. I welcome the growing public interest in these issues, which is perhaps not reflected in the attendance in the Chamber on a Thursday afternoon. An issue that is sometimes seen as dry and complex and often portrayed as too difficult or obscure for people to get their heads around is now accepted as a matter of great public interest. I welcome the determination of the media in that regard, particularly that of The Times, which has done a good job of investigating the issues and identifying and exposing what is becoming a plethora of tax avoidance schemes that persist in the UK.
Hard-working British families, who have had to cope with a cut in their living standards and less money in their pockets because of the state of the economy and who pay their proper contribution in tax to fund all our collective endeavours and ensure that we have the public services and infrastructure on which we all depend, are rightly angry when they see a small elite in Britain—wealthy individuals and profitable large corporations—avoiding tax and putting so much time, energy and money into finding ways to avoid making their proper contribution. It is a terrible sickness at the heart of our society that too many well-heeled individuals and profitable corporations simply do not accept that they, too, have a duty, coming from their legitimate wealth, to contribute according to their means to the society from which they expect to take according to their needs and their expectations. Too many rich individuals and profitable companies see tax avoidance as clever, cool and worthy of praise and admiration, whereas it is immoral and wrong.
If we are to maintain public confidence in the tax system, it is vital that everyone knows and sees that it is fair, with everyone paying their fair and proper share to the collective purse. Tax avoidance and evasion are important because huge sums are involved. We have had the HMRC estimates and I have seen a Tax Research UK estimate that puts the tax gap at £120 billion. Whichever argument we believe, we are talking about many, many billions. A quarter of that sum is down to tax avoidance and evasion, but we should also have regard to the fact that the Government, in figures published last year, admitted writing off nearly £11 billion of tax that HMRC called “uncollectable”.
When the Select Committee on Public Administration considered how HMRC handled the large tax disputes with major corporations, we found that up to a potential £25 billion of moneys were outstanding to the Exchequer, although I accept that that figure is not precise. That is a huge sum and we need to set it against the cuts the Government have chosen to implement, such as the £24 billion per annum cuts in benefits, tax credits and pensions that hit the most vulnerable in our society.
The PAC considered a range of tax avoidance issues, including how HMRC handles disputes with large companies, the use of personal service companies and how those who engage in business with and make their money out of the public sector arrange their affairs to avoid tax. This autumn, we will receive a report from the National Audit Office on the tax avoidance schemes exploited by wealthy individuals exposed by The Times, which found that wealthy people were too often paying as little as 1% of their income on tax arrangements—for example, the K2 scheme used by people such as Jimmy Carr.
Based on that work, I want to focus on four points on which I think that the Government can take practical steps to tackle and stop avoidance and evasion. First, greater transparency is vital. We know so little and people get away with so much because the principle of taxpayer confidentiality is used and, in some cases, abused to prevent proper accountability to the public by the tax authorities. We uncovered the scandal surrounding the Goldman Sachs settlement because of the brave and determined efforts of one whistleblower. Questions surrounding other deals remain, such as, in the case of the Vodafone deal, whether the amount finally paid was correct and whether it was right for the company to be given extra time to pay. The Government should consider full transparency on the tax negotiations for the FTSE 100 companies. They are publicly quoted companies that publish their accounts, and we know from their accounts how much they pay, so we should also be able to monitor how settlements are reached and why the amounts are determined. People advising those companies use knowledge gained from negotiating one deal to get a better settlement for other clients. The public should also have that knowledge, so that they can consider whether avoidance exists.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I agree with the right hon. Lady and I thank her and members of her Committee for their diligent work. First, have they considered looking at countries that have a full transparency regime for publicly quoted companies? Secondly, will they ensure that no company that does business with the Government can use offshore tax havens in any part of its ownership arrangements? That is currently very common, particularly among public utilities such as water companies and others that supply key, nationally important infrastructure.
Margaret Hodge
The Committee tries to look at international comparators, but it does not do enough such work. The right hon. Gentleman’s second point was to be one of my suggestions to the Government, and I agree with him entirely. My final point on transparency is that there is a belief in the country at large that bigger companies are not treated in the same way as small and medium-sized enterprises, which are struggling and often pursued relentlessly by Her Majesty’s Revenue and Customs. That belief will be shattered or broken only if we have full transparency and people can see that there are no sweetheart deals.
My second point concerns the proper resourcing of HMRC to tackle avoidance and evasion. Of course we want more efficiency from everyone employed at HMRC. The Labour Government cut 3,000 jobs, but I think that was wrong because evidence shows that for every £1 invested in pursuing tax avoidance, £10 is raised from the money collected. We should, therefore, be sensible about how we cut the deficit and we should invest in those areas where we will get money back.
I say to the Minister that it is worrying to see the threshold at which HMRC intends to pursue fraud actions raised because it does not have enough legal resources. It is also worrying that the extra money released by the Government in the spending review is not currently being used because HMRC cannot work out the training programmes that are required to get individuals up to speed for work on tax avoidance and evasion.
John Pugh (Southport) (LD)
One of the reports considered by the right hon. Lady’s Committee contained an acknowledgment by the Treasury that £1.1 billion was lost as a result of premature staff reductions. A report by the National Audit Office gives the figure of £1.1 billion losses to HMRC as a result of accelerating the cuts.
Margaret Hodge
I accept that entirely and it was not a sensible way of proceeding. I also want to mention the quality of staff in HMRC. When we carried out the Goldman Sachs review, it was worrying to find that so few people at the heart of HMRC who were engaged in those negotiations had what was called a “deep knowledge” of tax. They were up against highly skilled, knowledgeable and experienced—and highly paid—people, who were advising companies and high-wealth individuals. We must look at both quality and quantity of staff.
My third point is about the outrage caused by people whose income comes out of our taxes, but who fail to make their rightful contribution. I applaud the way the Government responded to the disclosure that some civil servants have personal services companies, and I hope that their work, and the work done by the Committee to support the report on that, will ensure that such practices no longer exist within the civil service. Evidence from the BBC, however, was shocking. Some 25,000 people working for the BBC are on off-payroll contracts, including 13,000 so-called “talent individuals” who appear on our television screens or on the radio. That is not an acceptable practice—goodness knows how it evolved—and I urge the Minister to take action on that and in local government where personal service companies still exist. I should tell the Minister that, in 2010-11, HMRC investigated only 23 cases of potential abuse of the use of the personal service company vehicle, which was down from 1,000 such cases in 2003-04. There is a resources and priorities issue within HMRC. Those people should set an example and show leadership in the fight against tax avoidance, and we should be able to see that they are doing so.
Equally—this point was raised by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes)—companies that benefit from public expenditure and provide infrastructural services from the taxpayers’ pound should pay their proper tax to the Exchequer. That should be written into the contracts. The problem that the Committee has uncovered most is in relation to private finance initiative projects. An assumption is made by the Treasury in the cost-benefit analysis of whether to go ahead with a PFI project that income will come back to the Treasury through corporation tax, yet all too often the companies that take the PFI contracts or buy them subsequently take their interest offshore. A recent survey by the European Services Strategy Unit found 90 firms in PFI contracts funded by the taxpayer that were based offshore for tax purposes. HSBC infrastructure unit, which has a lot of PFI deals, paid only £100,000 in tax on £38 million in profit—a tax rate of less than 0.03%.
Finally, I agree entirely on simplification. Complexity breeds avoidance and evasion. All Governments are to blame. They might introduce complexities with the best of intentions, but they end up as wheezes for avoidance and evasion. Labour’s film tax credit was a classic example of that.
I urge the Government to stop talking—we all talk the same talk. We must now deliver on simplification and on those simple ways to ensure that tax avoidance is not used as an excuse for cutting public services.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to follow the right hon. Member for Barking (Margaret Hodge) and I join the congratulations to the right hon. Member for Oldham West and Royton (Mr Meacher) on securing this important debate. I have spent a lot of the last few months debating tax—it came up in the Finance Bill and at various other times—which shows how important it is. I promise that I will not list any Take That songs to embarrass celebrities who seek to avoid tax. I got enough flak for that the last time I tried it.
I agree with hon. Members who have spoken that it is absolutely right that the Government do everything they can to minimise tax evasion and avoidance. All hon. Members want everyone to pay the amount of tax they fairly owe, because that reduces the burden on everybody who does so. It is right that the Government take every step they can within the legal powers they have to ensure that that happens.
Hon. Members have discussed how much the tax gap is. The last HMRC figures say that it is £35 billion. I have served on the all-party group on beer, which has inquired into measures to tackle beer duty fraud, so I have been through in some detail the weakness of tax gap calculations. The same issue came up in the Select Committee on Northern Ireland Affairs, which has had an inquiry into fuel duty. There is a problem in calculating how much revenue we do not have—we do not get the revenue, so it is quite hard to know what it would be—but I suspect that £35 billion is not a million miles off either way. I fear that the figure will have increased in the last tax year. I am told that if we look at the difference between 2008-09 and 2009-10, we see that the big reduction was in the loss of VAT, which was probably caused by the slight lowering of the VAT rate. Obviously, the rate has gone up since, so the tax gap will probably have increased slightly.
A report has shown that the UK tax gap is one of the lowest in the developed world—it is about 14% of tax revenue. I believe the gap in the US is somewhat higher, so it is not as if we are the worst in the world or have the weakest regime. We might even have one of the best.
It is important to understand that the tax gap is not entirely due to complicated tax avoidance or deliberate tax evasion. Much of it is innocent error and people lacking care in filing their returns—they do not actively seek to get it wrong. Measures to tackle avoidance or evasion will not close all £35 billion of the tax gap. There is not much we can do to get tax off someone who has gone bankrupt. Perhaps we could do more to prevent the amount of tax they owe from building up that high, but there will always be some loss when a business goes bust before paying its taxes. So we will not get that £35 billion down to zero—this will not be the panacea for the Government’s deficit problems—but it is right that we seek to get it down as low as possible.
I commend some of what the Government have done. Only this week, we saw a press release from the high tax unit showing that it was well ahead of its target and had already saved the Exchequer £500 million. The Government have adopted the right strategy, building on that of the previous Government, to deal with tax avoidance: they get in the disclosure of these ridiculously aggressive schemes, which ought to be closed down, and then they close them down. Then the strategy is to improve and tighten tax legislation for the areas most under threat, so that those opportunities are not there.
I am not convinced, however, that a general anti-avoidance or anti-abuse rule is the right way to go. I have concerns that it would contravene the rule of law. We, in Parliament, should pass laws that are clear, so that everyone understands what the law is, and then we can expect taxpayers to follow it. And if they do not, they can be severely punished. The problem with a general anti-abuse rule is that it allows the Revenue to say, “Okay, maybe you’re within the law, but we don’t think the law should have said what it said, so you should’ve been outside the law, even though you weren’t, and so we’re going to punish you.” I am not sure that we would want to give that power to a state agency in any other field of the law—the power to enforce not the law as we set it but the law as it might think we ought to have set it.
However much we stretch the general anti-abuse or anti-avoidance rule, fundamentally we are saying that the Revenue can tackle abuse that ought to be tackled by saying, “Ignore what Parliament says. Produce something that you think it should have said. And then enforce that.” I worry that that is a step too far—not that most of the people who would be caught would deserve anything less than they get, but the Revenue would be able to raise that stick against all manner of innocent individuals and businesses as well.
I worked as a tax adviser before entering this place. I can assure hon. Members that I was drawing up advance agreements on transfer pricing. I was not engaged in any naughty tax avoidance of any kind. Revenue Inquiries, in using its powers, writes, “Please send me this information. I think this doesn’t work as you say it does. By the way, if you don’t agree, I’ll have to use the general anti-avoidance rule.” And we have this stick being wielded in all manner of innocent situations in which businesses or individuals have got themselves into a complex situation where tax law is not clear, especially if there are a lot of transactions involving overseas parties.
Those individuals might be making perfectly sensible commercial attempts to apply the law as they think it is. They might not be trying to avoid tax but might be trying to be fully compliant, so the possibility of having that stick held over them and being told, “If you don’t pay up, we’re going to throw all these huge things at you,” will rightly concern lots of businesses around the country. We risk using a large sledgehammer, missing the nut and just increasing the burden on taxpayers. We have to look at the downsides of our tax regime appearing too unfriendly and uncommercial. How much investment will we lose if international businesses and individuals think that this is not a great place to do business? We have to be careful, therefore, about how much power we give the Revenue to apply its own interpretation of the law, rather than getting Parliament to do it.
Simon Hughes
I understand all the arguments and have seen the reports about general anti-avoidance measures and so on. Is there not the principle, however, that we should expect everybody, whether individuals or corporate bodies, to pay in tax at least a certain percentage of their profits every year to the Revenue—whether 20%, 25% or whatever—so that people know that they will not be allowed, by clever ruses, to avoid a minimum obligation to the state in which they live and work?
Nigel Mills
I thank my right hon. Friend for his intervention. Although that idea sounds attractive, and although various regimes around the world have minimum profit taxes and things like that, it would add huge complexity to our already too complicated tax regime. What we want is for people to be easily able to work out what tax they owe and then to pay it.
I have tabled amendments to both Finance Bills while I have been here to make the tax regime simpler, so that companies can get their tax profit much closer to their accounting profit. It should be much easier for them to know what tax they ought to pay, and if they have made an accounting profit, they ought to pay tax on it. That kind of reform would be a far better way of going down this line and making the transparency agenda much clearer. We do not need most of the complicated adjustments, reliefs or allowances that were introduced, probably to support well-meaning ideas, over the last 150 years. Our regime is far too cumbersome. It incentivises things that we do not mean to incentivise and penalises things that we probably ought to encourage. If we moved to a much simpler, flatter regime, where what a business reports as its accounting profit is pretty much what it pays tax on, that would be in everyone’s interest. It would reduce avoidance and make it a lot easier for business to comply and a lot easier for the Revenue to see that there was compliance, so that the Revenue’s resources could then be focused on tackling avoidance and evasion, which is what we ought to see.
I would like to use my remaining time on a report published quite recently by the RSA called “Untapped Enterprise”, which I would recommend Members read. It looks at how we can try to move people out of the informal economy and get them to be fully compliant as employers and taxpayers. The RSA’s research and the conclusions it reached are quite interesting. The report says that a significant proportion of new entrepreneurs feel that they need to stay in the informal economy while they test out their business and see whether they can make a profit on it, because they know that once they get caught by all the tax compliance and other reporting requirements, that can take up so much time and money that they might not be able to get their business off the ground at all. Most of them do not stay in the informal economy because they want to avoid tax; rather, they just want to focus on running their business.
Some of the ideas in the report for tackling the hidden economy are quite interesting. It makes the point, which has been raised in the debate, that we need to nurture the concept that paying tax is right and moral, that we get proper value for public services from doing so and that everybody ought to be doing it. The last thing we want to encourage is a situation where people think the Government are against them, that the taxman is an enemy or that avoiding tax is a perfectly sensible, reasonable thing to do because they think, “It’s them versus us,” or, “Every penny I can save is a good thing.” We need to make the case that paying tax is the right thing and everyone should do it.
While I am on this subject, I agree that we need to reform the non-dom rules. I cannot see any justification now for saying that because someone’s father was born outside the UK they do not have to pay full tax, even though they have lived here for 30 years. There should be a cut-off at, say, 10 years, so that once someone has been here for 10 years as a non-dom, they lose their non-dom status and have to start paying tax on their worldwide income. That would be a fair compromise between not discouraging people from coming here in the first place and getting our fair share of tax out of them.
The report also sets out the need to simplify the formalisation procedure. We need to make it simple for people to register their businesses for tax and to start paying. It needs to be simple to work out how much tax is owed. Let us not have people making the excuse that they did not pay tax because they did not know how much they were supposed to pay.
My final point is that we are moving towards a cashless society. It ought to be harder for business to be informal, because it is becoming more difficult for people to pay cash—indeed, I do not carry around a large amount of cash to pay for things with. That should move us in that direction, but we should also say to consumers, “Don’t pay people in cash; don’t encourage tax avoidance.”
Mr David Winnick (Walsall North) (Lab)
I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on initiating this important debate. I hope that I can take up one or two of the points made by Government Members.
The overwhelming majority of people in this country pay tax through pay-as-you-earn, in the same way as we in this House do. In my constituency, the average salary for full-time employment is under £23,000. I think we can proceed on the reasonable assumption that my constituents are not making inquiries about how to set up personal service companies, let alone make offshore tax arrangements. What is at stake, as my right hon. Friends the Members for Oldham West and Royton and for Barking (Margaret Hodge) rightly pointed out, is fairness and justice.
It simply cannot be right for some of the richest individuals in this country significantly to minimise their tax liability. My right hon. Friend the Member for Barking also made the point that it cannot be right that those who receive a very high income—£500,000 or more—pay a lower rate of tax than my constituents who are earning £23,000. It is Robin Hood in reverse. That is why this debate is so important, and I hope that these discussions will not end without further action being taken by the Government.
The Prime Minister tried to make political capital out of the tax arrangements of a particular individual during the recent mayoral election in London, but it was that same Prime Minister who appointed Sir Philip Green to examine Government spending—I suppose we should be grateful that he was not asked to examine tax avoidance. The hon. Member for Wycombe (Steve Baker) said that we should not be unfair to those who create wealth, and that we should recognise their value. I do not dispute that, but I do dispute the way in which those who are heavily involved in industry, commerce or retail arrange their tax affairs in such a way that they pay nowhere near the amount of income tax that they should pay.
Steve Baker
I hope that the hon. Gentleman also heard me say that one of my two reasons for objecting to sophisticated tax avoidance schemes was that they involve people quitting the moral high ground. In a sense, I agree with him on this point but, ultimately, what I want is lower taxes.
Mr Winnick
I take the hon. Gentleman’s point. If we are all for fairness in income tax arrangements, perhaps action can be taken.
I want to illustrate my point about the tax arrangements of the very rich, and I shall return to Sir Philip Green. He is not a non-dom. He resides and works in the United Kingdom, and he no doubt pays a fair share of tax. That is not in dispute. However, the well-known shops with which he is associated are actually owned by his wife, and she lives abroad, in Monaco, where apparently no tax is paid. That is an example involving one person—there are others—that illustrates the unfairness in the United Kingdom. A great deal of revenue is undoubtedly being lost as a result of the arrangements of that very rich individual and others, and I do not believe that that is fair. It seems that, few years ago, Sir Philip paid himself a modest £1.2 billion bonus, a lot of which went through various offshore accounts and tax havens and finally ended up in Monaco, where his wife resides.
My right hon. Friend the Member for Oldham West and Royton mentioned the amount of revenue that is lost as a result of such arrangements; I do not think that the figure he mentioned was disputed. Obviously, we can imagine how that money could be spent on hospitals and other essential facilities. In any case, it is absolutely wrong that there should be two or more different tax arrangements: one for the vast majority of our constituents and others for those who are very well off. That is why these points are being made today, especially from this side of the House.
When the Prime Minister tried to score political points by mentioning a particular candidate in the recent mayoral election, he did not of course mention Lord Ashcroft, a long-time deputy Conservative party chairman. I know that some of the Ashcroft money helped to provide funds for Conservative candidates in marginal constituencies. Lord Ashcroft apparently gave a pledge to give up his non-dom tax status in order to sit in the House of Lords. As far as we know, nothing was signed but a pledge was given, and the current Foreign Secretary, then leader of the Conservative party, was satisfied. We know now—it came out in the last weeks of the previous Parliament—that no such arrangements were made by Lord Ashcroft, who remained a non-dom.
It is interesting to note that in the United States—the least socialist country among all the democracies—no offshore tax arrangements are in place for its citizens. Wherever US citizens work abroad or wherever their money goes, they are subject to US tax regulations. It is very different from here. I must admit to being somewhat surprised when I learned that this was the position in America. All these offshore arrangements, tax havens and the rest simply need to be tackled, although whether this Government will tackle them is another matter.
Let me take up what my right hon. Friend the Member for Barking said. One issue relates to billionaires using these arrangements; another is the matter of personal service companies. I must confess that until someone was appointed to a public institution—a very high-profile one—in 1993, I was not aware of personal service companies, the purpose of which is to minimise one’s tax. I wrote to the director-general of the BBC before the Public Accounts Committee took the matter up. I asked how many of the BBC’s most senior managers—those earning £100,000 or more—had personal service companies. I received a prompt and courteous reply—there was no attempt to evade the question, although I would have used freedom of information facilities if need be—and I was told that there was only one such person. That is one manager, but the different position regarding presenters has arisen from the PAC.
Some of the most prominent broadcasters—not confined by any means to those of the BBC, as there are the commercial channels and others—and some other very prominent people in the media, including some who perhaps have liberal leanings, have arrangements whereby the amount of tax they pay is considerably less than it would be through PAYE. For all I know, there could be complications and administrative difficulties with personal service companies, but it is unfortunate, to say the least, that these highly paid individuals, perhaps receiving £500,000 or over £1 million a year—good people in many respects, I am sure, and very professional, as no one would doubt, irrespective of their private views—use an arrangement that substantially minimises the amount of income tax they pay. That is absolutely wrong.
Mark Durkan (Foyle) (SDLP)
The hon. Member for Wycombe (Steve Baker) complained earlier about misinformation relating to tax avoidance. Was it not misinforming for the Government, at a time of high public indignation, to promise a “general anti-avoidance rule”, but then come up with something that is too narrow and limited to be deemed “general”, too indifferent and inert to be called anti-anything, and far too weak to be regarded as a “rule”?
Mr Winnick
I absolutely agree with my hon. Friend. Of course, I would not expect a Conservative Government to take effective action, and it is most unlikely that they will do so. In fairness to my own side, we took some action in some respects, although I would have liked bolder action. Like my right hon. Friend the Member for Oldham West and Royton and the hon. Member for Brighton, Pavilion (Caroline Lucas), I certainly hope that the next Labour Government—may that come about soon—will be far more stringent in dealing with these matters, which really need to be dealt with.
This country’s tax arrangements seem peculiar and odd, so let me repeat my earlier point. Whereas the large majority of people—my constituents and, I would imagine, the constituents of nearly every Member in the House—pay their taxes according to what has been agreed to by Parliament, there are those, be they billionaires or those whom I have described who earn very large sums, who pay less than what the House has determined. The sooner we end that position, the sooner we can be satisfied that not just our constituents but those with very substantial wealth and those who earn large incomes pay their tax as they should. This issue should continue to engage the House of Commons.
Stephen Williams (Bristol West) (LD)
I am very pleased that we are having this debate, and I thank the right hon. Member for Oldham West and Royton (Mr Meacher) for persuading the Backbench Business Committee to obtain the time for it. I have sat through loads of debates on the general economy, Finance Bills and all the rest of it during my seven years in the House, but we have never really engaged in a debate on the rights and wrongs of the tax system. We have started to get there in today’s debate, although, if I may say so, I did not think that the right hon. Member for Oldham West and Royton quite got there himself. I felt that some of his opening remarks were a bit too aggressive towards the Government. However, I am glad that he initiated the debate, because it is important to debate the definitions of tax avoidance and tax evasion, the perceptions of those quite different issues, and where the wrongdoing actually lies.
This is not about the tax rates that we discuss quite often in the Chamber, and it is not about who is paying their fair share, although I agree with my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) that there is an important debate to be had about how much an individual and a corporation should contribute to society, and whether there should be a floor below which no one who is making a profit should drop in any given year. What we should be discussing today is payment of what is assessed and what is legally due: no less and no more.
Tax evasion is always wrong. I do not think that that is said clearly enough. It is illegal, and it is a fraud on the public and other taxpayers. It is always wrong, whoever is doing it, and whether a person is squirreling away millions in a secret bank account, paying in cash for work to be done on his or her own house, or paying a guest house owner. We shall all be going to party conferences soon, and I hope that none of our delegates will be tempted to pay guest house owners in cash. Those who do so should know, and should own up to themselves, that they are avoiding the obligation to pay VAT, and that it therefore follows that the person they are paying for the service is not putting the transaction through the books and is evading income tax as well.
Steve Baker
Does my hon. Friend agree that one of the reasons low-paid people evade tax is that taxes on them are far too high? One of the things that we need to do is continue the trend of lifting the lowest paid out of tax altogether.
Stephen Williams
I entirely agree with my hon. Friend. I am sure that he is delighted that his party is in a coalition with mine, because we are indeed lifting more of the low-paid out of tax completely by progressing towards a £10,000 income tax threshold. We should make taxes simpler as well as lower for people on low earnings.
This is a moral as well as a legal issue, and I think that perhaps we should discuss morals more in the Chamber. We all have a duty to pay, and cash in hand actually means cheating your neighbour. I think that, as Members of Parliament, we should be more courageous about making that clear. I agree with what the hon. Member for Walsall North (Mr Winnick) said about Sir Philip Green, but he is an easy target. We should be clear about the fact that if you are evading tax, it does not matter who you are: it is always wrong.
Health issues also arise, relating to tobacco and alcohol. My hon. Friend the Member for Amber Valley (Nigel Mills) mentioned beer duty. I am the chair of the cross-party group on smoking and health, and later this year I shall chair an inquiry into the smuggling trade—particularly the trade in tobacco, but there are cross-over issues involving alcohol. There is a very easy thing that the Government could do about those problems: they could tighten the bonded warehouse regime. There are currently very few restrictions on who can operate a bonded warehouse. Perhaps the Public Accounts Committee could consider that as well. A large amount of tax is evaded through the misuse of bonded warehouses and, as a result, people consume more alcohol and cigarettes and damage their health.
While evasion should be a black-and-white issue—it is always wrong—in respect of avoidance there are many shades of grey, which is a big problem. At the innocent end of the spectrum, tax avoidance is when people plan to pay no more tax than we in Parliament intend them to pay under the schemes we lay out in Finance Bills every year. I assume most of us have an individual savings account. I opened a new ISA earlier this year with Triodos bank, the ethical bank that has its headquarters in my constituency. Some of us signed a joint letter urging all parliamentarians to set an example by moving our money into ethical providers of finance, such as Triodos and the Co-op bank. By investing in ISAs, however, we are, of course, avoiding some income tax on our surplus capital.
I support all the various enterprise incentive schemes to encourage entrepreneurs to set up new businesses. I should declare a former interest, in that before entering Parliament I was a tax consultant working for some of the large firms that the right hon. Member for Oldham West and Royton laid into, but what we were doing was enabling people who were setting up businesses to take advantage of the reliefs his Government had introduced, in order to encourage more such people to take up good ideas, transform them into a business, create wealth and employ people. That is a good thing; that is good tax avoidance in the dictionary sense. Things go wrong, however, when such sensible planning is stretched too far and there are egregious schemes of avoidance, artificial transactions and contrived schemes.
The Chair of the Public Accounts Committee mentioned the very good exposés The Times did during the summer. As well as attacking Sir Philip Green and other fat cats, parliamentarians should make it clear that we condemn similar activities by those who are popular with the public—pop stars in Take That, premiership football players or Formula 1 racing drivers whom we are asked to believe all live in Monaco. These people make huge amounts of money because of the public enjoyment of what they do and they do not need to mitigate their tax below what the people who watch them perform think they have to pay.
What should we do about this? First, Her Majesty’s Revenue and Customs needs to focus much more on tackling avoidance. The headline figure of the number of people who work in HMRC has been mentioned, but how many people work for a particular arm of Government is less important than what they actually do when they are working. I hope the Minister will confirm that the efforts in the HMRC large business units and high net-worth units will be ever more relentlessly focused. The staff must have the appropriate training so they can match the skills levels of the lawyers, bankers and accountants pitted against them, and they must also have the necessary IT and other technical resources.
We parliamentarians have a duty as well. We can change the rates and rules, and we have done that in several Budgets since the 2010 general election. Last year, the Government tightened the rules in order to block a scheme of disguised remuneration, where individuals were receiving loans from their employers that they had absolutely no intention of ever repaying, and thereby were avoiding income tax. However, the Labour Front-Bench team at the time—I do not think its current occupants were part of that team, so I do not hold them personally responsible—instructed all its Back Benchers to vote against that coalition Government measure.
Under this year’s Finance Bill, we are introducing new stamp duty regimes in order to tighten up on the move of people buying properties via corporate envelopes and thereby avoiding stamp duty. The Liberal Democrats, and in particular my right hon. Friend the Business Secretary, called for that at the last election. Avoiding stamp duty in that way will now be almost impossible unless people want to incur an enormous liability in the future.
I listened carefully to what the right hon. Member for Oldham West and Royton was saying about the general anti-avoidance or anti-abuse regime. His words would have had more force if he had at least acknowledged that this Government had commissioned a report by Graham Aaronson. He has been in the business for more than 40 years, so I cannot think of anyone better to chair a committee looking at how we can tighten up on avoidance schemes. At least this Government are introducing an anti-abuse regime. It may not be perfect to start with, but a rule is being introduced. The right hon. Gentleman’s Government had 13 years to do that, but it was persistently ruled out by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown).
Mark Durkan
Is that observation not a bit like saying that if the Government were looking at creating an anti-strike rule, the person to put in charge would be Bob Crow?
Stephen Williams
Would the hon. Gentleman say that again, as I am not sure that I followed it?
Mark Durkan
On the logic that the hon. Gentleman has just deployed about the most suitable person to be looking at anti-avoidance, given his skills and predilections in that area, would the equivalent for a Government committing to an anti-strike rule not be to put Bob Crow in charge of that exploration?
Stephen Williams
It was the Bob Crow bit that I missed. That may be a fair point, but I would not put Graham Aaronson on the same moral plane as Bob Crow; I do not think that Mr Aaronson has held the public to ransom at various points. However, poachers do often make good gamekeepers. The Government commissioned the report and are acting on it, and they should be commended on doing so, given that the previous Government did nothing to put that in place.
We have talked about the domestic scene, but I wish to say something in passing about our obligations abroad to the developing world. During debates on this year’s Finance Bill, I mentioned how the rules tightening up on controlled foreign companies—that is fine, as it is our responsibility to secure our own tax base—will have unintended consequences for developing countries. It is for the Treasury to work in close concert with the Department for International Development to ensure that every time we change our tax law, we think through the implications that that will have abroad. In addition, some of our expanding aid budget should be expended on training overseas Governments to build up their expertise to make sure that they are able to levy taxes effectively and collect them from the multinationals operating in their countries. I know that a coalition of charities, including Christian Aid, is going to campaign on this issue later this year. I have been working with them, and I look forward to continuing to do so throughout the rest of the year.
Simon Hughes
Will my hon. Friend also encourage the Government to examine anti-avoidance measures involving offshore territories such as those that have been started in countries such as Finland?
Stephen Williams
My right hon. Friend makes a good point. I think that there is a duty on Parliament to make sure that we are clear about our intentions and clear about what is wrong, and on the Government to allocate the resources to catch the people who go beyond the rules.
Frank Dobson (Holborn and St Pancras) (Lab)
I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on persuading the Backbench Business Committee to put forward this debate. It is clear that nobody really knows how much the rest of the tax-paying taxpayers are being swindled out of as a result of tax evasion, tax avoidance and late payment. All we know is that a huge amount of money is not being collected. The question is: whose fault is it?
One of the functions of the House of Commons is to identify who is to blame for waste and inefficiency. On the failure to collect tax we need look no further, as it is mainly our fault as Members of the House of Commons. The rich and the big corporations do not pay what they should, HMRC does not collect as much as it should, and Ministers and officials suggest laws and regulations that do not do what they should, but we pass those laws and regulations. It is our job to decide what tax should be paid, but we tend to forget that it is also our job to put in place statutes and regulations to make sure that the tax we have voted for actually gets paid.
We are pretty good at making sure that most working people pay income tax, national insurance, council tax and, generally, VAT, but when it comes to dealing with large corporations and very rich individuals, our record is, frankly, pathetic. We, the House of Commons, pass statutes and regulations that are simply not up to the job. Government after Government have announced that they are cracking down on tax avoidance and evasion, but the experts in the City keep weaselling away, finding loopholes in the laws we have passed. It is probably true that we will usually be one step behind the City tax advisers, but at the moment we are not one step behind, but stumbling along several laps of the track behind those working the scams in the City.
I believe that this House needs to get its act together. I am not suggesting that we change the way we decide what tax should be levied, but once that has been decided in the usual way, I believe that the practicalities of how it is to be collected should be subject to much better scrutiny and final detailed approval by the House. I suggest that a taxation Select Committee should be established to concentrate exclusively on ensuring that any tax we have voted for is actually collected. The Committee should be able to hire expert advisers and require written and oral evidence from Treasury and HMRC officials and outside witnesses.
The taxation Committee would not need to trespass on the wider aspects of economic and fiscal policy covered by the Treasury Committee. Its sole object would be to formulate new tax regulations and practices in order to give minimum scope for avoidance, evasion and late payment. It should also monitor continuously the effectiveness of any existing arrangements and so keep up with the latest scams. Were the House of Commons, by this approach, to give tax collection the priority it deserves, I believe it would result in much more effective law and practice. Whatever the outcome, it could not possibly be less effective than the present arrangements.
That is not the only problem. Parliament is being denied the right to know what is going on at HMRC. Most of us would agree that most of our fellow citizens are entitled to keep their tax affairs confidential but, like my right hon. Friend the Member for Barking (Margaret Hodge), the Chair of the Public Accounts Committee, I would argue that that anonymity should not apply to major corporations. I remind the House that recently we had the ridiculous situation in which our Public Accounts Committee was told that it could not be told the details and background of the deal that an individual HMRC official had come to with Vodafone because they referred to the affairs of an individual taxpayer. Some people believed that the scam involved Vodafone being let off a tax liability of £6 billion. No one, apart from one or two people at the Inland Revenue and at the company, knows what the truth is. Can we tolerate that lack of transparency and affordability over a sum that is roughly equal to the taxpayer subsidy to the agriculture industry?
I hope that colleagues in all parts of the House see at least some merit in what I am proposing and recognise that we simply cannot go on as we have been doing. Clearly any new arrangements would need to be very carefully thought through, but they really should not be the subject of party controversy. Two of the main rights of a freely elected Parliament are to pass practical and workable laws and to control the raising of tax. We have a duty to the people who sent us here to exercise those rights effectively and so make a better job of it than we have been doing for decades.
Penny Mordaunt (Portsmouth North) (Con)
Over the past few months we have heard much about the morality of paying tax, whether it has been through the pillorying of the rich and famous, scrutiny of the conduct of big business operating in the UK or through the auspices of the Christian Aid tax fairness bus currently touring the country focusing on the conduct of UK businesses operating overseas.
Today there has been much discussion about individuals’ and businesses’ tax obligations to the state for the benefit of one’s fellow citizens. We have not heard much about the state’s obligations towards our citizens and businesses with regard to tax collection, and I want to rectify that today. Paying tax, being compliant and paying a fair amount is a two-way street. It is morally right that we should pay our taxes; evasion and aggressive avoidance are wrong. But just as the Government have a moral duty to spend taxes wisely and get good value from our public services, so, too, HMRC has a moral obligation to the taxpayer to ensure that its requests are reasonable and fair.
HMRC has extraordinary powers, frightening in their extent and enormity, that are enshrined in laws seemingly as complex and wide-ranging as the current tax code. Fifteen years ago, the relationship between taxpayer and tax collector was much more evenly balanced. Now there are punitive penalties for failing to submit returns, even if no tax is due or if HMRC owes the taxpayer a refund. The old tax tribunal system has been replaced with one that is far more rigid and less even-handed, and HMRC is able to issue completely unreasonable tax assessments to force taxpayers, who may have a legitimate dispute, to pay tax that they might not owe while their case is being investigated.
I often think that all that is missing from HMRC is the uniform and that it could be argued that we live in a state of financial martial law. It is time that the debate on the morality of tax turned its focus on those extraordinary powers, which often have a detrimental effect on precisely those citizens who have been absent from this debate so far—those on low incomes, the isolated, the vulnerable and older people.
Our tax code is hugely complex. The most popular edition of the tax guide now has over 17,000 pages; if my hon. Friend the Member for Wycombe (Steve Baker) has not read it, he can comfort himself with the thought that he would have had little chance of remembering what was in it if he had.
The system is especially complex for pensioners. In the last year of the Labour Government, the National Audit Office estimated that some 1.5 million older people had overpaid tax. Those overpayments have serious financial implications for the elderly, whose income is about 25% under the national average. Although the elderly are generally more compliant than taxpayers as a whole, they are often less aware of what they should do to comply and what allowances they are entitled to and they are more likely to face massive life changes such as retirement, bereavement or serious changes to their health that bring with them inevitable tax consequences.
Picture the confusion of the 91-year-old who after being widowed becomes a taxpayer for the first time, or the lady with inoperable cancer, whose husband has Alzheimer’s, pursued for failing to provide tax returns that HMRC had been sending to an address she had not lived at for nine years, despite its being clear that her allowances exceeded her income. Imagine the chaos caused to the life of a widow who received a tax demand for £3,500 as the Revenue had not been collecting tax on her state pension due to the fact her P161 was not sent to her when she retired at 60. Picture the gentleman who was being chased for underpayment wrongly, because neither he nor HMRC realised that he was entitled to the blind person’s allowance.
I applaud the work of Age UK, the Low Incomes Tax Reform Group and Tax Help for Older People. With their help, all the examples that I mentioned were resolved with a happy ending—evidence that the staff at HMRC are perfectly reasonable when these issues are pointed out. However, without that professional help and advocacy, many people end up paying more than they owe, with substantial detrimental consequences to their quality of life. That situation is not acceptable.
The complexity of the tax code and the frequency of HMRC errors mean that it is not reasonable to expect the burden of responsibility for checking demands to lie entirely with those vulnerable people. HMRC must at least have some responsibility for its own mistakes, especially if the consequence to the taxpayer of fulfilling that underpayment would be great hardship and would over the long term be detrimental to the public purse, as we saw with tax credit maladministration under the last Government. I would go further and say that HMRC should have an obligation to ensure not only that codes are correct but that for those on low and fixed incomes allowances are being used and people are as tax-efficient as they can be. That should be a performance measure that we judge it against.
Governments must take responsibility for their mistakes too. The Minister will be aware that I have had correspondence with him on the principle of retrospective taxation. It obviously behoves the Government to close loopholes as they are revealed, or better still to anticipate and remove them during the legislative drafting process. Nevertheless, when a loophole has been found in legislation, it is not illegal for it to be exploited—possibly morally repugnant, but not illegal. When clause 55 of the 2008 Finance Bill was discussed in Public Bill Committee, the Minister voiced the Conservative Opposition’s concern about its retrospective nature. If it was wrong to legislate retrospectively in 2008, it cannot be right now. We must work to close tax avoidance loopholes, but we must consider whether it is morally justifiable to take retrospective action on tax avoidance in the case of relatively low earners who signed up to schemes that were advertised openly and publicly and of which the Government and HMRC were aware.
Finally, I want to raise the subject of digital exclusion, specifically in relation to HMRC’s policy which makes it compulsory for all businesses, including the smallest, to file their business returns online. As a result, the proprietors of many micro-businesses who are unable to use a computer—for various reasons, including disability, age and lack of broadband access—have had to incur often disproportionate costs to employ an agent to file online for them or face penalties for not being able to file by electronic communication. Several proprietors have appealed their penalties, and those appeals are waiting to be heard by the First-tier Tribunal in November this year. The amounts charged are tiny—£100 for not filing online—but the costs to HMRC and the public purse in pursuing these cases are significant. The three lead cases involve older people, all with disabilities, who are unable to file online, and there is no statutory exemption for those with disabilities. There are many examples of otherwise compliant taxpayers being pursued relentlessly for small sums because of their inability to move to a digital channel to transact with HMRC.
The age of austerity and the recent focus on the moral good of paying taxes should not give HMRC any respite from simplifying the tax code, publicising allowances, reducing errors, and supporting businesses in hard times. It is in its interests and everyone else’s that it does so. It is better for the public purse that a business that has been paying tax on time for decades but has fallen on hard times survives and those jobs are kept. It is better for the public purse that an older person has that little bit of extra income to which they are entitled in order to stay well and independent. It is better for the public purse that HMRC’s resources are not taken up with correcting silly mistakes and are focused on tackling high-value evasion and aggressive avoidance.
I congratulate the Minister on the progress that he has made in simplifying the tax code, promoting common sense, and lifting many people out of paying tax altogether. May I urge him to go further, faster for the benefit of the Exchequer and the most vulnerable in our society?
Mr Virendra Sharma (Ealing, Southall) (Lab)
Thank you, Mr Deputy Speaker, for giving me the opportunity to speak in this very important debate.
We all know the context in which this debate takes place. We all speak to and listen to our constituents at our surgeries and in our town centres, and we know that they are hurting as a result of an international financial crisis caused by irresponsible bankers and made worse by a double-dip recession made in Downing street. The majority are hard-working families and individuals who pay their fair share of taxes and play by the rules, and expect others to do the same.
Given the budget deficit and strain on the public finances, it is all the more important to ensure that everyone pays their fair share of tax and that tax avoidance—playing the system and looking for loopholes—and tax evasion by those who engage in criminal behaviour to evade paying tax are vigorously clamped down on.
The vast majority of those engaged in tax avoidance are the rich and wealthy, and there is, rightly and unsurprisingly, a public outcry when celebrities, senior civil servants, business men and others use tax avoidance schemes to avoid paying their fair share of tax like everybody else. It is morally repugnant and obscene for a wealthy celebrity to pay only 1% in income tax.
The Government are right to consult on introducing a focused and targeted general anti-avoidance rule to stamp out such abuses. I fully support such a move. Tax avoidance legislation has become ever more specific and complicated. A GAAR should reverse that situation and allow a better use of HMRC resources to tackle avoidance across the board.
I part company with the Government on their current job-cutting at HMRC. I welcome the extra £970 million that they have put into tax collection up to 2014, but it makes no sense to cut jobs when the Department has been successful in collecting more tax. Over the past five years, HMRC has raised an extra £4.32 billion and the Public Accounts Committee’s report shows that an additional £1.1 billion could have been collected if 3,200 job losses had been avoided. It cannot be right to make job cuts when so much tax remains uncollected.
The Public and Commercial Services Union is 100% right on that and the public will think it a very strange thing to do when 11 times the extra investment that the Government are putting into tax collection was collected by hard-working HMRC staff over the past five years, and when even more could have been collected if the 3,200 jobs had been retained. Why are the Government planning another 10,000 job losses? I ask the Minister to think again. This is an investment that will result in billions for the Exchequer.
One of the jobs that staff saved from redundancy could do is work in my constituency, throughout London and other parts of the country to tackle the so-called “beds in sheds” problem. A minority of unscrupulous landlords are exploiting the vulnerable by renting out substandard outbuildings at extortionate rates and evading tax. My constituents regularly ask me, “Why should these landlords get away with not paying tax like everyone else?” This problem is all part of the shadow cash economy that denies the Exchequer billions in tax revenues.
The Government have given one-off funding to help councils tackle the problem with multi-partner teams that include HMRC officers in addition to UK Border Agency, police and council officers; but to really tackle it, raise some revenue and disrupt the shadow economy, more consistent resources are needed in both financial and officer terms.
Billions of pounds of tax remains uncollected as a result of both avoidance and evasion. I urge the Government to be braver and invest more in HMRC, not cut jobs. The returns are clear, the public accounts are in need of it and the public are calling for it.
John Pugh (Southport) (LD)
I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on stimulating this debate. I also welcome the Exchequer Secretary, who survived the ministerial cull. We all welcome his dry wit and expertise. Indeed, I debated this very subject with him in Westminster Hall about a year ago.
As other Members have said, we live in a society where the rights, benefits and privileges that people extract from society are often disconnected from the obligations that they feel towards it. That brings the spectacle of people benefiting from society and thriving because of it, but avoiding contributing to the tax base through either evasion or, more commonly, avoidance. Tax avoidance is a deliberate attempt to frustrate tax law and the intentions of tax legislators. It differs radically from tax evasion, whereby one deliberately ignores or flouts the letter of the law.
There are various remedies for tax avoidance. One, as has been suggested, is to simplify the law to make avoidance more evident and stark. That is what the Mirrlees review was, in part, about. Another remedy, which has been very attractive to people in this place, is to outlaw individual tax avoidance schemes piecemeal. That has been tried in Finance Act after Finance Act, only for further countermeasures to be needed for other schemes. That exercise is a bit like a cat chasing its tail—it is endless. That is why I favour a general anti-avoidance rule and have argued for it consistently in this Parliament and the previous one. That is also why the Government are considering it and why it is in the coalition agreement.
I do not want to comment on Mr Aaronson’s specific proposals, but a GAAR essentially bans schemes that have no commercial benefit other than to frustrate the intent of the law. The right hon. Member for Oldham West and Royton has argued that the progress does not look as though it will be enough. Other people have argued that it goes too far. There are those who believe that we should go only by the absolute letter of the tax law and therefore oppose a GAAR. There are Government Members who believe that. I call such people tax fundamentalists, because they argue that a GAAR would create an element of tax uncertainty and that what is not expressly prohibited should be allowed. They add to that the argument that if we had a GAAR, there would be other disbenefits, such as an increase in litigation and a reluctance to make investment decisions.
More fundamentally, some people argue that it cannot be wrong to do what is not formally and expressly forbidden. That argument is astonishingly weak. It reminds me of the arguments that cropped up during the expenses scandal, when people argued that it was acceptable to buy duck houses or to flip homes because it did not breach a particular rule, even though it frustrated the intentions of the scheme. It is worth noting that there is under-specification in other areas of law, not just in tax law. Disturbing the peace encompasses a number of scenarios, as does defamation in civil law.
None the less, there are ways in which the operation of a GAAR in tax law can be made more certain to address those concerns. The first is through the pre-vetting of tax schemes and disclosure. The previous Government went some way down the road to ensuring that that could and should happen. The second is, during the passage of the legislation, to make clear the intent of the law and what it is contrived to do. The objection about uncertainty is slightly exaggerated. When Tesco set up a holding company in Liechtenstein for its properties, it received no commercial benefit, unless it was in avoiding the property taxes that the Government expected it to pay.
In a recent speech, the Exchequer Secretary spoke about things that would be covered:
“Buying a house for personal use through a corporate entity to avoid”
stamp duty
“is avoidance. Channelling money backwards and forwards through complex networks for no commercial reason…is avoidance. Paying loans in lieu of salaries through shell companies is avoidance. And using artificial ‘losses’ deliberately accrued to claim back tax is avoidance.”
Those examples give a clear indication of the kind of things that should be caught by a GAAR. As my hon. Friend the Member for Bristol West (Stephen Williams) said, we can contrast that with other things that would not be caught, such as charitable tax relief. In that case the Government encourage people to organise their tax affairs in a way that causes a loss to the Exchequer.
We can speculate for as long as we want on the effects of a GAAR, but in some ways we do not need to, because we have a certain amount of evidence to go on. A lot of countries have GAARs in place, and not all of them produce uncertainty and litigation, although some do.
Stephen Williams
I believe that the UK is actually unique in not having a GAAR or a rule that is called something else but is effectively a GAAR.
John Pugh
Yes, and that indicates clearly that legal uncertainty and endless litigation are not central and natural features of a GAAR. They do not happen in other countries.
We cannot excuse a poorly drafted GAAR, so we have to get it right. We cannot console ourselves with the thought that the only victims of a poor GAAR are corporate bodies, high net worth individuals and so on. However, a GAAR is a very important tool, and there remains no convincing general argument against it.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before I call the Front Benchers, I remind them that it would be appropriate to give Mr Meacher a couple of minutes at the end to wind up the debate.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I commend my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) for securing this debate on a matter that we all agree has rightly risen to a high place on the political agenda. There is much that we can agree on today, and I think we all agree that Parliament is at its best when we agree on matters and stand together to improve them.
We have heard well considered and valuable contributions from many respected voices in the Chamber, but I want to pay particular tribute to my right hon. Friend the Member for Barking (Margaret Hodge), whose work with the Public Accounts Committee has helped to shed a lot of light on these issues. She made a powerful and sensible speech.
The financial crisis of 2008 led to a radical domestic and international shift in the approach to tax evasion and avoidance. The lack of transparency in the international financial system was rightly identified as a significant threat to global financial stability, and calls for change rightly came from all sides. The crisis has also led to the significant challenge of public expenditure reduction that we now face, which adds to the urgency of ensuring that every individual pays their fair share of tax and contributes to that effort.
As many Members have said, among the majority of hard-working people who pay all their taxes there is understandably growing hostility towards those who manage to avoid paying their fair share. Given that the Government are facing an increase in their borrowing—it is up by a quarter on last year’s forecast, partly as a result of falling tax-takes—I have no doubt that the issue has also risen high on the Government’s agenda.
The Government have measured the tax gap—the difference between tax owed and collected—at about £35 billion. There has been some debate about that figure today, and there are other estimates. The TUC’s estimate is much larger, as is that of the Tax Justice Network, which puts the figure in the region of £120 billion. We all appreciate that it is not an exact science, but whatever the figure, we accept that a significant proportion of the tax revenue that is due is going uncollected. If we closed the tax gap by half or even a quarter, we would avert real pain and suffering among the most vulnerable in our society, who rely on the services provided through public expenditure.
Members have rightly drawn a clear distinction between evasion and avoidance, and we need to remember that a small minority of people are involved. However, it is clearly not acceptable for those people to think that they can get away with avoiding their obligations if they buy the right advice or pay for sophisticated tax avoidance products.
Like benefit fraud, tax evasion—and avoidance in some cases—undermines the confidence of ordinary taxpayers in the legitimacy of the system. I think we all agree that the world has changed and that there should be no hiding place for tax cheats. The previous Labour Government had a record to be proud of in tackling avoidance, both domestically and internationally. Many of the comments today have paid tribute to that. In 2004, we introduced a requirement to disclose tax avoidance products in advance, to, I remind Members, a storm of protest. In 2009, we strengthened the regime and that has transformed the fight against avoidance—I am sure that the Minister and Members on both sides of the House would agree with that. More than 2,000 schemes had been identified up to March this year, protecting more than £12 billion of revenue.
In 2009, we also set up the high net worth unit and have received the good news this week that an extra £500 million in tax has been identified and recovered. When in government, we also introduced a code of conduct on tax for banks, as well as legislating on debt buy-back and credit loopholes that some companies were exploiting. I know that the Minister recognises the value of the steps we took in government to make progress on this issue and over a 10-year period we recovered more than £16.4 billion in particular targeted tax avoidance measures.
Internationally, as president of the G20 we led a global clampdown on tax havens and offshore evasion. As many hon. Members have said, that is an important aspect of what we must do if we are to close the tax gap. Similarly, I would be interested to hear comments from the Minister today about the measures he is considering to enter into international agreements along the lines of the agreement we negotiated with Liechtenstein and between the UK authorities and Belize. How much revenue does he consider has been saved through those agreements and what plans do the Government have in place to continue that work and to try to shut down some of the avoidance measures and tactics that are being exploited?
In government, Labour also persuaded the OECD to develop best practice guidelines on country-by-country reporting, an excellent initiative that was put on the agenda by international development organisations, particularly Christian Aid, ActionAid and Oxfam. Tax evasion costs developing countries billions of pounds every year in lost revenues and is a barrier to social and economic development, but in the Finance Act 2012 we saw changes to the controlled foreign company rules and many charities have expressed concerns that they will make it easier for UK companies to avoid paying tax in developing countries in which they own subsidiaries. ActionAid estimates the potential loss to developing countries as up to £4 billion a year, whereas the Government estimate is £1 billion. Either way, that change raises huge concerns; steps must be taken to improve transparency and the Treasury must work with the Department for International Development to ensure its commitment to combining tax and development policy. What plans does the Minister have in place to ensure that the new rules will not damage developing countries’ tax revenues? Has he had discussions with the new Secretary of State for International Development or with her Ministers on a joint strategy on this point? If it becomes clear that the changes are enabling and facilitating tax avoidance, what action will he take? At what stage will he check, as this is a matter of some urgency for those who are concerned?
Unfortunately, on a domestic level, the Government’s general anti-abuse rule is unlikely to take forward the battle against tax avoidance. It is disappointingly narrow, designed by its own admission to tackle only the most egregiously abusive tax avoidance schemes, whatever that means. I would be grateful if the Minister clarified that point. The union representing top officials at HMRC, the Association of Revenue and Customs—ARC—has even suggested that it could encourage tax avoidance by implying that anything outside its scope is legitimate tax planning and immune from scrutiny. Will the Minister clarify what constitutes—I quote from the Government’s consultation document—a “wholly unacceptable” tax avoidance scheme, and tell us how “abusive” will be defined? I have read the consultation document and the definitions proposed within it shed little light.
In its draft legislation, the Treasury defines non-abusive schemes as anything that is “reasonably regarded as reasonable”—I am paraphrasing for brevity. That provides neither clarity on the matter, nor armour for HMRC, which is more concerning. We know that one person’s tax planning is another person’s tax avoidance, and even when it is entirely legal, it is considered by many—including the Prime Minister and the Chancellor—as wrong or “morally repugnant”. Will the Government’s proposed legislation help to draw a clearer line? All the moral indignation in the world will not bring in more tax receipts, and clarity is essential.
Will the Minister confirm what proposals there are to levy penalties on those found in contravention of the new anti-abuse rule? There is widespread concern that the proposed legislation is nothing but a toothless tiger, or worse,
“a Trojan horse, which suggests tough action while actually facilitating avoidance.”
They are not my words but those of Graham Black, president of the Association of Revenue and Customs, which represents senior HMRC officials.
I congratulate my right hon. Friend the Member for Oldham West and Royton on his contribution to the debate and on laying his draft legislation before the House tomorrow. His Bill takes a much broader approach, and seeks to tackle not only abuse but more general avoidance, and it lays down the mantle at the Government’s door for them to clarify what they deem to be legally acceptable. It also seeks to give HMRC much wider powers than under the Government’s plan, and I would be interested to hear the Government’s response to the challenge posed by my right hon. Friend.
Finally, as many hon. Members have said, even with a proper anti-avoidance or anti-abuse scheme in place we will require a top-level agency to collect tax. HMRC has recently had a welcome public success in collecting revenue from top earners, but we know that it is struggling to maintain performance against huge job cuts. In May this year the Public Accounts Committee found that an extra £1.1 billion could have been collected if personnel had been left in place, and it called on the Government to consider the true value for money of further cuts. Have the Government done that? What consideration have they given to value for money in terms of personnel and the proposed cuts? If cutting staff means missing out on billions of pounds of tax revenue it is a false economy, and I would be interested to know what assessment the Government have made in the light of the report by the Public Accounts Committee.
Ministers say that they want to eliminate tax avoidance, but with an incredibly narrow GAAR, weak international agreements, and without giving proper resources to HMRC, the Government are not on track to succeed. The nation’s books will be balanced on the backs of the poorest in society, rather than on the rich who will continue avoiding their taxes.
The Exchequer Secretary to the Treasury (Mr David Gauke)
It is a great pleasure to respond to this debate, and I begin by congratulating the right hon. Member for Oldham West and Royton (Mr Meacher) on securing it. This has been a broad and wide-ranging debate, and over the past couple of hours we have discussed the taxation of large businesses and wealthy individuals, taxpayer confidentiality, HMRC staff numbers, a general anti-avoidance rule, and the right hon. Gentleman’s private Member’s Bill, which I am sure the House looks forward to debating tomorrow.
Tax simplification was raised by my hon. Friends the Members for Amber Valley (Nigel Mills) and for Wycombe (Steve Baker), and my hon. Friend the Member for Portsmouth North (Penny Mordaunt) discussed standards of service in HMRC. My hon. Friend the Member for Bristol West (Stephen Williams) raised the topical matter of cash in hand, and perhaps went even further than I did earlier this year in his remarks about negotiating a discount for cash. I suspect all those matters could have filled a two-hour debate in themselves, but let me attempt to address as many of them—and others raised in the debate—as I can.
My first point is that the Government have a strong track record in addressing the full range of avoidance and evasion that results in the tax gap—the difference between the tax that is collected and the tax that is due. We remain further committed to tackling the gap and to reducing that sum over the course of this Parliament. Our intention is that the compliance yield of £13 billion a year, which we inherited, will increase to £20 billion a year in this Parliament.
It is helpful to distinguish between tax evasion and tax avoidance. A number of hon. Members have done so in the debate, but let me underline the point. Put simply, tax avoidance is the reduction of tax liabilities by using tax law to get an advantage that Parliament never intended. As we have heard—not least from my hon. Friend the Member for Bristol West, who brings expertise to these matters—tax evasion is illegally understating tax liabilities. Evasion is fraud and means breaking the law. There is striking unanimity in the House on the need to address both avoidance and evasion, and that the Government should take them seriously. I shall discuss the different responses we have in place for each, and the new directions on tax avoidance that we are considering through consultation.
I should first like to set out a few facts on compliance generally. Last year, HMRC collected £474 billion in tax. The tax gap for the last year for which authoritative numbers were produced—2009-10—was £35 billion. Of that figure, tax avoidance constitutes around 14%, which is down from 17.5% in 2007-08. The tax gap arising from tax evasion is also falling—from 17.5% in 2007-08 to 12% in 2009-10.
I would make two observations on that, the first of which was made by a number of right hon. and hon. Members, namely that the vast majority of UK taxpayers do not avoid or evade tax. The vast majority of taxpayers and our constituents expect us to ensure that as many people as possible pay the right amount in tax. Secondly, although by international standards our tax gap is low, the Government are determined to do everything we can to improve those numbers. That is why we are re-investing more than £900 million to transform the approach to compliance, to close the tax gap, and to enable HMRC to address the serious matters it faces.
The investment is funding a range of measures to widen HMRC’s overall compliance coverage and target the highest risks. It also includes funding for a highly skilled work force. We are increasing the number of staff working on compliance by around 2,500 full-time equivalent positions by 2014-15. Reference has been made to the Public Accounts Committee report that highlights concerns that cuts in the number of compliance staff resulted in revenue in the order of £1.1 billion not being collected in the previous Parliament. Hon. Members are correct that the number of HMRC staff will fall in this Parliament, but the number of those focusing on compliance activities will increase. There will, for example, be more criminal investigators and people working in intelligence to tackle tax evasion and avoidance.
Margaret Hodge
I accept that it is the intention of the Exchequer Secretary to increase compliance activity, but I would like him to address two issues that I raised: first, the fact that HMRC has raised the threshold for taking action on fraud, as a result of which less money will be collected; and secondly that, although he said we needed more highly trained individuals, such training is not taking place, because of the Department’s inability to establish training provision and ensure that people benefit from it and get on with it.
Mr Gauke
I do not accept the right hon. Lady’s point about the increase in the fraud threshold. When I look at some of the work that HMRC is doing—for example, to address inheritance tax fraud—I see a substantial increase in activity. It is addressing far more cases than ever.
I know that the PAC takes a strong interest in training. It is important that staff are trained. People are being moved from other parts of HMRC—for example, from personal tax—into enforcement and compliance. It is important that they are properly trained, however, and that process is going on—progress is being made and the compliance yield is already increasing. Over the months and years ahead, we will increasingly see the benefits of a large and better-trained compliance team. It is absolutely right that the PAC scrutinises this specific point, but HMRC is making progress, and we all want to encourage it to make further and faster progress to ensure that we get the right staff in the right places.
Compliance revenue has more than doubled in six years, and HMRC is on track to bring in about £7 billion in additional tax each year by 2014-15. In addition, on avoidance, HMRC has closed down seven schemes in the past year alone and, since 2010, litigated about 30 direct avoidance cases, with a high success rate. On evasion, HMRC has secured 413 criminal convictions, resulting in more than £1 billion in additional revenue and revenue-loss prevention. Those are significant achievements,
Anyone reading the papers recently might well think that avoidance is rampant. I want to reassure right hon. and hon. Members that that is not the case, and the vast majority pay their taxes without trying to get around the system. Nevertheless, where we and HMRC see people trying to exploit the system, we will take swift action. Currently, there are a minority of cowboy tax advisers—small niche firms selling crude avoidance schemes unlikely to be successful under challenge from HMRC. Many of those who sell those schemes use tactics that border on mis-selling, and their clients can end up shocked when they are later pursued by HMRC over their involvement. The Government recognise the need to do more to target those who market such schemes to protect taxpayers and prevent them from entering into them.
Mr Meacher
Given what is widely accepted to be the unacceptable narrowness of GAAR, why are the Government not prepared to accept GANTIP? It would achieve what the Exchequer Secretary wants, which will not be achieved by GAAR.
Mr Gauke
If the right hon. Gentleman will forgive me, I will turn to that point later, although I am sure the House is looking forward to debating this matter at greater length tomorrow—I know that he is.
These aggressive tax avoidance schemes are the reason we recently launched our consultation entitled, “Lifting the Lid on Tax Avoidance Schemes”, setting out ways to improve the information on avoidance available to the public and making it easier for taxpayers to see whether their adviser has promoted failed avoidance schemes in the past. I have been encouraged by the response of the professional bodies, which share the aim of addressing the small fringe of cowboy advisers who promote such schemes. Some of the criticism of the tax profession as a whole has been unfair, but there is an issue with some aspects of it, which is why we are consulting on what we can do to address the problem and also to expand the regime covered by DOTAS—the disclosure of tax avoidance schemes—which the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), speaking for the Opposition, touched on. She is right that between its introduction in 2004 and the end of March 2012, it resulted in a total of 2,289 avoidance schemes being disclosed to HMRC. That, in turn, has led to more than 60 changes in tax law to stop avoidance.
Steve Baker
My hon. Friend makes his case powerfully, but I am concerned that we are locked into a paradigm of complexity and trying to deal with the consequences of that complexity. Does he share my view that if only we could find a route to tax simplification, we could make some of the problems disappear at source?
Mr Gauke
My hon. Friend is right to say that tax simplification has an important role. I do not think that it is a magic bullet or that it cures every problem, because there will inevitably be some complexity in a modern economy. However, where we can remove some of those complexities and boundary issues, that is clearly helpful. My point is that DOTAS is a valuable part of our tax regime, but we want to improve on it. There is scope for improvement, and more information could and should be disclosed to HMRC to enable it to address tax avoidance.
Let me turn to the GAAR. We are improving how we counteract avoidance once it is detected, through the UK’s first general anti-abuse rule. I note the criticism made by Labour Members, but when they were in power—indeed, some of them were distinguished in the former Government—they refused to bring forward a general anti-abuse rule. The GAAR will specifically target the most aggressive and persistent forms of avoidance without undermining taxpayer certainty or adding undue compliance costs to the tax system. I am confident that, unlike other suggested approaches, the Government’s approach strikes the right balance between protection against avoidance and clarity for taxpayers.
I know that there is an alternative argument, based on the proposal from the right hon. Member for Oldham West and Royton, which was drafted by Richard Murphy, as he said. However, I would make this argument to him:
“I…think that many appropriate checks and balances are built in to the drafting. HMRC cannot use this”—
the GAAR—
“willy-nilly, and that’s right. This should be a tool of last resort and not a battering ram for widespread use.”
Those words are from Richard Murphy, who was commenting on Graham Aaronson’s proposals. I know that Mr Murphy will be following this debate closely, and I think it right that we quote his views thoroughly. He also said:
“Appropriate defences for action are built in. Safeguards to prevent HMRC over-using the provision are included. The result is that the rule will be used against egregious cases, and not be aimed at all tax planning. That’s right: where the law provides for choice, planning is inevitable and right and I for one have never denied that fact.”
Finally, Mr Murphy said this in response to the Aaronson proposals:
“Let’s have no doubt about it: this is a very big step forward for tax justice and I warmly welcome this report and hope it moves rapidly towards becoming law.”
I entirely agree with those comments. I do not, in all fairness, always agree with Mr Murphy, and he does not always agree with me, but on this occasion he is absolutely right to set out the fact that there are safeguards.
I want to let the right hon. Member for Oldham West and Royton respond, but let me quickly deal with evasion. We encourage compliance, while making it clear that if people do not take the opportunity, we will find them and they will be subject to stringent penalties, and possibly prosecution. The measures that HMRC is taking include: 1,000 extra prosecutions a year for tax evasion by 2014-15; an enhanced, state-of-the-art risk profiling tool, Connect, that helps to identify tax cheats by cross-matching data to uncover hidden relationships between people and organisations; campaigns and new policies—such as the contractual disclosure facility—to encourage voluntary disclosure of evasion; specialist staff to provide a single point of contact for the 2,000 largest businesses and to address the growing risk of cybercrime; and taskforces carrying out intensive reviews in high-risk trade sectors.
We are active in tackling offshore evasion activity. That concern was raised by a number of Members. We now have a number of agreements with other tax jurisdictions, including the Liechtenstein disclosure facility, which the hon. Member for Newcastle upon Tyne North mentioned. That will require financial intermediaries to identify those who may have a UK tax liability, and it is expected to raise £3 billion by 2016. More recently, the Government have finalised a ground-breaking agreement with Switzerland on tackling tax evasion. It will apply to UK-based Swiss account holders and is expected to raise £4 billion to £7 billion a year.
Collectively, the avoidance and evasion measures that I have set out today, along with our record on general compliance, show how seriously this Government take any threat to our tax base. We are not complacent, however, and our plans to take a tougher stance on disclosure rules and the promoters of avoidance, to introduce a general anti-abuse rule, and continuously to target those who illegally evade tax all help to demonstrate that fact. I hope that the House will appreciate the steps that we are taking.
Mr Meacher
With the leave of the House, I thank the Minister for his response. As he said, this has been a valuable and thoughtful debate. I also agree that there is general consensus on this matter. No one in the House takes the view that tax avoidance is other than unacceptable. The only real question, which the Minister did not fully answer, is how the measures to tackle it should be undertaken. It is possible that the general anti-avoidance rules—GAAR—are an advance on the absence of any such rules. He quoted selectively from Richard Murphy, but he did not answer my question, which was why, if he was so concerned to reduce tax avoidance as much as possible, he did not think that GANTIP would be far more effective than GAAR. I hope that we shall return to that point tomorrow.
The hon. Member for Wycombe (Steve Baker) made a thoughtful speech, as always, and I welcomed his saying that people should pay their full rate of tax. He even suggested that they should do so voluntarily and altruistically. The trouble is that they will not do so. Warren Buffett is recommending that course of action in the United States, but I have not heard of a single millionaire or billionaire in the UK who supports that position.
My right hon. Friend the Member for Barking (Margaret Hodge) made an important speech, in which she said that the problem was that the rich simply did not see the payment of tax as a responsibility. I recall the words of Jon Moulton, a private equity partner, who complained that his colleagues were paying less tax than their cleaning ladies. That is the problem in this country.
Several proposals were put forward in the debate, but the Minister did not respond to them. I shall return to them tomorrow if I get a chance. One was that there should be full transparency of settlements made by HMRC. We all know the aggravation that was caused by the settlement with Vodafone. That principle should apply to all FTSE 100 companies. It was also suggested that it was counter-productive to cut the number of tax inspectors. Their numbers were cut under the previous Government—wrongly, in my view—and they continue to be cut now. The Association of Revenue and Customs estimates that the amount recovered by tax inspectors can amount to between 30 and 180 times their salaries, so there is a strong reason for markedly increasing their numbers.
The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) did not make a speech, but he made two targeted and relevant interventions. He said that any company that used tax havens should not be eligible to bid for a Government contract. He also suggested that everyone should pay at least a minimum rate of tax—some people have suggested 32%—in order to prevent the situation in which some people pay just 1% or 2% as a result of the diligence of their City lawyers and accountants.
This has been an extremely useful debate. I welcome it and hope the House will take these matters further.
Question put and agreed to.
Resolved,
That this House has considered the matter of tax avoidance and tax evasion.
Colin Traynor
(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Michael Meacher (Oldham West and Royton) (Lab)
Speaking in the House of Commons is rather like the apocryphal story of waiting for the 77 bus: you wait a very long time, and then two or three opportunities come along almost immediately.
I sought this debate in order to raise the case of one of my constituents, Colin Traynor, who was epileptic. He was assessed as fit for work, yet died less than four months later. I raise the issue knowing that, tragically, this is far from a unique case, but I believe that there are some particularly disturbing aspects of Colin’s treatment at the hands of Atos Healthcare and the Department for Work and Pensions that deserve official attention and reform.
Here are the facts of Colin’s brief life. He suffered from grand mal epilepsy from the age of 14 months. Although he was prescribed medication, his condition was never controlled. According to the detailed letter written by his parents a few months ago, which I have with me,
“he was unable to do normal things that some of us take for granted such as go out to work, drive a car and even socialising with friends.”
Colin’s mental awareness was affected, as he
“found it very difficult to communicate verbally with others; it could take him a while to process a question that was put to him”.
In 2008, Colin, then aged 25, was asked to attend an interview at Oldham jobcentre, which was designed to
“find out whether Colin would be willing to find employment.”
Colin welcomed the interview because it gave him hope that he might actually find an employer who would be willing to take him on, which he very much wanted. However, according to his parents’ letter:
“After doing everything possible to try and find employment for Colin, Remploy informed him that his condition was so severe that he was deemed unemployable. After 9 years of trying to find employment in the hope of living a little bit of normality in his life, Colin eventually came to terms with the fact that he would never be able to work.”
Then, in August 2011, Colin received a letter asking him to attend for a medical assessment on 4 November 2011. In his parents’ words:
“Colin was confused as to why when 3 years before that he was deemed unemployable”.
Let me quote at some length from a second part of the parents’ letter, which sets out exactly what happened:
“The medical assessment works on a point scoring system. Colin was only given 6 points in total; he would need 18. On 19/12/11 Colin received a letter stating that because Colin had not scored enough points in the medical assessment, he would have his incapacity benefit cut by £70 a week. This caused Colin a lot of stress and anxiety. He was worried about losing his home, not being able to pay his bills and even worried about not being able to afford good food to eat. He was informed that the decision would have to go to an appeal and could take as long as 9 months. He was told there was nothing more they could do, and he would just wait for the outcome of the decision. From the period of December 2011 to April 2012 Colin’s health deteriorated, his seizures increased due to the stress and he also lost a lot of weight. On the 3rd of April 2012 the stress and anxiety that Colin was suffering from resulted in Colin having a massive seizure and it took his life. Colin died at home on his own and he was only 29 years of age.”
The next day, Colin’s mother informed the DWP that he had died owing to his condition—as she put it,
“the same condition that DWP were expecting him to work with”.
On or around 19 April, a fortnight later, Colin’s mother contacted the DWP again to ask for a decision on Colin’s appeal. She was told that Colin’s file was at the bottom of the pile. On being told that he was dead, the DWP official, very shocked, said that she would find the file and bring it to the adjudicating officer’s attention immediately. The following day, Colin’s mother received a telephone call from the DWP saying that it had overturned the decision in Colin’s favour, and that he should never have been assessed in the first place.
Many people, including me, would conclude on hearing that story that this young man died at least in part owing to the procedural rigidity and heartlessness of a Government Department and its agents. That is certainly the view of Colin’s parents, and I want finally to quote the end of their letter. It ends with just one sentence:
“We as a family”
—it is signed by the mother, the father and the sister—
“hold the Government, David Cameron, Iain Duncan Smith personally responsible for the death of our son… and brother.”
Nothing is going to bring Colin Traynor back to life, but I believe that the Government owe it to his memory, and that of hundreds of others who have lost their lives in similar circumstances, to make fundamental changes to the work capability assessment procedures which are taking such a terrible administrative toll in fear, intimidation, distress and death.
First, the mechanistic nature of computer points-based assessment should be ended. It is reaching obviously wrong conclusions in a vast number of cases. The Conservative hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), to whom I pay tribute, has established that 29,000 claimants who originally scored zero in the test were later granted the benefit on appeal. In his words:
“it seems that some people are not failing by a couple of points. They are failing completely—then going to a tribunal—then passing completely.”
I simply say that a system that reaches such widely wrong decisions in such a huge number of cases when it may be a matter of life or death does not deserve to survive, and should be scrapped.
Secondly, a revised and new system should be able to distinguish at the outset, by means of a much more personal and sensitive interview, those who, by any standard, cannot possibly be fit for work. It is highly significant that in Colin Traynor’s case the DWP finally admitted that he should never have been assessed as being able to work in the first place. The tragedy, which is unforgivable, is that that happened only after he had been dead for a fortnight. That alone ought to compel a fundamental rethink of the procedures, so that this never happens again.
Thirdly, the fact that so many Atos assessments are overturned at tribunal appeals shows that these procedures are deeply flawed. We know the statistics: 40% of people appeal against the decisions, and 38% of those appeals are successful. That means that more than one in seven of all the original decisions are reversed on further systematic examination at tribunals. Last year, some 1,100 claimants died under compulsory work-related activity for benefit, and a number of those found fit for work and left without income have committed, or attempted, suicide. I simply say that a record of failure of that magnitude clearly indicates that the system is so faulty that it needs wholesale replacement.
Fourthly, it is unacceptable that those who are deprived of benefit, thus putting their life and well-being at risk, should have to wait six months or more for their appeal to be heard. If Colin Traynor’s appeal had been heard promptly, he would almost certainly be alive today.
The least the Minister should confirm today is that the Atos medical testing contract should be suspended—as the National Audit Office demanded last month—until new and more sensitive and discerning procedures are put in place that end this dreadful catalogue of distress and death, which shames the Government. I hope the Minister will respond positively on each of these heartfelt points.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I thank the right hon. Member for Oldham West and Royton (Mr Meacher) for raising these important points on the handling of this case, and I assure him that we are committed to improving the work capability assessment, the incapacity benefit reassessment and the appeals processes.
I would like to start by restating our sincere condolences to Mr Traynor’s family. The right hon. Gentleman will be aware from his previous correspondence with the Secretary of State on this case of our plans to undertake a full internal review. This review has now been completed, and it confirms that we have correctly applied the procedures for incapacity benefit reassessment in this case. The work services director for Jobcentre Plus North West and representatives from the Oldham benefit centre have arranged to meet the right hon. Gentleman and members of Mr Traynor’s family to discuss the case on 28 September. Let me deal with a few points in respect of Mr Traynor’s case before dealing with the broader issues.
Following a WCA, it was decided that Mr Traynor did not have limited capability for work, and he was found fit for work with effect from 4 January. Prior to this decision, Mr Traynor had been contacted by the decision maker to establish whether there was any further evidence that should be taken into account. No further information was provided at that stage, and we wrote to Mr Traynor confirming our decision. Mr Traynor submitted an appeal against the decision on 12 January and continued to receive benefit throughout this period—albeit at a basic rate—while his appeal was considered.
Following the consideration of new information, in the form of evidence from Mr Traynor’s GP and an epilepsy specialist nurse, the original decision was changed by a Department for Work and Pensions decision maker and Mr Traynor was placed in the work-related activity group. The right hon. Gentleman quoted from the letter from Mr Traynor’s parents and solicitor, which I have read, and he suggested Mr Traynor was facing increased stress. That was not communicated to DWP during that period.
Mr Meacher
Irrespective of whether the distress, of which the parents were aware, was made known to the authorities, the crucial point in this case is: how can a 29-year-old who had been subject to grand mal seizures since he was 14 months old, and for whom Remploy had desperately tried for three years to get a job and could not do so, have been regarded as employable?
Mr Hoban
I do not want to get into the details of Mr Traynor’s case, because there is an opportunity for the right hon. Gentleman and Mr Traynor’s family to go through those with the regional director. I will come on to deal with the process in a bit more detail. Mr Traynor was asked questions during the course of his assessment by an Atos employee, which led to that conclusion. As I said a few moments ago, it was not until Mr Traynor submitted an appeal that he provided us with further evidence. The Department had asked for that evidence earlier and it had not been supplied.
I wish to make a broader point that comes out of this and other cases, which is that it is important that claimants provide information to support their claim at the earliest opportunity, so that we make the right decision first time around. I am sorry to say that we often find that evidence to support an application is provided only at the appeal stage. Not only is it the responsibility of all of us, as Members of Parliament, to help our constituents, but it is the responsibility of groups advising people with complex conditions, be they disability awareness groups or Citizens Advice, to ensure that when they work with people they encourage them to submit the evidence at the outset, so that we get these decisions right first time.
The right hon. Gentleman asked why Mr Traynor was referred for a work capability assessment. The reassessment of claimants entitled to the old-style incapacity benefit is a key part of our reform agenda to create and deliver a 21st-century welfare system by ensuring that those people who can work are given the correct help and support to do so. We do not believe that it is acceptable to write people off to a lifetime on benefits because they have a health condition or impairment. A claimant on incapacity benefit may not have had to speak to anyone in the Department about their health condition or work options for as long as five years. People are left on their own with no support or sense of how and when they may return to work.
The employment and support allowance regime recognises the importance of work and is designed to help claimants move towards employment with the right help and support. We therefore need to ensure that people currently receiving incapacity benefits are supported in preparing for a return to work where some form of employment is a possibility. The reassessment of 1.5 million existing incapacity benefits claimants started nationally in April 2011 and is expected to take three years to complete. Claimants are being reassessed using the work capability assessment process. Claimants who are assessed as having limited capability for work will be moved to ESA and will be placed in either the support group or the work-related activity group. The Department does not aim to reduce the levels of support for the most severely ill or disabled people, so claimants in the support group will be paid a higher rate of benefit. Claimants in the work-related activity group will be expected to undertake activity to support their return to the labour market.
That process is based on the Government’s fundamental belief that many people with health conditions are able to sustain and progress in employment. Indeed, evidence points to the negative impacts of being without work and suggests that appropriate work is generally good for people, regardless of whether they are disabled or have a health condition. In the context of Mr Traynor’s condition, the respected book “Fitness for Work”, published by the Faculty of Occupational Medicine, clearly sets out that
“most people with epilepsy are capable of normal employment without need for supervision or major restriction”.
That is supported by Epilepsy Action, which states on its website that many people with epilepsy do go out to work, that their epilepsy does not disrupt their work in any way and that nearly all jobs are open to people with epilepsy. I pay tribute to the hard work of organisations such as Epilepsy Action, which work not only to support their members but, crucially, to inform employers and tackle misconceptions about epilepsy.
Of course, no two individuals are the same and it is essential that the work capability assessment is capable of looking at individual circumstances and dealing with the wide variety of health conditions that individuals may have. That is why the work capability assessment was developed in consultation with medical and other experts, alongside representative groups. The working group, and that of a subsequent internal review carried out by the Department, includes an expert in neurological disability and rehabilitation to ensure that it deals effectively with conditions such as epilepsy.
The right hon. Gentleman commented that Colin was confused as to why he had been called back for reassessment. I will set out why we are going through the reassessment process and say a little about the process that happens when someone is called for assessment. Guidance to staff refers to the fact that claimants are not already identified as vulnerable but might become so at any point during their IB reassessment process. Following the letter to the claimant advising them that incapacity benefit is changing and that we will be assessing their entitlement to ESA, we call them to ensure that they understand the process and provide them with the opportunity to ask about anything about the process that might concern them. The ESA50 and the accompanying letter encourage claimants to provide full details about their conditions and offer face-to-face help to complete the form if they feel they need it. Once returned by the claimant, the content of the ESA50 is scrutinised by Atos, which can refer to a claimant’s GP for more information or advise departmental staff about any vulnerability if it believes it is necessary to do so.
The right hon. Gentleman suggested that the points were awarded by a computer, but the medical assessment conducted by an Atos Healthcare professional is a confidential, face-to-face discussion about the claimant’s condition that affords both parties the opportunity to identify and respond to any vulnerability that might prevent the claimant participating effectively in the IB reassessment process. Prior to making a decision about a claimant’s entitlement to ESA, the decision maker calls the claimant to provide them with an opportunity to offer any additional evidence. We recognise the concerns that people called for reassessment might have, which is why we have tried to ensure that there are steps in the process to explain to them what is happening, reassure them and give them the opportunity to make their points and express their concerns about the process.
Although we believe that the need for, and the principles of, the work capability assessment are right, the system we inherited from the previous Government contained flaws that undermined its effectiveness. We have therefore moved swiftly to put things right and are committed to improving the work capability assessment continually to ensure that it is as fair, accurate and efficient as possible.
We recognise that many people with a health condition want to work and can do so with the right support. In June 2010 we appointed Professor Malcolm Harrington, a highly respected occupational physician, to undertake independent reviews of the assessment. He has completed two reviews and is currently undertaking the third. His reviews set out a series of recommendations for improving the assessment. We fully endorsed the recommendations and are committed to making the changes as quickly as possible. For example, we have: improved the standards and consistency of decision making through additional training and better use of evidence; improved the way we communicate with claimants by providing personalised statements, summarising key advice clearly and implementing the customer charter; and made changes to the claims process to better support the claimant at each step of the process and ensure that they understand what is required of them.
Professor Harrington has also worked with charities to propose alternatives for the majority of work capability assessment activities, although I understand that, in relation to epilepsy, nothing has been received in relation to consciousness. We are confident that the improvements we are making to the assessment following these reviews will ensure that we increase the number of decisions that are right first time and improve the service provided to claimants.
It is important to state that Atos does not make the decisions on benefit entitlement; decision makers in the Department make the decisions after considering the advice Atos provides and any other appropriate evidence, including information from GPs, consultants and so on. The Department makes millions of such social security benefit decisions each year, the majority of which are not appealed. In fact, between October 2008 and May 2011 the Department made more than 1 million decisions following receipt of a work capability assessment from Atos. Only 9% of those decisions were overturned.
Let me talk about what we are trying to do to improve the appeals process. We want to encourage claimants to provide all the evidence to support their claim at the earliest opportunity. The Department for Work and Pensions now interacts more with claimants at an early stage to ensure that decision makers get more decisions right first time. We are also introducing a mandatory reconsideration process for benefits, so that when a claimant queries a DWP decision, they will be given an explanation by telephone and helped to identify any additional evidence that could change it. Claimants will still be able to appeal after the reconsideration if they wish.
This debate was initiated as a result of the unfortunate case of Mr Traynor and we extend our sympathy to his family, but it also highlights why we are right to introduce the additional stage in the process where a decision maker contacts the claimant to seek additional evidence before they make a final decision. The introduction of mandatory reconsideration will build on that. We will continue our programme of reassessing existing incapacity benefit claimants over the coming years.
Mr Meacher
I am grateful to the Minister for giving way. He has largely been talking about process. Clearly, the Government are trying to improve the process. However, the fact that there have been three reviews by Professor Harrington suggests that the process is pretty flawed.
May I return to my original question? Whatever improvement there has been in the process, how can someone subject to grand mal epilepsy seizures virtually from birth have been construed, at any stage in his 29 years of life, as able to work? He wanted to work; he probably came to the original work capability assessment eager to work. But how could he be accepted for working when Remploy and others considered that he was unemployable?
My last point is that Mr Traynor probably would not have died if he had not received the deduction of £70 a week in his incapacity benefit. How would that get someone into work? It simply produces extreme stress and anxiety.
Mr Hoban
Let me deal with those points. The right hon. Gentleman asked why Professor Harrington had done three reviews. The legislation, passed when his party was in government, actually required five independent reviews to be carried out. Professor Harrington is now conducting the third of those reviews. That is why it is happening. The reviews also demonstrate a commitment to learn, develop and listen to the experiences of claimants and the groups that represent them.
I will try not to go through the fine detail of Mr Traynor’s case; I am not sure that Parliament is the right place for that. However, having looked at the assessment form that was completed through a conversation with Mr Traynor, I should say that it was clear that the number of fits that he had during the day were relatively few across the course of the year. That was the information used to determine whether he was capable of working; it was then superseded by the letter from his GP and the epilepsy specialist nurse. Based on the original information supplied, the conclusion appeared to be right. Later information led to the reassessment of the conclusions made at that original assessment. I am sure that the north-west director will go through that in more detail with the right hon. Gentleman and Mr Traynor’s family.
We will continue to learn lessons from employment and support allowance, incapacity benefit reassessment and the work capability assessment. We are applying those lessons to the introduction of the personal independence payment, particularly around appeals and reconsiderations, to encourage claimants to provide all evidence to support their claim at the earliest opportunity. I reiterate that point. It would improve the whole process if we encouraged claimants to provide as much information as possible at the start of their application rather than leaving that to the appeal process. That is one of the learning points to come out of the debate this evening.
Question put and agreed to.