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Oral Answers to Questions
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
1. What recent discussions he has had on the Act of Settlement 1700.
The Deputy Prime Minister (Mr Nick Clegg)
As the House is aware, we have sadly lost two Members over the last few weeks. Before I reply to the hon. Gentleman’s question, let me say that both Malcolm Wicks and Sir Stuart Bell will be very sorely missed.
The right hon. Member for Croydon North was an example to all who entered the House. He always held to the highest standards of public life, and was a credit to the House of Commons. On a personal level, I—along with everyone else, I am sure—was struck by his modesty, compassion and commitment. He worked tirelessly for his constituents. Whether he was dealing with fuel poverty or pursuing legislation to support carers, Malcolm tackled it all with true dedication.
We also heard the sad news of the death of the hon. Member for Middlesbrough. While, as pro-Europeans, Sir Stuart and I agreed on the importance of Europe to the United Kingdom, I think he made it abundantly clear at every opportunity that on pretty well everything else he strongly disagreed with me. He was a strong champion of Church matters in his 13-year role as Second Church Estates Commissioner, and he clearly cared deeply about the House and its traditions, earning the respect of Members in all parts of the House.
Our thoughts and prayers go to the families and friends of both Members at this difficult time.
My officials continue to work closely with the Government of New Zealand in their co-ordination of the proposed reforms of royal succession throughout the 16 Commonwealth realms, which were announced by the Prime Minister at the time of the Perth agreement on 28 October 2011.
Tom Greatrex
I thank the Deputy Prime Minister for his answer, and associate myself with his comments about our two former colleagues, recently departed.
The Deputy Prime Minister referred to the work of the New Zealand Government. He will know that legislation will soon be needed to enable those changes to be made, and that it will be initiated in the House of Commons. Given his unenviable record of success in relation to constitutional change, may I suggest that he pass responsibility for the legislation to another Minister, so that there will be some chance of its actually being introduced?
The Deputy Prime Minister
So there are to be Christmas cracker jokes from the very beginning.
No; we will pursue this. As the hon. Gentleman may know, we are already pursuing it, along with 15 other Commonwealth realms, but the process is very complex legally. Although the idea is simple—ending male primogeniture in the succession rules and allowing successors to the monarchy to marry Catholics, removing that discriminatory rule from the current arrangements—it is proving to be quite difficult and time-consuming to align all the legislative processes across all the realms, but I know that the New Zealand Government are doing all they can to expedite that.
Mr James Gray (North Wiltshire) (Con)
Unlike the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), I have every confidence that my right hon. Friend will do a brilliant job in introducing these long-overdue reforms. Is it not ironic that, had the Queen had a younger brother, she would not be Queen at this moment? Is it not time to introduce the other reform to which my right hon. Friend referred briefly? At present, not only a monarch but anyone in the line of succession may not marry a Roman Catholic or, indeed, become one. That is an absurdity, and we must surely do away with it as soon as we can.
The Deputy Prime Minister
I certainly agree that the current rules are anachronistic and explicitly discriminatory. That is the point of the reforms. It should be borne in mind that the new rules, particularly those on male primogeniture, came into effect from the moment that the declaration was made in Perth. Although some painstaking work is needed to extend the legislation to all the Commonwealth realms, it has already taken effect.
Katy Clark (North Ayrshire and Arran) (Lab)
2. What plans he has to bring forward legislative proposals on the recall of hon. Members.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
The Government remain committed to establishing a recall mechanism that is transparent, robust and fair. We are grateful to the Select Committee on Political and Constitutional Reform for its consideration of our proposals and we are now taking proper time to reflect on its recommendations.
Katy Clark
How does the Minister intend to define “serious wrongdoing” in the legislation?
Miss Smith
As I have noted, we intend to introduce a recall mechanism that is transparent, robust and fair. We have set out two different sets of triggers that apply and we are also working with the powers of the House of Commons on these matters, including the definition of serious wrongdoing.
Mr John Spellar (Warley) (Lab)
3. What his policy is on the House of Lords (Cessation of Membership) Bill [Lords], Lords Bill 21 of Session 2012-13.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
As my right hon. Friend the Deputy Prime Minister made clear to the House on 3 September, the Government consider that the provisions of the Bill do not address the issues that make reform of the House of Lords necessary.
Mr Spellar
I suppose I am not surprised that the Deputy Prime Minister did not answer that question himself. He will be aware, probably more than most, that there are some gaps in the legislative programme for this Session of Parliament. Will he therefore arrange for Lord Steel’s Bill to come before this House and allow adequate time for discussion of that modest but useful measure, rather than allow the best to be the enemy of the good?
Miss Smith
That is rather rich considering that it was the Opposition who refused to commit to a timetable motion on the original legislation. We are focusing on economic matters.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Does my hon. Friend agree that now we appear to have sent House of Lords reform off into the distance we should be using any parliamentary time available to concentrate on the most important thing, which is getting growth back into our economy?
Andrew George (St Ives) (LD)
Nevertheless, does the Minister not agree that in spite of the foundering of the House of Lords Reform Bill there are still many residual issues on Lords reform for which there is all-party support and that there is no reason for the House or the Government not to accept that those reforms can be brought forward?
Miss Smith
Minimal alternatives such as those set out in the noble Lord’s Bill are, in the Government’s view, no alternatives at all. The Government have been clear that any changes must include the introduction of elected Members to the House of Lords.
Sheila Gilmore (Edinburgh East) (Lab)
4. What the Government’s political and constitutional reform agenda is up to May 2015.
The Deputy Prime Minister (Mr Nick Clegg)
The Government have already introduced fixed-term Parliaments, a significant constitutional change, and given people a say on the voting system for this House. We have established cross-party talks on party funding and work on individual electoral registration, recall and lobbying reform is ongoing. We have radical measures in train to shift power from the centre to local decision makers, whether that takes place through the reforms in the Localism Act 2011, the Local Government Finance Bill or the introduction of local enterprise partnerships and city deals. Although I imagine some people will say that withdrawal of the House of Lords Reform Bill marks the end of the Government’s constitutional reform agenda, it is clear that that is not the case.
Sheila Gilmore
The Deputy Prime Minister originally said that his reforms would be ranked with those of the 1832 Great Reform Act, but given that the only legislation that is either through or nearly through—fixed-term Parliaments, the reduction in the number of MPs and individual voter registration—arguably demonstrates a lessening in democratic accountability, would not a better title be the “Great Reactionary” rather than the “Great Reformer”?
The Deputy Prime Minister
If the hon. Lady is such an ardent reformer, why did she not get her party to push for House of Lords reform? That was something her party used to believe in, but it was not prepared to will the means to meet the ends.
Sir Roger Gale (North Thanet) (Con)
Given the right hon. Gentleman’s European credentials, will he find the time to bring the UK into line with many European states and ensure that the perpetual right to vote for expat UK citizens is enshrined in law?
The Deputy Prime Minister
As the hon. Gentleman knows, there is a time limit of 15 years. Various member states and other countries around the world have time limits on how long expatriates can vote in the nation they come from, whereas others do not. So far, although we keep the rules under review, we have not come to the conclusion that we will seek to change them in any significant way.
Ms Margaret Ritchie (South Down) (SDLP)
Given the public response to electoral reform and the right hon. Gentleman’s disappointment over Lords reform, and given that the Boundary Commission for Northern Ireland today published its revised proposals for further consultation, can he confirm the Government’s stated position on reducing the number of parliamentary seats?
The Deputy Prime Minister
As the hon. Lady knows, yes, the boundary commissions have published their latest revisions. Equally, I have made it clear that because of a failure to deliver the wider package of reforms that we had agreed within the coalition Government, including House of Lords reform, when it comes to a vote the Liberal Democrats will not support these changes ahead of the election in 2015.
Bob Blackman (Harrow East) (Con)
Can my right hon. Friend confirm the progress on individual voter registration so that we can not only get an accurate register, but combat electoral fraud?
The Deputy Prime Minister
We are now in the latter stages of the legislation. The hon. Gentleman is right to highlight that the central purpose of individual voter registration is to bear down on fraud. That is something with which I should have thought all Members would agree. The Labour Government had plans to introduce individual voter registration, to come into effect on a slightly slower timetable than the one that we are introducing, yet for some reason the Labour party has now decided that it is against this anti-fraud measure from first principles—a very curious change of mind.
Wayne David (Caerphilly) (Lab)
I note that the Government are happy for the Scottish Parliament to allow 16 and 17-year-olds to vote in the Scottish referendum, but surely to be consistent the Government should extend the franchise to all 16 and 17-year-olds throughout the United Kingdom. If the Government are prepared to do that, we on the Labour Benches will support them. Will they accept our offer?
The Deputy Prime Minister
As the hon. Gentleman well knows, I personally am sympathetic to the principle of giving 16 and 17-year-olds the vote, but it is not something that we are going to proceed with as a Government because it is not agreed within the coalition. He should be precise about the powers that we have given to the Scottish Administration. We have given them a degree of discretion over the franchise that applies to referendums, which applies to all referendums because the franchise needs to be decided on a referendum-by-referendum basis. To that extent, the powers that we have granted to the Scottish Government are nothing exceptional to the decisions made on the franchise for each referendum, wherever that might take place.
Mr Peter Bone (Wellingborough) (Con)
5. When he plans to bring forward proposals to implement the parliamentary boundary review.
The Deputy Prime Minister (Mr Nick Clegg)
The boundary commissions are continuing with the boundary review in accordance with the legislation, which requires them to report before October next year. It will be for Parliament to consider the recommendations and vote on them in due course.
Mr Bone
The Conservative Members of the coalition delivered AV—[Interruption.] They delivered the opportunity for AV, and the biggest majority in this Parliament on a Second Reading was for House of Lords reform, so how can the Deputy Prime Minister then vote against the boundary review and expect to remain in the Government? Is it his view that that is a principle of the highest integrity and in the interests of democracy?
The Deputy Prime Minister
I am delighted that, if only fleetingly, the hon. Gentleman was in favour of AV and not just of the principle of holding a referendum on AV. As he knows, we are honouring the coalition agreement by leaving the boundary review legislation on the statute book. That is primary legislation from the past which Liberal Democrat Members passed, but for all the reasons that I have explained before, we are not going to introduce the changes ahead of the general election in 2015.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
12. The Deputy Prime Minister says that the Liberal Democrats will not vote for the boundary change proposals but the chair of the Conservative party, speaking for once using his real name, says that he has still not given up hope, so who should we have confidence in—him or the chair of the Conservative party?
The Deputy Prime Minister
Yes, I have also read press reports that the chairman of the Conservative party wishes to strike a deal with us on boundaries in return for a party funding deal. I suppose that is finally a “get rich quick” scheme which he is prepared to put his name to. Let me be clear—[Interruption.]
Mr Speaker
Order. We want to hear the words of the Deputy Prime Minister. I want a full hearing.
The Deputy Prime Minister
Let me put it this way: a change of mind on my part on the issue as is likely as the hon. Member for Wellingborough (Mr Bone) going to Norway to accept the Nobel prize on behalf of the European Union. It is not going to happen.
Mr Andrew Turner (Isle of Wight) (Con)
Why does the Deputy Prime Minister oppose the proposals by the Boundary Commission today when he was all in favour of them last September? Did anyone expect him to change his view by 180°?
The Deputy Prime Minister
I was surprised when parties and Members in this House, having fought on a manifesto commitment to reform the House of Lords, decided against simply voting in favour of a timetable motion to do so. These things happen, and I think that everybody in the country understands that a coalition Government is a deal. It is like a contract, and where one part of the contract is amended another part of the contract is amended as well, and we move on.
Sadiq Khan (Tooting) (Lab)
I begin by welcoming the Parliamentary Secretary, Cabinet Office, the hon. Member for Norwich North (Miss Smith) and congratulating her on her new role. We genuinely wish her well. I also welcome the fact that the Deputy Prime Minister has finally found some principle and backbone. We welcome his rigour in answering the last question raised in relation to the one asked by the hon. Member for Wellingborough (Mr Bone). But bearing in mind that during the last year thousands of pounds of taxpayers’ money has been spent on a boundary review that will be futile, and that there will be uncertainty and further taxpayers’ money spent during the next 14 months, why not use his power to put a stop to it now?
The Deputy Prime Minister
As I have explained, the legislation is on the statute book and that will not change. I have merely made clear during the last few weeks and months the position of Liberal Democrat Members when the matter comes to a vote.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
6. What terms of reference he has given to the commission of priorities for the economy of the north-east.
The Deputy Prime Minister (Mr Nick Clegg)
The terms of reference for a strategic, constructively critical review of the economy in the north-east have rightly been set by the north-east local enterprise partnership itself, not by Government. The partnership has commissioned a high-profile team of leaders from UK finance, industry, public and civil society to produce this review, and I believe it will be an excellent means of helping to drive growth in the north-east. I look forward, as I believe my right hon. Friend does too, to receiving the report early next year.
Sir Alan Beith
Is my right hon. Friend confident that this group, which has an important and valuable job to do, can take fully into account those things that matter to the economy of Northumberland, in particular the dualling of the A1 and the provision of broadband in rural areas?
The Deputy Prime Minister
Absolutely. I can assure my right hon. Friend on that because the group, as he knows, is independently constituted and can address itself to the concerns surrounding broadband infrastructure and road transport, which I know are deeply felt and on which he has long campaigned in the north-east.
Diana Johnson (Kingston upon Hull North) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Deputy Prime Minister (Mr Nick Clegg)
As Deputy Prime Minister I support the Prime Minister on a full range of Government policies and initiatives, and I take special responsibility for the Government’s programme of political and constitutional reform.
Diana Johnson
I am interested that the Deputy Prime Minister takes full responsibility. Given the waste of £12 million on the Boundary Commission review, which, from what the right hon. Gentleman has just said, will not go anywhere, and the £100 million wasted on the west coast rail franchise, is he proud of the Government’s record in wasting taxpayers’ money?
The Deputy Prime Minister
It seriously beggars belief that an Opposition Member, whose Government drove this country to the edge of bankruptcy, tries to make a point about value for money. The Government are repairing, rescuing and reforming the British economy because the hon. Lady’s party wasted such monumental amounts of money over 13 years.
Neil Carmichael (Stroud) (Con)
T4. Will the Deputy Prime Minister join me in saluting the fact that we now have a million new jobs in the private sector, largely through entrepreneurial activity? Will he further join me in suggesting that we need a greater focus on developing a culture for entrepreneurial activity in this country, and will he consider coming to my constituency to support my festival for engineering and manufacturing, where that is being put into practice now?
The Deputy Prime Minister
I certainly agree that an entrepreneurial culture and a backing for engineering and manufacturing is crucial to the rebalancing of the woefully unbalanced economy that we inherited from the Labour party, which spent all its time on a prawn cocktail charm offensive in the City of London, letting the banks get away with blue murder. We have a manufacturing festival in Sheffield that is extremely successful and I am delighted to hear that there is one in the hon. Gentleman’s constituency as well.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I associate the Opposition with the Deputy Prime Minister’s remarks about Sir Stuart Bell and Malcolm Wicks? I draw attention to Sir Stuart’s work on the House of Commons Commission, which was not often seen by Members but was very important for Members on both sides of the House. When Leader of the House, I saw at first hand the painstaking commitment and dedication with which he carried out that work over many years. We will miss that work.
I also endorse what the Deputy Prime Minister said about Malcolm Wicks. He made an extraordinary and unique contribution to British politics. I believe that he was no less than the father of British family policy. His work moved us beyond what were sometimes stale arguments for or against marriage into substantive policy discussions about balancing work, bringing up children and supporting carers. Members on both sides of the House recognise that we will miss them both greatly.
Nobody can be in any doubt about the utmost seriousness of the vile abuse perpetrated by Jimmy Savile. It has come to light that Jimmy Savile committed these crimes at the BBC and at other public institutions. Does the Deputy Prime Minister agree that we need one inquiry that looks into what happened in each of the institutions to see whether there were patterns of systemic failure and so that we get a coherent picture? Does he agree that any inquiry must be completely independent? That is the very least that Savile’s victims would expect if we are to get to the truth and learn the lessons. Will the Government now set up an independent inquiry?
The Deputy Prime Minister
I certainly accept that there might be a case for an inquiry and that, if one that is as broad as the right hon. and learned Lady suggests it should be were to be held, it should be independent and able to look at the full range of shocking revelations that have come to light. We are not ruling that out, but I think that the first priority must be to allow the police to conduct their work in relation to these deeply troubling and shocking revelations and allegations. Like her, I keep asking myself how on earth this was possible on this scale, over such a prolonged period of time and in so many different settings. In many ways it is the dark side of the cult of celebrity that might have intimidated people from speaking out earlier. Now that we know these things and they are coming to light, we should proceed in a way that is led by what the police find and keep an open mind on the issue of an inquiry.
Ms Harman
The police are carrying out important investigations that obviously should not be impeded, but that does not mean that an independent inquiry should not be set up now. I ask the Deputy Prime Minister to reflect on that and think again, because revelations are coming forward daily and the victims of this abuse need to hear firmly that the truth will be discovered. I can assure him that we stand ready to discuss terms of reference to ensure that we have the full and thorough inquiry that is no less than what the victims deserve.
The Deputy Prime Minister
The right hon. and learned Lady says, reasonably enough, that there is no reason why we cannot establish an inquiry while the police are doing their work, but I think that the practical issue is the other way around: what kind of work could an inquiry do while the police are conducting their investigations? We should not imagine that an inquiry that cannot pursue certain avenues of investigation because the police are conducting their own investigations would necessarily be the best answer for the victims at this time. Let us at least agree that we must first do everything we can to ensure that proper answers are given to the victims. I am grateful to her for her signal that she is prepared to work together on a cross-party basis as we get to the bottom of what on earth happened.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I ask the Deputy Prime Minister what he thinks politics in this country should be about? I remind him that he argued with some passion for more equal constituencies and fairer boundaries on their own merits. Is politics about arguing for what one believes in on a point of principle, or is it about getting what one can out of a particular situation for one’s own political advantage, in which case why should we ever believe anything he says?
The Deputy Prime Minister
I am not sure that the hon. Gentleman has yet got his head around the politics of coalition. [Interruption.] He raises these questions month in, month out. His party did not win the general election; that is fact 1. Neither did my party; that is fact 2. Fact 3 is that we need to compromise for the benefit of the country as a whole; and when we compromise we enshrine that in a coalition agreement, which is like a deal. When one party does not abide by a certain part of that deal, it is perfectly legitimate for the other party to say that it will amend the terms of that deal. That is the meaning of coalition politics.
Kerry McCarthy (Bristol East) (Lab)
T2. The Deputy Prime Minister, not for the first time, disappointed many people this week by refusing to support calls for the editor of The Sun to take the long overdue step of dropping page 3, saying that it would be illiberal to do so. Does his version of liberalism really prevent him from taking a public stand against the objectification of women? Whose interests is he most interested in protecting?
The Deputy Prime Minister
Not for the first time, the hon. Lady has entirely twisted what I said. I said—I would be interested to know whether she agrees with this—that it would be wholly illiberal and wrong for this House to seek to compel any editor to determine the content of their newspapers. If that is the kind of authoritarian nonsense she believes in, then I am perfectly content to say that we entirely disagree.
Lorely Burt (Solihull) (LD)
T13. In addressing concerns over the operation of the European arrest warrant, does my right hon. Friend agree with our police that we must not throw out the baby with the bathwater and that rather than scrapping the arrest warrant we should be reforming it?
The Deputy Prime Minister
I think that there is widespread agreement in all parts of the House that the European arrest warrant is not perfect in its operation. There is clearly a legitimate concern about its disproportionate application to what are essentially judicially frivolous cases, and that is why it needs reform. The disagreement is between those who argue that we should reform it while remaining a full signatory to it, which is the Government’s current position, and those who feel that we should abdicate from it altogether. The reason I am strongly opposed to the latter position is that criminals do not recognise borders. Paedophiles, murderers and terrorists need to be chased across borders. It is not about whether one is pro or anti-European or likes or loathes Brussels; it is about whether one is for or against going after nasty, wicked people. That is why I support continuing to be a full signatory to the European arrest warrant while, of course, continuing to argue for its reform.
Mr Speaker
Order. We have a lot to get through, so we need to speed up from now on.
John Mann (Bassetlaw) (Lab)
T3. As the man with his finger on the pulse of the nation, can the Deputy Prime Minister tell the House the level of the new CIL tax—community infrastructure levy—that is currently being introduced in his own Sheffield city region?
The Deputy Prime Minister
I cannot answer that question; I will get back to the hon. Gentleman.
James Wharton (Stockton South) (Con)
In his answer to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), the Deputy Prime Minister spoke about the north-east local enterprise partnership. Will he confirm that he is aware that there is more than one LEP in the north-east, and that the Tees Valley LEP, which is doing a great job of working with businesses, the Government and the regional growth fund to deliver employment, growth and investment in the south of the region, will have a place at the table when discussing the north of the country?
The Deputy Prime Minister
I agree with the hon. Gentleman that everybody who has a stake in the future success and prosperity of the north-east economy should have a voice in the important discussions that are taking place. As he will know better than I do, one of the great strengths of One North East was that it spoke for the region as a whole. One of the strengths of LEPs is where they work most effectively together on behalf of a region as a whole.
Mr William Bain (Glasgow North East) (Lab)
T5. Six months ago the Deputy Prime Minister described the new energy tariff agreement as a “landmark deal” for UK consumers, but now Which? has found that there are still over 230 tariffs in existence and that three out of four consumers are paying the highest possible tariff. When are the Government going to act to end this rip-off of 5 million consumers by the big six energy companies?
The Deputy Prime Minister
As the hon. Gentleman knows, we have announced new arrangements that will compel the big six utility companies to provide information to consumers about which tariff is best for them. That has not yet come fully into effect, but it will be a huge change. He is quite right: there is still far too much confusion and too much information, with too many contradictory messages being given to households and consumers about their energy bills and the tariffs available to them. This will, I hope, make a dramatic difference, because it means that in clear, simple terms people will be informed of the cheapest tariff that suits them best.
Tim Farron (Westmorland and Lonsdale) (LD)
Does my right hon. Friend agree that it is very important that we tackle the threat to our economy and our society of climate change and that the messages given out by Ministers on both sides of the coalition are consistently and strongly pro-green, pro-green energy and pro-green manufacturing in order to give green business the confidence to invest?
The Deputy Prime Minister
As my hon. Friend will know, the coalition agreement commits this Government—across all parties—to be the greenest Government ever. We have achieved many radical new things, such as the carbon budget, the carbon floor price, the green investment bank and the green deal, which will be the first of its kind anywhere in Europe and will be unveiled in the next few months. I say to my hon. Friend that this is not just about whether we think it is right for the environment, but about what is right for our economy. The green sector employs close to 1 million people, was growing at about 4% or 5% last year and is one of the few sectors that runs a trade surplus. That is why he is right that we should be working consistently to deliver more investment and more jobs for the people of Britain.
Steve Rotheram (Liverpool, Walton) (Lab)
T6. Is it not an affront to the Deputy Prime Minister’s party that the Tories are trying to buy Lib Dem support for boundary changes by offering financial enticements? Given his record on constitutional reform, does he agree that the only way to ensure that those proposals never see the light of day would be for him to give them his full backing?
The Deputy Prime Minister
The hon. Gentleman probably writes his questions before he comes into the Chamber, but he will have heard me answer that question on three occasions over the past half an hour.
Zac Goldsmith (Richmond Park) (Con)
Given the problems with the reform agenda so far, and given the fact that recall represents an opportunity for some real, meaningful change that voters will notice, many people are concerned that the assurances being given at the moment are vague at best. Will the Deputy Prime Minister give us a crystal-clear timeline and will he draw inspiration, as he rewrites it, from my private Member’s Bill, the Recall of Elected Representatives Bill?
The Deputy Prime Minister
The hon. Gentleman and I have spoken and I pay tribute to him for his dogged sincerity and commitment to a radical, California-style model of recall. We have looked at it and, as he knows—we have discussed it—we have concerns about the danger of such a model of recall becoming a kangaroo-court process. There need to be some checks and balances. We recently received the Political and Constitutional Reform Committee’s report, which makes certain observations and, indeed, strong criticisms of our approach, and we are considering our response.
Helen Jones (Warrington North) (Lab)
T7. The Deputy Prime Minister has said that he will not support the implementation of the boundary proposals. Will he clarify whether that means he will vote against them or abstain?
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
In light of my right hon. Friend’s answer that he will vote against any boundary changes, will he confirm that he will, therefore, allow Government Ministers to vote against Government policy?
The Deputy Prime Minister
As I have said, it is an excellent tribute to both sides of the coalition that, notwithstanding huge pressures to do otherwise, we have religiously stuck to the commitments that we made together to the British people in the coalition agreement. On this particular occasion, for reasons I will not rehearse now, one party in the coalition felt unable to deliver one very important part of the constitutional reform agenda—House of Lords reform—so, reasonably enough, the other part of the coalition has reacted accordingly on the issue of boundaries. Those are circumscribed circumstances which will not and do not prevent the coalition Government from working very effectively on a broad waterfront of other issues, the most important of which, of course, is cleaning up the economic mess left by that lot on the Opposition Benches.
Helen Goodman (Bishop Auckland) (Lab)
T8. I welcome the commission that has been set up on the north-east economy, because we need all the help we can get at the moment. Further to the question asked by the hon. Member for Stockton South (James Wharton), does the Deputy Prime Minister understand that the commission must report to both local enterprise partnerships, and was it not a mistake by the Government to split our region into two?
The Deputy Prime Minister
I do not think that it was a mistake for the Government to replace the layer of regional development agencies, many of which were disconnected from the communities, cities and towns that they sought to represent. I am sure that the hon. Lady, who is fair-minded, will accept that RDAs were too often distant from the businesses and people that they sought to represent. I know that there was a lot of backing in the north-east for One North East, and that is why it is very important that all the LEPs in the north-east continue to work together to promote a cohesive approach to economic development that represents the whole of the north-east region.
Bob Blackman (Harrow East) (Con)
One concern among voters is the alleged irregularities in postal voting, which have increased over the past few years. What changes does the Deputy Prime Minister propose to ensure that our elections are free and fair?
The Deputy Prime Minister
The main change, other than some important rule changes to the administration of the postal voting system, which the hon. Gentleman will know about, is the introduction of individual voter registration. That is the biggest single weapon that we have against the worrying instances of widespread electoral fraud in parts of the country. That is why I hope that, instead of constantly complaining about our attempts to stamp out electoral fraud, the Labour party will support them.
Dan Jarvis (Barnsley Central) (Lab)
T10. The early intervention grant is used by local authorities to fund programmes that have the potential to transform the long-term life chances of deprived children. We discovered recently that hundreds of millions of pounds of that money will be diverted to fund the provision of nursery places for two-year-olds. We cannot tackle child poverty and improve social mobility by taking money from one set of essential services to pay for another. What steps does the Deputy Prime Minister propose to take to protect this specific pot of funding?
The Deputy Prime Minister
I recognise the hon. Gentleman’s legitimate concern about an important area of Government policy, but he is just plain wrong when he says that money is being taken away from the EIG. We made it clear that some of the money under the EIG umbrella was dedicated to the two-year-olds offer. As he knows, that is a new offer of 15 hours’ pre-school support for two-year-olds from the most deprived families in this country. It is a radical and progressive step towards greater social mobility and early intervention. We have retained the total amount of money for early intervention, but allowed the EIG to be used in a more flexible way. I ask him not to be preoccupied with which pot the money is in, but to focus on the fact that we will do big progressive things with exactly the same amount of money.
Greg Mulholland (Leeds North West) (LD)
Specialist manufacturing is a huge growth opportunity for the economy. Surgical Innovations in my constituency is a great example of that. It is receiving £4.91 million from the regional growth fund. Will my right hon. Friend say when we can expect the next round to be announced, so that we can hear more good news stories like that?
The Deputy Prime Minister
We will make the impending announcement on the third round of the regional growth fund in the coming days. Although there have been criticisms about the pace of the disbursement of the money under rounds 1 and 2, my hon. Friend will be delighted to know that 60% of the projects from the total envelope of £2.5 billion are up and running, creating thousands upon thousands of jobs directly and tens of thousands of jobs indirectly, and enhancing private sector as well as public sector investment in our economy.
Karl Turner (Kingston upon Hull East) (Lab)
T11. Does the Deputy Prime Minister believe that abusing police officers at the gates of Downing street and calling them “f***ing plebs” would constitute serious wrongdoing for the purposes of recall? What representations has he made to the Prime Minister on this issue?
The Deputy Prime Minister
My right hon. Friend the Chief Whip has made it clear that he acknowledges that what he did was wrong, he has apologised to the police officer in question, and the police officer has accepted his apology.
The Deputy Prime Minister
I know a thing or two about apologies, musical and otherwise, and I think that when someone is big enough to say that they made—[Interruption.]
Mr Speaker
Order. It is not a criminal offence to shout at the Deputy Prime Minister, but it is notably discourteous. The hon. Member for Kingston upon Hull East (Karl Turner) is used to practising in the courts as a barrister. He is a senior and sober fellow, and should behave accordingly.
The Deputy Prime Minister
My right hon. Friend the Chief Whip has made it clear that he acknowledges that what he did was wrong, he has apologised, and the police officer in question has accepted that apology. I hope that we can move on from there.
Andrea Leadsom (South Northamptonshire) (Con)
My right hon. Friend is right to say, as he has many times, that one of the great achievements of the coalition has been to come together in the national interest. Will he not, therefore, reconsider the fact that reducing the number of Members of Parliament and equalising the number of electors in each seat is clearly in the national interest?
The Deputy Prime Minister
As I sought to explain, the legislation on the boundary reviews remains on the statute book and there is no question of our seeking to repeal it. To that extent, we are honouring the coalition agreement commitment to introduce legislation to hold boundary reviews and reduce the number of MPs in this House. However, for all the reasons that I have explained, the legislation will not be introduced in effect before the next general election.
Sheila Gilmore (Edinburgh East) (Lab)
T12. Earlier, the Deputy Prime Minister was asked about the economy, and he stated that he effectively had to enter into coalition to rescue the economy. Would that argument not be stronger but for the fact that none of the predictions about growth has actually happened over the past two and a half years?
The Deputy Prime Minister
The hon. Lady may lightly dismiss the fact that the Government have created 1 million new jobs in the private sector. She may lightly dismiss the fact that we have some of the lowest interest rates in the developed world, saving ordinary households thousands and thousands of pounds. She may lightly dismiss the fact that the bond markets are not on our necks as they are in so many other over-indebted countries. Those are huge achievements which were not made any easier by the Labour party’s lamentable economic record in government.
Guy Opperman (Hexham) (Con)
1. What steps he is taking following the publication of the report of the Hillsborough independent panel in September 2012.
Helen Jones (Warrington North) (Lab)
3. What recent steps he has taken to ensure that the Hillsborough families receive justice.
Alison McGovern (Wirral South) (Lab)
4. What recent steps he has taken to ensure that the Hillsborough families receive justice.
Mr David Hanson (Delyn) (Lab)
8. What assessment he has made of the recommendations of the Hillsborough independent panel.
Mr Robert Buckland (South Swindon) (Con)
9. What steps he is taking following the publication of the report of the Hillsborough independent panel in September 2012.
The Attorney-General (Mr Dominic Grieve)
My consideration of the evidence in this matter is far from complete, but as I do not wish to cause the families affected by this disaster any greater anxiety, I have decided to take an exceptional step and announce that, on the basis of what I have already seen, I am persuaded that an application to the Court for fresh inquests must be made.
Ninety-six people died as a result of what occurred at Hillsborough that day, and 96 inquests were held. I believe that, as all those deaths arose from a common chain of events, it would be better for me to apply for all 96 cases to be considered again. I want to allow all the families affected the opportunity to make representations to me on that issue, and I will be in contact with them.
I wish to make it clear that, having announced my decision, I will still need further time to prepare the application so that the strongest case can be made to the Court. I have given that work priority and I will continue to do so. I have today laid a written ministerial statement in both Houses announcing my decision.
Guy Opperman
All in the House and all the families involved will welcome the Attorney-General’s decision today; they have lived with a completely wrong verdict for far too long. Will the Attorney-General assist the House by telling us about the speed of the process, so that urgent justice can prevail?
The Attorney-General
I need to complete my consideration of the evidence and, as I have said, I need to provide the families with the opportunity to make representations, and to consider any representations that are made. I need to complete my consideration of the legal issues, and I then need to make the application to the Court. When the case is heard will be a matter for the Court’s listings. It is very difficult for me to give a precise timetable for my hon. Friend; I will move as quickly as I can.
Helen Jones
I say a genuine thank you to the Attorney-General for what he has announced today. The families who have waited so long for justice are at least now within reach of that justice. Will he assure the House that sufficient resources will be made available so that work on getting a new inquest can proceed as quickly as possible? Can he say whether that inquest will be held in Liverpool, as the families have always requested?
The Attorney-General
I am satisfied that there will be sufficient resources to take this forward. The venue of any eventual hearing is not really a matter for me. Should—I stress this for the House—the application that I make to the Court be successful, it will be for the Court and the coroner to decide where the inquests take place. I am sure that representations can then be made in respect of that, but it is not my decision.
Alison McGovern
I thank the Attorney-General for his very important statement; he will know what a hugely important day this is for Merseyside and the many people around the world who care about putting right the injustice of Hillsborough. Will he meet a delegation of Members of Parliament, with the families, so that we can talk about some of the complexities of what he has announced today?
The Attorney-General
I am always happy to see Members of Parliament. As for meeting with delegations, the hon. Lady will appreciate that one feature of my work is that I must take it independently. If there is a good reason for meeting people, I am certainly always happy to do so, but she will appreciate that I have already undertaken to consult representatives of the families. We will do that as a formal process, and I would obviously wish to avoid something that does not appear sufficiently structured.
Mr Hanson
I genuinely thank the right hon. and learned Gentleman for his announcement, which will be of great comfort to my constituents whose family members died at Hillsborough, and particularly to the families of those who died after the 3.15 pm cut-off. Will he indicate whether he expects the Director of Public Prosecutions’ potential consideration of criminal charges to have any impact on the timing of the inquest?
The Attorney-General
Clearly, the consideration of charges is done independently by the DPP and I have no role in it. It is perhaps trite to say—I think I have said this before—but were there to be criminal proceedings, that could undoubtedly impact on when an inquest could take place. However, I do not think that it has any impact on the timing of my making an application to the Court for it to order inquests to take place if it is so minded.
Mr Buckland
The Attorney-General’s announcement is indeed welcome news. Will he assure me that adequate parliamentary time will be given for the fullest of debates into the shocking revelations that we heard last month?
The Attorney-General
It is my understanding that there will be the opportunity for a debate on this matter next Monday, 22 October, which I believe will be led by my right hon. Friend the Home Secretary. Obviously, I will be present for as much of the debate as possible to listen to what is said.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Attorney-General’s statement is greatly to be welcomed, and the families had a very positive meeting with the DPP yesterday. All hon. Members hope that justice for the Hillsborough families is finally in sight. However, the Crown Prosecution Service faced criticism for failing to act 14 years ago when it was presented with evidence of the wholesale alteration of witness statements by South Yorkshire police and their solicitors. In order to build further public confidence in the process launched by the DPP last week, will the Attorney-General consider discussing with the DPP the value of instructing, at the outset, a senior and independent-minded Queen’s counsel to lead the review of evidence and the decision-making process on any possible prosecutions? Does he agree that such an additional check and balance would be helpful and positive?
The Attorney-General
I thank the hon. Lady for her comments. I understand that she wrote to the DPP on 8 October, which I believe his office received last Friday, to raise some of those issues. I understand that she will get a reply from him as soon as possible.
May I reiterate that the DPP, under our constitutional system, acts entirely independently from myself, although I have superintendence. I am sure he will have noted the hon. Lady’s comments. The question as to how he best goes about conducting his operations within the CPS, bringing prosecutions or reviewing any matter that is historic, is a matter for him, but it is always open to him to discuss it with me.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The Attorney-General’s announcement will be welcome not just on Merseyside and in Yorkshire, but by football supporters in the whole country. Will he, at an appropriate time, and perhaps with colleagues from the Ministry of Justice, talk to the new chief coroner to ensure that the lessons of this experience are learned for all future inquests?
The Attorney-General
I thank my right hon. Friend for what he said and I think I agree with him. It is worth bearing it in mind that the world has moved on quite a lot since the events surrounding the original inquests. We have much better systems in place. One of the challenges, should the Court be minded to grant my application, will be how to structure the new inquests, if they are to take place. I have no doubt that tried and tested methods—they have already been used with great success in other recent, high-profile matters—are in place.
Steve Rotheram (Liverpool, Walton) (Lab)
Can the Attorney-General guarantee that the costs of any new inquests will be borne by the state?
The Attorney-General
That is a rather difficult question for me to answer. Ultimately, costs can be a matter for the Court. As I have indicated, at the moment, the costs of the preliminary work that is taking place are borne by my Department. I cannot assess how much those will be. Once the matter is within the court process, the courts have discretion, but I suspect—it is probably inevitable—that the taxpayer will pay a considerable amount of the cost.
Angela Smith (Penistone and Stocksbridge) (Lab)
I note the Attorney-General’s comments about where the inquest might be held, but is it his view that the inquest should definitely not be held in Sheffield?
The Attorney-General
The hon. Lady has made her point, but it is not for me to start giving views or instructions to the Court or coroner about how they should conduct an inquest, if one is held. I have no doubt, however, that representations made by hon. Members and representatives of the families will be noted by those concerned.
Diana Johnson (Kingston upon Hull North) (Lab)
2. What recent discussions he has had with the Director of Public Prosecutions on the prosecution of disability hate crimes by the Crown Prosecution Service.
The Solicitor-General (Oliver Heald)
The whole country marvelled this summer at the achievements of the Paralympians, which provided a huge opportunity for changing attitudes towards disability. The CPS takes disability hate crime very seriously and the DPP has made his own commitment very clear. I have not had the opportunity to discuss the matter with him yet, but I can assure her that the CPS prosecutes these cases whenever it can.
Diana Johnson
I start by welcoming the Solicitor-General to his new position.
In 2011, the number of disability hate crimes rose by one third to 2,000, but only 523 convictions were upheld. When he has such conversations, will he talk through how that conviction rate might be increased?
The Solicitor-General
The hon. Lady has spent much time and effort campaigning for disability rights, including within the criminal justice system, and I respect the point she makes. Nevertheless, it is important to recognise that progress has been made: the number of convictions has risen steadily from 141—I believe—in 2007-08 to the 480 concluded in the past year. However, yes, more progress needs to be made, and the DPP has explained in the past that he thinks a lot more needs to be done.
Rehman Chishti (Gillingham and Rainham) (Con)
According to the CPS website, there is no legal definition of a disability hate crime. Will the Solicitor-General look into this matter and see whether it can be reviewed?
The Solicitor-General
My hon. Friend makes an important point. It is important to monitor and identify crimes, particularly violent and public order crimes involving an element of disability hate. The CPS has issued new guidance on this matter to its prosecutors, who of course have the right in appropriate cases to ask, under section 146 of the Criminal Justice Act 2003, for an uplift in the sentence. That needs to be done in appropriate cases.
George Hollingbery (Meon Valley) (Con)
5. What changes he expects following the publication of the Director of Public Prosecution’s final guidelines for prosecutors in cases involving the media.
The Attorney-General (Mr Dominic Grieve)
The guidelines issued on 13 September by the DPP should ensure a more consistent approach by prosecutors and provide transparency to the public over how such cases are handled.
George Hollingbery
Weighing the competing elements of public interest and criminality in this area of the media will always be a nuanced matter. Is my right hon. and learned Friend confident that the new guidelines bring greater clarity to prosecutors and will lead to increased robustness in decision making?
The Attorney-General
Yes, I am. As my hon. Friend will be aware, the guidelines arose from a response by the DPP to the Leveson inquiry and from evidence he gave before it. Essentially, the guidelines encapsulate in a transparent fashion the practice of the CPS in this area. I therefore have every confidence that they provide, and will continue to provide, a robust application of the law. There is no special law for journalists in this context, but there are public interest considerations which, as the DPP has shown in the guidelines, will be taken into account.
Fiona Mactaggart (Slough) (Lab)
As I read the guidelines, it is unlikely that they will make much difference to two of the ways in which social media have been horrifyingly used for criminal purposes. One is paedophiles using Twitter and the other—perhaps not criminal, but certainly shocking to large numbers of our constituents—is the use of YouTube to mock Islam. What more has the Attorney-General done to prevent that kind of crime, as opposed to prosecuting it?
The Attorney-General
Crime committed on social media is crime. I would like to reassure the hon. Lady that if there are examples of criminal behaviour taking place on social media—incitement, sex crimes or incitement to religious or racial hatred—it is for the police to investigate initially, as she will appreciate. However, if that evidence is then brought to the Crown Prosecution Service, it would be surprising if it were not in the public interest to bring a prosecution. As she will be aware, there are already instances of individuals who have committed crime on social media having been successfully prosecuted.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
6. What progress Advanced Language Solutions has made on reporting to the Crown Prosecution Service the results of checks to ensure that all of its interpreters have been security vetted.
The Solicitor-General (Oliver Heald)
Advanced Language Solutions has completed its review and has provided assurances to the Crown Prosecution Service that a full audit trail is now held in respect of the 1,100 interpreters on its list and that all vetting information has been fully verified.
Meg Hillier
The Government have overseen a shambles in the provision of interpreting services. They have procured an IT system, at a cost to the taxpayer of £42 million, to ensure that interpreters turn up in court, but they are not turning up. Justice is being delayed, and in many cases it is being denied. What action is the Attorney-General taking to ensure that the Ministry of Justice is taking proper action to ensure that justice is not ill served by such chaos?
The Solicitor-General
It is important that there should be strong performance in this area. There has been a major improvement since the early months of the contract, when there were the problems that the hon. Lady has rightly outlined. The picture is one of improvement and one where the Government are saving £15 million a year, so we are also ensuring good value for money. There has been an improvement, and we will continue to monitor the area closely.
Miss Anne McIntosh (Thirsk and Malton) (Con)
7. What proportion of prosecutions for burglary were successful in each of the last three years; and if he will make a statement.
The Solicitor-General (Oliver Heald)
The Crown Prosecution Service’s records show that the proportion of defendants prosecuted successfully for burglary in each of the past three years was 86.1% in 2009-10, 85.8% in 2010-11 and 85.6% in 2011-12.
Miss McIntosh
I congratulate my hon. Friend on his new position and thank him for that answer. Does he believe that fewer prosecutions will be brought if the new offence of using grossly disproportionate force, which the Justice Secretary intends to introduce, is brought in?
The Solicitor-General
No. The intention is to be firm on burglary. In fact, the number of successful prosecutions increased from 23,700 to 25,077 between 2009 and the most recent figures. The approach is to be firm on burglary.
Tony Lloyd (Manchester Central) (Lab)
Is there any systematic review examining the causes where prosecutions fail? Obviously it could be quite right that the court should find a person not guilty, but sometimes there is a failure to pursue the prosecution adequately, either because witnesses do not match up or the case is not properly put, so is there any systematic review of where prosecutions fail?
The Solicitor-General
Yes, this is something in which the Director of Public Prosecutions takes a particular interest. As Law Officers, we are in the position of superintending the process, and we ask the sort of probing questions that the hon. Gentleman would wish us to ask.
Jeremy Corbyn (Islington North) (Lab)
10. What assessment he has made of progress in reforming the European Court of Human Rights; and if he will make a statement.
The Attorney-General (Mr Dominic Grieve)
Good progress has been made in clearing the backlog of inadmissible cases before the Court. As the hon. Gentleman will be aware, the Government have approached the need to reform the European Court of Human Rights through the Brighton declaration. Reaching agreement on the declaration represents a substantial step towards realising the Government’s ambitions, particularly on the extent to which the Court should get involved in questions that national courts have already fully considered. We need now to ensure that the reforms are implemented swiftly. The first key step—preparation of a draft protocol to reflect the required amendments to the convention—is due to be completed by April 2013.
Jeremy Corbyn
I thank the Attorney-General for that answer, but will he give a complete and categorical assurance to the House that there is no question of Britain withdrawing from the European convention on human rights? Doing so would mean being the only country, alongside Belarus, that was not part of the convention, which has performed an important role in promoting and defending human rights across every one of its member states. We should be part of that process, not turn away from it.
The Attorney-General
I entirely agree with the hon. Gentleman. There is no question of the United Kingdom withdrawing from the convention. We helped to draft it and we support it strongly. It has already contributed to widespread changes across Europe, including the decriminalisation of homosexuality, the recognition of the freedom of religion in the former Soviet countries, the prevention of ill treatment in police stations and elsewhere, and the removal of military judges from civilian courts. Those are all very good reasons for it continuing its very good work.
Petition
Andrew Stephenson (Pendle) (Con)
I would like to present a petition organised by several of my local mosques and bearing the signatures of about 8,000 people residing in Pendle. I was presented with the petition at a public meeting on 3 October at Silverman hall in Nelson and promised to make the House aware of the petitioners’ feelings.
The petition states:
The Petition of residents of Nelson, Lancashire and elsewhere,
Declares that the Petitioners believe that the showing in the UK of the film Innocence of Muslims, which the Petitioners believe has blasphemous contents, has deeply offended Muslims not only in the United Kingdom but also throughout the world; further that freedom of speech and the showing or publishing of material in certain instances has been restricted by the UK and that the Government in recent legislation e.g. The Anti-Terror laws, restricted such where it was thought best for the public interest and that this evidences that freedom of speech can be restricted in certain cases; further that the Petitioners believe that the effects of this film have caused racial and religious relations in an already troubled world to deteriorate and has caused people to suffer upset and injured feeling and is an infringement of their religious rights and beliefs; further that, the Petitioners believe films such as this one merely serve to damage efforts to rebuild community relations at time when all communities should be working hard to do so; further that the Petitioners believe such films are therefore not in the interests of public or society as a whole and that the Petitioners believe it is the social responsibility of any government in modern times to prevent such material from being shown or published as it goes against all efforts of promoting world peace.
The Petitioners therefore request that the House of Commons urges the Government to legislate to ban the showing of the film Innocence of Muslims in the UK and urges the Government to conduct a comprehensive enquiry to consider and re-introduce a new law against blasphemy, with a view to passing legislation aimed at protecting all religions and races from being subjected to mocking and ridicule.
And the Petitioners remain, etc.
[P001123]
Speaker’s Statement
Mr Speaker
Nominations closed at midday for candidates for the post of Chair of the Procedure Committee. Two nominations have been received: Mr James Gray and Mr Charles Walker. A ballot of all Members of the House will therefore be held tomorrow between 11 am and 1 pm in Committee Room 16. I expect to be able to announce the result to the House later tomorrow.
Extradition
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
With permission, Mr Speaker, I would like to make a statement about the case of Gary McKinnon and the Government’s response to Sir Scott Baker’s review of our extradition arrangements. I will turn first to Mr McKinnon’s case. I should explain to the House that the statutory process under the Extradition Act 2003 has long ended. Since I came into office, the sole issue on which I have been required to make a decision is whether Mr McKinnon’s extradition to the United States would breach his human rights.
Mr McKinnon is accused of serious crimes, but there is also no doubt that he is seriously ill. He has Asperger’s syndrome and suffers from depressive illness. The legal question before me is now whether the extent of that illness is sufficient to preclude extradition. As the House would expect, I have very carefully considered the representations made on Mr McKinnon’s behalf, including from a number of clinicians. I have obtained my own medical advice from practitioners recommended to me by the chief medical officer, and I have taken extensive legal advice.
After careful consideration of all of the relevant material, I have concluded that Mr McKinnon’s extradition would give rise to such a high risk of him ending his life that a decision to extradite would be incompatible with Mr McKinnon’s human rights. I have therefore withdrawn the extradition order against Mr McKinnon. It will now be for the Director of Public Prosecutions to decide whether Mr McKinnon has a case to answer in a UK court. This has been a difficult and exceptional case, and I would like to pay tribute to all the Home Office officials and lawyers who have worked on the case over the years.
Extradition is a vital tool. In a world in which criminals and crimes can easily cross borders, it is vital to the interests of justice and public protection that criminals cannot avoid justice simply by sheltering behind a border, but concerns about the working of our extradition law have grown over recent years. There has been public concern about the extradition regime operating in the European Union, about the European arrest warrant, and about the extradition arrangements outside the EU, principally with the United States.
That is why, in September 2010, I commissioned a review into our extradition arrangements. That review was undertaken by Sir Scott Baker—a former judge in the Court of Appeal—and a distinguished and expert panel including David Perry QC and Anand Doobay. I am extremely grateful to them for the professional and thorough way in which they went about their work. Nobody who has read their near-500 page report can be anything but impressed by the depth and clarity of its analysis.
At the same time, there has been considerable parliamentary interest in extradition. In a debate last December, Parliament agreed unanimously that it believed there were problems with our US and EU extradition arrangements. In coming to a decision on how the Government should respond to the Baker review, I have taken full account of the review’s recommendations as well as of the views of Parliament. Yesterday, I announced that the Government’s current thinking is that we will opt out of all pre-Lisbon treaty police and criminal justice measures. The Government will give careful consideration to those measures, including the European arrest warrant, and will then seek to opt back into those individual measures where it is in our national interest to do so.
The European arrest warrant has had some success in streamlining the extradition process within the EU, but there have also been problems. There are concerns in particular about the disproportionate use of the EAW for trivial offences, and for actions that are not considered to be crimes in the UK. There are also issues around the lengthy pre-trial detention of some British citizens overseas. We know these concerns are shared by other member states. We will therefore work with the European Commission and with other member states to consider what changes can be made to improve the EAW’s operation. I believe this is necessary to ensure that the EAW provides the protections that our citizens demand.
There are also concerns about our extradition arrangements with countries outside Europe. A key reason for the loss of public and parliamentary confidence in our extradition arrangements has been the perceived lack of transparency in the process. I believe extradition decisions must not only be fair, but must be seen to be fair, and they must be made in open court where decisions can be challenged and explained. That is why I have decided to introduce a forum bar. This will mean that where prosecution is possible in both the UK and in another state, the British courts will be able to bar prosecution overseas, if they believe it is in the interests of justice to do so.
I have been conscious, however, of Sir Scott Baker’s concern that the introduction of the existing forum legislation would lead to delays and satellite litigation. So rather than commence the existing provisions, I will bring forward, as soon as parliamentary time allows, a new forum bar that will be carefully designed to minimise delays. In parallel, the Director of Public Prosecutions will independently publish draft prosecutors’ guidance for cases of concurrent jurisdiction, and a bilateral protocol governing the approach of investigators and prosecutors in the UK and the US is being updated alongside this guidance.
As for the United States-United Kingdom extradition treaty, I agree with the Baker review that our arrangements are broadly sound and that the treaty brings benefits to both our countries. Less than two weeks ago, for example, we saw the extradition to America of Abu Hamza and four other terror suspects. Although there is a perception that the evidence tests used by the US and the UK —probable cause and reasonable suspicion respectively—are unbalanced, Sir Scott Baker found that there is no significant difference between these two tests.
I have also accepted the Baker review’s recommendations that a prima facie evidence test should not be reintroduced for those countries where it is not currently required. The courts are already able to subject requests from all countries to sufficient scrutiny to identify and address injustice or oppression. Reintroducing prima facie evidence would be likely to lead to further delays, and it is absurd to propose that we should require prima facie evidence from countries such as the United States, Canada and Australia, when we do not require such evidence of other countries with far less mature judicial systems.
I also agree with the Baker review’s recommendation that the breadth of the Home Secretary’s involvement in extradition cases should be reduced. Matters such as representations on human rights grounds should, in future, be considered by the High Court rather than the Home Secretary. This change, which will significantly reduce delays in certain cases, will require primary legislation.
Finally, I propose to reduce delays in the extradition system, in the light of the recent extradition of terrorist suspects to the United States. In addition to the measures I have just announced, the Government will look further at proposals in the Baker review to introduce a permission stage for appeals to the UK courts. We will work closely with the European Court of Human Rights on a programme to reduce the wholly unacceptable delays that have occurred there, and we have also been considering how we can reduce delays in the deportation of foreign nationals who pose a threat to our national security. There is scope for reforming rights of appeal, streamlining the stages, expediting cases through the court and looking again at the provision of legal aid for terrorist suspects.
As Sir John Thomas, the judge in the Abu Hamza case said, it is in the overwhelming public interest that our extradition arrangements function properly. They must also be fair. We must balance both strong safeguards for those accused of cross-border crimes with assurance that justice will be done. That is the Government’s aim; that is what our proposals will produce, and I commend this statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
This was clearly not an easy decision for the Home Secretary to make. I know that she has asked for additional legal advice, medical advice and other evidence over the two and a half years in which she has had to consider this matter. That is testimony to the difficulties she has faced and to the challenges of the case. I have not seen any of the papers—the legal advice, the criminal evidence or the medical evidence—and it is for the Home Secretary alone to make a judgment that people will respect. She will know that it is not for me to second-guess her decision on this matter today. I do, however, want to ask her about the wider reforms that she has proposed, and also about the consequences of this judgment for other cases.
Let me first ask the right hon. Lady about the forum bar that she has proposed. As she will know, the last Government legislated for a forum bar, but the legislation has not been implemented. I think that that is because of concerns raised not only by Scott Baker but by the present and the last Government about some of the practical implications. Clearly delays, and the risk of delays, are important issues, but we shall be happy to work on the detail with the Home Secretary, through Parliament, and to discuss how the problems could be solved. However, I think that there is a wider issue that may not yet have been considered in the legal debate about forum bars. I refer to internet crimes, which constitute a growing proportion of overall crime. Conceivably such crimes could be committed in several jurisdictions at once. Wider discussions are needed about where they should be dealt with, and about ways in which our traditional extradition arrangements may not have caught up with a different kind of crime that is going to increase.
There will clearly need to be international co-operation and consideration of how the problem should be addressed. I urge the Home Secretary to set up a high-level group with the United States, the European Union and other main countries with which we have arrangements specifically to consider internet crimes. However, I should like to know whether she feels able to do that, given her diplomatic relations with other countries.
We need a fair framework for justice in relation to cross-border crimes. We need to be able to bring people back to Britain to face justice, and we need a fair framework for extraditions from the UK. However, that fair framework will be possible only if it is drawn up through negotiation and co-operation with other countries. As the Home Secretary will know, there is already considerable concern about whether her approach to the EU, the opting out and opting in and the current relationship between the Government and the EU will make it harder to secure the sensible reforms of the European arrest warrant that we need.
Obviously our historic relationship with the United States gives us an opportunity to work together, whether on the bilateral protocol to which the right hon. Lady referred or on other arrangements. May I ask her whether there is a positive relationship between the Home Office and the US Government to ensure that such arrangements and reforms can be agreed to?
May I also ask whether today’s judgment has implications for other cases? Other people who are subject to extradition or immigration proceedings cite medical conditions as a reason for them not to be extradited. It would be useful for Parliament and the courts to understand the test that the right hon. Lady has applied, and to know whether it will set precedents for other cases.
Have the right hon. Lady’s medical advisers proposed any threshold for these decisions? She said that she had sought her own medical advice. Did that constitute a separate medical assessment of Gary McKinnon, which I understand she had sought, or a review of the assessment made by his doctors? Does the test have any implications or set any precedent for other extradition cases, such as the case of Haroon Rashid Aswat? The US Government have sought his extradition alongside that of Abu Hamza and others which the Home Secretary has supported. He is in Broadmoor at present, having, I understand, been diagnosed with schizophrenia. Has the Home Secretary changed her position on his case, or does it remain the same? Clearly there were issues involving his medical condition that she had to consider. Finally, let me ask her about the case of Richard O’Dwyer, whose extradition she has confirmed and who has not raised any medical issues. Will his case be affected by any of the changes that she has announced today?
I agree with the right hon. Lady that it is sensible to remove the role of the Home Secretary from decisions such as this. It has taken a very long time for this decision to be made. I think we would all agree that such cases take too long, and that it is in the interests of justice, the families involved and the victims of crimes for them to be dealt with far more speedily.
Mrs May
I thank the right hon. Lady for her approach in response to my statement. She raised three key issues. The first was about the forum bar and our ability to work together to consider these issues across the House and I welcome her suggestion of cross-party work. We all want to ensure that the measure can be introduced in a way that does not introduce delays to extradition proceedings and does not permit significant satellite litigation. I am sure that my right hon. and learned Friend the Attorney-General will have noted her offer.
The right hon. Lady then raised the question of cyber and internet crime, which is a key issue. We are conscious of the growth of cybercrime. That is why there will be a cybercrime unit in the National Crime Agency and why, when the Government took office, we set aside a significant sum of money over the four years of the comprehensive spending review to deal with both cyber-security and cybercrime. It is important to work internationally and I have already been party to a number of discussions with other member states in the European Union and with the United States; those discussions are ongoing. We all have a mutual interest in ensuring that we address cybercrime.
Finally, she asked a number of questions about my decision on Mr McKinnon. I have given the most careful consideration to all the material, medical and otherwise, in this difficult and exceptional case and I have concluded that the ordering of his extradition and his subsequent removal would give rise to such risk to his health and, in particular, to a high risk of his ending his life that a decision to that effect would be incompatible with his human rights under article 3. My decision is based on Mr McKinnon’s human rights under article 3.
Mr David Burrowes (Enfield, Southgate) (Con)
I warmly congratulate the Home Secretary on saving the life of my constituent, Gary McKinnon, today. I also praise the tireless campaigning of Gary’s mother, Janis Sharp, and the huge public support. Today is a victory for compassion and the keeping of pre-election promises. May we make another promise that after the reforms announced today, a vulnerable UK citizen will never again have to endure 10 years of mental torture, as Gary McKinnon did, and that the British principles of justice and fair play will return to extradition?
Mrs May
May I commend my hon. Friend, who has been assiduous in his work on behalf of his constituent, which is recognised and respected across the House? On his second point, I have become increasingly concerned, and not just because of the recent cases of Abu Hamza and others. Obviously, Mr McKinnon’s case has been under consideration for some time. It is important that the Government consider the whole extradition process so that while we make sure that people can obtain their proper legal rights, we also ensure that there is no excessive delay in the system, so that decisions are brought to a conclusion at an earlier stage.
Mr Dennis Skinner (Bolsover) (Lab)
Does the Home Secretary agree that although a lot of people on both sides of the House might want to take some credit for the decision—and they would be right to do so, based on the part they have played—there is no doubt that without the extra-parliamentary activity of my constituent Janis Sharp, Gary McKinnon’s mother, this decision could not have been made in the way that it has been made today? I want to thank my constituent for all that Bolsover fighting spirit. She has won the case after a long, drawn-out 10 years and when she gets on that television, she never misses a chance.
Sir Menzies Campbell (North East Fife) (LD)
I understand the difficult nature of the decision that my right hon. Friend has had to take. Extracts of some of the medical reports have been circulating in the House of Commons today and it seems to me that under the terms of the medical advice she received there was no other conclusion to reach that was consistent with Mr McKinnon’s human rights but that she should bring an end to the extradition process. As we have already heard, that is subject to universal acceptance.
I also agree with what my right hon. Friend said about a forum bar and the need, even with such a procedure embodied in our law, to ensure that it does not become the source of undue delay. Regrettably, however, I must disagree with her on the question of standard of proof. Once again, I respectfully disagree with the conclusions reached in the Baker report. In that, I am supported by a large body of credible legal opinion, not to mention many right hon. and hon. Members on both sides of the House. Does she understand that sooner or later it will not be the perception that will be challenged but the substance of the distinction? Would not the protocol to which she referred as being necessary between the United Kingdom and the United States be an exact and appropriate vehicle in which to state that no one will be extradited from Great Britain to the United States unless there is probable cause for doing so?
Mrs May
I am grateful for my right hon. and learned Friend’s remarks on a number of my announcements today. I fully recognise the concern expressed in this House and elsewhere about the perception that there is a difference. Sir Scott Baker considered the issue very carefully and came to the conclusion that there was no significant difference between the requirements on either side of the Atlantic and that in effect there was no practical difference between the two. I recognise, however, the opinion expressed by my right hon. and learned Friend today.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
Given the politically and emotionally charged atmosphere around this case, I think that we all understand why the Home Secretary has taken the decision she has. There have been efforts—of which she and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), her predecessor, are aware—to try to find a way around the situation so that it does not create a precedent for the future, particularly in relation to the cybercrime issues raised by the shadow Home Secretary. That has involved trying to organise video-conferencing and for sentences to be served in the United Kingdom. Without that, surely we will create a rod for our backs in that individual cases will be judged on the support they get from the public rather than on the logic and legal requirements that must be applied in any extradition case.
Mrs May
I have taken this decision after, as I have said, the most careful consideration of all the material—medical and other—that has been available to me. Having considered that material, I took the decision announced to the House this afternoon. The right hon. Gentleman mentioned video-conferencing. The American Government have made it clear that undertaking such video-conferences would not be possible under their constitution. Cybercrime is an issue, obviously, but he hints at the question of whether someone should physically be tried in the UK or prosecuted and tried in another country, be it the United States or elsewhere. Of course, the introduction of the forum bar will offer a transparent process whereby people will see how decisions are taken on whether it is right for someone who is subject to an extradition request to be tried here in the UK or in the US.
Mr John Redwood (Wokingham) (Con)
I warmly welcome the Home Secretary’s wish to improve our extradition arrangements. Does she accept that many of us in this House feel that the US-UK arrangements were unfair to the UK and that the European arrest warrant is unfair to the UK? We look to her to reform to give Britain and her people a better deal.
Mrs May
I thank my right hon. Friend for his comment. As I said in my statement, I think that the UK-US treaty is, as Sir Scott Baker found, broadly sound. It is important that we have a robust treaty on extradition with the United States and that we ensure that extradition can take place both ways across the Atlantic. As I have said, there are a number of ways in which we need to change how we operate so that people can see that the extradition arrangements are fair and can take comfort and have confidence in them. The British people need to have confidence in our extradition arrangements.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
As the Home Secretary said, Gary McKinnon is accused of very serious offences. The US was perfectly within its rights and it was reasonable for it to seek his extradition. We now do not know whether Gary McKinnon will ever have to face justice on those accusations. Can the right hon. Lady confirm that US authorities were willing to allow him to serve any sentence in the UK? On the issue of High Court judges making these decisions, Lord Justice Burnton said in the High Court in July 2009 that Gary McKinnon’s case did not even “approach Article 3 severity”. He quoted all the precedents for this. What does the Home Secretary think she knows that Lord Justice Burnton did not? She has made a decision today that is in her party’s best interest; it is not in the best interests of the country.
Mrs May
I recognise that the right hon. Gentleman had a decision to take in this case in his time as Home Secretary. I respect the decision that he took on the material that was available to him at the time. I believe that the decision of the judge that he referred to was in 2008.
Mrs May
I stand corrected. It was said that it was 2008, but I recognise that the right hon. Gentleman says 2009. As I said, I have given very careful consideration to the material, medical and otherwise, that has been available to me and I have come to the decision that extradition would not be appropriate in relation to Mr McKinnon’s human rights under article 3. That is the decision that I have taken on the material available to me.
Mr Speaker
Order. We will hear from Top Cat in a moment, not just yet. I should have explained. Mr David Davis—he with the slightly greyer hair and the longer service in the House.
Mr Davis
I, for one, congratulate the Home Secretary wholeheartedly on her decision on Gary McKinnon today, but I also share some of the concerns of my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell). There are a number of cases where there are concerns over justice being done, with respect to both Europe and the USA—in particular, in respect of the USA, there are fears that the intimidatory use of the plea bargaining arrangements force possibly innocent people to make guilty pleas, and similar problems in the justice systems of other European countries. Will the Home Secretary give the House an undertaking that what she proposes to bring about today will give protection to UK citizens equal to that which American citizens get from their constitution?
Mrs May
As I said in response to my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell), I understand that a number of Members, including my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), still have concerns about the perception of the imbalance between the probable cause and reasonable suspicion tests. As I say, Sir Scott Baker looked at this and found that there was no significant difference between them—that in practice the application of those two tests was not significantly different as between the US requests and the UK requests. I can assure my right hon. Friend that Sir Scott Baker’s decision was relevant to those from the UK whose extradition to the United States was requested, and vice versa.
Keith Vaz (Leicester East) (Lab)
I warmly welcome the decision that the Home Secretary has made today, which is fully in keeping with the recommendations of the Home Affairs Committee over the past three years, and I commend the work of the hon. Member for Enfield, Southgate (Mr Burrowes) and Janis Sharp. I agree with the Home Secretary that a forum bar has to be introduced but I disagree on the evidence test. We need an evidence test and we need to renegotiate the treaty, which is unfair and unbalanced. I disagree with those on both Front Benches on ministerial discretion. As the Home Secretary has ably demonstrated today, Home Secretaries must make these decisions. We cannot hand all the decisions to the judges to make on our behalf.
Mrs May
The right hon. Gentleman knows that I have set out my position in relation to the Secretary of State’s discretion, so on that matter we will have to disagree. As I said, I recognise that there may continue to be some concerns in the House in relation to the perception of the information or evidence available on both sides of the Atlantic when an extradition case is being considered one way or the other. I think I am right in saying that the United States has never refused an extradition request from the United Kingdom, and that should be recognised. Very often people look at the treaty and assume that all it ever does is extradite UK citizens to the United States. Of course, the opposite is true. A good number of people have been extradited from the United States to the UK to stand trial.
David T. C. Davies
As a member of the Home Affairs Committee which considered the matter, I offer my warmest congratulations on behalf of all those who feel that the Home Secretary has stood up for the rights of British nationals and, in her subsequent comments, for the wider British national interest.
Mr David Winnick (Walsall North) (Lab)
Despite the comments of my right hon. and respected Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), a former Home Secretary, is the Home Secretary aware that the decision that she has made on this individual case will be widely and warmly welcomed, not only in the House but outside? It is a very good decision and she should be proud of it. However, on the extradition treaty with the United States, may I remind her how critical she and the Liberal Democrats were in opposition? Like a number of Members, I remain of the view that the treaty needs to be looked at again.
Mrs May
I had a hopeful moment there when the hon. Gentleman was speaking! I thank him for his earlier remarks. I am well aware that this was a matter on which there was considerable discussion when it went through the House. I am also aware that the forum bar arrangements that are in the Police and Justice Act 2006 were moved by the then shadow Home Affairs team, led by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), who is now the Attorney-General, so we are well aware of the issues that were raised at the time. I believe that the introduction of the forum bar will ensure that people see that justice is being done in relation to the decision whether extradition should take place and where prosecution should take place. Other changes that we will introduce on the extradition proceedings will ensure that people can see that this is a process in which they can take comfort and have confidence.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I congratulate my right hon. Friend on making an excellent decision, and my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), who has been tireless in his support of Gary McKinnon and his family. The decision today will move forward the understanding of people with autism. Will my right hon. Friend make sure that the benefits are spread more widely by undertaking a review of the treatment of people with autism within the criminal justice system as they often suffer disproportionately because of their condition?
Mrs May
I thank my right hon. Friend for her comments and commend her for the work that she did in introducing her private Member’s Bill that became the Autism Act 2009, which has had a significant impact. When she talks about the criminal justice system, part of that is for the Home Office, but some of the issues that she is thinking about may be more appropriate for the Justice Secretary in relation to the treatment of those individuals with autism in prison and in other custodial circumstances. I have certainly noted her comment and will bring it to the attention of the Justice Secretary.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Home Secretary says that the matter is now for the Director of Public Prosecutions. Has she referred the case to him? Given her extensive knowledge of the medical evidence, does she think it likely that Mr McKinnon will be fit to stand trial in this country?
Mrs May
The hon. Gentleman is absolutely right: it is now for the Director of Public Prosecutions to decide whether the case should be prosecuted. Very simply, it is not the case that politicians tell the Director of Public Prosecutions what to do, who to investigate or who to prosecute, so he will come to his decision based on the information available to him.
Sir Roger Gale (North Thanet) (Con)
Further to my question to my right hon. Friend yesterday and in the interests of those of us who have or have had constituents who have been held for long periods in European and foreign prisons—people who are United Kingdom citizens—will she seriously consider ensuring that no United Kingdom citizen may be extradited to another country where the period of detention before trial is very considerably longer than that in the United Kingdom?
Mrs May
We will seek to consider with the Commission and other member states the issues that have arisen in relation to the operation of the European arrest warrant. This view is not held solely by the United Kingdom. Across a number of member states, there are concerns about the way in which the EAW has been operating, and we shall be working on that matter as part of our consideration of closed measures that we may choose to opt back into, or wish to opt back into, in relation to the 2014 justice and home affairs powers. However, I have certainly heard the point that my hon. Friend makes.
Caroline Lucas (Brighton, Pavilion) (Green)
I too warmly welcome the decisions on Gary McKinnon and the forum bar, and only wish that they had been made sooner. Why, if the Home Secretary accepts that the law needs to change, did she sanction the extraditions of Babar Ahmad and Talha Ahsan? Surely they should also be benefiting from a fair extradition process. They were extradited on 5 October, and it will be a year at least before they even come to trial. They are British citizens accused of committing crimes here in Britain, and they should be tried in Britain, not in the United States.
John Hemming (Birmingham, Yardley) (LD)
I welcome the Home Secretary’s statement and echo the comments of the right hon. Member for Haltemprice and Howden (Mr Davis) about plea bargaining in the US and the effect that that has on British citizens extradited there. In her discussions with the Secretary of State for Justice in respect of changes to the appellate process, will she please take into account that domestic proceedings can be exhausted in the county court, which is a very low level for appeals from the magistrates court?
Mrs May
I note my hon. Friend’s point. As I said, and as he recognises, the matter is being considered between the Home Office, the Ministry of Justice and other relevant Ministers, and we will seek to ensure that we can produce a process that does not involve excessive delays, but which gives appropriate fairness and proper regard to individuals’ legal rights.
Mr Kevin Barron (Rother Valley) (Lab)
The Home Secretary says that she agrees with the Baker review recommendations that the breadth of the Home Secretary’s involvement in extradition cases should be reduced, and that will need primary legislation. Can she give us an idea of when that primary legislation will come before the House?
Mr Robert Buckland (South Swindon) (Con)
On behalf of the all-party parliamentary group on autism, I warmly welcome my right hon. Friend’s decision today. Will she make sure that her Department redoubles its efforts to ensure that all people with autism, Asperger’s syndrome and related conditions are treated properly and their needs addressed when they are detained and arrested prior to any charge?
Dr Hywel Francis (Aberavon) (Lab)
On behalf of the Joint Committee on Human Rights, I warmly welcome the Home Secretary’s decision on Gary McKinnon. Will she look again at the JCHR’s report on extradition, particularly with regard to the evidence given to us on the European arrest warrant?
Mrs May
I thank the hon. Gentleman for his question and thank him and the right hon. Member for Leicester East (Keith Vaz) for the work that their two Committees did on extradition arrangements. The Government will respond, I hope later today, to his Committee’s report, and obviously will refer to the issue that he has raised.
Dr Julian Huppert (Cambridge) (LD)
I warmly congratulate the Home Secretary on her decision not to extradite Gary McKinnon and to introduce a forum bar, and join all those paying tribute to Gary and to Janis Sharp for their extremely long 10-year struggle.
The Home Secretary made her correct decision, based, as she explained, on the European convention on human rights. Will she ensure that all her other decisions are also founded on that excellent bedrock? [Interruption.]
Jeremy Corbyn (Islington North) (Lab)
I commend the Home Secretary for her welcome decision on Gary McKinnon and all those who campaigned for so long for this justice.
In answer to the hon. Member for Brighton, Pavilion (Caroline Lucas), the Home Secretary referred to the case of Babar Ahmad and Talha Ahsan. They have been deported to the USA, they faced no prosecution in this country and they were in prison for a long time in this country. Under the new procedures that she envisages, could such a deportation take place in the future? Does she not accept that their case is materially different from those who were deported at that time and that we should have some respect for the fact that they were never prosecuted in this country yet they are now being prosecuted in the USA?
Mrs May
The cases that the hon. Gentleman raises were considered through a series of proceedings in the courts in the United Kingdom and by the European Court of Human Rights. All those courts determined that it was perfectly appropriate for those individuals to be extradited to the United States.
Stephen Phillips (Sleaford and North Hykeham) (Con)
The correct decision to which my right hon. Friend has come has been warmly welcomed across the House, and I join in welcoming it. She referred to the fact that she is having discussion internationally, both with the United States and with EU member states, in relation to our extradition arrangements. Are any changes to the European arrest warrant being suggested by other EU member states, and what does she propose to do to carry those forward?
Mrs May
If I may just clarify, I think that my hon. and learned Friend has picked up on the discussions that I referred to in response to the shadow Home Secretary, which were international discussions about cybercrime. We will indeed be having discussions with other member states on the European arrest warrant. It is already the case that other member states have raised issues, for example, on proportionality. This is a matter of concern for other member states, not just the United Kingdom.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
We must welcome the fact that decisions in these cases are based on fairness and justice, and I welcome the decision today if that is the case. But is the Home Secretary aware of the number of cases involving fugitives who have fled to Pakistan? It seems almost impossible to get an arrangement with the Pakistan Government to bring back people such as Shahid Mohammed, who was alleged to be part of a gang that killed a family of eight children in a firebomb incident. The rest of the accused have been committed to prison, but he is still at large in Pakistan and there is no arrangement whereby he can be extradited. Will she look into this case so that we can have fairness and justice for the Chishti family in my constituency?
Mrs May
I recognise the hon. Gentleman’s concern about that particular case. He is right to say that no arrangements are in place to enable us to deal with that matter. I assure him that I and the Attorney-General have heard his comments and I will look into the circumstances of the case that he raises.
Mark Reckless (Rochester and Strood) (Con)
Confidence in our extradition arrangements had fallen so low that few members of the public would have been surprised if Gary McKinnon had been extradited yet Abu Hamza had been allowed to stay. Does the Home Secretary believe that her statement today, combined with her statement yesterday on the European arrest warrant, provides a sufficient basis on which she can restore confidence in our extradition processes?
Mrs May
Yes, I sincerely hope that that is exactly what will happen as a result of the changes that the Government will bring about. People have been concerned. There has been general public disquiet about some of our extradition arrangements. The proposals that I have put before the House today and that will come before the House in primary legislation will give people confidence in our extradition system.
Mr Andy Slaughter (Hammersmith) (Lab)
Will the Home Secretary answer the question that she has avoided twice in relation to forum and the cases of Babar Ahmad and Talha Ahsan? In both those cases, forum was the key issue; it was not in the other cases that she conflates them with. How does she explain her timing in introducing the forum bar only days after they were removed from the country?
Mrs May
The decision that those individuals be extradited went through all the proper and appropriate processes, including the European Court, and in all those stages extradition was considered appropriate. We have a process already whereby decisions are taken as to whether individuals should be prosecuted in the UK or in any other country asking for extradition, and those decisions are properly taken by the courts. We will in future be changing the way that that takes place so that it is more open and transparent.
Mr Dominic Raab (Esher and Walton) (Con)
I welcome the fact that we have a Home Secretary with the backbone to stand up for British citizens and British principles of justice. I also welcome the shadow Home Secretary’s acknowledgment—her first, I think—that the European arrest warrant needs reform, because in quantity and quality those cases have proved far more serious than our arrangements with the United States, including in relation to my constituent Colin Dines. Does the Home Secretary agree that the best bet for common-sense reform of the EAW would be to exercise the block opt-out and then use our leverage to press for modest safeguards so that we do not continue to hang innocent citizens out to dry?
Mrs May
I thank my hon. Friend for his observations and comments. As he knows, the Government’s current thinking is that we will exercise the block opt-out and then seek to opt in to a number of measures. We will obviously consider the matter carefully and, as I said earlier, discuss the whole question of the European arrest warrant with the European Commission and other member states. As I have indicated, I am aware that other member states are also concerned about certain aspects of the European arrest warrant’s operation.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I fear that the Home Secretary is gambling with the justice for British victims of foreign criminals who flee to their home countries in Europe. She has chosen to opt out of the EAW, with no guarantee that we can opt in again, which could mean that British citizens will be denied justice. Will she outline in more detail what conversations she is having with other EU member states and what plan B is? Is it bilateral treaties with every single member state?
Mrs May
I am surprised that the hon. Lady does not understand the process a little better than her question suggests. I announced yesterday that the Government’s current thinking is that we will exercise the block opt-out. It is not open to us to opt out of individual measures; we can only block opt in or block opt out and then seek to rejoin certain measures. That is the process that the Government are currently going through. We will be talking with the European Commission and other member states about arrangements for the opt-ins and the specific measures that the Government choose to opt in to. The circumstances she sets out in her question are quite far from the reality.
Nick de Bois (Enfield North) (Con)
I warmly congratulate the Home Secretary on her decision on Gary McKinnon and my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) on his efforts; there are now two Enfield constituents who have benefited directly from the Home Secretary’s interest in and positive response to extradition matters. On the problem of British nationals languishing in jails for unacceptable periods of time pre-trial in Europe, does she recognise that that is in large part because the EAW is based on the rather flawed principle of mutual recognition of each others’ judicial systems, and will she ensure that she challenges and examines that in any future negotiations?
Mrs May
I recognise my hon. Friend’s concern about that issue, which he has expressed on a number of occasions. I can assure him we will be looking in detail at the operation of the European arrest warrant, not only as part of our internal consideration but as part of our discussions with the European Commission and other member states.
Yasmin Qureshi (Bolton South East) (Lab)
I, too, welcome the Home Secretary’s decision regarding Gary McKinnon. When she reviews these particular provisions, I want to ask her to consider three things in relation to extradition: whether extradition to another country can be for actions that are not criminal offences in this country; whether a proper case has to be made in a British court before someone can be extradited; and, if a significant part of the alleged conduct has occurred in the United Kingdom, whether the trial must be heard in the United Kingdom.
Mrs May
The point of introducing the forum bar is that there will be a transparent process for considering, challenging and examining whether a prosecution should take place in the UK or in another country. The decision taken by the courts will be transparent and open, and that is what I believe will give people more confidence in our extradition arrangements.
Michael Ellis (Northampton North) (Con)
My right hon. Friend must of course look at such cases individually, but does she agree that the Anglo-American extradition treaty is sound, fair and balanced between our two countries, which are on a generally equal footing, as Sir Scott Baker found in his extensive report; that there is no imbalance in the evidence tests that currently apply; and that there is no need for a prima facie test, which after all we do not apply to other countries that have far less mature justice systems? Will she also take the opportunity to indicate that she has full confidence in the American justice system, which is infinitely preferable to those of many other countries with which we have extradition arrangements?
Mr Speaker
Order. I am listening with great interest to the hon. Gentleman, but I must say to him that if he had been paid by the word when practising in the UK courts he would now be an immensely wealthy man.
Mrs May
I do indeed agree with my hon. Friend that the UK-US extradition treaty is broadly sound. It is important that we have good, well-working extradition arrangements between the UK and the US, and we have seen the benefit of that in relation to a number of cases in which people have been extradited to the US or back to the UK. He is right: Sir Scott Baker did say that there was no need for a prima facie test, which is why I do not propose to introduce such a test in the new arrangements we are proposing. I repeat that it is important that we have well-working extradition arrangements with the US that people can have confidence in. I believe that the limited changes I have announced today will give people that confidence.
Mr Denis MacShane (Rotherham) (Lab)
Is the Home Secretary aware that it is not a crime in France to have sex with a 15-year-old child but it is here; and that it is not a crime here to wear a Nazi uniform, throw up Heil Hitler salutes and swagger around talking about the Third Reich but it is in Germany? I worry that Interior Ministers in our partner countries will hear her statement and think, “Well, if something is not a crime here, why send someone back? If someone brings in a chit stating that they are depressed and not very well, why send them back?” I am not disputing the sincerity and integrity of her decision, but I hope she thinks a bit longer and harder before in effect telling many other countries that they do not need to extradite people back to us.
Mrs May
There is no hint in anything I have said that that will be the case. The right hon. Gentleman raised a concern yesterday about the European arrest warrant, and I will repeat what I said yesterday: we will be looking, with the Commission and other member states, at the operation of the European arrest warrant because, although there have been benefits, there have been problems. That is exactly what I said in my statement, and I think that it is right that we look at it properly and carefully.
Mr Graham Stuart (Beverley and Holderness) (Con)
I, too, welcome the Home Secretary’s statement and think that her lustre will have been burnished further in the Bone household, if I may say so in the absence of our hon. Friend the Member for Wellingborough (Mr Bone). Has she made any estimate of the number of people who are currently extradited but who in future are likely to be tried in this country rather than abroad after the introduction of a forum bar, and who will decide the criteria on which the judges will make those decisions?
Mrs May
Every individual case must be considered on its merits, so it is not possible to look ahead to future cases and predict how many people would be prosecuted here in the UK rather than abroad. We will obviously look at the arrangements for the forum bar and how it will operate when we introduce it in primary legislation. As it is necessary to introduce it in primary legislation, the House will be able to scrutinise the arrangements that are put in place.
Jim Shannon (Strangford) (DUP)
I, too, welcome the Home Secretary’s statement and congratulate her on a victory for the democratic process and for fair play. Can she confirm that a precedent has not been set with regard to the reasons to stop an extradition? What assurance can she give that the two outstanding extradition requests from the US, and indeed any future extradition requests, will not be affected by this decision?
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Thank you, Mr Speaker, for giving me the opportunity to be the last Member here to congratulate my right hon. Friend on her decision and on bringing Gary McKinnon’s 10-year nightmare to an end. I can assure her that my constituents will welcome today’s announcement, both the specifics and the more general reforms she has proposed. I encourage her to bring those forward as soon as possible so that cases do not drag on like this in future.
Vehicle Fuel Receipts (Transparency of Taxation)
Robert Halfon (Harlow) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision for receipts for vehicle fuel to display the amount of fuel duty paid and the amount of that duty to be spent on road building; and for connected purposes.
Before I begin, Mr Speaker, I am grateful for your permission to mention that in Harlow on Monday there was a tragic fire in which four children and their mother lost their lives. I want to express my heartfelt condolences to their extended family and to their community and to thank the emergency services for all that they have done.
The principle of the Bill is very simple—that taxes should be clear to the people who pay them. At the moment, they are not. To their credit, the Government believe in transparency. As the Prime Minister has said,
“We want to be the most open and transparent Government in the world…With a presumption in favour of transparency”.
I am glad to say that this Government have moved towards a “right to data”, putting on to the internet information on Whitehall spending, as well as on ministerial meetings and procurement contracts. They are rightly supporting the idea of my hon. Friend the Member for Ipswich (Ben Gummer) and giving taxpayers a statement of where their tax goes. These are important steps towards transparency.
Why not do that for fuel duty as well? After all, this Government believe in cheaper petrol. Ministers have done more to cut fuel duty in two years than the previous Government managed in 13. Petrol is now 10p cheaper than planned in Labour’s last Budget, but the problem is that fuel duty is still a stealth tax. At the moment, when we fill up our car our receipt says “Fuel £50, VAT £10”. This is wrong. If my receipt was accurate, it would say how much fuel duty I am paying, which is currently disguised in the price. It would say something more like: “Fuel £25, duty £25, VAT £10”. There should also be some mention of how much of that tax is spent on our roads.
I want to explain three things: first, that fuel duty was never meant to be a millstone around our necks; secondly, what I am proposing; and thirdly, why transparency works. The history of car taxation is a textbook case of how a tax becomes entrenched. First, it is temporary and hypothecated for a specific purpose, then it is expanded, and finally it is folded into general taxation. As I have set out to the House before, this is exactly what happened to fuel duty between 1909 and 1937. In the early years of the 20th century, funding for roads was drawn mainly from local ratepayers. The 1909 Budget put a new duty on motor spirit—that is, petrol—but it was ring-fenced for a road improvement fund, and David Lloyd George promised that it would always be devoted exclusively to the roads. However, through the 1920s the road fund was repeatedly raided to prop up the Treasury, and from 1937 it was treated as a general tax.
By 1966, the result was that just one third of the revenue was actually spent on roads; by 2008, it was just one fifth. The proportion being spent on roads has shrunk hugely, but at the same time fuel duty has risen. Over the years, a series of temporary increases were brought in. The fuel duty escalator began in 1956 with the Hydrocarbon Oil Duties (Temporary Increase) Act 1956. At that time, duty was fluctuating between 5p and 6p a litre, and VAT did not exist because we had not yet joined the European Community. The temporary increase was a mirage. Fuel duty is now 58p, with 20% VAT on top—an increase of more than 1,000%. My argument is that on every receipt of every fuel bill the tax burden should be clear and transparent, and there should be some indication of how much is being spent on our roads. So my receipt would say: “Fuel £25, duty £25, VAT £10, amount spent on roads approximately £7.”
This campaign has been supported by FairFuelUK, which has gained 15,000 signatures on a petition specifically on this issue, and hugely by the TaxPayers Alliance, which has put leaflets out on forecourts around the country, as well as by the independent fuel retailers, led by Brian Madderson.
Some Treasury officials may be sceptical about this Bill. “Isn’t this up to the retailers?”, says Sir Humphrey. To them I say that the Government have complex rules about what one can and cannot put on a receipt, especially if VAT is involved. On Her Majesty’s Revenue and Customs’ website, there is a 15-bullet-point list of what precisely a VAT receipt must show. The point of my Bill is to bake transparency into the system, to give clarity to retailers, and to make it standard across the whole country. That is something that only a Bill could easily achieve.
Why is this necessary? First, we need to be honest with motorists. The average family in my constituency of Harlow spend a tenth of their income on fuel—more than they spend on the weekly shop. In essence, they are facing petrol and diesel poverty, and morally they have a right to know why their bills are so high. Secondly, tax transparency would act as a deterrent to stop any future Government hiking fuel duty without good reason, because people will see the increase on their receipts. Thirdly, it would make it easier to hold the big oil companies to account. The Government say that their actions have a low impact compared with huge swings in the oil price. My proposal would give people the hard evidence, on a weekly basis, to know that falls in the oil price are being passed on to consumers, as campaigned for by PetrolPromise.com. As an aside, I should say that earlier today I, and many colleagues, met Clive Maxwell of the Office of Fair Trading. I am glad that he is now looking very carefully at the petrol and diesel market and will report in January.
This proposal would be a small step towards the kind of white van Conservatism that the Prime Minister talked about in his conference speech. At least those of us on these Benches are all white van Conservatives now. It might even help to make the case for ditching Labour’s 3p rise in fuel duty, which this Government have so far delayed to January 2013. I urge Front Benchers to delay the rise further, because too many people are still suffering from the high cost of petrol and diesel.
This is a simple Bill that does what it says on the tin. It would give us basic transparency on fuel duty, about what people pay, and where the money goes. It would make the system more honest, act as a deterrent against tax rises, and add pressure on the oil companies to be fair. I hope that the whole House will support it.
Question put and agreed to.
Ordered,
That Robert Halfon, Martin Vickers, Jason McCartney, Anne Marie Morris, Caroline Nokes, Nick de Bois, Jim Shannon, Mr Angus Brendan MacNeil, Nadine Dorries, Charlie Elphicke and Mr Marcus Jones present the Bill.
Robert Halfon accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 30 November and to be printed (Bill 72).
Enterprise and Regulatory Reform Bill (Programme) (No. 2)
13:44 - The House divided: - Ayes: 273 / Noes: 217 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I beg to move,
That the Order of 11 June 2012 (Enterprise and Regulatory Reform Bill (Programme)) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on Consideration and Third Reading shall be completed in two days.
3. Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.
4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
TABLE | |
|---|---|
Proceedings | Time for conclusion of proceedings |
New Clauses relating to civil liability for the breach of health and safety duties; new Clauses and new Schedules relating to the determination of bankruptcy applications by adjudicators. | 4.15 pm on the first day |
New Clauses relating to the Equality Act 2010. | 6.00 pm on the first day |
New Clauses relating to the regulation of estate agents; new Clauses and new Schedules relating to listed buildings and amendments to Schedule 16; new Clauses relating to the Osborne estate. | 7.00 pm on the first day |
New Clauses and new Schedules relating to, and amendments to, Part 2; new Clauses and new Schedules relating to, and amendments to, Part 1. | 4.00 pm on the second day |
Amendments to Clauses 61 to 64; amendments to Part 6 (other than amendments to Clauses 61 to 64); remaining new Clauses and remaining new Schedules relating to, and amendments to, Part 5 (other than amendments to Schedule 16); new Clauses and new Schedules relating to, and amendments to, Parts 3 and 4; remaining new Clauses; remaining new Schedules; remaining proceedings on Consideration. | 6.00 pm on the second day |
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on the second day.
The Bill aims to promote long-term growth and simplify regulation. The Government have tabled new clauses, introducing a number of further measures to improve regulation, and amendments, which followed from the useful and detailed deliberations in Committee. The Government recognise the importance of the Bill and of the new measures that have been added, so we have provided two days for Report and Third Reading. The first day is for the consideration of new areas that we propose be added to the Bill. On the second day, we will deal with amendments to the existing clauses, as well as other new clauses that have been suggested. We have provided for an order that takes into account the issues that Labour Members have told us they particularly wish to focus on.
We have provided for timetabling of the two days. We can, of course, go faster than the timetable set out, but this arrangement will ensure that the debate is not too drawn out on any specific areas and so we will be able to cover the entirety of the Bill appropriately. We have provided to Opposition Members, and also placed in the Library of the House and on the Department for Business, Innovation and Skills website, an explanation of all the Government amendments, which is in line with the new procedures that the Leader of the House has been keen to encourage on Report. Such an approach builds on the requests made and the work encouraged by the hon. Member for Brighton, Pavilion (Caroline Lucas), as well as others from across the parties in this House. We have also provided a short summary, as will now be done for all Bills in the future. We hope that that will help to facilitate understanding and the debate.
Mr Chuka Umunna (Streatham) (Lab)
I do not intend to speak for long. As I said on Second Reading, this really is a mishmash of a Bill; it is a missed opportunity and it certainly does not provide the compelling vision or plan for growth that we need. Its provisions range widely from the setting up of the green investment bank to extending the primary authority scheme; and from reforming our entire competition regime to implementing measures relating to the Osborne estate—for the avoidance of doubt, I should say that that does not refer to the estate of the Chancellor of the Exchequer. In what has been labelled an “enterprise Bill”, this Government are seeking to make fundamental changes not only to the rights at work of every person in this country, but to the remit of the body charged in this country with promoting human rights and a society free from discrimination.
I am grateful that two days have been given for the debate of the remaining stages of this Bill, including the extra 15 minutes afforded for the debate of the measures relating to the Equality and Human Rights Commission —we must be grateful for small mercies. However, given the sheer variety of issues covered, which do not all hang together, and the seriousness of the changes envisaged to people’s basic rights in this Bill, the time that has been given to debate it is simply insufficient. That is all the more the case in the light of the Government’s last-minute new clauses, which seek to abolish the provisions of the Equality Act 2010 relating to third-party harassment of employees—no trivial matter—and other provisions, including those relating to discrimination questionnaires. Those provisions relate to ensuring that employees can work free from sexual, racial or other harassment, and they should be properly debated in a timely fashion.
In the light of everything I have just said, the lack of time afforded is thrown into particular sharp relief when we look at the running order for the second day —tomorrow—when a raft of provisions relating to people’s rights at work will be debated in the same breath as measures establishing a green investment bank. The House is expected to do all that in less than two hours. So it is for this reason that the Opposition oppose today’s programme motion.
Question put,
Enterprise and Regulatory Reform Bill
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:03 - The House divided: - Ayes: 295 / Noes: 215 - Question accordingly agreed to.
18:00 - The House having divided: - Ayes: 314 / Noes: 239 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss Government amendment 34.
Matthew Hancock
Government new clause 14 relates to civil liability for breaches of health and safety duties. It fulfils our commitment in the Budget to introduce measures to reduce the burden of health and safety, following the recommendations made in the independent Löfstedt report. Professor Löfstedt considered the impact that the perception of a compensation culture has had in driving over-compliance with health and safety at work regulations. The fear of being sued drives businesses to exceed what is required by the criminal law, diverting them from focusing on sensible preventive health and safety management and resulting in unnecessary costs and burdens.
Professor Löfstedt identified the unfairness that can arise when health and safety at work regulations impose a strict duty on employers that makes them liable to pay compensation to employees injured or made ill by their work, despite all reasonable steps having been taken to protect them from harm. Employers can, for example, be held liable for damages when an injury is caused by equipment failure, even when a rigorous examination would not have revealed the defect. The new clause is designed to address that and other unfair consequences of the existing health and safety system.
We all have different reasons for coming into politics. When I was growing up, I had one of the experiences that brought me to this place, concerning the over-burdensome intervention of health and safety officers. I worked in a family computer software company when an over-long health and safety investigation took place, which took up huge amounts time for the officers and senior management. The only result at the end of it was the recommendation that some bleach in a cupboard must be labelled correctly. After a sign was put up saying, “There is bleach in the cupboard. Please do not drink it,” the company was passed under the health and safety regulations.
These changes will ensure that there is a reasonableness defence in the consideration of some health and safety cases.
Guy Opperman (Hexham) (Con)
I am enjoying the march back through time to the Minister’s computer existence. I speak as a former health and safety barrister—on behalf of the prosecution, I should say. I welcome the changes recommended in the independent report. Is not what we are trying to do to bring flexibility and fairness to a system that is too old and defunct?
Matthew Hancock
We are ensuring that due health and safety measures are protected, but that there is a test of reasonableness for the actions of employers, so that those who have taken all reasonable precautions cannot be prosecuted for a technical breach. That will reduce the impression among many businesses, especially small businesses, that they are liable to health and safety legislation in many cases when they are not. It will reduce that impression while ensuring that taking reasonable steps to abate health and safety difficulties remains a vital part of everybody’s responsibilities. Indeed, the new clause does not change the criminal procedures in relation to health and safety.
How do we propose to do this? Civil claims for personal injury can be brought by two routes: a breach of the common-law duty of care, in which case negligence has to be proved, or a breach of statutory duty, in which case the failure to meet the particular legal standard alleged to have been breached has to be proved. The new clause will amend the Health and Safety at Work etc. Act 1974 to remove the right to bring civil claims for breach of a statutory duty contained in certain health and safety legislation.
John Cryer (Leyton and Wanstead) (Lab)
As I am sure the Minister knows, the 1974 Act is riddled with the phrase
“so far as is reasonably practicable”.
Does that not give the protection against flimsy claims that he has been talking about?
Matthew Hancock
The 1974 Act does not give that protection, because a test of negligence is not required to proceed with a prosecution. In future, proof of negligence will be required to bring a case. It will be possible to bring a civil action for a breach of common law duty of care only on the basis that the employer has been negligent.
Claire Perry (Devizes) (Con)
I am enjoying the Minister’s attention to detail on this important matter. Will he reassure us that this provision will not add to the burden for small businesses because of the process of providing proof? Has he done any number crunching to show what it will mean for the businesses that matter so much to Britain?
Matthew Hancock
My hon. Friend anticipates my speech, because this provision will reduce the burdens on business. It is difficult to know precisely by how much because businesses react not only to the letter of the law, but to the perception of the law. There are perceived health and safety requirements that go beyond technical breaches of the law, and we want to remove them. One can go to the new Government website and ask whether something is required by health and safety legislation. Many of the cases that are brought to the Government’s attention are not required by health and safety legislation. The problem is the perception of health and safety legislation. By including a reasonableness defence, we will help to remove the implied, expected and perceived burdens on business.
Julian Smith (Skipton and Ripon) (Con)
When my hon. Friend became a Minister, what assessment did he make of the previous Labour Government’s attempts to lift the burdens on business and the perception of those burdens over the 13 years that they were in office?
Matthew Hancock
I have found no evidence of that. If my hon. Friend can point any out to me, I would be extremely grateful.
David Rutley (Macclesfield) (Con)
I welcome the direction in which the Minister is taking the debate and the policy. I will never forget a conversation that I had in Macclesfield marketplace, a place with which I know he is familiar. A lady told me how disturbed she was that the perception of health and safety was giving it a bad name. I asked who she worked for and she said the Health and Safety Executive. The situation is going too far. Does the Minister agree that it is important to move to a common-sense approach, which I think is the direction in which he is taking Government policy?
Matthew Hancock
It is important to have a health and safety framework in which responsible businesses act in a way that supports and enhances the safety of the people who work for them. Indeed, it is vital that we all have a duty to behave reasonably on questions of health and safety.
I hope that making negligence a requirement before a health and safety case can be brought will mean that those who behave reasonably have no reason to fear health and safety legislation and that those who think carefully and responsibly about the businesses that they run will know that they are behaving not only reasonably, but lawfully.
Chris Kelly (Dudley South) (Con)
I thank the Minister for his speech. Does he agree that the managers of companies who are acting reasonably will be freed up to go out and win more export business, including those in the manufacturing and engineering companies in my constituency of Dudley South?
Matthew Hancock
Indeed, this action will reduce the burdens on business and help Britain to compete. It also provides important reassurance to employers that they will be liable to pay compensation only when it can be proved that they have been negligent.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
I well recall when I worked in the shipyards watching the white particles of dust and asking whether they had any health and safety implications, only for the employer to tell me, “Don’t be stupid. Get on with your lot, young man. It won’t do you any harm.” Hundreds of thousands of people are now suffering from mesothelioma. Is that the kind of employer that the Minister wants to support?
Matthew Hancock
The hon. Gentleman gives a good explanation of why there is cross-party support for health and safety measures that are reasonable. After all, it was a Conservative Government who brought in the Factory Acts. On the specific point that he raises, the provision is forward looking and is not retrospective. It will not have an impact on acts that were committed in the past, but is about actions that take place in the future. He raises an important question and I hope that I have reassured him.
Mr David Anderson (Blaydon) (Lab)
I thank the Minister for giving way; he is being very helpful. Will he clarify whether there is currently—or will be in the legislation—a legal definition of what “reasonable” actually means?
Matthew Hancock
The definition of reasonableness will come from the common law interpretation, and the concept is already well regarded and specified in law.
The new clause makes a significant contribution to the Government’s reform of civil litigation to redress the balance between claimants and defendants. It is good for Britain’s competitiveness, reduces burdens on businesses, and strengthens and underpins our health and safety system, thereby ensuring that people think it is fit for purpose.
Julie Hilling (Bolton West) (Lab)
I am concerned by the Minister’s remarks because far too many people are already killed at work each year, and people are also injured through faulty or wrong seating and other things that happen. The office is not a safe working space, and when the Minister says that we worry too much about health and safety, I am worried that we will make things far worse for people not only in heavy industry but in other working situations. Health and safety legislation exists to protect those people from back injury, repetitive strain injury and all the other things that occur. This legislation will completely reduce that issue in people’s minds.
Matthew Hancock
On the contrary, although I share the hon. Lady’s concerns to ensure that health and safety legislation is regarded and reasonably interpreted throughout work forces, whether in industry, agriculture or offices, and although such legislation is an important part of the modern workplace, it is unhelpful when health and safety becomes a byword for regulations that get in the way and stop businesses competing or, for instance, children from being taken on school trips once reasonable precautions have been put in place, and instead bring the whole system into disrepute. That is what the Government are trying to stop. The key defence of negligence ensures that if people breach health and safety rules or have not acted reasonably, that will—of course—be taken into account under the system, and the new clause will not change criminal health and safety procedures. We must, however, ensure that unreasonable claims, and the existing perception of health and safety legislation, do not get in the way of Britain’s ability to compete.
Stewart Hosie (Dundee East) (SNP)
The Minister is pushing the point about perception. He is right: businesses do respond to perception, and sometimes go further than is legally required. However, if they respond to perception in one direction, they may well respond to a new perception in another direction and do less than is required. If that is the case, how many injuries or deaths will it take for the Minister to be back at the Dispatch Box rewinding some of the changes?
Matthew Hancock
If businesses behave unreasonably and are negligent, they will be caught by the system. That proves the point about why we have to strike a good balance between a health and safety system that everybody supports and under which employers—and others—have to behave reasonably and take reasonable precautions, and a system in which the test of having acted reasonably is not a defence in civil law. That is the change being made; it will help to free up business, and I commend the new clause to the House.
Mr Deputy Speaker (Mr Nigel Evans)
I call the Minister [Interruption.] I meant the shadow Minister.
Mr Iain Wright (Hartlepool) (Lab)
If only, Mr Deputy Speaker.
This is my first opportunity to congratulate the hon. Member for West Suffolk (Matthew Hancock) on his promotion. It is a pleasure to see him at the Dispatch Box, as he has been many times in his guise as Disraeli, Churchill, or perhaps Sir Robert Peel, and it is good to see him in his current incarnation.
In his opening remarks, the Minister mentioned that the new clause seeks to deal with perception. We should not, however, be legislating on the basis of perception, and as he spoke I became increasingly concerned that this is yet another example of an insensitive, out-of-touch Government who somehow deem all regulation as inherently bad, and health and safety legislation as all-encompassing, bureaucratic and often unnecessary.
Julian Smith
I reciprocate the hon. Gentleman’s remarks. Does he agree with the Government that perception is important in health and safety legislation in almost the same way as in employment law? Does he claim that there is no issue with perception, and does he totally disagree with what the Government are trying to do?
Mr Wright
On perception, there is a feeling in the country—it is often fuelled by the media—that the so-called health and safety culture is inevitably a drag on economic growth and recovery. We must, however, set the context, and I want to make an important point to the Minister. The TUC estimates that every year at least 20,000 people die prematurely as a result of injuries, illnesses, or accidents caused by or in their place of work. That is far too many. The shocking figure from the Health and Safety Executive of 173 workers who were fatally injured at work often excludes a large number of other work-related deaths, but that figure alone means that 173 people went to work and did not come back, and that should not happen in a modern, compassionate society.
Alison Seabeck (Plymouth, Moor View) (Lab)
Does my hon. Friend agree that improvements to the health and safety regime were out there for all to see during the construction of the Olympic site? There were no deaths and few injuries, which was because the health and safety regime had been properly applied.
Mr Wright
I agree with my hon. Friend. In the great and almost universal celebration of the London Olympics this summer, we should never forget that we saw the first Olympic stadium and village in the history of the games to be built without a single fatality. That is something to be proud of and was a result of the good partnership between Government—of all political persuasions—management and trade unions, together with workers, working to ensure that nobody was injured or killed while doing such important work.
Andrew Bridgen
Not only did I serve on the Public Bill Committee for this important Bill, but I served on the Löfstedt review into health and safety reform, as did a representative from the Trades Union Congress, Sarah Veale. I assure the shadow Minister that there was absolute agreement among those on the Löfstedt review, including the TUC, that the perception of health and safety legislation—indeed, over-perception—is wrong in this country, and is holding back business and giving health and safety a bad name. The new clause goes some way in addressing that.
Mr Wright
I will go on to address the Löfstedt report in specific terms, and say where we agree with it and where we disagree, particularly with regard to the new clause, and if the hon. Gentleman will allow me, I will expand on that point. I am conscious that my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), a proud member of the Union of Construction, Allied Trades and Technicians, also wants to intervene, but I will first give way to the hon. Member for Hexham (Guy Opperman).
Guy Opperman
I am most grateful. All hon. Members will support the fact that the Olympics produced a death-free environment during the construction phase. However, changing laws on limited civil issues from strict liability to a balance of proof civil liability would not necessarily have affected or changed that. I hope that the hon. Gentleman will agree with and acknowledge that.
Mr Wright
I understand where the hon. Gentleman is coming from. In his opening remarks, however, the Minister mentioned a degree of concern about perception. Health and safety is first and foremost an important means to achieve safety for the worker, but a safe and healthy work force and workplace can also be efficient and productive. I wish to expand on that point, but I will first give way to my hon. Friend.
Luciana Berger
My hon. Friend is generous in giving way, and I echo his welcome for the fact that there were no deaths during the construction of the Olympic site. However, there were 50 deaths in this country last year on construction sites, and as he said, 173 fatal injuries, which was only two fewer deaths than the previous year, which indicates that we have a long way to go; 173 families have been affected. The Minister spoke of perception, but I am concerned about the reality for the families of those who have tragically died at work.
Mr Wright
My hon. Friend is absolutely right. It is important that the House and the country has 28 April—workers memorial day—as a focus for remembering that people should not go to work and not come back, and that families should not be disrupted by death and injury at work. We need to pull together to ensure that health and safety is considered not as peripheral and a nice thing to have, but as central to our society and a productive economy.
Mr Wright
If the hon. Gentleman will allow me, I will move on.
There are benefits to business from an effective and proportionate health and safety regime. As I mentioned, a safe and healthy work force can be a productive and effective work force. The Institution of Occupational Safety and Health estimates that, by having an effective health and safety regime, employers could save up to £7.8 billion, individuals could save up to £5.12 billion, and the economy, each and every year, could save up to £22.2 billion. It is important that health and safety is classed not as unnecessary and bureaucratic, but as conducive to good, effective and sustainable economic growth.
It is with those figures in mind that we should consider the merits of health and safety regulations and legislation, and the long-established premise of strict liability. As we know and as the Minister said, Professor Löfstedt reported in November last year. My right hon. Friend the Member for East Ham (Stephen Timms), who speaks for the Opposition on health and safety, welcomed many aspects of Löfstedt’s review. As my right hon. Friend said, most of it was positive, sensible and evidence-based, which is not a phrase we have heard often in deliberations on the Bill, and reinforced the view that health and safety is not a burden.
Over a number of years, the Health and Safety Executive has undertaken simplification exercises, which had support from both trade unions and employers. There are 46% fewer regulations than 35 years ago, and there has been a 57% reduction in the number of forms used. There is a perception that firms, and particularly small firms, spend disproportionate time on health and safety to the detriment of business and growth, but the average business spends 20 hours and just over £350 a year on health and safety risk management and assessment, according to the Minister’s Department. Such activities therefore do not exactly take up a huge amount of businesses’ time.
Julian Smith
The shadow Minister might be about to say this, but does what he just said mean he will get on the side of the small business in Britain, as the Government are doing, and vote with them on new clause 14, or will he oppose it?
Mr Wright
The Labour party has always been on the side of small businesses, and Labour Members will continue to be so. In the 13 years of Labour government from 1997 to 2010, 1.2 million businesses were created, whereas 50 businesses each and every day are folding as a result of the current Government’s macro-economic polices and the double-dip recession. I shall therefore take no lessons from the hon. Gentleman.
Professor Löfstedt suggested that the UK needs a greater understanding of risk. We need to reject tabloid claims and the perception at the centre of the debate so far that health and safety legislation has somehow gone too far. He also recommends that education is provided to employers, workers and students on the dangers they face. However, the short section on strict liability in Professor Löfstedt’s report offers no argument or evidence for changing the current legislative arrangements, but rather an assumption that strict liability is unfair on employers. In fact, Löfstedt refers to three cases, but two were not strict liability cases, so would not be affected by the new clause. The assumption that the Government are guilty of making—they have been guilty of making many such assumptions on employment rights—is that the removal of that type of liability in some cases will boost the economy. That is economically illiterate, however, and not the solution that businesses, including small businesses, want to get us out of the double-dip recession that has been made in Downing street.
I mentioned the accusation of there being no evidence—we have heard that phrase time and again during the consideration of the Bill. There has been no consultation on the measure, which means that there could well be unintended consequences, because the Government have not sought the expertise of those who deal intimately with such issues. There has been no impact assessment on the measure, but can the Minister say why not? What are the expected costs and benefits of implementing the measure, which is supposed to liberate businesses to concentrate on economic growth? Does he have tangible, quantifiable, empirical evidence to support such claims?
Health and safety regulation has always contained a balance between different types of obligation—the majority are qualified by the phrase “reasonable practicability”, but some are strict. Although Professor Löfstedt had the insight that “reasonable practicability” has underpinned health and safety regulation, it has never been the key concept. A central point of the Opposition’s argument is that the balance has existed since the Factories Act 1937, which has been mentioned. In that three quarters of a century, the balance has been generally considered fair. Removing it risks taking us back to a 19th-century mill owner’s view of health and safety, which the Opposition could never support.
If someone is injured because of a defect in a piece of equipment provided by their employer, the law is that it is no defence for the employer to say that they had a proper system of maintenance and inspection. Most people would think that right and fair, so it is unfortunate that the Government do not. They believe it is unfair for an employer to be the subject of civil action and pay compensation when they are not at fault, but what about fairness and justice for the injured worker? They are not at fault and did not ask to be injured. The new clause would remove the right to compensation for workers in those circumstances unless they can prove fault. The Government seek to place the burden on vulnerable employees, but the employer, and not the employee, selects and provides the work equipment. Regardless of fault, it is therefore the employer and not the employee who creates the risk. That is important.
Alison Seabeck
Prior to my previous question, I should have declared an indirect interest, which is already on record.
Given the emphasis placed on business concerns by Conservative Members, does my hon. Friend agree that it is slightly surprising that the Federation of Small Businesses briefing to MPs does not mention them? Perhaps that suggests that the line he is taking is the correct one.
Mr Wright
The FSB has been incredibly important throughout the consideration of the Bill, including on the green investment bank and ensuring that the supply chain can derive benefit from the potential in the new green economy, but it did not mention such concerns. The measure is not a priority for business and its absence is not a hindrance to economic growth. The balance, which has been well established for three quarters of a century, works well and will not hinder growth or recovery.
Mr Anderson
In Committee, mention was made of anecdote, a lack of evidence and perceptions, but we have to add a new one, which the Minister led with—impressions. We now have a Government run by impressions, but they are not very good at making impressions.
Mr Wright
The Minister is the Mike Yarwood of the House of Commons. It is nice to see a good, relevant, pertinent and timely reference to popular culture, from my own point of view.
The new clause will do nothing to enhance recovery and enterprise, and might have the unintended consequence of making the health and safety environment less safe and therefore less productive and efficient. I ask the Minister to think again, because this does nothing to aid the recovery that the country so badly needs.
Mr Anderson
The Minister started with his experience in the world of health and safety. My experience is based not only on my life as someone who worked for 20 years in the coal mining industry and then as a care worker but before that on the experience of my father, who worked the coal mines in the 1930s, when, in this country, one coal miner was killed every six hours on average. Think about that. One thousand men a year did not go home, in part because health and safety was a laughing matter and put to one side, because production was all. My father was twice buried alive—thankfully, he got out both times—and had a very close friend die in his arms, having had his head crushed between two mining coal tubs. It was not a satisfactory way to spend your life.
As a result of that history, the Government in 1947 nationalised the coal mines, set up a train of processes that included health and safety committees in the mining industry and joint consultative committees, and started planning for legislation that produced the Mines and Quarries Act 1954. That Act was actually put in place by a one-nation Tory Government, but they did it for the right reasons—to improve the conditions of people who were vital to the economic success of this country. As a result of that legislation and the improved techniques and machinery, the number of people dying in mines in the 1980s could be counted in single figures. The work force was depleted by about 70% between the 1930s and 1980s, but the number of health and safety measures fell from 1,000 to fewer than 10. For me, that history is vital to understanding how important health and safety issues are.
In 1989, I moved from the mines to become a care worker taking care of elderly people. Members might think that that is a completely different scenario, but let us think about it. The Minister gave the example of the bottle of bleach in the cupboard. It is important to know what is in cupboards to which people might well have access, particularly older people who might not have the capacity to understand what they are dealing with. That is why we introduced measures such as the Control of Substances Hazardous to Health Regulations 2002, which were about protecting people dealing with dangerous liquids.
There were issues around the lifting and handling of people who were not mobile. The impact on care businesses was huge. People accepted, however, that if they wanted to do things properly and protect not only the workers but the people they were taking care of, they needed to introduce such measures. There were other issues around medication—how to supply it, how to make it safe, how to make sure it was not given to the wrong person, how to make sure that medication records were kept up to speed—that were all part and parcel of the health and safety measures that we should all be pleased are in place.
The discussions on the Bill have been marked, certainly in Committee, by a lack of real evidence. The man tasked by the Prime Minister with reviewing employment law, Adrian Beecroft, was questioned during the evidence-taking sessions, particularly by my hon. Friend the Member for Vale of Clwyd (Chris Ruane). In response to the question about what the empirical evidence and research was based on, Adrian Beecroft said:
“I accept the accusation that my views on whether the change would improve the efficiency of people working in businesses are based on conversations with a sample of people, which is not statistically valid.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 145, Q330.]
Justin Tomlinson (North Swindon) (Con)
The hon. Gentleman is making some important points, but, regarding evidence, perhaps we could learn lessons from our European partners. For example, the nursery staff ratio in Germany is considerably less than here, which has driven down the costs while maintaining safety. So there is evidence, if we look further afield.
Mr Anderson
I am more than happy to follow that knowledge. If we want examples, let us look at Germany right across the board—at its employment legislation and practices, including on health and safety. It is a good example of an economy that is growing while having much tighter working rights and better regulation than this country does.
Mr Jim Cunningham (Coventry South) (Lab)
I was interested in what the hon. Member for North Swindon (Justin Tomlinson) said about Germany, but he forgot one thing—after the war, it was a Labour Government who, along with their allies, set up the German industrial and other structures.
Mr Anderson
That is absolutely right. We took the best of what we had in this country, and thankfully the Germans picked it up. It would be a good idea if we looked at what they did and brought it here.
To repeat, Adrian Beecroft talked about
“conversations with a sample of people, which is not statistically valid.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 145, Q330.]
So there is no evidence base. It is a couple of guys talking in the pub, at a football match or out playing golf. It is two old guys sitting in deck chairs, saying, “Wouldn’t it be nice if we got rid of all this health and safety stuff and all these employment rights? Then everyone could make more money.”
Ian Lavery (Wansbeck) (Lab)
Whether perception or reality, one thing we know for certain is that nearly 200 people were killed in the workplace last year and that in excess of 20,000 people were killed or died as a result of work. That is the evidence base. That is factually correct. There is little evidence other than that. Does my hon. Friend agree?
Mr Anderson
I could not agree more with my hon. Friend. He speaks from the history of the real world, not from just reading books and studying things at university. He has been in the real world and seen how people are affected when health and safety is allowed to go by the board. The words that were used continually in Committee were: “The perception is this”, “The impression is this.” It was based on anecdotes and assumptions. There was no evidence. If we create laws without evidence, we create nonsense.
In conclusion, I return to the word that I asked the Minister to define—“reasonableness”. In 20 or 30 years of negotiating contracts for people at work, that is one of the words I used to hate in any contract, because “reasonable” is made of elastic. It is a word used by lawyers and others to get around things. I will give hon. Members a real example. I used to represent home care workers, who went into people’s houses and took care of some of the most vulnerable people in this country. Their contracts included a range of duties, and included the words, “and other reasonable things”. There were questions: is it reasonable for a home care worker to bathe an old man or old woman? Is it reasonable for a home care worker to distribute medication to a man or woman? One would think, “Well, of course it is,” but if something went wrong, the employer would say, “You shouldn’t have been doing that. You’re not paid to do that. You shouldn’t have given that medication; you didn’t know whether they’d had it earlier in the day.” I am therefore concerned when the Minister says that the word “reasonable” can apply in that way, because it is a word that will be argued over and tossed around whenever there is a dispute.
Let me return to the point, which was mentioned earlier, that the Bill will create a “new impression”. It will create the impression that all bets are off—that employers do not have to care about health and safety, and that people can do what they want as long as they believe it is reasonable. It will not be reasonable when the statistics that my hon. Friend the Member for Wansbeck (Ian Lavery) spoke about earlier are not 200 people but 300 people a year killed in the workplace. Indeed, it will not be 20,000 people dying from injuries, but 30,000 people. We will come to regret this; it should be stopped at this stage.
Jim Sheridan
I rise to speak as chair of the all-party health and safety group. Unfortunately there are no active junior coalition partners on the group; hence the reason we have such a poor turnout from the junior coalition partners for this debate. I have no doubt that at the next election the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson)—who is in her place on the Front Bench—will be telling people in the west of Scotland that she stood up for workers. However, we will be reminding her of what her party has been doing for the workers.
The all-party group’s activities include producing reports. Just recently we published a report in conjunction with the TUC on asbestos in schools. I would encourage the Minister to get a copy of that report, which basically suggests that we have to challenge perceptions. Who would have thought that there was a health and safety issue in our schools? But there is. Some of our decaying schools are riddled with asbestos, and pupils, teachers, janitors and other people working in schools are being exposed to it. People do not see it, so they think there is not a problem, but there is in fact a major problem. Despite representations to the coalition Government to take action, they have so far refused to do so, which is unacceptable. Indeed, I am told that this place is being shut down for a number of years to deal with asbestos, so it is quite okay to clear the asbestos in this place, so that we can all live safely, but we cannot do it for our children in the schools. That for me tests the perception of this coalition Government when it comes to health and safety.
As I have said, in my earlier days when I worked in the shipyards in the west of Scotland in Glasgow, I remember seeing white flakes floating down and being told by the employer, “You’re just a trouble maker. There’s nothing wrong with them; it’s just rays of sunshine coming through.” I have to admit that we do not get many rays of sunshine in Glasgow, but on the days that we did, we could see those white flakes floating down. We raised concerns, but we were told that we were just being stroppy and obtrusive, when in fact we were talking about something that caused a real disease that people could not see. Since then I have attended far too many funerals of people who worked in the shipyards and had died a horrible death from mesothelioma. Indeed, even insurance companies are now refusing to pay out. Those poor people and their families who are chasing compensation are having to deal with unscrupulous insurance companies that even today are denying them the opportunity of compensation. I hope that those on the Government Benches will be able to tell their constituents who are suffering from asbestos-related disease that they are doing the right thing for future generations, because at the moment that is exactly what they are not doing.
Julie Elliott (Sunderland Central) (Lab)
Does my hon. Friend accept that asbestos is not only a hazard in the workplace? I know of numerous cases where people who just used to give their dad a cuddle when he came home in his work clothes died some years later of mesothelioma or asbestosis. Indeed, we have not yet reached the peak incidence of such cases, because it takes so long before the disease manifests itself. Will the changes being proposed today not make the problem so much worse?
Jim Sheridan
My hon. Friend is absolutely right. There is nothing more concerning for people who work with asbestos than to see their relatives catching such a serious disease as mesothelioma. Indeed, I know of one person who worked in a shipyard who had the displeasure of burying his daughter who had died from mesothelioma, simply because when he came home at night she used to sit on his knee. The dust was still there and she was swallowing it, but they did not see it and she was suffering. It was horrible to watch that father bury his daughter.
Every week in this House the Prime Minister and the Leader of the Opposition pay tribute to our armed forces in conflicts throughout the world, and quite rightly so. However, when it comes to fatalities and near fatalities, there are more people killed or injured in the workplace than there are members of our armed forces affected in conflict areas around the world, yet we do not talk about them. Indeed, instead of talking about those people, we want to introduce legislation that will increase their number. When we talk about the armed forces and people losing their lives, please let us remember the workers who are losing their lives, of whom there will be more as a direct result of the Government’s legislation.
Julie Hilling
Does my hon. Friend agree that this debate is not just about those terrible deaths and injuries? It is also about the long-term conditions that people develop—for example, because their desk is crammed in a corner and they cannot sit at it properly, or because they get repetitive strain injuries. The Bill will make things worse for the conditions that give rise to such long-term problems. Ministers may say that the Bill will not affect deaths and injuries—we question that—but I am sure that my hon. Friend is convinced, as I am, that it will make things much worse for those long-term conditions.
Jim Sheridan
My hon. Friend is absolutely right. Indeed, there is a school of thought that says, “If you work in an office, there are no health and safety hazards,” but that is not true. Indeed, the reality is quite different.
We also have to consider the excessive burden put on the NHS as a result of accidents in the workplace. However, we are only talking about the accidents that are reported. We need to understand that more accidents happen in the workplace that go unreported, because the individuals do not want to report them in case they get the sack. We are therefore not getting the true figure for people injured in the workplace.
Ian Lavery
With regard to mesothelioma and asbestos-related diseases, at any one time we have roughly 9 million children in school, which is a huge concern. There are also about 800,000 to 900,000 teachers in schools where there is asbestos. Should we not be looking immediately for the full withdrawal of asbestos from schools? It has been done in other countries, by the way, Northern Ireland being one. Should we not be looking for a phased removal and, in the meantime, managing asbestos properly in schools to prevent people from dying? The problem is that such diseases have a latency period of between 30 and 40 years, so people do not report them. They do not develop diseases until 30 or 40 years later, and even then they are not sure where they have come from.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I did not want to interrupt the hon. Gentleman, who I know was making an important point, but I should just remind the House that this is not a general debate on health and safety; rather, we are talking about new clause 14.
Jim Sheridan
I appreciate that, Mr Deputy Speaker. I congratulate my hon. Friend the Member for Wansbeck (Ian Lavery), who is secretary to the all-party health and safety group. He is absolutely right about asbestos and schools. He has done an extensive job of work on that and the point he makes is absolutely right.
On the overall question of accidents or fatalities in the workplace, may I remind the Minister of the extensive amount of money that it will cost the NHS to treat people who have been injured at work through no fault of their own? It is a false economy to have unscrupulous employers putting their workers in danger and then for the NHS—that is, the taxpayer—to have to pick up the bill. That is completely wrong.
On the perception of employers, I worked for a number of years for an excellent and progressive employer, Thales, in the defence industry. It looked after its employees and had a health and safety director, and people reacted accordingly. If we treat people sensibly, we get a sensible response.
I recently asked my local chamber of commerce what problems it had in creating jobs and moving the economy forward, and what barriers were caused by the current health and safety situation. It told me clearly that it did not have a problem with health and safety legislation in the workplace, and that it wanted the Government to concentrate more on restarting the economy, creating jobs, getting money back into the economy and employing people. It said that the Government should focus on that, not on going back to the old Conservative days of saying that the trade unions are the enemy within and should be dealt with accordingly.
The Minister mentioned a bottle of bleach in a cupboard, but there are occasions when children are in offices or other places where there are bottles of bleach lying about, perhaps because of a lack of child care facilities. If those bottles are not clearly identified, there is every possibility that a child could lift one up and drink from it. I would not like to think of any child suffering as a result of that. The new clause is a complete diversion from where the country has been going. There is no appetite in the country for this type of waste of parliamentary time.
Mr Jim Cunningham
Does my hon. Friend agree that when the Conservative manifesto at the last election mentioned cutting red tape, as previous Conservative Governments have, it actually meant an attack on working people’s rights in the factories and coal mines?
Jim Sheridan
There is no doubt about that. We know the rationale behind it—it is just a backhanded attack on trade unions and health and safety representation in the workplace. I worked in the construction industry for many years, and there is clear evidence that where there is trade union organisation on construction sites, safety is considered paramount and the number of accidents is far lower than on non-organised sites.
I do not believe that there is any appetite for the new clause among either our constituents or our businesses, large or small. They want the coalition Government to focus on doing what they were elected to do—getting us through these difficult times, getting people back to work, getting our kids educated and rediscovering our health service. This self-indulgent new clause is not worth the paper it is written on, and there are far more important things to be discussed.
Matthew Hancock
We have had impassioned contributions to the debate, not least from the hon. Members for Blaydon (Mr Anderson) and for Paisley and Renfrewshire North (Jim Sheridan). Several Opposition Members have made the point about a lack of consultation with the Opposition Front Benchers. However, the Löfstedt review involved a consultation, to which there were something like 400 submissions. That review published some of the evidence on which our proposal is based, not least evidence showing that most employers do not make a distinction between health and safety measures on a civil and a criminal basis. They are therefore more likely to waste time over-complying—the hon. Member for Paisley and Renfrewshire North mentioned the problem of time being wasted—than to focus on the need to ensure rigorous health and safety so that they can reduce the number of deaths and serious injuries in the workplace. That is what is valuable, and Opposition Members have spoken powerfully about it. That is where the focus should be, rather than on over-compliance with the details and technicalities that are often put in place, which are not required and not helpful for safety purposes. Instead, they give health and safety a bad name.
Mr Anderson
Is not the danger, though, that we will end up with under-compliance, which will lead to more people dying? I would rather waste time, as the Minister puts it, than waste lives.
Matthew Hancock
I assure the hon. Gentleman that if there is under-compliance, people will have been negligent and the full force of both the criminal and civil law will be available.
The hon. Member for Hartlepool (Mr Wright) mentioned the Federation of Small Businesses, but it has stated:
“A wider problem for small businesses is that many do not feel confident that they are compliant owing to confusion about what is absolutely necessary, and so feel the need to gold-plate the law to protect them.”
Indeed, an FSB survey showed that 87% of its members supported the Löfstedt approach. Given that figure, and given that the FSB is clear about the lack of confidence caused by the current confusion in the law, I hope he will accept that it is very much behind the Government’s approach.
Likewise, EEF, the manufacturers’ organisation, has stated:
“The current compensation system is serving the needs of neither employees nor employers and is the source of many of the media stories and public concern about excessive health and safety.”
That concern has been part of our debate. Of course, the substance of when technical breaches occur is a crucial part of the change that we are making, but I am glad that the hon. Gentleman acknowledged that there is also the problem of perception, which leads to over-complication. Both those problems need to be addressed, and they will be by our changes.
John Howell (Henley) (Con)
I was moved, as I am sure everyone else in the House was, by the earnest statements that Opposition Members made about how members of their families and other people they knew had been killed by industrial diseases. However, difficulties such as those that we find in the current legislation do not help to prevent such cases.
Matthew Hancock
Indeed, and over-compliance and the fear of technical breach bring the wider health and safety law into disrepute. All parties support that law. As has been acknowledged, it was introduced by a Conservative Government, and it has been vigorously supported by Labour Governments over the past century or so. However, it is undermined when the impression is given that the system is over-complicated, confusing and aimed at technical, rather than substantive, breaches.
Andrew Bridgen
I, too, was impressed with the genuine passion of Opposition Members who talked about health and safety, but I honestly believe that they missed one fundamental point. They seem to believe that there is no cost to over-compliance with regulations, but there is not only a cost to our economy and the Exchequer, which is important at the moment, but a cost borne by the long-term unemployed and the workless. They pay for over-compliance by not having access to the workplace, which vastly decreases their life expectancy. They are the people paying the price.
Matthew Hancock
My hon. Friend makes the point with great power that those who are out of work pay for an uncompetitive economy. They are the people whom we need to support.
Mr Iain Wright
If this is about costs and benefits, why is there not an impact assessment for the new clause?
Matthew Hancock
The benefits are set out clearly in Löfstedt. Most importantly, because it is necessarily difficult to ascertain the amount of over-compliance, Britain’s health and safety system will benefit from being able to compete and focus its resources on avoiding substantive breaches of health and safety law rather than on technicalities and over-compliance. All parties should focus on problems such as death in the workplace due to negligence. The hon. Member for Paisley and North Renewfreshire—[Laughter.] North Renewfershire—
Ian Lavery
If the proposals are passed by Parliament, does the Minister envisage a great reduction in the number of fatalities in the workplace next year?
Matthew Hancock
I would expect the focus to be on the substantive breaches and negligence that, sadly, bring about the injuries and deaths in the workplace that we all want to minimise.
The hon. Member for Paisley and elsewhere mentioned the problems with asbestos in educational institutions, and especially in further education colleges. I want to give him the reassurance that past actions will not be affected by the changes in the law, should it be passed according to the will of Parliament. Now that the problems with asbestos are widely known and documented, I anticipate that people who ignore those problems will be ruled negligent by the courts, rather than such instances merely being considered technical breaches. I therefore do not see that question applying in such circumstances.
Jim Sheridan
For the benefit of Hansard, I should like to point out that my constituency is Paisley and Renfrewshire North. Concern has been expressed that this whole debate has been driven by B-list celebrities and B-list journalists on The Daily Mail who have probably never worked in such a workplace in their lives. Can the Minister name one company that has clearly told him that it will employ more people if the Bill goes through?
Matthew Hancock
As I have said, 87% of FSB members support the Löfstedt approach—[Hon. Members: “Name them!”] I am sure that if the hon. Gentleman asks the FSB, it will give him the names of some of those supporters. I prefer to be driven by evidence such as that survey, rather than by unnecessary concerns, given that precautions are being put in place through these amendments. The hon. Gentleman mentioned sunshine in Glasgow, and I hope that the new jobs and benefits to business that will result from the ability to remove the perception of a fear of health and safety will bring that sunshine not only to Glasgow but to the rest of the country. I hope that the new clause will reduce the effects of the perception of a need for over-compliance with health and safety measures, and that instead the focus can be placed on substantive breaches of health and safety regulations. I commend the new clause to the House.
Question put, That the clause be read a Second time.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Government new schedule 2—‘Adjudicators: bankruptcy applications by debtors and bankruptcy orders.
Government new schedule 3—‘Adjudicators: minor and consequential amendments.
Government amendments 37, 41 and 44
Jo Swinson
As well as moving the new clause, I shall speak to new schedules 2 and 3, along with Government amendments 37, 41 and 44, the latter of which are consequential amendments on territorial extent and commencement.
These amendments will reform the process by which an individual may apply for his or her own bankruptcy. They will remove the existing requirement for the indebted individual to present a bankruptcy petition to court and replace it with a new administrative process. Currently, a person with unmanageable levels of debt who wishes to make him or herself bankrupt must petition the court—the local court—for a bankruptcy order. There is no dispute that requires a court to make a judgment on competing interests in these scenarios. The vast majority of such applications—last year there were more than 30,000—are accepted by the courts with very little scrutiny.
The amending provisions mean that instead of petitioning the court, applicants would submit their bankruptcy application to a new adjudicator. This proposal was consulted on by the previous Administration and was broadly supported by interested parties. I should say that the Government consulted on removing the court from a wider range of cases, but as significant concerns were raised, this amendment concerns only debtors’ own petitions.
The adjudicator will hold a new statutory office, which we intend to be located in the Insolvency Service. The adjudicator will consider each application, and will decide on an objective basis whether the criteria for the making of a bankruptcy order have been met. If they have been met, the adjudicator will make the order. The administrative process is similar to the way in which individuals enter bankruptcy in Scotland, and in some other jurisdictions throughout the globe.
Applicants for bankruptcy will no longer need to attend court. Applications will be electronic, which will deliver significant savings, and applicants will be able to pay the fees in instalments. Bankruptcy will none the less remain a serious step. It may be the right solution for some debtors, as it allows debts to be written off and a fresh start to be made; but, quite rightly, those advantages are tempered by the serious implications of a bankruptcy order. Bankrupts are subject to restrictions, their assets can be sold for the benefit of creditors, and a portion of their incomes can be used to help repay their debts. For many, other debt remedies will continue to be more appropriate. We will therefore encourage debtors to take independent debt advice before making their bankruptcy applications. We will work with the Money Advice Service and providers in the debt advice sector to ensure that all debtors have the information that they need in order to make an informed decision.
There will be no change in the process that takes place after the making of a bankruptcy order. When an order is made by an adjudicator, the present post-bankruptcy order procedures will continue to operate, and the serious consequences that apply to an individual who is made bankrupt will remain.
Ian Murray (Edinburgh South) (Lab)
It is good to reach the Bill’s report stage following a mammoth session in Committee before the summer recess, and it is interesting to note that the Opposition made such a strong and determined case in Committee that no Ministers from the Department for Business, Innovation and Skills are left on the Front Bench.
The new clause amends the Insolvency Act 1986 and introduces an administrative procedure for debtor petition bankruptcies. It is extremely worrying that the number of people who find themselves caught in a spiral of debt is increasing, and that many are forced to declare themselves bankrupt as a result. The figures are stark. Citizens Advice has dealt with more than 2.2 million problems involving debt, and has received 131,000 inquiries about bankruptcy and 142,000 about debt relief orders. The issue is not just about financing and debt; it is about relationships and, in some cases, lives. Bankruptcy is all too often a stigmatising experience, and evidence shows that that applies particularly to men.
Although the number of people declaring themselves bankrupt has fallen, the number of those becoming insolvent has risen sharply, according to official Government figures. As the Minister said, there were more than 30,000 personal insolvencies in just one quarter this year. That is a staggering figure, which shows how many households need help with debt problems. Insolvency is a very difficult condition to have to face, and it usually comes at the end of a long struggle to deal with debt and other money problems. The leading debt charity Clarifi, formerly known as the Consumer Credit Counselling Service, has said that it expects the number of personal insolvencies to increase over the next year, and has warned that more than 6 million households are still living on the edge. It is therefore vital for those who are struggling to pay their debts, or even just worried about their debts, to seek free advice and support. Opposition Members believe that it is hugely important for the process of insolvency to be as swift as possible, and we welcome the initiatives that will speed up that process.
As the Minister will know, key stakeholders have broadly welcomed the proposals, but they have raised several issues that I hope the Minister will deal with. First, there is the issue of the establishment of the location and how the new administrative process will deal with bankruptcy tourism. Secondly, there is the issue of the qualifications of adjudicators, which has prompted concerns similar to those relating to the Government’s proposals in respect of the role of legal officers in the employment tribunal system, and has been raised on a number of occasions. It is important for adjudicators to be in a position to make crucial judgments not just about bankruptcies, but about referrals to court. They need both knowledge of insolvency law and experience of the court system. Given that the Secretary of State has the power to appoint adjudicators, may I ask what experience-related criteria they will have to meet?
Thirdly, there is the issue of fees. People who are struggling with debt often cannot afford the £700 that it costs to go bankrupt, even when bankruptcy would otherwise be the best way out of their problems. That leaves them in a financial black hole. The number of people using debt relief orders, one of the cheaper remedies, has risen sharply again. It seems slightly perverse that someone who is struggling with debts should have to find more money in order to petition for bankruptcy.
The Bill empowers the Lord Chancellor to be flexible in fixing fees. Given that the new streamlined system has the potential to be electronic, and to be simpler and cheaper, I wonder whether the Government will consider some remedies for the problem of fees, such as allowing people who are seeking bankruptcy to pay in instalments.
The Minister mentioned advice for debtors. There is a view that taking the bankruptcy system out of the formal courts process and making it more administrative will reduce the gravity of the situation in which people find themselves. It is important for bankruptcy to be seen as a last resort, but all possible advice and guidance should be given to those who seek to go down that route.
Finally, may I press the Minister on one of her great loves, the Post Office? It has been said that the new administrative task of filling out the bankruptcy forms in the prescribed manner could be performed through the Post Office by means of a passport-style “check and send” arrangement. That would also allow the Post Office to divert people to other forms of debt advice, including free advice.
We support the change to a more administrative bankruptcy system because it is one of the critical remedies for debt, but we should be grateful if the Minister could provide some comfort on the issues that have been raised.
Mark Durkan (Foyle) (SDLP)
Like my hon. Friend the Member for Edinburgh South (Ian Murray), I welcome the new clause and new schedules. On Second Reading, I asked the Government to look at the Insolvency Act 1986 in the context of the Bill, but they said at the time that they did not want do so. I am glad that they have now revised their view.
As my hon. Friend said, it is important for a number of issues to be tested, not least bankruptcy tourism. That is causing concern in both parts of Ireland at present, in key agencies and in terms of public opinion. I support the new clause and the extension of the Bill to amend the 1986 Act; however, I ask the Government to consider not just section 263, with which new clause 16 deals, but section 233. Changes could be made that would reduce the number of companies that go bankrupt.
Although these provisions are about making insolvency more straightforward and easing the process of bankruptcy, both as it is going on and afterwards, the amendments to section 233 being sought by R3—the Association of Business Recovery Professionals—would mean that businesses, which are currently subject to demands for ransom payments from suppliers once they go into administration, could instead be protected and brought into recovery rather than ransomed into bankruptcy. Essentially, the suggestion is that chapter 11-style protections could be brought into UK law. As it stands, the Insolvency Act is meant to protect companies in administration from having their supplies cut off, but utility supplies under that Act extend only to gas, electricity, water and telecommunications and not to IT and software, which are vital services for a modern business.
Justin Tomlinson
That is an extremely important point. First, utility companies can reset the tariff and choose the most expensive option, further adding to pressure on keeping the company viable. Secondly, we need to modernise the language, because IT contractors were not an option when the law was first introduced but are now essential to most businesses.
Mark Durkan
I thank the hon. Gentleman for that intervention and he has amplified the point that I am trying to make. In 1986, IT and software were not seen as vital for the conduct of a business but now, clearly, they are and the Bill must make good the deficit in the legislation. Also, as he said, the law as it stands forbids utility suppliers from ceasing to supply a company that has gone into administration although, of course, it does not prohibit them from charging a super-high tariff. That exposes companies in administration to ransom demands that can drive them towards bankruptcy. The Government are right to consider the Insolvency Act, but they must widen the scope of that attention beyond these very welcome amendments.
Neil Parish (Tiverton and Honiton) (Con)
I merely seek reassurance from the Minister. I can understand the need to simplify the bankruptcy procedure for those who, through no fault of their own, seek it because of their debts, and that is absolutely right. I am slightly concerned, however, that some companies shift money around and go bankrupt because it suits them to do so, taking other companies down with them. I want the Minister to reassure me that the adjudicator, or whatever he or she will be called, will have the powers to look into such cases so that it is not easy to go bankrupt when one should not. Such companies bring other good companies down with them.
Jo Swinson
I have appreciated the good but brief debate on this issue, on which there is clearly a degree of support on both sides of the House. That is always welcome and I particularly welcome the support for these measures from the hon. Member for Edinburgh South (Ian Murray) and the official Opposition.
I share the concern about the fact that too many people sadly need seriously to consider bankruptcy. We all know from our experience in our constituency surgeries the distress and heartbreak that can cause to the people who are contemplating such a measure. The impact of that decision on individuals is why it is absolutely right to do what we can to improve the process, to make it swift and efficient and, where possible, to prevent people from having to appear in court, which adds to the stigma that has been mentioned and is a distressing and difficult experience.
Bankruptcy should be considered as a last resort. A wide range of different measures are promoted and encouraged through people who give debt advice such as individual voluntary agreements, of which there are about 49,000 a year; debt management plans, of which 150,000 people take advantage each year; and the new debt relief orders for specific categories of very vulnerable and poor debtors, 29,000 of whom take them up every year. In that context, the 38,000 bankruptcy orders show that bankruptcy is not used by all the people who face such difficulties. Of course, the general advice to individuals in difficult financial circumstances is to seek advice early. The earlier the problems can be confronted, the more possible it is to avoid the worst consequences.
I am happy to address the specific issues raised by Members. The hon. Members for Edinburgh South and for Foyle (Mark Durkan) mentioned bankruptcy tourism, which is a practice whereby a debtor opts to access insolvency proceedings in a particular member state by relocating to that member state. That potentially enables them to seek a better outcome than might have been possible in their previous country. That is allowed for under the EU insolvency regulation provided that the relocation is genuine. For many individuals in such circumstances, the relocation might not be straightforward so it is perhaps unsurprising that the number of individuals from other EU countries who relocate to the UK for this purpose is very small. There is no evidence of widespread abuse, but the official receiver or a creditor can apply to court to annul the bankruptcy order if abuse takes place.
On the question about the adjudicator, the Insolvency Service is already looking at this for the debt relief orders that it administers and it will be able to do exactly the same in relation to the way in which adjudicators conduct their business.
On the qualifications of adjudicators, they will be making an objective decision by reference to prescribed criteria and there will be a right of appeal for an applicant if the adjudicator refuses to make an order. Obviously, they will need appropriate qualifications and experience to function effectively, and the Secretary of State will make sure that people appointed to that role are appropriately qualified. They will be based within the Insolvency Service which, as the House knows, is an executive agency of BIS, and will already have extensive experience of administering an electronic administrative process similar to the debt relief order regime. It is important to point out that adjudicators will not be able to be official receivers as well, as that would be deemed to be a conflict of interests so those roles will be kept separate.
I appreciate that for individuals seeking bankruptcy, the levying of fees on that is not straightforward. The administration fee will remain unchanged at £525, which is a significant sum for people in that situation. In the context of overall bankruptcy, where they will be expecting debt relief of at least £15,000, it is not as huge as could be imagined in the comparison.
What is important about the way in which the new system will operate is that it will take the courts away from a process in which they do not need to be involved. Where there is no dispute, where somebody wants to declare themselves bankrupt and nobody has a problem with that, there will be no requirement for that costly court process. That will generate significant savings so the application fee for the process is expected to be about £70, instead of the current court fee of £175. That will be helpful and of benefit to people applying for this option. It is estimated that overall debtors will save about £1.5 million. There is a saving for the Court Service as well, as this will be a more efficient process handled through the adjudicator, and individuals personally affected by bankruptcy will benefit. The suggestion from the hon. Member for Edinburgh South about paying in instalments is one that the Government have taken on board. It is part of the process and offers real advantages, compared with the current situation.
I was delighted that the hon. Gentleman mentioned the Post Office, which I, as the Minister responsible, am passionate about, as I know are Members in all parts of the House, who support their local community post offices. The Government are committed to ensuring that the Post Office can be an effective delivery mechanism for more front-office Government services. There is good news—last year, for the first time in a decade, the income stream that the Post Office received from Government services increased, so there is a positive story to tell.
The Post Office is looking at a wide range of ways in which it can increase its services and its revenue. Playing a wider role in identity checks, as was mentioned, is one of those. It is important to bear in mind that the Post Office will bid for such contracts on the basis of being able to provide an effective and efficient mechanism for doing so. It is a very good organisation that is able to provide such services and win those contracts on the merits of the bid that it submits.
On the issues relating to advice, there are examples of more credit union facilities and a wider range of financial services being able to be accessed through post offices. Access to financial services from that excellent network of 12,000 branches is of particular help to people in communities that do not have a local bank branch, perhaps because they are very rural communities. Now that 95% of bank accounts are accessible at post offices, the recent announcement from HSBC was welcome. The hon. Gentleman certainly raises an important point.
On the points made by the hon. Member for Foyle and my hon. Friends the Members for North Swindon (Justin Tomlinson) and for Tiverton and Honiton (Neil Parish), it is important to point out that the amendments relate to personal insolvency, not company insolvency, and were I to detain the House on company insolvency, Mr Deputy Speaker may have concerns. I hear Members’ concerns and I know from Members’ correspondence that people are worried about the procedures when companies become insolvent. The change of termination clauses in insolvency would have implications for the suppliers, so many demands need to be balanced, but I recognise the concerns and we are looking more widely at issues facing companies in insolvency. My officials have been engaging with interested parties and stakeholders and will continue to do so.
I think I have dealt with the various points made by hon. Members, so I commend the new clause and the amendments to the House.
Question put and agreed to.
New clause 16 accordingly read a Second time, and added to the Bill.
New Schedule 2
‘Adjudicators: bankruptcy applications by debtors and bankruptcy orders
‘Adjudicators: bankruptcy applications by debtors and bankruptcy orders
“Chapter A1
Adjudicators: bankruptcy applications by debtors and bankruptcy orders
263H Bankruptcy applications to the adjudicator
(1) An individual may make an application to an adjudicator in accordance with this Chapter for a bankruptcy order to be made against him or her.
(2) An individual may make a bankruptcy application only on the ground that the individual is unable to pay his or her debts.
263I Debtors against whom an adjudicator may make a bankruptcy order
(1) An adjudicator has jurisdiction to determine a bankruptcy application only if—
(a) the centre of the debtor’s main interests is in England and Wales, or
(b) the centre of the debtor’s main interests is not in a member state of the European Union which has adopted the EC Regulation, but the test in subsection (2) is met.
(2) The test is that—
(a) the debtor is domiciled in England and Wales, or
(b) at any time in the period of three years ending with the day on which the application is made to the adjudicator, the debtor—
(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or
(ii) has carried on business in England and Wales.
(3) The reference in subsection (2) to the debtor carrying on business includes—
(a) the carrying on of business by a firm or partnership of which the debtor is a member, and
(b) the carrying on of business by an agent or manager for the debtor or for such a firm or partnership.
(4) In this section, references to the centre of the debtor’s main interests have the same meaning as in Article 3 of the EC Regulation.
263J Conditions applying to bankruptcy application
(1) A bankruptcy application must include—
(a) such particulars of the debtor’s creditors, debts and other liabilities, and assets, as may be prescribed, and
(b) such other information as may be prescribed.
(2) A bankruptcy application is not to be regarded as having been made unless any fee or deposit required in connection with the application by an order under section 415 has been paid to such person, and within such period, as may be prescribed.
(3) A bankruptcy application may not be withdrawn.
(4) A debtor must notify the adjudicator if, at any time before a bankruptcy order is made against the debtor or the adjudicator refuses to make such an order—
(a) the debtor becomes able to pay his or her debts, or
(b) a bankruptcy petition has been presented to the court in relation to the debtor.
263K Determination of bankruptcy application
(1) After receiving a bankruptcy application, an adjudicator must determine whether the following requirements are met—
(a) the adjudicator had jurisdiction under section 263I to determine the application on the date the application was made,
(b) the debtor is unable to pay his or her debts at the date of the determination,
(c) no bankruptcy petition is pending in relation to the debtor at the date of the determination, and
(d) no bankruptcy order has been made in respect of any of the debts which are the subject of the application at the date of the determination.
(2) If the adjudicator is satisfied that each of the requirements in subsection (1) are met, the adjudicator must make a bankruptcy order against the debtor.
(3) If the adjudicator is not so satisfied, the adjudicator must refuse to make a bankruptcy order against the debtor.
(4) The adjudicator must make a bankruptcy order against the debtor or refuse to make such an order before the end of the prescribed period (“the determination period”).
263L Adjudicator’s requests for further information
(1) An adjudicator may at any time during the determination period request from the debtor information that the adjudicator considers necessary for the purpose of determining whether a bankruptcy order must be made.
(2) The adjudicator may specify a date before which information requested under subsection (1) must be provided; but that date must not be after the end of the determination period.
(3) If the rules so prescribe, a request under subsection (1) may include a request for information to be given orally.
(4) The rules may make provision enabling or requiring an adjudicator to request information from persons of a prescribed description in prescribed circumstances.
263M Making of bankruptcy order
(1) This section applies where an adjudicator makes a bankruptcy order as a result of a bankruptcy application.
(2) The order must be made in the prescribed form.
(3) The adjudicator must—
(a) give a copy of the order to the debtor, and
(b) give notice of the order to persons of such description as may be prescribed.
263N Refusal to make a bankruptcy order: review and appeal etc.
(1) Where an adjudicator refuses to make a bankruptcy order on a bankruptcy application, the adjudicator must give notice to the debtor—
(a) giving the reasons for the refusal, and
(b) explaining the effect of subsections (2) to (5).
(2) If requested by the debtor before the end of the prescribed period, the adjudicator must review the information which was available to the adjudicator when the determination that resulted in the refusal was made.
(3) Following a review under subsection (2) the adjudicator must—
(a) confirm the refusal to make a bankruptcy order, or
(b) make a bankruptcy order against the debtor.
(4) Where the adjudicator confirms a refusal under subsection (3), the adjudicator must give notice to the debtor—
(a) giving the reasons for the confirmation, and
(b) explaining the effect of subsection (5).
(5) If the refusal is confirmed under subsection (3), the debtor may appeal against the refusal to the court before the end of the prescribed period.
263O False representations and omissions
(1) It is an offence knowingly or recklessly to make any false representation or omission in—
(a) making a bankruptcy application to an adjudicator, or
(b) providing any information to an adjudicator in connection with a bankruptcy application.
(2) It is an offence knowingly or recklessly to fail to notify an adjudicator of a matter in accordance with a requirement imposed by or under this Part.
(3) It is immaterial for the purposes of an offence under this section whether or not a bankruptcy order is made as a result of the application.
(4) It is not a defence in proceedings for an offence under this section that anything relied on, in whole or in part, as constituting the offence was done outside England and Wales.
(5) Proceedings for an offence under this section may only be instituted—
(a) by the Secretary of State, or
(b) by or with the consent of the Director of Public Prosecutions.” ’.—(Jo Swinson.)
Brought up, read the First and Second time, and added to the Bill.
New Schedule 3
‘Adjudicators: minor and consequential amendments
‘Adjudicators: minor and consequential amendments
1 The Insolvency Act 1986 is amended in accordance with this Schedule.
2 In section 253 (application for interim order), omit subsection (5).
3 In section 255 (cases in which interim order can be made), in subsection (1)(b) for “petition for his own bankruptcy” substitute “make a bankruptcy application”.
4 (1) Section 256A (debtor’s proposal and nominee’s report) is amended as follows.
(2) In subsection (1) omit the words from “unless” to the end.
(3) In subsection (3) for “petition for his own bankruptcy” substitute “make a bankruptcy application”.
5 For the heading to Chapter 1 of Part 9 substitute “The court: bankruptcy petitions and bankruptcy orders”.
6 In section 264 (who may present a bankruptcy petition), in subsection (1) omit paragraph (b).
7 For section 265 (conditions to be satisfied in respect of debtor) substitute—
“265 Creditor’s petition: debtors against whom the court may make a bankruptcy order
(1) A bankruptcy petition may be presented to the court under section 264(1)(a) only if—
(a) the centre of the debtor’s main interests is in England and Wales, or
(b) the centre of the debtor’s main interests is not in a member state of the European Union which has adopted the EC Regulation, but the test in subsection (2) is met.
(2) The test is that—
(a) the debtor is domiciled in England and Wales, or
(b) at any time in the period of three years ending with the day on which the petition is presented, the debtor—
(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or
(ii) has carried on business in England and Wales.
(3) The reference in subsection (2) to the debtor carrying on business includes—
(a) the carrying on of business by a firm or partnership of which the debtor is a member, and
(b) the carrying on of business by an agent or manager for the debtor or for such a firm or partnership.
(4) In this section, references to the centre of the debtor’s main interests have the same meaning as in Article 3 of the EC Regulation.”
8 In section 266 (bankruptcy petitions: other preliminary conditions), in subsection (4) omit “, (b)”.
9 (1) Sections 272 to 274A (and the cross-heading immediately preceding those sections) (debtor’s petition) are repealed.
(2) In consequence of the repeal of section 274A by paragraph (1), omit paragraph 3 of Schedule 20 to Tribunals Courts and Enforcement Act 2007 (debt relief Orders: consequential amendments).
10 For the cross-heading immediately before section 278 substitute—A
Chapter 1A
Commencement and duration of bankruptcy”.
11 In section 278 (commencement and continuance), in paragraph (b) (discharge of bankruptcy order) omit “the following provisions of”.
12 In section 279 (duration of bankruptcy), in subsection (6) for “adjudged” substitute “made”.
13 In section 282 (court’s power to annul bankruptcy order), in subsection (2)—
(a) omit “, (b)”,
(b) after “section 264(1)” insert “or on a bankruptcy application”, and
(c) in paragraph (a) after “pending” insert “or the application was ongoing”.
14 In section 283 (definition of bankrupt’s estate), in subsection (5)(a) for “adjudged” substitute “made”.
15 (1) Section 284 (restrictions on dispositions of property) is amended as follows.
(2) In subsection (1) for “adjudged” substitute “made”.
(3) In subsection (3) for “presentation of the petition for the bankruptcy order” substitute “making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition”.
(4) In subsection (4), in paragraph (a) before “petition” insert “bankruptcy application had been made or (as the case may be) that the bankruptcy”.
16 (1) Section 285 (restriction on proceedings and remedies) is amended as follows.
(2) In subsection (1)—
(a) after “when” insert “proceedings on a bankruptcy application are ongoing or”, and
(b) for “adjudged” substitute “made”.
(3) In subsection (2) after “proof that” insert “a bankruptcy application has been made or”.
17 (1) Section 286 is amended as follows.
(2) Omit subsection (2).
(3) In subsection (8), for “adjudged” substitute “made”.
18 In section 288 (statement of affairs), in subsection (1) for “debtor’s petition” substitute “bankruptcy application”.
19 In section 290 (public examination of bankrupt), in subsection (4)(a) for “adjudged” substitute “made”.
20 (1) Section 297 (appointment of trustee of bankrupt’s estate: special cases) is amended as follows.
(2) Omit subsection (4).
(3) In subsection (6) omit “(4) or”.
21 (1) Section 320 (court order vesting disclaimed property) is amended as follows.
(2) In subsection (2)(c) before “bankruptcy” insert “bankruptcy application was made or (as the case may be) the”.
(3) In subsection (3)(c) before “bankruptcy” insert “bankruptcy application was made or (as the case may be) the”.
22 In section 321 (orders under section 320 in respect of leaseholds), in subsection (1)(a) before “bankruptcy” insert “bankruptcy application was made or (as the case may be) the”.
23 In section 323 (mutual credit and set-off), in subsection (3) before “a bankruptcy” insert “proceedings on a bankruptcy application relating to the bankrupt were ongoing or that”.
24 In section 334 (stay of distribution in case of second bankruptcy), in subsection (2) before “presentation of the petition” insert “making of the application or (as the case may be) the”.
25 (1) Section 336 (rights of occupation etc of bankrupt’s spouse or civil partner) is amended as follows.
(2) In subsection (1) for “presentation of the petition for the bankruptcy order” substitute “making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition”.
(3) In subsection (2) for “adjudged” substitute “made”.
26 In section 337 (rights of occupation of bankrupt), in subsection (1)—
(a) in paragraph (a) for “adjudged” substitute “made”, and
(b) in paragraph (b) before “bankruptcy petition” insert “bankruptcy application was made or (as the case may be) the”.
27 In section 339 (transactions at an undervalue), in subsection (1) for “adjudged” substitute “made”.
28 In section 340 (preferences), in subsection (1) for “adjudged” substitute “made”.
29 In section 341 (meaning of “relevant time” under sections 339 and 340), in subsection (1)(a) for “presentation of the bankruptcy petition on which the individual is adjudged” substitute “making of the bankruptcy application as a result of which, or (as the case may be) the presentation of the bankruptcy petition on which, the individual is made”.
30 (1) Section 342 (orders under sections 339 and 340) is amended as follows.
(2) In subsection (1) for “adjudged” substitute “made”.
(3) In subsection (5)—
(a) for paragraph (a) substitute—
“(a) of the fact that the bankruptcy application as a result of which, or (as the case may be) the bankruptcy petition on which, the individual in question is made bankrupt has been made or presented; or”, and
(b) in paragraph (b) for “adjudged” substitute “made”.
31 In section 342A (recovery of excessive pension contributions), in subsection (1) for “adjudged” substitute “made”.
32 In section 343 (extortionate credit transactions), in subsection (1) for “adjudged” substitute “made”.
33 (1) Section 344 (avoidance of general assignment of book debts) is amended as follows.
(2) In subsection (1) for “adjudged” substitute “made”.
(3) In subsection (2) before “presentation” insert “making of the bankruptcy application or (as the case may be) the”.
34 In section 345 (contracts to which bankrupt is a party), in subsection (1) for “adjudged” substitute “made”.
35 (1) Section 346 (enforcement procedures) is amended as follows.
(2) In subsections (1) and (2) for “adjudged” substitute “made”.
(3) In subsection (3)—
(a) in paragraph (b) before “bankruptcy” insert “bankruptcy application has been made or a”, and
(b) in paragraph (c) before “on that petition” insert “as a result of that application or”.
(4) In subsection (4)(a) after “while” insert “proceedings on a bankruptcy application are ongoing or (as the case may be)”.
36 (1) Section 347 (distress, etc) is amended as follows.
(2) In subsection (2)—
(a) after “individual to whom” insert “a bankruptcy application or”, and
(b) before “on that petition” insert “as a result of that application or”.
(3) In subsection (3) for “adjudged” substitute “made”.
37 In section 348 (apprenticeships, etc), in subsection (1)(a) for “petition on which the order was made” substitute “application for the order was made or (as the case may be) the petition for the order”.
38 In section 350 (application of Chapter 6 of Part 9: bankruptcy offences), in subsection (1) after “applies” insert “—
(a) where an adjudicator has made a bankruptcy order as a result of a bankruptcy application, or
(b) ”.
39 (1) Section 351 (definitions for the purposes of Chapter 6 of Part 9) is amended as follows.
(2) In paragraph (b) before “presentation” insert “making of the bankruptcy application or (as the case may be) the”.
(3) Omit paragraph (c), and the preceding “and”.
40 (1) Section 354 (concealment of property) is amended as follows.
(2) In subsection (1)(c) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
(3) In subsection (3)(a) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
41 (1) Section 355 (concealment of books and papers; falsification) is amended as follows.
(2) In subsection (2)(d) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
(3) In subsection (3)(b) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
42 In section 356 (false statements), in subsection (2)(c) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
43 In section 358 (absconding), in paragraph (b) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
44 (1) Section 359 (fraudulent dealing with property obtained on credit) is amended as follows.
(2) In subsection (1) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
(3) In subsection (2) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.
45 In section 360 (obtaining credit and engaging in business), in subsection (1)(b) for “adjudged” substitute “made”.
46 (1) Section 364 (power of arrest) is amended as follows.
(2) In subsection (1)(a) after “to whom a” insert “bankruptcy application or a”.
(3) In subsection (2) before “presentation” insert “making of the bankruptcy application or the”.
47 In section 376 (time limits), after “anything” insert “(including anything in relation to a bankruptcy application)”.
48 (1) Section 381 (definition of “bankrupt” and associated terminology) is amended as follows.
(2) In subsection (1) for “adjudged” (in both places where it occurs) substitute “made”.
(3) After subsection (1) insert—
“(1A) “Bankruptcy application” means an application to an adjudicator for a bankruptcy order.”
(4) In subsection (2) for “adjudging” substitute “making”.
49 In section 383 (definition of “creditor” etc.), in subsection (1)(b)—
(a) after “to whom a” insert “bankruptcy application or”, and
(b) after “that” insert “application or”.
50 In section 384 (definitions of “prescribed” and “the rules”), in subsection (1) omit “section 273;”.
51 In section 385 (miscellaneous definitions), in subsection (1)—
(a) before the definition of “the court” insert—
““adjudicator” means a person appointed by the Secretary of State under section 398A;”,
(b) in the definition of “the debtor”, in paragraph (b)—
(i) before “bankruptcy petition” insert “bankruptcy application or a”, and
(ii) after “to whom the” insert “application or”,
(c) omit the definition of “debtor’s petition”, and
(d) before the definition of “dwelling house” insert—
“determination period” has the meaning given in section 263K(4);”.
52 In section 387 (meaning of “the relevant date”), in subsection (6)(a) after “after” insert “the making of the bankruptcy application or (as the case may be)”.
53 In section 389A (authorisation of nominees and supervisors), in subsection (3)(a) for “adjudged” substitute “made”.
54 In section 390 (persons not qualified to act as insolvency practitioners), in subsection (4)(a) for “adjudged” substitute “made”.
55 In section 415 (fees orders), after subsection (1) insert—
“(1A) An order under subsection (1) may make different provision for different purposes, including by reference to the manner or form in which proceedings are commenced.”
56 In section 421A (insolvent estates: joint tenancies), in subsection (9) in the definition of “value lost to the estate”, for “adjudged” substitute “made”.
57 In section 424 (who may apply for an order under section 423 in respect of transactions entered into at an undervalue), in subsection (1)(a) for “adjudged” substitute “made”.
58 In Schedule 4ZA (conditions for making a debt relief order), for paragraph 3 substitute—
3 A bankruptcy application under Part 9—
(a) has not been made before the determination date; or
(b) has been so made, but proceedings on the application have been finally disposed of before that date.”
59 (1) In Schedule 4A (bankruptcy restrictions orders), paragraph 2 is amended as follows.
(2) In sub-paragraph (2)—
(a) in paragraph (a), for the words from “petition” to the end substitute “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition and ending with the date of the application for the bankruptcy restrictions order”, and
(b) in paragraph (j), for “presentation of the petition” substitute “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition”.
(3) In sub-paragraph (4) omit the definition of “before petition”.
60 In Schedule 6 (categories of preferential debts), in paragraph 14(1) for “adjudged” substitute “made”.
61 (1) Schedule 9 (provisions capable of inclusion in individual insolvency rules) is amended as follows.
(2) After paragraph 4 insert—
“Adjudicators
4A Provision for regulating the practice and procedure of adjudicators.
4B Provision about the form and content of a bankruptcy application (including an application for a review of an adjudicator’s determination).”
(3) After paragraph 4B (as inserted by sub-paragraph (2)) insert—
“Appeals against determinations by adjudicators
4C Provision about the making and determining of appeals to the court against a determination by an adjudicator, including provision—
(a) enabling the court to make a bankruptcy order on such an appeal, and
(b) about where such appeals lie.”
(4) After paragraph 24 insert—
24A Provision requiring official receivers—
(a) to keep files and other records relating to bankruptcy applications, and
(b) to make those files and records available for inspection by persons of a prescribed description.”
62 (1) In the Table in Schedule 10 (punishment of offences), insert the following entry after the entry relating to section 262A(1)—
“263O | False representations or omissions in connection with a bankruptcy application. | 1. On indictment 2. Summary | 1. 7 years or a fine, or both. 2. 12 months or the statutory maximum, or both.” |
(2) In the application of the entry inserted by sub-paragraph (1) in relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (limit on magistrates’ court powers to impose imprisonment), the reference in the fourth column to “12 months” is to be read as a reference to “6 months”.’.—(Jo Swinson.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 12
Equality Act 2010: third party harassment of employees and applicants
‘In section 40 of the Equality Act 2010 (employees and applicants: harassment) omit subsections (2) to (4).’.—(Jo Swinson.)
Brought up, and read the First time.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Government new clause 13—Equality Act 2010: obtaining information for proceedings.
Government new clause 17—Power to provide for equal pay audits.
Amendment 56, page 43, line 27, leave out clause 52.
Government amendments 35, 36, 45 and 47.
Jo Swinson
We come now to equality measures and various technical and consequential amendments relating to territorial nature and commencement. The new clauses relate to Great Britain’s legal framework on equality and human rights. New clauses 12 and 13 repeal provisions in the Equality Act 2010 that expressly place liability on employers for repeated harassment of their customers, and provisions related to obtaining information. New clause 17 enables Ministers to require employment tribunals to order equal pay audits where an employer is found to have broken equal pay and/or sex discrimination laws. Opposition amendment 56 seeks to remove from the Bill measures to improve the focus and effectiveness of the Equality and Human Rights Commission.
The Government’s amendments and clause 52 are necessary to clarify our legal framework on equality and human rights, and in doing so make it more effective. But they are also about laying the foundations for a sustainable economic recovery. In the current economic circumstances we simply cannot afford not to maximise the full potential of our work force. All hon. Members support making it easier for people to play an active role in our economy, and it is for that reason that I hope we can agree on the provisions. A vague legal framework, full of aspiration but lacking clarity, helps no one, and, worst of all, can hold people back.
The shadow Secretary of State for Business, Innovation and Skills has described these measures as a sign of the Government rowing back on equalities. They are anything but. Rather they are a clear indication of the Government’s commitment to making a real difference on the ground. This is reflected not only in the legislative measures that we are debating today, but in what the Government have achieved since taking office in 2010. [Interruption.] The shadow Secretary of State asks what we have done for equalities. I will tell him.
We have established the first ever inter-ministerial group on equality and published the first ever cross-government strategy; legislated to allow civil partnerships on religious premises; published the first ever transgender action plan; introduced support for disabled people seeking elected office; launched “Think, Act, Report” to have gender equality reporting; established the Women’s Business Council, which is doing vital work to help identify the barriers holding women back in the work place; provided support for women to set up and grow their own businesses with more than 5,000 women mentors; and championed equality on company boards, with the number of FTSE 100 all-male boards halving and new appointments to boards rising from 13% women in the last year of the Labour Government to 34% under this Government. We have published the first ever sports charter aimed at combating homophobia and transphobia; all premiership and championship football teams are now signed up against homophobia and transphobia. We are of course consulting on equal civil marriage, something the previous Government did not do. We have also legislated to end age discrimination in the provision of goods and services.
Stewart Hosie
The Minister is describing an onerous list of questions, so perhaps she can tell the House how few need to be answered in order for the information to be provided so that someone can get proper redress.
Jo Swinson
This is a procedure about obtaining information. There are clearly differences between different cases. However, it is also clear from the consultation that this is being used as a sort of fishing expedition whereby additional questions are asked in order to produce an undue burden on business and perhaps sometimes to encourage the idea that the process might be seen to be far too burdensome and that a settlement should therefore be reached instead, even where there may not have been a breach by the employer.
John McDonnell (Hayes and Harlington) (Lab)
Can the Minister say what percentage of responding organisations supported her position, because I believe that 83% were opposed to it?
Jo Swinson
It is certainly true that a wide range of views were put forward to the consultation. Among business groups, there was a very strong view that this costs a lot of money, and I will explain why. Based on the sample, the five to six hours spent on each form at a cost of £160 equates to a cost to employers of £1.4 million a year, and it could be considerably higher because many employers may use more expensive legal advice.
Mr Chuka Umunna (Streatham) (Lab)
If the Minister’s complaint is about the quantity of questions, then why not limit the number that can be asked? We are all limited in the number of questions that we can submit at the Table Office, so why not apply similar principles to this procedure?
Jo Swinson
I have already outlined various circumstances in which there is a range of questions with many sub-sections. We are saying that it is helpful for business and employees to discuss these issues and to be able to provide information. However, this provision is placing requirements and fears on businesses, and the disproportionate costs that they are facing in complying with it represents a total cost to business of nearly £1.5 million a year. That is a significant cost that we should not take lightly.
Individuals can seek information from an employer about an alleged breach of the 2010 Act without relying on this provision; they can request that information verbally or in writing. Of course, it is in businesses’ interests to respond to reasonable requests of this kind, because the courts would still be free to draw inferences from any employer or service provider’s refusal to answer questions or from answers that seem evasive.
Kate Green (Stretford and Urmston) (Lab)
I am sure the Minister would accept that in many businesses there is an imbalance of power between an individual employee, who might be in a non-unionised workplace—a small business—and the employer, who, after all, is paying that employee. The employee may therefore be reluctant to upset their employer, and the statutory questionnaire procedure at least means that the employee can look to a formal external process to try to elicit information.
What assessment, if any, has the Minister made of the costs and savings in court time? Notably, many of the 83% of respondents in favour of the existing procedure were members of the judiciary, presumably because it makes for a simpler court process when cases do go to tribunal.
Jo Swinson
I thank the hon. Lady for her intervention. Some of the previous Government’s reforms were introduced, ostensibly, to try to reduce the number of cases coming to tribunal, but they have not that effect at all. We have seen a mushrooming in the number of cases at tribunal, which has resulted in a huge backlog. That is no good for employers or for employees, as the stress of waiting for a tribunal preys heavily on people’s minds. The other measures in the Bill are taking firm and important steps to encourage conciliation at an earlier stage to try to reduce the number of tribunals, and to consult on ways in which we can have a rapid resolution so that fewer cases come to tribunal. Those things will do what she suggests is helpful; we all agree that we want to reduce the number of tribunals, but those are the right ways in which to address the concerns, rather than having lengthy and cumbersome questionnaires for businesses. We have therefore concluded that this obtaining information procedure is disproportionate, and our amendment would repeal it.
Stewart Hosie
The Minister has said that this onerous, form-filling, information-gathering exercise costs £1.4 million, but she went on to say that the information can still be requested, verbally or in writing. Presumably a great deal of time will still be required by the employer to provide the information. So what net saving across the whole of business does she envisage? Is it a third of that figure—is it just over half a million pounds? What is the quantum in this?
Jo Swinson
As the hon. Gentleman says, there will clearly be some taking into account of and familiarisation with the new procedures, which will have a cost attached. The impact assessment therefore suggests that £800,000 is what business will save on an annual basis, and that is still a significant sum.
New clause 17 relates to cases where an employer has been found to have broken equal pay law or to have discriminated between women and men in non-contractual pay. It introduces a power to make regulations to require employment tribunals to order such an employer to carry out an equal pay audit. The pay gap between men and women stubbornly persists. In 2011, it was still more than 20%, having fallen only five percentage points in the previous eight years. That is why we are acting under the coalition commitment to promote equal pay. We have followed the lead of the previous Government in introducing a voluntary initiative, “Think, Act, Report”, to encourage employers to have more transparency about pay and other issues. More than 50 of Britain’s leading employers, covering hundreds of thousands of employees, are now supporting this initiative. They include Tesco, which publishes details of its gender pay gap, and household names such as BT, IBM, Fujitsu, Morgan Stanley and Unilever, which are all taking steps towards greater transparency. For those companies, which are doing the right thing, a voluntary approach is appropriate. I would argue that it is also often more likely to be successful, because of the genuine buy-in from senior management.
At the same time as we pursue that voluntary, positive action, we still think that it is right to introduce stronger legislative sanctions for cases where employers have been found to have broken the law. We know that many businesses agree with this approach. For example, in response to the “Modern Workplaces” consultation, a large organisation told us that equal pay audits could be an effective way to increase transparency where the law was seen to be breached. Representatives of one small and medium-sized enterprise said:
“For the sake of all those employers who do make huge efforts to have a fair pay system, if others can ‘get away’ with discrimination and generally provide women with lower pay, this is anti-competitive and a burden on ‘good’ employers. So a compulsory audit is entirely appropriate”.
Any regulations made under this power would affect only employers who are found to have broken the relevant laws. These regulations will: set out the content of an equal pay audit; outline the procedures for verifying that an equal pay audit meets an agreed standard; set out to whom and how an equal pay audit should be published; and specify the non-criminal sanctions that should apply where an employer fails to comply with an equal pay audit order.
I remind the House that the regulations will not be applied to micro and start-up businesses during the moratorium on new rules, which will apply until 2014. I assure the House that we will consult further on the practical detail before any regulations are introduced, and that they will be subject to an affirmative resolution of both Houses of Parliament.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
What message does the Minister think this gives when one in two young black men, compared with one in four of their white counterparts, are unemployed? How can she justify this downgrading of the EHRC in such conditions?
Jo Swinson
I accept the hon. Lady’s genuine concern about the issue she has raised: there is far too much of an equality gap in our society and between young white and black men. Of course, the Government are committed to tackling that. However, I question whether she really believes that section 3 of the 2006 Act will do that. The message that this sends is that this Government are committed to equality but focused on really making a difference. [Interruption.] I hear the shadow Secretary of State, the hon. Member for Streatham (Mr Umunna), murmuring various things from a sedentary position, but if he really thinks that the EHRC, which was bequeathed to us by the previous Government, was functioning well and was effective, I do not know what planet he is living on. We should consider what has been said about the organisation’s effectiveness. Its accounts were not being signed off and it was wasting money; £866,000 was spent on a website that was never launched. It was not functioning well. It is important that we focus it on its specific duties, and that is what our amendments will do.
Jack Dromey (Birmingham, Erdington) (Lab)
The hon. Lady has referred to the previous Government’s record. As deputy general secretary of Unite, I work very closely with the EHRC. May I give one example of effectiveness and ask her to comment on it? The commission conducted a ground-breaking analysis of the two-tier labour market in the supermarket supply chain, which causes division in the workplace and damages social cohesion. As a result, the supermarkets were brought to the table and told that enforcement powers would be used unless they changed the way in which they procured. Major changes were made as a consequence, so that all workers enjoyed equal treatment in the supply chain. Does the hon. Lady challenge that excellent example of the effectiveness of the EHRC?
Jo Swinson
I am not saying for a second that the EHRC did nothing right. We are committed to keeping it and refocusing it to make it more effective.
The general counsel said that
“other parts of the legislation provide sufficient clarity on what our job really is.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 79, Q177.]
A raft of stakeholders has criticised how the EHRC was being run. Although it has done some good things, it was not being run in the efficient way that is required of an organisation with such an essential duty and such an essential role to play in the equalities and human rights make-up of our country.
Julie Hilling
I am very confused about the Minister’s statement that she will make the EHRC more efficient, when what she will actually do is to continue to cut its budget hugely. How can it be more efficient with a tiny percentage of the staff that it had? It will be unable to do the representative work that it used to do and a vast amount of the other work that it used to do. How will that make it more efficient?
Jo Swinson
The EHRC was not particularly efficient in some of the work that it was doing. For example, it cost its helpline far more to deal with cases relating to working rights than other Government and external providers. We are ensuring that the money is spent better. Opposition Members seem to forget that the financial situation left to this Government was an appalling mess. It does no good for equalities in this country not to have the effective use of public money. We should all want to see that. [Interruption.] I am answering the hon. Lady. We should all want to see the effective use of public money. It is wrong to suggest that there are no ways in which the EHRC could have been improved.
Jo Swinson
We have heard from various Opposition Members that the EHRC was functioning fantastically.
There are many ways in which the EHRC could improve. We are making a variety of changes to it, but we remain committed to this organisation and to improving it. Just this morning, we had the pre-appointment scrutiny hearing for the new chair, Baroness Onora O’Neill, which is a positive step. I am optimistic about how the organisation will move forward and improve its governance, which is badly needed.
Kate Green
The Minister is right that improvements were needed in the governance and management of the EHRC. Opposition Members have not disputed that. However, to confuse that with changing its legislatively provided remit is simply not being clear, as that is a very different point of principle. Nobody is saying that the organisation could not be run better. What Opposition Members are querying is the need to cut away the ground from under its feet by changing its very purpose.
Jo Swinson
I appreciate that Opposition Members are exercised about this issue, but it is not something that the organisation itself is exercised about, as is evidenced by the quotations from the general counsel in the Committee hearing.
A range of organisations responded to the consultation and gave their views on the change in the general duty. The Association of Chief Police Officers said that the general duty is
“broad in nature, open to wide interpretation and is more in the nature of a vision statement”.
The CBI said that it is
“too vague and creates unrealistic expectations”.
The Gender Identity Research and Education Society said:
“There is no essential specific legal function”.
I particularly like the way in which we managed to unite two organisations that are not usually in agreement—Stonewall and the Evangelical Alliance. The Evangelical Alliance said:
“It’s impossible to achieve and could lead to all kinds of unsatisfactory political interpretations”.
Stonewall said:
“We are not clear that the Commission has made a sufficient case for the retention of Section 3.”
I accept that many Opposition Members think that this change means that the sky is falling in, but the EHRC and its stakeholders do not concur with that viewpoint.
We are reducing the frequency with which the commission is required to publish reports.
Jo Swinson
I am sorry, but I want to make some progress. I have taken many interventions.
Jo Swinson
As a fellow Scot and in this week’s spirit of compromise and co-operation, I will give way.
Stewart Hosie
I am not sure about compromise and co-operation. The Minister spoke about the repeal of section 3, but it is also the repeal of section 10 of the Equality Act 2006. Although it makes sense to make the EHRC more efficient and cost-effective, I am curious to know how removing the specific duty to promote good relations between different groups makes any sense, given her declaration that she wants the organisation still to function and do the good things it was doing.
Jo Swinson
The hon. Gentleman does not need to worry about that because under existing duties in sections 8 and 9 of the 2006 Act, the EHRC still has all the requirements and focus it needs. In the consultation, a range of stakeholders spoke about the repeal of the good relations duty in section 10, and whether it was the Association of Chief Police Officers stating that a greater emphasis on its responsibilities in regulating the new public sector duty is broadly supported, or Stonewall saying that the need for the good relations function has not been sufficiently demonstrated, a wide range of stakeholders did not seem to think that there was a problem.
We are reducing the frequency with which the commission is required to publish a report on progress from every three years to every five years, and by allowing a longer time scale between reports, we believe the commission will be able to capture more meaningful change over time. We accept, however, that seismic societal changes or developments do not always happen conveniently every five years, and there is no reason why the commission cannot report more frequently if it wishes.
I know that many Opposition Members have concerns about the repeal of the good relations duty in section 10 of the 2006 Act, but we are clear that a separate mandate is not necessary. The commission’s most valuable work in this area—for example its inquiry into disability-related harassment—can be carried out under its core equality and human rights functions, which we are not amending. That view is supported by the evidence I have outlined that was provided to the Public Bill Committee by the EHRC’s general counsel and other stakeholders.
We are repealing the power associated with the good relations duty in section 19 of the 2006 Act because other organisations gather the information that that legislation permits the commission to monitor. For example, since 2011, police forces in England and Wales have been required to collect data on suspected hate crime relating to race, religion or belief, disability, sexual orientation and gender reassignment. The commission will retain the ability to review and use those data under its existing equality and human rights duties which—I repeat—we are not amending. In Scotland, where the EHRC’s human rights remit is limited, the Scottish Human Rights Commission will be able to use its powers accordingly.
On the power to make arrangements for the provision of conciliation in non-workplace discrimination disputes, as set out in section 27 of the 2006 Act, unfortunately the commission has consistently failed to deliver a well-targeted, cost-effective service. The free conciliation service funded until March 2012 by the EHRC offered poor value for taxpayers’ money. Average costs were more than £4,000 per case, compared with £600 to £850 when going through the Ministry of Justice website, “Find a civil mediation provider”.
A good and effective conciliation service should—of course—be available to those who need it, to help people resolve disputes without recourse to the courts. Good quality, accessible and effective mediation is readily available at reasonable cost throughout England, Wales and Scotland through the MOJ’s website that provides access to a full range of civil mediation council-accredited mediators at set fees, and in Scotland through the Scottish Mediation Network’s “find a mediator” website. For that reason, we are repealing the commission’s power to make provision for conciliation. The new Equality Advisory and Support Service, launched at the beginning of this month, will signpost individuals with discrimination disputes to those alternative, more cost-effective, mediation services. In evidence in Committee, the general counsel of the commission agreed that it is not
“particularly important for us to provide the service for conciliation.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 79, Q175.]
Contrary to accusations from the Opposition, these legislative measures do not represent an attack on equalities or undermine the commission’s important role. On the contrary, we believe that they will help the commission to become more effective in delivering its core functions of promoting equality of opportunity and human rights, and creating a fair environment for jobs and growth. I am therefore unable to support amendment 56, and I commend the Government amendments to the House.
Mr Umunna
I will speak first to amendment 56, which is my name and those of my right hon. and hon. Friends. We propose to remove clause 52 in its entirety. I shall then speak to Government new clauses 12, 13 and 17 and related measures on third-party harassment, discrimination questionnaires and equal pay orders.
Debbie Abrahams
It was rather telling that, in response to a question from my hon. Friend the Member for Stretford and Urmston (Kate Green), the Secretary of State said that this was just legislative tidying up. It is absolutely outrageous.
Mr Umunna
I agree that it is absolutely outrageous. Furthermore, on the issue of simplifying regulation, let me say this to Government Members: the promotion and protection of equality and human rights is not, and should not be seen as, regulation. The unrelenting pursuit of these things helps to make this the fair and decent country that Britain is to live in. It is something that we should celebrate.
What is the Government’s defence? What is their justification for pressing ahead with including clause 52 in the Bill? In Committee, the Minister’s predecessor—she did the same today—sought to rely heavily on the comments of the commission’s general counsel in the public evidence session. I have read that evidence in full, and it is true that at the end of it he said:
“The commission is not opposed to the Bill.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 80, Q180.]
As the general counsel made clear, however, it is not for him or the commission to take a position on the Bill. It is a political matter for the Government. That said, he made some interesting comments to which, I note, the Minister did not refer. He was clear that resources were being cut. He said that
“if the commission is given fewer resources, we will have fewer staff and less money to do the work that we would want to do.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 74, Q162.]—[Interruption.]
From a sedentary position, the Under-Secretary of State for Skills, the hon. Member for West Suffolk (Matthew Hancock), says, “Who racked up the debt?” I do not think that we can put a price on human rights and equality in this country.
On the commission’s remit, the general counsel was unequivocal. He said:
“This Bill reduces our powers and our remit… We would prefer to keep the remit we have, so we have not promoted the amendments in the Bill.”
Finally, on the repeal of the general duty in section 3 of the Equality Act 2006, he said that the section
“sets out a vision for a kind of society that I guess most people here would want to live in”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 19 June 2012; c. 79, Q176-79.]
and confirmed that the repeal of the duty “lowers the vision”.
Before moving on, it would be remiss of me not to turn to the Minister’s comments about the commission’s recent problems. Yes, the Joint Committee on Human Rights and the Public Accounts Committee have been very critical of the commission, and, yes, the National Audit Office has qualified its accounts, but none of these inquiries concluded that its remit should be changed in the way the Government are doing in the Bill. The most recent accounts were unqualified, and the running of the organisation has not been helped by the Government preventing it from recruiting a permanent chief executive and senior management team for more than two years. These recent problems are hopefully in the past and certainly do not justify the winding down of the commission.
The Minister, and the Secretary of State in his letter to me earlier this month, said that it was not the Government’s intention to water down, wind down or abolish the commission. Nevertheless, we know that many Government Members would like to see the back of it.
Andrew Gwynne (Denton and Reddish) (Lab)
Of course, one of the benefits of the commission is its independence from Government and Ministers. Does my hon. Friend share my concern that altering the commission’s remit will fundamentally undermine the independence of what is left of this organisation?
Mr Umunna
Absolutely, and I would say two things about what my hon. Friend has just said. First, when it comes to the comments of the general counsel, one has to consider that he is passing comment on his masters who are cutting his budget massively. To suggest that that does not weigh on his mind when he makes comments about the Bill is probably quite naive. The second thing I would say is that the independence of the organisation is paramount, and its ability to do its job will be compromised by the changes being made.
Let me point out to the Minister that what people are entitled to do when making a judgment about her party and her Government’s intentions for the commission is to look at the actions they have taken. The catalogue of things that I have just listed has meant not only that people in her own party are incredibly worried about its future, but that many of the stakeholders who work in this area are also worried about it. At the moment, the general view among many people is that we are effectively seeing the abolition of this important organisation by stealth. That is what seems to be happening.
Luciana Berger
I should share with my hon. Friend the fact that I worked for the Commission for Racial Equality before it merged into the new body. I know that there are always challenges with any organisation, but the work it did was crucial. Does he, like me, share the concern raised only a few days ago by Brendan Barber, the TUC general secretary, that what the Government are doing essentially makes a mockery of their claim that equality is at the heart of the coalition Government?
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
My hon. Friend hit the nail on the head when he talked about abolition by stealth. Anyone who has ever had cause to take an issue to the Equality and Human Rights Commission knows that going to an independent body that has rights over other bodies to take action is vital. Taking an internal route through an organisation is sometimes too slow and inadequate. Will he make a commitment about what the Labour Government will do when we are back in power in 2015?
Mr Umunna
I am proud to be associated with a party that was responsible for setting up many of the predecessor bodies of the Equality and Human Rights Commission. Let me be absolutely clear: we thoroughly support this organisation. It is incredibly important, not only in taking an anti-discrimination stance towards some of the things that unfortunately happen in our society, but in being proactive in promoting that. I have just returned from a visit to Israel, where I learned more about the situation there. I met the Israeli and Palestinian Governments, and one of the things that I felt so proud of was the fact that an equalities commission was recently created in Israel. We know that society there has major challenges in that respect, but that commission is being modelled on ours. I think that says something about the body we have in this country.
Mr John Redwood (Wokingham) (Con)
I would be grateful if the Opposition addressed the proposals that we are meant to be debating. The Government are not saying, “Just strip it all away”; they are proposing equal pay audits and other mechanisms. It would be useful to know what the Opposition think about them.
Mr Umunna
I have just addressed each point about the commission that the Minister raised in her speech. I understand the right hon. Gentleman’s impatience; I shall turn to the other points now.
Let me turn to the Government’s new clauses. Last week the Government tabled new clause 12, which provides for the repeal of the provisions in the Equality Act 2010 relating to employer’s liability for third-party harassment of employees. That, of course, was a key recommendation in the infamous report of the Prime Minister’s employment law adviser Adrian Beecroft. To find the reason for the original introduction of those measures—I am basing my remarks on my legal practice and study: I was an employment lawyer before being elected—we have to return to the mid-1990s. In 1994, there was a well-known case in which two black hotel waitresses were made to serve drinks in Manchester during a performance by the notorious late comedian Bernard Manning. They were subjected to racially and sexually abusive remarks by Manning, and they took their employers to a tribunal. They should never have been put in that situation, and they issued proceedings and won the tribunal. After that case, however, case law was uncertain—I can say that, having dealt with the case law that existed before the Equality Act 2010 came into force. Through section 40 of that Act, which the Government are partly repealing, we legislated to put protection against such third-party harassment on to a firm footing and cover all types of unlawful discrimination.
Meg Hillier
My hon. Friend is making his point very powerfully. My worry is that under the umbrella of saying that they want to get rid of regulation, the Government are affecting some of the most vulnerable workers in our society, who do not have the protection of a well-paid job and education to argue their case but rely on the law in question. Without it, they will just have to shut up and put up with the harassment that they face daily, often in domiciliary situations such as the one that he described.
Mr Umunna
My hon. Friend hits the nail on the head and identifies the Government’s real motivation. We are in the third quarter of a contraction, which we will hopefully come out of in the next quarter. We were promised many things in relation to the economy that have not turned out to be the case. In their desperation to get the economy moving, and with their complete refusal to stimulate the economy, the Government are now doing the traditional thing and looking to water down people’s rights at work as a substitute for a proper growth plan.
New clause 13 would abolish discrimination questionnaires, which employees can submit to their employers to obtain further information and make up their minds about whether to institute proceedings, or maybe to assist them in reaching a settlement with their employer. I know those questionnaires well, because I was professionally involved in drafting them on behalf of employees. I was also involved in drafting the responses on behalf of employers.
From the employees’ point of view, there is no doubt that those questionnaires help them access evidence at an early stage, which is incredibly important so that, as I said, they can determine whether to litigate or precipitate a settlement. They will now be all the more important because of the large fees that the Government are levying on people who wish to institute claims in an employment tribunal.
Turning to the employers’ point of view, the Government’s own Equalities Office carried out research on the questionnaires and found that only 2% of private sector employers had had to complete one in the past three years, and that most of those who had done so agreed that responding to them had been straightforward. We do not need to abolish the questionnaires, and I do not accept the reasons for doing so that have been put forward by the Minister. I say that not only from a political point of view but in the light of my professional experience of working for a number of years on these matters.
Mr Umunna
I want to make some progress; I have given way a few times now.
I welcome the addition of new clause 17 to the Bill. It will enable tribunals to recommend that an employer who loses an equal pay or sex discrimination case be required to carry out an equal pay audit. I simply want to raise one question about the scope of the measure. Is my understanding correct that it will apply to private sector employers only? Perhaps the Minister will expand on that point.
Jack Dromey
My hon. Friend is making a powerful case. Procedurally, a number of barriers are being put in the way of people seeking justice and the enforcement of their rights. Does he share my view that closing the regional offices and reducing the commission to a rump of its former self will mean that those who are powerless, when challenging those with power who are denying them equality and equal treatment, will no longer have an Equality and Human Rights Commission that is fully behind them?
Mr Umunna
I completely agree with my hon. Friend.
I have absolutely no doubt that if the Minister were in opposition, she would be making many of the points that I am now making. She would be jumping up and down and objecting in the strongest terms to what the Government are now doing. I have referred to the assurance that was given, then broken, by the Secretary of State, which the Minister does not seem to recollect. May I also remind her of something that she said to the Deputy Prime Minister in this House? She said:
“Will the Deputy Prime Minister reassure my constituents that the Government will resist any siren calls to water down the Equality Act as part of the red tape challenge?”
The Deputy Prime Minister replied:
“I can certainly confirm that, as far as I am concerned, there will be no move to dilute incredibly important protections to enshrine and bolster equality in this country under the guise of dealing with unnecessary or intrusive regulation.”—[Official Report, 24 May 2011; Vol. 528, c. 770.]
Well, if that is not a broken promise, I do not know what is.
Jack Dromey
My hon. Friend has repeated back to the Minister something that she said on a previous occasion. Does he agree that she is conspicuous in her silence in now refusing to stand up and defend what she said at that time?
Mr Umunna
Quite right. One argument that has been consistently advanced by Liberal Democrat Ministers, as well as at the Liberal Democrat conference the other day, is that the Liberal Democrats are a check on the worst excesses of their coalition partners. I believe, however, that people will look at their actions. Their words do not marry up to what they are doing in Government. The Secretary of State said at his party conference that if Britain wanted
“competence with compassion, fairness with freedom and more equality…that government must have Liberal Democrats at its heart.”
The measures in the Bill really do call that claim into question.
John McDonnell
I shall speak to amendment 56. Far be it for me to correct my hon. Friend the Member for Streatham (Mr Umunna), but I think the amendment is in my name. I say that only to give notice formally that I intend to move the amendment and divide the House on it. It is in my name only because of my speed of pace in getting to the Vote Office—that is all.
This is not one of those parliamentary knockabout debates, but a fundamentally important one. I have been a Member since 1997 and I have noted that in every debate on equalities during that period, what emerged was a near consensus about the approach towards, and the commitment to, the legislative framework. When we debated the Equality Act 2006, near consensus was achieved in this House about the legislative framework that was being put in place. I thought that that was one of those occasions on which the House rose to its full height, and it was held in esteem for reaching that consensus.
To be frank, there is an element of tragedy to what is happening. We are going dramatically backwards here. The Minister listed a range of reforms that the Government had introduced, most of which I believe the Opposition supported. I welcome them, but the difference between those reforms and the one we are considering is that there was consensus about most of them, both in this House and outside it.
As my hon. Friend the Member for Streatham has said, a vast range of organisations have expressed concern. I received a briefing from the Equality and Diversity Forum—I hope that other Members have received it, too—which basically urged the Government to think again and provided a detailed brief, setting out point by point its arguments for opposing the Government’s proposals. Some of these organisations deserve listening to. They include Age UK, the British Institute of Human Rights, the Children’s Rights Alliance for England, Citizens Advice, Disability Rights UK, the Discrimination Law Association, End Violence Against Women—the list just goes on and on—the Fawcett Society, Friends, Families and Travellers, Justice, the Law Centres Federation, Mind, the National AIDS Trust, Race on the Agenda, the Refugee Council, the Royal National Institute of Blind People, the Runnymede Trust, Scope, the TUC and the Women’s Resource Centre—and there are many more. As my hon. Friend said, tomorrow there will be a further letter from organisations that supported this House for almost a generation as we devised the legislation and the legislative foundation of our equalities law. This Government are now breaking that consensus.
To be frank, there were concerns that there would be a Conservative party attack on equalities after the election. We were hoping that that would not be the case. I argued that many of the legislative debates we had had over the last generation would be put to bed and would not be reopened. Many feared such an attack, but most of us hoped when the coalition was born that the Lib Dems would head it off. I know that there are those who have tried to do so. We have heard today of letters coming in from different Lib Dem groups, urging the Government to think again. Unfortunately, they have failed. As a result of that failure to convince the Government to think again, we are faced with the most significant step backwards on equalities that we have seen in the last 20 years.
Kate Green
I share my hon. Friend’s distress and sorrow at what is happening under this Government. Is it not also the case that when the Equality Act went through the previous Parliament, it was Liberal Democrat Members, including the Minister’s own predecessor, who were particularly at pains to push our Government, a Labour Government, to go further? Is this not an appalling and distressing reversal of position?
Stephen Pound (Ealing North) (Lab)
Don’t: there is no need. It is not necessary.
John McDonnell
This is a serious debate and, to be fair—my hon. Friend was here at the time—there were Conservative and Lib Dem Members who sought to push things further. What I thought was important about that debate was that we reached a consensus. We reached a fairly high plateau of agreement. It was recognised that some wanted to go even further, but no one wanted to go backwards, which is what this legislation does. This is a backward step.
Julian Smith
I am listening carefully to what the hon. Gentleman is saying. Does he agree that John Wadham, the director of the EHRC, specifically said during an evidence session in Committee that he and the organisation did not have any problems with the Government’s Bill?
John McDonnell
With the greatest respect, I do not think that that is the case. I know John well—he is an old friend—and I do not believe that he used that exact form of words. What the organisation said was that it was for the House to decide on the Bill. I think that what the staff and board of the EHRC are trying to do is survive, and I think that some things have been said simply so that they can survive.
Debbie Abrahams
The briefing from the EHRC uses very neutral language, but it nevertheless expresses blatant concern about, in particular, the removal of important functions such as the helpline, funding for voluntary organisations, and legal advice. The idea that people should have to pay to issue a challenge when they have been discriminated against is outrageous.
John McDonnell
I agree. I think that what John Wadham and others in the organisation have said is that they will do their best and will live with what legislation there is, but I also think that when they gave evidence to the Committee, their intention was not to support the Bill. It is for us to decide.
Julian Smith
Either the hon. Gentleman is calling me a liar, or he has not read Hansard. The written record of the evidence sessions shows that John Wadham said that the organisation did not have a problem with the Bill.
Madam Deputy Speaker (Dawn Primarolo)
Order. Had the hon. Member for Hayes and Harlington (John McDonnell) referred to the hon. Member for Skipton and Ripon (Julian Smith) as a liar, I should have picked him up on it, but he did not.
Madam Deputy Speaker
No, he did not imply it. He did not raise the issue of the hon. Gentleman’s integrity in any way. There seems to be a dispute about what was actually said, and I think that that is different.
John McDonnell
Let me assure the hon. Member for Skipton and Ripon (Julian Smith) that I would never call him a liar. What I am trying to say is this. The organisation has previously made it very clear that the House will be the determinant of the Bill. I believe that John Wadham has been a good and effective civil servant over the years, and that he will implement whatever comes out of the House as effectively as possible, but I also believe that he and his colleagues are simply trying to survive in whatever way they can, and will speak accordingly.
Mr Umunna
As I said earlier—and as my hon. Friend will know, because he has read what John said—John did say that he was not opposed to the Bill. However, I have just given chapter and verse on all the problems that he has raised in relation to it. He is, of course, an existing employee of the commission, so it is very difficult for him. Why should we not consider, for example, what the commission’s former director of human rights and director of disability rights said in July about what the Government are doing? He said:
“By repealing section 3 of the Equality Act 2006, the Commission will cease to be an agent of social change harnessing the law and its powers to address entrenched inequalities.”
John McDonnell
We will come on to the individual elements, but it is clear from the representations that have been received that there is sufficient concern. Let me put it no more strongly than that. For any Government whose members have arrived at consensus on a contentious issue to come along and break that consensus warrants much deeper consideration than is being given by the Government. The messages from the organisation itself, which is seeking to survive in whatever form it can, have been clear enough to most of us to suggest that it has an underlying concern that it will be unable to fulfil the role we have expected of it up until now.
Jack Dromey
My hon. Friend makes a powerful point about the organisation’s inability to fulfil its role in the future. I have met the staff in the Birmingham office on the issue of disability access to public transport, from buses in Wolverhampton to the de-staffing of stations in the region by London Midland. The disabled are saying that they are being turned into second class citizens who are unable to access public transport and that the support of the Birmingham office of the EHRC is essential to them. Does my hon. Friend agree that if that office goes, so too will the champion of the disabled?
John McDonnell
I chair the PCS parliamentary group, which represents the union that represents the staff. I have therefore been involved in the discussion with them about the cuts that have taken place. The pressures that existing staff are under are immense. Reducing staff numbers still further will lead almost to the breakdown of the organisation.
Let me return to the Bill. We have been saying that there is real worry about the Government’s intent and the future of the organisation. The cuts in resources and staff are being compounded by the undermining of the legislative basis on which the organisation operates. It is that legal basis that we must consider.
On clause 52, the original legislation laid out a general duty to send out the message to which my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) referred. As a community we needed and continue to need the message that there is an organisation advising the Government that will encourage and support a society based on freedom from prejudice and discrimination—a society based on individual human rights, respect for the dignity and worth of each individual, equal opportunities to participate and a mutual respect between groups based on understanding and valuing diversity and shared respect for human rights. I do not think that society has changed so dramatically that that statement is irrelevant—it needs to be embodied in legislation and repeated time and time again. It had all-party support in 2006.
Andrew Gwynne
My hon. Friend is absolutely right, and I am proud to have been part of the Government that introduced the Equality Act. However, does not this provision shed light on the Government’s real motives? By stripping down the commission and stripping it of its remit, they are undermining the equalities that we cherish and hold dear.
John McDonnell
I do not see how it can be interpreted any differently. The argument has been made that this provision has been included in the Bill for a purpose and that it is all to do with removing restrictions on businesses so that they can be encouraged to be more enterprising and create better profits, which might somehow contribute to tackling the recession. The argument is almost that we cannot afford equality, but our argument is that we cannot afford inequality. That is exactly why we enacted that legislation in 2006. There were strong arguments about not just fairness but efficiency. If there is discrimination against people, sections and groups in society, they cannot make their contribution. That was why we made a strong economic argument for the 2006 Act.
Stella Creasy (Walthamstow) (Lab/Co-op)
I note that the Minister talked about value for money. Does my hon. Friend agree that the value-for-money argument for dismantling the commission is a very bad one, because of its impact on our economy through the added cost to businesses of failing to tap into the potential of people against whom there is discrimination in our society?
John McDonnell
Exactly. In 2006 we had a lengthy debate on all sides when we identified groups in society that had not been given a fair crack of the whip and which, if they had, could contribute so much to our economy. Clause 52(1)(a), which removes section 3 from the Equality Act 2006, removes that statement.
It is interesting that only a few months ago the European Commission, in its recent report on equality, recommended to other Governments that they follow the example of the UK and embody in legislation a vision of an organisation that can contribute towards developing a society based on equality. Here we are, taking a step backwards from what is happening elsewhere across Europe. This is not just a tidying-up exercise. It is not about creating unrealistic expectations. It undermines the legislative basis of the organisation.
At the recent conference on discrimination law, Sir Bob Hepple QC made it clear what section 3 stands for. He said that it provides the link between the promotion of equality and good relationships between groups and society, and that without it we are rudderless. That was his statement. We included the measure in the original legislation to give direction.
It is extraordinary that in the Government’s own consultation, which has been cited time and again today and which was entitled “Building a fairer Britain”, there was overwhelming opposition to the abolition of section 3. The opposition was 6:1 against removing that visionary statement from the legislative basis of the commission.
Clause 52(1)(b) repeals the duty to promote good relations between members of different groups. MPs who have been working in their constituencies as MPs, councillors or community activists will recall that it is these sections that we have used to protect individual groups against racist attacks, attacks on Travellers and against undermining and stigmatising people with mental health problems. This is the legislative base that we have used time and again to ensure that the commission can play its full role.
As my hon. Friend the Member for Streatham said, this is the measure that we used to tackle racism in football, so it has been used in campaigns and it has been effective. We have used it to undermine the development of extremist racism in our society and to ensure that we give advice to public authorities, particularly local authorities at elections, to set standards.
It has been argued that other organisations will be available to do this, such as the Runnymede Trust and the Fawcett Society, but both of them are reliant on public funds and some of the public funds that go to those organisations are from the EHRC. The EHRC is having its grant-making cut so those organisations will not be out there to fulfil that role.
On the removal of the duty in section 10, I want to raise an issue on behalf of organisations such as DPAC—Disabled People Against Cuts—and the group in Scotland, Black Triangle. Section 10(5) places a duty on the commission
“to promote or encourage the favourable treatment of disabled persons.”
Over the past year we have had debate after debate on hate crime against people with disabilities. We thought we had a breakthrough with the Paralympics in raising the profile of people with disabilities and extolling what they can do if given the chance. What message does it send out that we are scrapping that duty of the commission?
Chris Ruane (Vale of Clwyd) (Lab)
Four or five categories of hate crime are monitored—race, religion, gender, sexuality and disability. Over the past year disability hate crimes are the only hate crimes across all the categories that have gone up, and the reason is the language used by the Tories. Does my hon. Friend agree?
John McDonnell
In debates in Westminster Hall and in this Chamber, Member after Member has raised the issue of the rise in hate crime against people with disabilities. They have cautioned Conservative Members and others about the language that they use and about their actions. This proposal sends out a message that the Government are not interested in this matter, and it undermines the very organisation that has the statutory responsibility. We are not the only ones who are anxious about this. The Government’s consultation shows that the proposal was opposed by 7:1.
On section 12, the Government seek to reduce the frequency of monitoring progress from three years to five years. It is extraordinary that in the debate on the introduction of the monitoring process, it was Conservative Members who argued that three years was not enough, because there would be only one report every Parliament. Now it is to be every five years. That was opposed by 5:1. It is argued that further reports can be brought forward at the commission’s will, but the most important thing is the requirement that the House places on the organisation. The monitoring process every five years will prove totally ineffective.
The repeal of section 27 and the powers to provide conciliation services to resolve disputes involving alleged discrimination is extraordinary. In other parts of the Bill the Government promote conciliation to resolve disputes, yet in this area we are removing that role from the commission. The argument is that the commission has not been particularly effective. If we are concerned about the effective operation of the commission, we should reform the commission, not undermine its legislative base and remove its powers. If the pre-appointment hearing for the new head is today, we should give that person a chance to reform the organisation before we take away the opportunities to exercise effectively the powers that were bestowed upon it by previous legislation.
I will deal with new clause 13 and the abolition of the questionnaire only quickly, because, like my hon. Friend the shadow Secretary of State, I have dealt with these questionnaires from a trade union point of view. As has been said, only 2% of employers have ever been involved and none has claimed the duty was onerous. To be frank, when the questionnaires come back a trade union representative can tell his member, “This isn’t a runner,” or he can say, “This is a runner. We had better start negotiating.” When it can be proved that a case has merit, usually the employer will realise that there is something real to address.
Jack Dromey
Again, from my experience in the trade union movement I support what my hon. Friend says. As a result of the process of using the questionnaire, for every one case that goes forward, three cases do not, precisely because it is established that there is no case to pursue. That means that the hopes of individuals are not raised, but neither is any unnecessary burden imposed, in this case on employers.
John McDonnell
Exactly. Part of the role of a trade union representative is to ask the individual, “Do you really want to put yourself through this when there is so little chance of success bearing in mind what information has come back?”
Mr Umunna
What I find so reprehensible about what the Government are doing to these protections in this Bill—the same applies to the points that we will be discussing tomorrow in relation to employment law—is that in many respects the people for whom these protections are so important are those who are not represented by a trade union because they provide backstop protections for them in the event that they cannot get assistance elsewhere.
John McDonnell
Exactly. Amazingly, the questionnaire process has been operating effectively since 1975, and in the consultation, 83% opposed this proposal. Most people just want to get on with the practicalities of conciliation, not resort to law because of its expense and risk, and the questionnaires enable us to do that. The Discrimination Law Association offered example after example of the questionnaire’s effectiveness, but they seem to have been completely dismissed by the Government.
New clause 12 relates to third-party harassment which my hon. Friend the Member for Streatham eloquently addressed. I do not think that scrapping the duty set out in the legislation will in any way clarify matters. In fact, I think that it will cause more confusion. At least when cases are brought up with employers, even informally, representatives can point to the legislation and the duty and it is then clear what the employers have to do. Example after example has been pointed out, but I will give one that was raised with us some years ago. Black firefighters arriving at a scene were being discriminated against and targeted, so their employers had to put in place additional protections. Another example was of discrimination taking place in jobcentres. With regard to the consultation, if the Government were listening to people they would hear that 71% are opposed to these proposals.
Reference has been made to other cuts that have been made to the commission. The Minister raised the issue of the helpline, which has now been transferred to the Government Equalities Office. It only takes referrals from other organisations and does not advertise its services, so I think that the Government are effectively hoping that it will simply wither on the vine and there will no longer be a service for people.
I am also concerned—the Minister has not mentioned this—that a new framework document is now being discussed with the commission that, I think, threatens to limit its future freedom of operation. There is to be a further budget review, as I have said. If the Government are planning to abolish the commission, I would rather they came clean about it and were up front, rather than killing it off by stealth, by cuts and by undermining its legal powers. That would be more honest.
It is not the case that equalities are no longer relevant; discrimination is taking place in our society. We extol the virtues of British society but the reality is that, as everywhere else, discrimination takes place daily and has to be confronted, and we need an effective organisation to do that. If we want an effective organisation, it has to have legal powers that are set out clearly in law. This legislation will undermine those powers and make them less clear than ever before.
I think that this flies in the face of everything this House has worked for over the past generation and the joint work that has been done across parties to promote equality and give effective powers to a body and underpin them in legislation. That is now being thrown to the wind, and for what? I think that it is the result of a combination of ideology and the desire to make savings that, frankly, I do not think will be realised. The proposals will most probably cost more than they actually save. I urge the Government to think again. I urge the Liberal Democrat partners in the coalition to return to their first principles and to what they said a number of years ago. If the Government do not amend the Bill, I hope that the other House will take a role in this and stand up for equality in our society once again.
Kate Green
It is a pleasure to follow my hon. Friend the Member for Hayes and Harlington (John McDonnell) and to endorse his comments. We are genuinely shocked, disturbed and surprised that the Government, and particularly the Minister, have brought forward the amendments to the Equality and Human Rights Commission’s remit and by some of the specific changes proposed to employment legislation.
As my hon. Friend has just said, despite progress—progress that we can be proud of across this House and in society at large—in addressing inequality and injustice in this society, despite the fact that much good work has been done in our communities to boost and strengthen community harmony, despite the many efforts that have been made to create better educational opportunities for young people from all backgrounds, and despite many examples of progress for women, disabled people, black and ethnic minority people, lesbians and gay and transgender people, despite all that progress, we are still a fundamentally very unequal society.
We are a society where there is still a gender pay gap of 20%; where young black men are still disproportionately more likely not to be in employment, and even when they achieve good degrees still find that they end up with fewer employment chances and lower earnings; where disability hate crime is reported to be on the rise; and where great offence and hurt can still be caused within our communities, as we have seen only recently with the “Innocence of Muslims” film. It is really important that we do not take progress on equality for granted, because there is a very long way to go.
Stephen Pound
Many people of my generation thought that the days of overt racism in football died when bananas stopped being thrown at people like Clyde Best, but when we see such incidents as recently occurred at the Chelsea-QPR game, we realise that a fetid, bubbling sewer of racism still runs through the veins of our society. Does my hon. Friend agree that there has never been a time when it has been more important to have a strong, well-funded, supportive, proactive commission than now, because old Adam is not dead and the old evil has not gone way?
Kate Green
That is absolutely right. One of the great dangers of the Government’s proposals is that they assume that the problem is sorted and we can take our eye off the ball when that is clearly not the case.
It is important to think about the language we use and the provisions we make in legislation, because that sets a context, an ambition and a sense of priority for the country and for the institutions within it. Equally, beginning to weaken that language and remove provisions sends the message that this is not all that important and other things are more important.
I am particularly concerned that these changes are being made in the context of an enterprise Bill, as though equality were in some way inimical to enterprise, when in fact it lies at the heart of successful enterprise. The most socially and economically successful societies are also the most equal societies. It is wrong to seek to weaken our commitment to equality in an enterprise Bill, of all places.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
My hon. Friend raises the very important issue of the “Innocence of Muslims” film and the inter-faith concerns that have been caused. Does she agree that a strong equalities body is vital for promoting a sense of good will, cohesion and understanding between communities that will not be there without the mechanisms in society to help to deliver that?
Kate Green
It is absolutely right that we need a strong institutional infrastructure to promote and encourage greater equality, respect for human rights and good relations between different sectors in society, particularly as regards the interests of marginalised and more vulnerable groups.
Julian Smith
Does the hon. Lady not welcome the equal pay audits in the Bill, the Government’s same-sex marriage proposals, and the many equality proposals that they are taking forward? Are those proposals not more important than this body, which has, in a number of reviews, been given quite a lot of criticism?
Kate Green
The hon. Gentleman confuses the operation of the body with its remit. We are not saying that nothing can be done to improve the operation of the EHRC, but that is a different matter from its remit and the context that the Bill is important in setting. While the Government have made one or two grudging steps forward in relation to improving equalities, the proposal on equal pay audits is a watering down of our commitment to have such audits across the board for larger businesses, not only when they have been unsuccessful at tribunal, and the proposals on equal marriage now appear to have been kicked into the long grass. I am glad to see the Minister shaking her head and look forward to the legislation coming forward very shortly. Yet again, the Government have chosen not to go as far as Labour Members were calling for, by wanting to limit equal marriage to civil marriage. There seems to be no good reason not to take that further and for religious institutions that would like to offer a religious ceremony to be able to do so. The hon. Gentleman picked on one or two instances of progress set against a backdrop of failure to take the most progressive action, and in many instances an unwinding of progress on progressive action. It is unlikely that this Government can claim to have done much strenuously to promote equality—in reality, the opposite is the case.
Seema Malhotra
Does my hon. Friend share my grave concern that the removal of the general duty under clause 51—now clause 52—was described by the Business Secretary as
“a bit of legislative tidying up”?—[Official Report, 11 June 2012; Vol. 546, c. 75.]
Does she agree that it is far from just “tidying up” and that it is in fact a watering down of a duty that is vital for our social well-being?
Kate Green
It is shocking that the Secretary of State regards this simply as legislative tidying up, because it goes to the heart of our vision for equality and human rights. I am also concerned that it has been suggested—indeed, the Minister alluded remarks—that other bits of the legislation are going to be good enough and we are not going to lose anything really. For example, the Government have mentioned the possibility of relying on the public sector equality duty, but that, too, is being reviewed by this Government.
What we have had with the red tape challenge, with this Bill and now with the consultation on the public sector equality duty is the piecemeal dismantling of our equalities infrastructure. It is utterly disgraceful that the Government have set about it in this way. They have made proposals today on the statutory questionnaire and on third-party harassment. The consultation on those has just closed and there has been no formal response from the Government; we have simply seen proposals brought forward in this legislation. The Secretary of State assured me personally on Second Reading that he had no plans to bring forward such measures, yet here they are today appearing in the Bill so I am very concerned that the Minister’s assurances that the equalities context is safe in the Government’s hands and that other aspects of legislation will continue to protect it are simply not worth the paper they are written on, given the Government’s track record on this matter over the past few months.
I now wish to examine the good relations duty, a really important duty that has been in place since the time of the Commission for Racial Equality and some of the shocking racial discrimination that we saw in earlier decades. That all culminated in the Macpherson report following Stephen Lawrence’s murder. That was a time that brought home a real shock to our society about how we had failed to address discrimination and inequality in our country. As I say, we have made progress in the intervening decades in our treatment of, and the opportunities afforded to, some minority groups in our society, but victimisation, discrimination, hate crime and disrespect to minorities continue today.
My hon. Friend the Member for Hayes and Harlington highlighted some of the groups that, even today, experience that discrimination: disabled people; people with mental health difficulties; and Gypsies and Travellers. There is still racism and there is still religious hatred. There are still women who are experiencing and are victims of violence, or who are at risk of it. All those groups continue to suffer from derogatory language, discriminatory behaviour, prejudice and public hostility. It is quite wrong to think that we do not need to continue to protect in legislation a positive duty to promote and improve good relations, particularly to protect the interests of minority and disadvantaged groups.
The situation is not helped when some of this hostility is whipped up by Ministers’ own language; it is not helped by language that implies that people on disability benefits are benefit scroungers or that Gypsies and Travellers are all involved in illegal encampments, arriving one Friday night, parking up with their tents and disappearing by Monday. There is too much condemnation based on anecdote, which fuels this culture of hostility. It is really important that we have a strong commission that is able positively and proactively to tackle that and promote good relations between different groups.
Julian Smith
Could the hon. Lady give some tangible examples of how the general duty actually helped the groups of people she has mentioned?
Kate Green
The hon. Gentleman should realise that we are talking about the good relations duty, not the general duty, which is a duty to promote equality and reduce discrimination. However, we have heard some examples this afternoon of how it has been used. It was used, for example, to create the Let’s Kick Racism Out of Football campaign, and it has been used recently to underpin what I think all Members would recognise as an important report published by the EHRC last year, “Hidden in plain sight”, which addressed the issue of disability hate crime. I am not saying that there is no more work to be done; I am saying that the removal of the good relations duty does not inspire confidence that the commission will have its eye on the ball of doing more work. It is important that we do not lose sight of the progress that we still need to make.
Mr Umunna
My hon. Friend is absolutely right. We need a commission not only to act as an anti-discrimination vehicle that identifies discrimination and deals with it when it happens, but proactively to prevent such things from coming up in the first place. The section 3 duty makes it clear that the organisation has those twin purposes.
Kate Green
My hon. Friend is right. Opposition Members are wary of the commission being reduced to a mere regulator between two parties, rather than seen as an agent of social change. There is a real opportunity for a highly regarded, well-resourced public body, with the right remit, to shape and influence public attitudes. The Government’s proposals will put that work and ambition at risk.
Julian Smith
Does the hon. Lady really think that a body can make such changes? Is this not about leadership in all our public sector organisations and private companies? Does she really think that a body, however much resource it has, can achieve those changes?
Kate Green
The hon. Gentleman is right to say that we need leadership in all walks of society—of course we do. We need to see it in our businesses, schools, public services and communities. I am sure he is not saying that there is no need whatever for the state to sign up, positively and proactively, to endorse and create an institutional mechanism and infrastructure to help achieve that. But if that is what he is saying, he is very much at odds with best international practice and the relevant directives of the United Nations and the European Union. As I have said, in a country where there is still gross inequality, it would take a great leap of faith to say that we can afford to dismantle the equalities infrastructure; surely what we should be doing is building it up.
Andrew Gwynne
My hon. Friend is right to say that the great advances that have undoubtedly been made in race equality, disability rights and so on do not mean that there is not unfinished work to be completed. There is an awful lot of progress still to be made and that is a case for a stronger commission, not the rolling back of provisions.
Kate Green
My hon. Friend is right. It is regrettable that we are having a debate about watering down the commission’s remit. There is no evidence of public support for that and there is not even much evidence of business support for it. Opposition Members believe that it sends the wrong the signal at a time when we still need to make so much progress.
Stephen Pound
On that point, this Bill is called the Enterprise and Regulatory Reform Bill, and in a spirit of generosity and open-heartedness I have been trying to identify the coalition Government’s motivation. I can only assume that they believe that industry is like a group of greyhounds, straining at the slips and longing to burst forward in a great explosion of entrepreneurial activity, that are somehow being held back by these fetters of legislation. If that is the case, I ask my hon. Friend why she believes that the most successful economy in Europe—that in Germany—has no call to abandon the protective mechanisms that make society a better place and that underline the old saying that this country would not be a good place for any of us to live in until it is a good place for all of us to live in?
Kate Green
I cannot begin to say why the Government want to weaken the equalities infrastructure. I cannot work out whether it is because of ideology; whether they genuinely believe that there is a business case for it, although they have not managed to demonstrate that clearly this afternoon; or whether there are pressures on them to be seen to be passing legislation in this field because there is not much else for the House to do. I regret that the fact that the Government have put this particular structure into this position, because that says something very profound about what is valuable and important in our society. I am very disappointed that the Government and this Minister are bringing these provisions forward this afternoon.
Jack Dromey
In the Bill, the Government pray in aid enterprise to deny equality. Does my hon. Friend agree with the automotive and engineering personnel managers whom I met in Birmingham, who said that the work of the commission had been invaluable in getting the best out of their work force and that they wanted to get the best out of the work force of the city? As one of them said, enterprise and equality are not opposites; they are partners.
Kate Green
Absolutely. That is also true in the public sector. In my constituency, a major public sector institution is even now working with the Equality and Human Rights Commission to marry up its human resources practices and its service delivery. That demonstrates exactly the kind of strong institutional body that we want and that we ought to be protecting and promoting today.
My hon. Friend the Member for Hayes and Harlington mentioned the concerns that Opposition Members have about the framework agreement that covers the operation of the commission, its relationship with Government and, crucially, its independence. There are worries that the combination of the changes to the framework agreement and the fact that it will report only every five years, as opposed to every three years, as now, will seriously weaken its independence and the balance between the independent commission and the Government Equalities Office, which I think is still within the Home Office, although I am happy to be corrected by the Minister if it has moved.
Kate Green
The Minister is indicating that it has moved. We are concerned that the balance of power and influence in determining strategy has shifted from an independent commission to an internal Government body. In the context of the international A-grade status, that is a cause of concern.
Mr Umunna
That is exactly what Neil Crowther, the former director of human rights and director of disability rights at the commission to whom I referred earlier, has said. He stated that as a result of what the Government are doing,
“where now the EHRC is empowered to determine measures of Britain’s progress towards equality and human rights and the outcomes towards which it will focus its resources, in future government will do so.”
Kate Green
Exactly; I think that all Members will be concerned about that.
Mr John Wadham, who has been much quoted in this debate in support of the Government’s position—although that support was not the position that the EHRC took in its first public submission on these matters—has identified the concern over the independence of the commission. He suggested that if the measures proposed by the Government were to come in, he would like to see a compensating measure that would see the commission report to Parliament. Of that compensating measure, today there is no sign.
I will move on to two of the Government new clauses that relate to employment rights. The first relates to third-party harassment, which has been mentioned by my hon. Friends. The Minister said that the relevant provisions in the Equality Act 2010 were not necessary because employees have other forms of redress. However, the fact that there is a specific legislative provision to cover third-party harassment highlights the possibility for employees to have redress. They might be unaware that their employer has such a liability and obligation to them. In smaller and un-unionised workplaces, it is particularly difficult for employees to understand that they may be entitled to redress.
It is also important for employers to recognise the good practice of many exemplary employers in focusing on their responsibility for their staff’s welfare. I was struck, as were some of my hon. Friends, by some of the employers who strongly endorsed the provisions of the 2010 Act and said that they were an important tool in protecting and reinforcing the rights of their employees. They were concerned that other employers might not follow the same good practice and they regretted the change.
Luciana Berger
Does my hon. Friend share the concerns echoed by the TUC that the removal of third-party harassment provisions will lead to life getting much harder for thousands of people who work in care homes, as well as health workers and teachers—the three groups specifically highlighted by the TUC?
Kate Green
One concern is that the workers affected are likely to be low-paid—often women—or people with low levels of qualifications, and they will lose out most by the removal of third-party harassment provisions. The Union of Shop, Distributive and Allied Workers—I draw attention to my membership of that union and its support for my constituency party—is aware of cases in which shop staff have been victims of harassment, sometimes by customers or perhaps outside the store if customers have been asked to leave for disruptive behaviour. Those staff have used third-party harassment provisions to work with employers and ensure that steps are taken to protect shop workers, particularly late at night when few staff may be on site. The Opposition are worried that the provision has worked well to protect more vulnerable workers, and we regret that the Government now seek its removal.
The statutory questionnaire procedure has been in place since the sex discrimination legislation of the 1970s, and Labour Members are at a complete loss to understand the Minister’s objections. Far from being costly and burdensome to business, we see the procedure as helpful and something that businesses can use to focus on the essentials of a problem, and make clear to employees—and potentially to their representatives—whether there is a case to answer. As colleagues with trade union backgrounds have pointed out, in many cases, the advice received by the employee following the completion of a statutory questionnaire is that there is no case. Where there is a case, however, or structural discrimination in the workplace, surely we want to offer employees who are the victims the best possible means of uncovering and dealing with it, and maintain the strongest possible regulatory framework to enable information to be elicited, analysed, and used by employees when discrimination has occurred.
The Minister suggested that the statutory questionnaire procedure was burdensome for business. As colleagues have pointed out, however, over a three-year period only 2% of businesses—0.7% a year—completed the questionnaire. To the best of my knowledge, no micro-businesses—none of the smallest businesses for which the Minister may argue that the measure could be more burdensome—have ever completed a statutory questionnaire. If they have, it was not in the written evidence received during the Government consultation. I therefore suggest that the burden on business that the Minister seeks to portray, and the cost to business of around £1 million—as I think we were told—is pretty negligible in the context of other costs borne by businesses for the protection of workers in the workplace.
Julian Smith
The hon. Lady knows full well that the smallest businesses in our country do not really get a look-in at the written evidence sessions. They do not have time to participate, and therefore they are not represented. To pretend otherwise would not be correct.
Kate Green
I accept what the hon. Gentleman says. The problem, however, is that we did not get any evidence from micro-businesses, although perhaps for the best of reasons. I accept it may be difficult for those businesses to find the time and resources to make submissions to formal Government processes, but equally, no evidence has been presented that many micro-businesses have a problem and have used the statutory questionnaire procedure. The legislation comes from speculation rather than information and evidence, and that is much to be regretted.
Andrew Gwynne
I agree with my hon. Friend. Does her case not underline the real point that these regulations—and the legislation—is working, and that the framework in place means that the statutory questionnaire procedure has not been used in the numbers suggested and is not the burden that it is made out to be by the Government?
Kate Green
That is absolutely right. It is also important to recognise that in an employer-employee relationship, there is an imbalance of power, even in many of the smallest businesses. One thing that the statutory questionnaire procedure helps to do is redress that power imbalance—that has been specifically noted in European directives as one of the purposes of such procedures. It is a regret that Ministers have decided that that protection for employees should be removed.
The statutory questionnaire procedure promotes efficiency in the workplace—cases can be abandoned or issues clarified early—but the fact that the judiciary has come out in the Government’s consultation largely in favour of it suggests that it also leads to efficiencies in the courtroom and the tribunal, because the issues will have been well analysed and distilled. Given the many pressures being brought to bear on employment tribunals, I would have thought that the Government would want to give serious consideration to the cost-effectiveness of the statutory questionnaire procedure in respect of tribunals.
These highly regrettable measures have been thrown into the legislation at the eleventh hour. It appears that they are more a sop to the prejudices of a small number of business organisations rather than a recognition of any business hostility to legislative provisions that have existed for many years.
Finally, I should mention what is happening to the general landscape of places where people can go for redress and advice. My hon. Friends have mentioned the ending of the commission’s grants programme to the voluntary sector; changes to its helpline provision; and the ending of its ability to offer conciliation services in non-employment matters. As the Minister well knows, that is happening against a backdrop of swingeing cuts to legal aid funding and to local authority funding for advice organisations. Those who have suffered discrimination or injustice now have real difficulty even to get to the means of presenting and taking their case. I would understand it if the Minister argued that that is not exactly the EHRC’s core function if it were not for the fact that all other provision of such advice and information is being dismantled. It is extremely difficulty for the Minister to argue that there is no need for the EHRC to provide such a service when the same service is being removed from every possible place where people in need might look for it.
The Opposition are distressed and saddened by the proposals in the Government’s new clauses and amendments. We are concerned that they speak either to Government Members’ intrinsic hostility to the concept of equalities and the landscape to protect them, or to a casual dismantling of provisions that work extremely well. We are concerned that the signal sent to wider society is a negative one—the suggestion is either that equality is a job done, which it plainly is not, or that it is no longer important, even though there is agreement across the House that it is very important.
I hope the Minister takes the opportunity to think again this afternoon about some of the Government’s proposals, but I can absolutely assure her that if that does not happen, the subject will be a matter of live debate in the House of Lords. Their lordships take a great interest in equality and social justice and will be very concerned about provisions that appear to weaken the institutional infrastructure to protect and promote equality. I look forward to many more robust arguments. I hope that, in the end, the provisions will be seen as damaging and that they will be withdrawn, so that we will be able to move forward as an exemplar country in our commitment to equality and our determination to make continuing progress.
Jo Swinson
Although this debate has not been as consensual as the previous one on insolvency measures, I recognise none the less that Members have raised genuine concerns, on which I hope to reassure them.
Various Members referred to the Second Reading debate and, in particular, the question that the hon. Member for Stretford and Urmston (Kate Green) posed to my right hon. Friend the Secretary of State, who said that there were no proposals, at that point, to bring forward the measures in the amendments today. Of course, in June, when Second Reading was undertaken, a consultation was under way, so we did not have firm proposals at that point. My right hon. Friend said, though, that there was nothing to stop people proposing amendments, and since then, of course, the consultation has ended. In answer to the hon. Lady’s specific question about the consultation, I can say that the Government published their response on 10 October. She is right that the Government Equalities Office has moved, following the reshuffle, and is now housed in the Department for Culture, Media and Sport, where the Minister for Women and Equalities is also Secretary of State.
I can provide a range of clarifications. The shadow Secretary of State asked about the scope of equal pay audits, in particular, and whether they would apply only to private organisations. I can confirm that they will also apply to public sector organisations, so it will be the case for all employers, although we must bear in mind the moratorium on additional burdens on micro-businesses until 2014. It is certainly not our intention, however, to limit its scope to the private sector.
The hon. Member for Vale of Clwyd (Chris Ruane) made a helpful intervention pointing out the unfortunate increase in disability hate crime. It was helpful because it reminded us of the issue. I share his concern, and he should not be under the impression that such concern is limited to the Opposition.
Chris Ruane
I hope that the Minister noticed that I did not say “the Liberal Democrats”. I said “the Tories”.
Jo Swinson
I thank the hon. Gentleman for that clarification, but given that I speak on behalf of the Government, it is only fair that I point out that many of my Conservative colleagues also share his concerns. Very often, on the issue of people with disabilities who require support, the reporting in some sections of the media leaves a lot to be desired.
Jack Dromey
Were the disability organisations right or wrong in their recent powerful report making a direct link between the tone set by the Government and the rise in hate crime?
Jo Swinson
Every organisation is entitled to put forward its views and concerns. It is important that language is used carefully, as has been pointed out by various Members. Whether they are a member of the Government or not, everyone needs to be careful about the language they use in these discussions. That is not to say, of course, that we should never make any changes to provisions affecting people with disabilities, but that debate should be conducted responsibly.
The hon. Member for Hayes and Harlington (John McDonnell) was rather dismissive of many of the Government’s measures on equalities, and said that there was much consensus in these areas. These are measures that the previous Labour Government did not undertake during their 13 years in power, so if there is such consensus, the question needs to be asked, “Why didn’t they get on with it?”
John McDonnell
The hon. Lady completely misinterpreted what I said. I was not dismissive at all. I welcomed the measures and said that they were supported across the House. This measure, however, is one of the first steps on equality in nearly a decade that has not been taken consensually.
Jo Swinson
I take the hon. Gentleman’s point that there has not been a consensual debate today, although I do not think it would be accurate to say that there is a consensus on, for instance, the Government’s measures to tackle discrimination in the trans community or our proposals on equal marriage. I can say that as a constituency MP, and my mailbag, and no doubt those of others, would attest to it. The Government have a positive record, including on measures that the previous Government did not address.
On the reasons for new clause 12, the shadow Secretary of State gave a version of events that differed from mine in referring to the case in 1994. For the record, according to the GEO’s lawyers, the reasoning and rationale for bringing forward that provision is as I set out in my opening remarks. It is also worth pointing out that even though the 1994 case to which he referred happened before that provision was in place, those individuals rightly won their case. Ultimately, the important change is the change in definition, which took place as a result of the case, which I mentioned, in 2007.
Mr Umunna
The point is that after the 1994 case was won, the principal point of law that was the subject of the case was called into question several times and the law changed various times—I know that from my own practice—which is why we did what we did in the Equality Act 2010.
Jo Swinson
The change made in 2007 was made for the specific reason that has been mentioned, and that was what was replicated in 2010, but in any event, I reiterate what I said earlier about the fact that significant protections remain. This is not to say that by removing the three strikes test there is no remaining protection for people, so that employers do not have to have regard to ensuring that their employees are not harassed at work; rather, employers retain a common-law duty of care to their employees, and they will still need to ensure that they do not fall foul of the Protection from Harassment Act 1997.
Let me turn to the Equality and Human Rights Commission. I am glad that we are not assuming, on both sides of the House, that the position was perfect under the last Government, and I welcome the comments that various Opposition Members have made to that effect. It is worth bearing in mind that we had significant concerns, as did many of the stakeholder organisations, about the EHRC’s ability to fulfil its core duties. On human rights, for instance, Liberty said:
“We have…watched the turbulent”
history
“of the EHRC with some disappointment…The EHRC has a vital statutory duty”
to defend human rights, and
“notwithstanding considerable staffing and other resources, this is a duty which it is yet to fulfil.”
The Equality and Diversity Forum expressed concern that the human rights inquiry was
“the only visible work EHRC has done that is explicitly concerned with fulfilling its duty to promote respect for human rights.”
The Public and Commercial Services Union listed human rights debates from which it said the commission was absent due to a
“failure to communicate its role effectively”.
In addition, concerns were expressed by the Joint Committee on Human Rights, so there was indeed a problem with the basic statutory duties that are the core functions of the EHRC not being properly undertaken previously. That is why our amendments seek to focus the duty and make it crystal clear that that is the priority.
Kate Green
The hon. Lady has mentioned a number of organisations and their concerns about how the commission was fulfilling or failing to fulfil some of its core responsibilities, but does she not accept that not one of the organisations she has named—neither Liberty, the Equality and Diversity Forum nor the PCS—has called for a reduction in the commission’s remit? What they have called for is improvements in governance and management, some of which, I accept, we are now seeing.
Jo Swinson
It is certainly the case that there is wide agreement that improved governance and management are necessary. Much of that has been happening, which is definitely to be welcomed. However, this comes back to whether we should have a legal duty—something that is tightly drawn and focused—or something that is more akin to a mission statement or vision statement. The purpose of a legal duty is about something being manageable and achievable, and although the duty that the shadow Secretary of State read out described what we would all want to achieve, it would be ambitious for a Government, with all the resources available to them, to say that they would achieve them, let alone for a solitary organisation to try to achieve such a wide range of ends, albeit good ones.
Mr Umunna
I am grateful to the Minister for giving way to me again. We are not the only ones who have raised concerns about what she is doing to the commission in this Bill; they include members of her party, as I have said. Councillor Lester Holloway, the head of the BAME Councillors Association, has said:
“A combination of biting budget cuts and the stripping away of many of its powers threatens to turn the commission into little more than a glorified equalities thinktank.”
The head of the Ethnic Minority Liberal Democrats has said:
“I have heard the argument that if it wasn’t for the Lib Dems the Conservatives might have abolished the EHRC altogether by now. However that argument is unlikely to cut much ice”—
Madam Deputy Speaker
Order. Mr Umunna, when I say, “Order”, you sit down. I also need to remind you that interventions are supposed to be brief. I appreciate that you were using a quotation, but using several quotations is not in order.
Jo Swinson
I meet and speak to those Liberal Democrat colleagues regularly, and I spoke to Lester Holloway last week about these issues. Some of the points that have been made have been based on inaccurate information, such as that about black and minority ethnic staff in the commission. The commission has corrected a lot of inaccurate information and misunderstanding about the impact that the restructuring plans will have on its staff. Of course, diversity is taken very seriously in all public sector organisations, but in the EHRC perhaps more than most there is acute awareness of how vital it is.
The duties that will remain in sections 8 and 9 of the Equality Act 2006 are the core functions of the EHRC. Several Members referred to the Let’s Kick Racism Out of Football campaign, which was an excellent initiative but contained nothing at all that could not be done under section 8. It is a false argument to take something excellent that the EHRC has done in the past and say that such an initiative could not be taken in future because of the changes that we are making to section 3. It absolutely could be taken under section 8.
Several Members asked whether the changes to the EHRC were about growth. I am not going to pretend that making its remit more structured is specifically a growth measure, but that does not mean that it is not a helpful thing to do. I have outlined the impact that the provisions coming out of the red tape challenge will have on business. Business will welcome that, coupled with all the other measures that we are taking in the red tape challenge to bear down on unnecessary regulation.
Several comments have been bandied around that many Government Members wish to see the back of the EHRC and that the change is abolition by stealth. I hope that I can reassure hon. Members that that is not the case. We certainly have not heard any suggestions to that effect from Government Members. Perhaps if that was what they believed, they would have come to the House to say so today. [Interruption.] I am sure that if any of them had wished to say that, they would have done. Even if that were the case, it is not the coalition Government’s position. We recognise that the EHRC is an important institution and that equalities law is vital. It is vital to our economic recovery, because we need to ensure that we use the talents of all the people in our work force and potential work force. That is why we are ensuring that it is focused on what is most important. We want to focus the EHRC on its core functions and, as I have mentioned, strengthen its governance and accountability, in which we have already had some degree of success.
A few Members mentioned the consultation and suggested that there was not necessarily unanimous support for the Government’s measures. However, if we examine the responses that were received from individuals—for clarification, they were not Members of Parliament—we see that more than half advocated the abolition of the EHRC. Opposition Members should be slightly careful what they wish for if they urge Governments always to follow consultation results exactly. We obviously have to take views into account, but we must also ensure that important provisions and protections are not undermined. Even if there were to be a groundswell of support for doing such a thing, the Government would recognise the important protections that the EHRC ensures are in place.
The hon. Member for Hayes and Harlington (John McDonnell) asked questions about the equality advisory and support service helpline, which opened on 1 October. It has some advantage compared with the previous commission helpline. It is open for longer—from 9 am to 8 pm Monday to Friday and from 10 am to 2 pm on Saturday—and is therefore more convenient. It handles conversations that people might not want to have while they are at work, so having longer opening hours is helpful and makes the service more accessible. It is free to phone from landlines, and it will soon be free from most mobiles too.
The inaccurate suggestion was made that the helpline can be used only when there are referrals from other organisations. That is not the case. It is there to help people with discrimination problems, and there is nothing to prevent a member of the public from approaching the EASS directly, although we accept that most people probably will access it via a referral.
Jo Swinson
It started on 1 October and there are not massive advertising budgets at the moment, but—[Interruption.] The hon. Gentleman clearly wants some huge advertising campaign, but we do not have massive budgets available at the moment. It is important that the advice is out there, that referrals are there and that the information is available when people wish to access the service.
The hon. Gentleman also said that he was concerned about the zero-based budget exercise that was being conducted on the EHRC. However, I understand that that is now Labour party policy. At its recent conference, the shadow Chancellor said that
“the public I think would expect this, to have a proper zero-based spending review where we say we have to justify every penny and make sure we are spending in the right way.”
Perhaps the hon. Member for Hayes and Harlington does not agree with the concept of a zero-based budget review, but his shadow Chancellor certainly does.
John McDonnell
There is a difference between conducting a zero-based budget exercise when seeking to ensure the effective operation of an organisation and having one when 62% cuts have just been made and the Government are threatening to close it.
Jo Swinson
I can say from the Dispatch Box that there is no such threat to close the organisation. The EHRC is an important part of our equalities infrastructure and the Government are committed to ensuring that it is maintained—
Jo Swinson
The shadow Secretary of State might wish to let me respond to the point raised by the hon. Member for Hayes and Harlington; then I will see whether I have an opportunity to hear from him.
The hon. Member for Hayes and Harlington mentioned the percentage of cuts and bandied about a figure of 62%. It is important to bear in mind that removing functions such as the conciliation service, which are now being provided elsewhere, will clearly result in a reduction in the number of individuals required. That service is no longer being provided by the EHRC. When we take into account the functions that have been transferred, the cuts that the EHRC is dealing with are broadly in line with other public sector cuts. Yes, it would be lovely to be in a situation in which we did not have to make any cuts but, unfortunately, the nature of the economic circumstances that we were left with in 2010 means that that is not possible.
Mr Umunna
I think it is fair to say that we remain deeply concerned about this matter. Will the Minister give us a guarantee now that, for the remainder of this Parliament, there will be no move to make any further changes to the statutory remit or footing of the Equality and Human Rights Commission?
Jo Swinson
The shadow Secretary of State does not surprise me greatly when he says that he is not convinced by our arguments today. This was never going to be the most consensual of debates. He is now asking me to look into a crystal ball, but I am clearly not going to make any predictions for the future. I will, however, say that the EHRC is a vital body that is hugely important to our equalities protection. We are conducting a zero-based review to ensure that it can undertake its functions in a more focused way, and that is what we will continue to do.
The hon. Member for Stretford and Urmston mentioned the potential risk to the A-rated status of the EHRC as a human rights body. We are in discussions with the international co-ordinating committee on this, and we want to address any concerns that it might have. We are determined to ensure that we have an A-rated and highly respected human rights body. The hon. Lady also asked about the framework document and suggested that it could undermine the independence of the institution. In fact, it has been agreed on between the commission and the Government, and it sets out specifically that the commission must be
“free to exercise its statutory functions free from ministerial interference or undue influence.”
Kate Green
I am grateful to the Minister, and I note that assurance, but does not the framework document imply that the function of the EHRC is to deliver the Government’s equality strategy? That does not exactly speak to its independence.
Jo Swinson
As I have said, the framework document is absolutely independent. The commission should be
“under as few constraints as reasonably possible in determining its activities, timetables and priorities”,
and it should not be regarded as the servant or agent of the Crown, or enjoy any status, immunity and privilege of the Crown. Those words are very clear.
I agree with the hon. Lady that there is much more to do on equality. This is in no way “job done”. She outlined the scandal of the remaining pay gap, which we are committed to addressing. I would point out, however, that we were left with a 20% pay gap in 2010 after 13 years of a Labour Government. So before the Opposition get too holier than thou, they should show a little humility. It was not “job done” after they had been in government. We need to work together to ensure that equalities are driven forward, and that these situations are improved. In addition, on the issues the hon. Lady raised around racial inequality, social mobility and the sort of action we are taking through the pupil premium will certainly help. I welcome her support for equal marriage, and I would note again that the previous Labour Government did not do anything about it for 13 years.
We are deliberately making sure that the EHRC is improved in respect of its management. We have made significant progress at the EHRC: we have a permanent chief executive appointed, and as I said, the pre-appointment scrutiny hearing took place this morning for the preferred candidate for its chair. Ministers will, of course, properly consider the report before formally deciding whether to appoint Baroness O’Neill. We have had two clean sets of accounts laid before Parliament—
Mr Speaker
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
Mr Speaker
With this it will be convenient to discuss Government amendment 33.
Jo Swinson
New clause 15 amends the definition of “estate agency work”, which determines the application of the Estate Agents Act 1979. This fulfils our commitment to introduce a measure on this issue following our recent targeted consultation, which was developed as part of the disruptive business models/challenger businesses theme of the red tape challenge.
New clause 15 extends a current exemption to that definition of estate agency work. Intermediaries, such as internet portals for private sales, will be out of the scope of the Estate Agents Act if they merely enable private sellers to advertise their properties and provide a means for sellers and buyers to contact and communicate with one another. Such intermediary businesses will therefore not be obliged to comply with requirements that are relevant to full service estate agency businesses, such as the disclosure of any self-interest in a property transaction and membership of a redress scheme for residential estate agents. These private sales businesses are not actively involved in property transactions, but offer a lower-cost alternative of enabling individuals to market their own property and buy and sell privately.
Those intermediary businesses will be able to provide a means for the seller and prospective buyer to contact one another, for example online; to provide a branded for sale board to the seller to assist this process; and to pass on to a prospective buyer solely the information provided by the seller in their advertisement, by whatever channel of communication. If, however, the intermediary offers any personal advice to a seller or a buyer, or other ancillary services, such as preparing property particulars or photographs or an energy performance certificate, the intermediary will be in the scope of the Estate Agents Act and bound by its obligations. The Estate Agents Act will therefore continue to apply to businesses that are involved in or have scope to influence property transactions.
The Government have found uncertainty and a range of views among stakeholders as to the application of the Estate Agents Act to intermediary businesses, particularly online. This is unhelpful to consumers who might wish to use an intermediary, and unhelpful to businesses, whether intermediaries or more traditional estate agents, or those interested in entering the market. Stakeholders are also concerned that consumers should be protected where they rely on a service provider in relation to a transaction as valuable and important as a house sale or purchase. Clearly, for most people it is the highest value and most important purchase they will make. The Estate Agents Act will continue to apply to businesses providing personal advice about a potential sale or other ancillary services.
For those reasons, this is a limited deregulation. It addresses the perceived uncertainty as to the scope of the Estate Agents Act and it brings benefits to consumers and to the industry, but, crucially, it does not unduly reduce consumer protection in relation to services that involve the service provider in the property transaction.
Mr Iain Wright
I thank the Minister for her helpful comments and I have also read her written ministerial statement to the House on this matter from 13 September. As she rightly says, Government new clause 15 updates and extends an exemption to the definition of estate agency work, as set out in the Estate Agents Act 1979. The legislation pre-dated the rise of the internet, and as the Minister rightly said, the world of buying and selling a house has been revolutionised by the internet. Buyers and sellers are now more likely to looking at the likes of Rightmove, Zoopla or PrimeLocation online than to be using a traditional high street estate agent, at least in the early stages of the process.
From the Minister’s comments I understand that some private sales internet portals may be exempt from the Estate Agents Act while others may be within its scope, depending on whether they provide advertising space or allow prospective buyers and sellers to match up via an online messaging board.
The Minister mentioned the Government’s report “Removing Red Tape for Challenger Businesses”. I was struck by a particular comment that is relevant to this part of the Bill. It states:
“Stripped-down business models, offering competitive prices to home buyers and sellers in exchange for limited, online services are caught by current legislation which applies a broad definition to ‘estate agency work’. Once legally categorised in this way, these innovative businesses are tied to regulation which can be disproportionate to the range of services they offer, and which may be inhibiting the growth of this alternative method of house buying and selling.”
The Opposition do not necessarily disagree with the Government’s approach to this, and we would certainly welcome innovation and improved competition to support, first and foremost, the consumer in what is, as the Minister rightly said, probably the biggest and most significant purchase or sale in his or her life, but we do have a number of questions that I hope the Minister will be able to address.
Discussions about amending the Estate Agents Act 1979 go as far back as February 2010, when the Office of Fair Trading reported on its study into home buying and selling. I fully appreciate that the study strongly stated that innovation could have an impact on the cost of buying and selling a home and that the current legislation might be hindering the emergence of new business models, but it also stated that overall satisfaction with estate agents had improved in recent years and that, where there were problems in the process, consumers on the whole did not tend to think that the estate agent was at fault. The OFT found the existing legislation to be both comprehensive and wide-ranging and that further regulation was unnecessary.
I appreciate—I say this before the Minister intervenes—that the amendment is deregulatory in nature, but the OFT report concluded that the focus should be on improving the enforcement of current rules to guard against serious breaches. That being the case, and notwithstanding my earlier, hopefully supportive, comments welcoming the introduction of a greater degree of innovation in the industry, will she go back to first principles and outline the specific benefits that the new clause will produce? What forecast has she made regarding how and in what numbers she anticipates new entrants will come into the market? What estimates has she made regarding cost savings to consumers? Has she been able to quantify the savings to business that such a deregulatory approach would produce?
For a Bill that purports to be all about enterprise, the theme of our deliberations during its passage through the House has been a spectacular lack of evidence to support its provisions, so it would be useful if she could provide some quantifiable and empirical evidence. What consideration has the Minister given to consumer protection in the light of the new clause? Is there a risk that people will not have access to the suitable, robust and—one would hope—impartial advice that could be provided by an estate agent? Has she thought about the potential risks to vulnerable people, particularly the elderly, some of whom might be susceptible to scare tactics and unscrupulous behaviour? What is in place to ensure that those people do not see a reduction in their consumer protection as a result of the new clause?
The Minister might also be aware of concerns raised by the National Association of Estate Agents about a potential breach of the UK’s anti-money laundering regulations as a result of the new clause. Estate agents are covered under the third money laundering directive, which I understand has been implemented in the UK through the Money Laundering Regulations 2007. The Minister referred to those regulations in her written ministerial statement last month, stating that the Terrorism Act 2000 and the Proceeds of Crime Act 2002 incorporate the definition from the Estate Agents Act 1979 in applying particular standards to regulated sectors, which include estate agents. Can she therefore confirm that the new clause will deal with the risk of money laundering? Can she—for my purposes, rather than anybody else’s—clarify that those estate agents who will be taken out of the scope of the 1979 Act because they provide a slimmed down business model will still be seen as a regulated sector for the purposes of money laundering regulations? I hope that she can answer these questions comprehensively, but the Opposition can certainly support one of the things she proposes with regard to injecting a greater degree of innovation into the market and embracing new business models. I look forward to hearing what she has to say.
Jo Swinson
I welcome the hon. Gentleman’s general support for the new clause. He is right to point out that the world has changed since the current legislation on estate agents came into force and that the internet has been absolutely revolutionary in that regard. He mentioned a number of popular and well-known property websites. I just caution him not to conclude that those household names would necessarily be caught by this limited deregulation. That is not the intention of the new clause at all. To put it into perspective, there are currently about 14,000 traditional estate agent offices in the UK—virtually all of them also have an internet presence—but there are fewer than 30 private sales portals in the UK, all of which are small and medium-sized enterprises, so that is quite an undeveloped part of our market. As for how many property sales go through estate agents, in 2000 the figure was 87%, with only 11% sold privately. That compares with other markets where it is rather less than that; for example, in the United States about 20% of sales are undertaken privately.
Mr Iain Wright
The Minister will recall that I mentioned concerns about money laundering. Will she say a few words about that?
Jo Swinson
The companies covered by this deregulation would not be involved in the transaction of money, because if they were they would remain caught by the Estate Agents Act. We therefore do not need to worry about this in relation to making it easier to undertake money laundering. Of course the Government maintain their provisions to try to make sure that they enforce the existing rules against money laundering in an appropriate fashion.
I hope that in the absence of any other questions from Members we will be able to proceed with a fair degree of consensus on this useful, though limited, deregulatory measure.
Question put and agreed to.
New clause 15 accordingly read a Second time, and added to the Bill.
New Clause 9
Listed buildings in England: agreements and orders granting listed building consent
‘(1) The Planning (Listed Buildings and Conservation Areas) Act 1990 is amended as follows.
(2) In Chapter 2 of Part 1, after section 26 insert—
“Buildings in England: heritage partnership agreements
26A Heritage partnership agreements
‘(1) A relevant local planning authority may make an agreement under this section (a “heritage partnership agreement”) with any owner of a listed building, or a part of such a building, situated in England.
(2) Any of the following may also be a party to a heritage partnership agreement in addition to an owner and the relevant local planning authority—
(a) any other relevant local planning authority;
(b) the Secretary of State;
(c) the Commission;
(d) any person who has an interest in the listed building;
(e) any occupier of the listed building;
(f) any person involved in the management of the listed building;
(g) any other person who appears to the relevant local planning authority appropriate as having special knowledge of, or interest in, the listed building, or in buildings of architectural or historic interest more generally.
(3) A heritage partnership agreement may contain provision—
(a) granting listed building consent under section 8(1) in respect of specified works for the alteration or extension of the listed building to which the agreement relates, and
(b) specifying any conditions to which the consent is subject.
(4) The conditions to which listed building consent may be subject under subsection (3)(b) in respect of specified works are those that could be attached to listed building consent in respect of the works if consent were to be granted under section 16.
(5) If a heritage partnership agreement contains provision under subsection (3), nothing in sections 10 to 26 and 28 applies in relation to listed building consent for the specified works, subject to any regulations under section 26B(2)(f).
(6) A heritage partnership agreement may also—
(a) specify or describe works that would or would not, in the view of the parties to the agreement, affect the character of the listed building as a building of special architectural or historic interest;
(b) make provision about the maintenance and preservation of the listed building;
(c) make provision about the carrying out of specified work, or the doing of any specified thing, in relation to the listed building;
(d) provide for public access to the listed building and the provision to the public of associated facilities, information or services;
(e) restrict access to, or use of, the listed building;
(f) prohibit the doing of any specified thing in relation to the listed building;
(g) provide for a relevant public authority to make payments of specified amounts and on specified terms—
(i) for, or towards, the costs of any works provided for under the agreement; or
(ii) in consideration of any restriction, prohibition or obligation accepted by any other party to the agreement.
(7) For the purposes of subsection (6)(g), each of the following, if a party to the agreement, is a relevant public authority—
(a) the Secretary of State;
(b) the Commission;
(c) a relevant local planning authority.
(8) In this section “specified” means specified or described in the heritage partnership agreement.
(9) In this section and section 26B—
“owner”, in relation to a listed building or a part of such a building, means a person who is for the time being —
(a) the estate owner in respect of the fee simple in the building or part; or
(b) entitled to a tenancy of the building or part granted or extended for a term of years certain of which not less than seven years remain unexpired;
“relevant local planning authority”, in relation to a listed building, means a local planning authority in whose area the building or any part of the building is situated.
26B Heritage partnership agreements: supplemental
‘(1) A heritage partnership agreement—
(a) must be in writing;
(b) must make provision for the parties to review its terms at intervals specified in the agreement;
(c) must make provision for its termination and variation;
(d) may relate to more than one listed building or part, provided that in each case a relevant local planning authority and an owner are parties to the agreement; and
(e) may contain incidental and consequential provisions.
(2) The Secretary of State may by regulations make provision—
(a) about any consultation that must take place before heritage partnership agreements are made or varied;
(b) about the publicity that must be given to heritage partnership agreements before or after they are made or varied;
(c) specifying terms that must be included in heritage partnership agreements;
(d) enabling the Secretary of State or any other person specified in the regulations to terminate by order a heritage partnership agreement or any provision of such an agreement;
(e) about the provision that may be included in an order made under regulations under paragraph (d), including provision enabling such orders to contain supplementary, incidental, transitory, transitional or saving provision;
(f) applying or reproducing, with or without modifications, any provision of sections 10 to 26 and 28 for the purposes of heritage partnership agreements;
(g) modifying any other provision of this Act as it applies in relation to heritage partnership agreements.
(3) Regulations made under subsection (2)(a) may, in particular, include provision as to—
(a) the circumstances in which consultation must take place;
(b) the types of listed building in respect of which consultation must take place;
(c) who must carry out the consultation;
(d) who must be consulted (including provision enabling the Commission to direct who is to be consulted in particular cases); and
(e) how the consultation must be carried out.
(4) Listed building consent granted by a heritage partnership agreement (except so far as the agreement or regulations under subsection (2) otherwise provide) enures for the benefit of the building and of all persons for the time being interested in it.
(5) Subject to subsection (4), a heritage partnership agreement cannot impose any obligation or liability, or confer any right, on a person who is not party to the agreement.
(6) Section 84 of the Law of Property Act 1925 (power to discharge or modify restrictive covenant) does not apply to a heritage partnership agreement.”
(3) After section 26B insert—
“Buildings in England: orders granting listed building consent
26C Listed building consent orders
‘(1) The Secretary of State may by order (a “listed building consent order”) grant listed building consent under section 8(1) in respect of works of any description for the alteration or extension of listed buildings of any description in England.
(2) The consent may be granted subject to conditions specified in the order.
(3) Without prejudice to the generality of subsection (2), the conditions that may be specified include any conditions subject to which listed building consent may be granted under section 16.
(4) A listed building consent order may (without prejudice to section 17(2)) give the local planning authority power to require details of works to be approved by them, and may grant consent subject to conditions with respect to—
(a) the making of an application to the authority for a determination as to whether such approval is required, and
(b) the outcome of such an application or the way it is dealt with.
(5) A listed building consent order may enable the Secretary of State or the local planning authority to direct that consent granted by the order does not apply—
(a) to a listed building specified in the direction;
(b) to listed buildings of a description specified in the direction;
(c) to listed buildings in an area specified in the direction.
(6) An order may in particular make provision about the making, coming into force, variation and revocation of such a direction, including provision conferring powers on the Secretary of State in relation to directions by a local planning authority.
(7) Nothing in sections 10 to 26 applies in relation to listed building consent granted by a listed building consent order; but that does not affect the application of sections 20, 21 and 22 in relation to an application for approval required by a condition to which consent is subject.
26D Local listed building consent orders
‘(1) A local planning authority for any area in England may by order (a “local listed building consent order”) grant listed building consent under section 8(1) in respect of works of any description for the alteration or extension of listed buildings.
(2) Regulations under this Act may provide that subsection (1) does not apply to listed buildings of any description or in any area.
(3) The consent granted by a local listed building consent order may relate—
(a) to all listed buildings in the area of the authority or any part of that area;
(b) to listed buildings of any description in that area or any part of that area.
(4) The consent may be granted subject to conditions specified in the order.
(5) Without prejudice to the generality of subsection (4), the conditions that may be specified include any subject to which listed building consent may be granted under section 16.
(6) A local listed building consent order may enable the local planning authority to direct that the consent granted by the order in respect of works of any description does not apply—
(a) to a listed building specified in the direction;
(b) to listed buildings of a description specified in the direction;
(c) to listed buildings in an area specified in the direction.
(7) An order may in particular make provision about the making, coming into force, variation and revocation of such a direction, including provision conferring powers on the Secretary of State.
(8) Nothing in sections 10 to 26 applies in relation to listed building consent granted by a local listed building consent order; but that does not affect the application of sections 20, 21 and 22 in relation to an application for approval required by a condition to which consent is subject.
(9) Schedule 2A makes provision in connection with local listed building consent orders.
26E Powers of Secretary of State in relation to local orders
‘(1) At any time before a local listed building consent order is adopted by a local planning authority the Secretary of State may direct that the order (or any part of it) is not to be adopted without the Secretary of State’s approval.
(2) If the Secretary of State gives a direction under subsection (1)—
(a) the authority must not take any step in connection with the adoption of the order until they have submitted the order or the part to the Secretary of State and the Secretary of State has decided whether to approve it;
(b) the order has no effect unless it (or the part) has been approved by the Secretary of State.
(3) In considering an order or part submitted under subsection (2)(a) the Secretary of State may take account of any matter the Secretary of State thinks relevant.
(4) It is immaterial whether any such matter was taken account of by the local planning authority.
(5) The Secretary of State—
(a) may approve or reject an order or part of an order submitted under subsection (2)(a);
(b) must give reasons for that decision.
(6) The Secretary of State—
(a) may at any time before a local listed building consent order is adopted by the local planning authority, direct them to modify it in accordance with the direction;
(b) must give reasons for any such direction.
(7) The local planning authority—
(a) must comply with a direction under subsection (6);
(b) must not adopt the order unless the Secretary of State gives notice of being satisfied that they have complied with the direction.
(8) The Secretary of State—
(a) may at any time by order revoke a local listed building consent order if of the opinion that it is expedient to do so;
(b) must give reasons for doing so.
(9) The Secretary of State—
(a) must not make an order under subsection (8) without consulting the local planning authority;
(b) if proposing to make such an order, must serve notice on the local planning authority.
(10) A notice under subsection (9)(b) must specify the period (which must not be less than 28 days from the date of its service) within which the authority may require an opportunity of appearing before and being heard by a person appointed by the Secretary of State for the purpose.
(11) The Secretary of State must give the authority such an opportunity if they require it within the period specified in the notice.
26F Considerations in making orders
‘(1) In considering whether to make a listed building consent order or local listed building consent order the Secretary of State or local planning authority must have special regard to the desirability of preserving—
(a) listed buildings of a description to which the order applies,
(b) their setting, or
(c) any features of special architectural or historic interest which they possess.
(2) Before making a listed building consent order the Secretary of State must consult the Commission.
26G Effect of revision or revocation of order on incomplete works
‘(1) A listed building consent order or local listed building consent order may include provision permitting the completion of works if—
(a) listed building consent is granted by the order in respect of the works, and
(b) the listed building consent is withdrawn after the works are started but before they are completed.
(2) Listed building consent granted by an order is withdrawn—
(a) if the order is revoked;
(b) if the order is varied or (in the case of a local listed building consent order) revised so that it ceases to grant listed building consent in respect of the works or materially changes any condition or limitation to which the grant of listed building consent is subject;
(c) if a direction applying to the listed building is issued under powers conferred under section 26C(5) or 26D(6).”
(4) After section 28 insert—
“28A Compensation where consent formerly granted by order is granted conditionally or refused
(1) Section 28 also has effect (subject to subsections (2) and (3)) where—
(a) listed building consent granted by a listed building consent order or a local listed building consent order is withdrawn (whether by the revocation or amendment of the order or by the issue of a direction), and
(b) on an application for listed building consent made within the prescribed period after the withdrawal, consent for works formerly authorised by the order is refused or is granted subject to conditions other than those imposed by the order.
(2) Section 28 does not have effect by virtue of subsection (1) if—
(a) the works authorised by the order were started before the withdrawal, and
(b) the order included provision in pursuance of section 26G permitting the works to be completed after the withdrawal.
(3) Section 28 does not have effect by virtue of subsection (1) if—
(a) notice of the withdrawal was published in the prescribed manner and within the prescribed period before the withdrawal, and
(b) the works authorised by the order were not started before the notice was published.
(4) Where section 28 has effect by virtue of subsection (1), references in section 28(2) and (3) to the revocation or modification of listed building consent are references to the withdrawal of the listed building consent by revocation or amendment of the order or by issue of the direction.”
(5) Schedule [Local listed building consent orders: procedure] (which inserts Schedule 2A to the Planning (Listed Buildings and Conservation Areas) Act 1990) has effect.’.—(Matthew Hancock.)
Brought up, and read the First time.
Mr Speaker
With this it will be convenient to discuss the following:
Government new clause 10—Listed buildings in England: certificates of lawfulness.
Government new schedule 1—‘Local listed Building consent orders: procedure.
Government amendments 38 to 40, 42, 43, and 48 to 50.
Matthew Hancock
I shall speak to new clause 9 and new schedule 1 in the first instance. Those provisions are intended to improve the effectiveness of the listed building consent regime and they follow the Penfold review of non-planning consents. They introduce a new system of national and local class consents, and received broad support during consultation. The new system is designed to reduce the number of listed building consent applications for works that have neither a harmful nor significant impact on a building’s special interest. It will be possible to grant consent automatically for certain categories of work or buildings—where the extent of the special interest is well understood—without the need to make an additional application. Thus, the new provisions will protect listed buildings. I, like many others in this House, have a special adoration for the heritage of our listed buildings in this country, not least the one in which we are standing. Our approach will also improve the operation of the regime. [Interruption.] I suppose that I should declare an interest, although it is not the one that the hon. Member for Hartlepool (Mr Wright) thinks; I work in a wonderful listed building and I want to ensure that it is protected.
The changes will also reduce burdens on applicants and free up local planning authority resources to focus on the listed building consent applications that really matter. The Secretary of State will be required to consult English Heritage before making a national order and will be able to apply conditions to consent granted by an order, as with listed building consent at the moment. Both the Secretary of State and any local planning authority will be able to direct that an order does not apply to a specified building, or to buildings of a specified type or in a specified area. The Secretary of State will have the power, at any time, to revoke a listed building consent order, having first served notice on the local planning authority and given it an opportunity to make representations.
The Secretary of State or the local planning authority must have special regard to the desirability of preserving the listed buildings to which the order applies, as well as their setting and any features of special architectural or historic merit that might be affected. We envisage that the processes leading to a class consent will involve the same level of public notice, engagement and consultation as applies to listed building consent currently. These provisions will reduce regulatory burdens without diminishing protection for important heritage sites and buildings. New clause 9 also restates, with minor technical changes in some of the consequential Government amendments, provisions on heritage partnership agreements which were already in the Bill.
New clause 10 introduces a new certificate of lawfulness of proposed works to listed buildings, which will provide certainty to owners and developers of listed buildings—this proposal also received support during consultation. Works to a listed building that do not affect its character as a building of special architectural or historic interest do not require listed building consent. However, interpretations of whether or not consent is needed can vary, and local planning authorities are often reluctant to give a view because it is ultimately a matter for the courts to determine. That means that those seeking to make changes to listed buildings are sometimes required to submit a formal application for listed building consent in order to gain certainty as to whether or not proposed works would affect the special interest. We hope that certificates of lawfulness of proposed works will provide a simple, straightforward mechanism for owners and developers of listed buildings to gain the certainty they require, while reducing the number of unnecessary consent applications. I therefore trust, not least given the widespread support we had in the consultation, that hon. Members will support these new provisions, and I commend them to the House.
Mr Iain Wright
As I mentioned during the Committee stage, we have no issue with some of the Government’s provisions for heritage planning. Indeed, when we were in government we prepared something similar, in the guise of the Heritage Protection Bill. I am on the record as saying that the merging of conservation area consent and planning permission is sensible and helps us to streamline the process so that it is efficient for the benefit of all concerned. I reiterate the point that I made in Committee that Opposition Members recognise the merits of heritage planning agreements. They have the potential to provide greater efficiency and time savings in the planning process while ensuring, as the Minister has rightly said, that our listed buildings are safeguarded for future generations.
The new clauses, however, raise a number of questions about the Government’s approach. The Department for Culture, Media and Sport document “Improving Listed Building Consent” had a consultation period of only four weeks—from 26 July to 23 August. The Heritage Alliance rightly raised significant concerns that that was insufficient and I agree with its written submission to the consultation:
“One month is an extremely short period of time in which to co-ordinate the responses of third sector and voluntary organisations, many of whom meet monthly or quarterly, and may not have an August meeting because of the holiday break. A consultation period over the summer break, which includes the Olympic Games, should be longer not shorter, because potential respondents are on holiday and/or their decision-making bodies do not meet in August.”
Will the Minister directly address that point? Why was the consultation period curtailed, especially when it involved a Department that had geared itself up for the Olympics, which were taking place at that time?
John Penrose
Perhaps I can provide some clarity, as I was the Minister involved at the time. The simple answer is that we were struggling as a team to get everything ready in time—it was a very compressed time scale—and, as the hon. Gentleman has pointed out, many of the issues had already been discussed extensively and consulted on throughout the heritage sector as a result of the previous Government’s Heritage Protection Bill. Many of the arguments had already been discussed extensively in public and informally, so we thought it was possible to do it in a short period, particularly because, if we did not do it that fast, we would not be here today getting this Bill on the statute book—subject, of course, to the will of the House.
Mr Wright
I am grateful for the hon. Gentleman’s insider knowledge of the deliberations. There could have been further legislative opportunities. The essential point is that the consultation period was short and in August, at a time when the world was focused on the Olympic games, so not everyone’s views were reflected, as would normally happen. It was contrary to the Cabinet Office’s suggestion of a 12-week consultation period. Notwithstanding the fact that we agree with much of what has been said, we could have had a more considered approach so that people felt they had had their say.
John Penrose
I should also mention that we had extensive discussions with representatives from many interested groups, such as the Heritage Alliance, and were able to reassure them in face-to-face meetings that their concerns had been understood and that their substantive worries or issues were being incorporated. At that point, I think that the Heritage Alliance was reassured, compared with its starting position in the original submission, which the hon. Gentleman has read out.
Mr Wright
Again, I am grateful to the Minister for his intervention. [Interruption.] I apologise—the hon. Gentleman is a former Minister, but it can only be a matter of time before he is made a Minister again. I am grateful for his useful perspective.
In new clause 9, proposed new section 26C(4) to the Planning (Listed Buildings and Conservation Areas) Act 1990 means that, when conditions are imposed, the listed building consent order may provide that the requirement to have prior approval for works ceases to apply if the local planning authority or the Secretary of State fails to notify the decision within a prescribed period. That seems to be a reasonable approach, with the onus on the relevant authority. However, such heritage provisions raise questions about resources and the capacity to deliver those objectives. Given the cuts and staff reductions in local authorities, the pressures on all services and the fact that local authorities are rightly having to prioritise differently, what work can the Minister do, perhaps with his counterparts at the DCMS and the DCLG to ensure that local planning authorities can prioritise this matter sufficiently?
John Penrose
I will rise briefly in the limited time available, and I welcome the fact that both Front-Bench speakers seem to be strongly in favour of this provision, albeit with a few questions to answer. I was the Minister at the time the measures were originally conceived and drafted—albeit taken from an earlier attempt by the previous Government—and I am delighted to see such wide cross-party support. I am sure all hon. Members will agree that, given the incredibly tight time scale that needed to be executed over the summer and the past few weeks in order to include these measures in the Bill, an enormous amount of incredibly hard work has been done by officials from the Department for Culture, Media and Sport, and those elsewhere on the Bill team, and we should mark that. In case there is a perceived conflict of interest, I should mention the fact that I live in a listed building. I do not think that makes a huge difference, but I will at least draw it to the attention of the House.
The proposed new clauses—together with their predecessors that were included in the Bill in Committee—form a rounded package. The overall picture now emerging is that the owner, or potential owner, of a listed building will have far greater certainty and clarity about what they can and cannot do with that building than they would otherwise have had. Uncertainty and fog are the enemies of speedy investment, and life will be far simpler and more straightforward for owners who wish to make changes in a way that is consonant and in sympathy with the heritage nature of their property. They will be able to get on and make those changes with far greater confidence that what they are doing is acceptable and allowable.
The Bill will also mean—this goes to the heart of one or two of the questions asked by the hon. Member for Hartlepool (Mr Wright)—that in many cases local authorities will save themselves a great deal of time and money. Members will know that heritage consent is not something for which local authorities can charge, and it therefore acts as a net cost on their operations. Anything that can reduce the amount of additional processing required—obviously without abandoning important heritage protection—must be helpful. Therefore, if in Somerset, Kent, Staffordshire, or wherever, local authorities are able to note a particular style of vernacular architecture that is locally listed, either at national level or with conservation areas, and list a series of changes that would be allowable, that must be to everybody’s advantage. It helps the owners and the local planning officials. I therefore welcome these measures and give them my strong support, and I am hopeful that all hon. Members will support them in due course.
Mr Speaker
Order. I remind the House that there is no protected time for a ministerial response. I would like the Minister to be able to respond to a number of points raised by hon. Members, but we are working to the Government’s timetable, approved by the House. Therefore, if the Minister is to reply, a certain self-discipline will hereafter be required.
John Mann (Bassetlaw) (Lab)
I am Mr Self-Discipline, but someone needs to break this ridiculous, cosy consensus over the tax grab that is being proposed, and I suggest that the House should get into the real world. I live in a listed building and deal with local authorities, and week by week, across the country, pre-planning advice from those local authorities is being charged for.
At the moment, if I want to splice one little piece of wood in one window in my house, I require planning permission costing £400. The Government’s new clause means that, if I want to splice one little bit of rotten wood, I will be charged £400 for pre-planning advice by my authority. That is happening with authorities all over the country. It is total nonsense.
Authorities are finding new ways of making money and new taxes. It might not be the Government’s intention, but that is what happening. Authorities are finding new ways that they never bothered about before to say, “You’d better seek some advice before doing things.” My neighbour has been told that a slight change in the colour of his paint requires planning consent. My house is 400 years old and I have a brick wall that is 30-years-old. I was told this week that if I want to add a brick to it, I will need planning consent. Where is the heritage in a 30-year-old 1970s brick wall in a 400-year-old house? There is none.
This is a tax grab by local authorities. Added to the affordable housing tax grab and the community infrastructure levy tax grab, it means that those who live in listed properties will not be able to afford to do anything with them. It is about time someone spoke up against the additional taxes that this evil coalition is bringing in.
Mr Speaker
Order. I fear I must now call the Minister—I am sorry to disappoint the hon. Gentleman.
Matthew Hancock
In the very short time available, I shall first deal with the previous two speeches. I agree with every word spoken by my hon. Friend the Member for Weston-super-Mare (John Penrose) and am grateful for his intervention, but I disagree with almost everything that the hon. Member for Bassetlaw (John Mann) said, not least because the Government’s measures will make his situation easier, and because changes other than where there is a special interest will no longer require consent in the same way. That will make his life easier.
Paul Maynard
The Twentieth Century Society has asked me to point out one of its concerns. There is no obligation to any planning authority to consult it, as an amenities society, rather than English Heritage. As the Minister may know, they have very different views on modern buildings. Will he reflect on that?
Matthew Hancock
I shall respond to that and to the questions from the hon. Member for Hartlepool (Mr Wright) in the same way, if I may.
Enforcement, local consultation—this deals with my hon. Friend’s concern—and the system for calling in are unchanged by the new clauses. There will be no addition of formality. That is unlikely—[Interruption.] That is not the intention. The new system will be less cumbersome than the current one.
On the question of what “conclusively presumed” until there is a “material change” means, “material change” means exactly what it says.
I echo what was said by my hon. Friend the Member for Weston-super-Mare and add that there were 400 responses to the consultation, not least because of the amount of face-to-face discussions with Ministers at the time and the amount preparatory work.
On capacity, we will work with local planning authorities, but overall, the measures will reduce the burden on them. Currently, local planning authorities do not put a named individual in charge. In most cases, there is an IT system to ensure that proposals go through to somebody in good time.
Let me give the House an example of how the measures will help. British Waterways carried out 353 works to designated heritage assets in 2010-11. Some 164 required full applications, and 189 were performed after clearance to proceed without consent through correspondence with the local planning authority. We certainly do not want to water down the communication with local planning authorities that makes things easier.
I shall give some examples of the sorts of things that the provision will help. Technically, grouting within a listed property requires consent. I am sure that we can all agree that grouting is good and is the sort of thing that could be covered by a national agreement. Lock replacements—
“Schedule 2A | Section 26D |
Business without Debate
European Union Documents
Delegated Legislation (Committees)
Film ‘Innocence of Muslims’
Andrew Stephenson (Pendle) (Con)
I would like to present a petition organised by several of my local mosques and bearing the signatures of about 8,000 people residing in Pendle. I was presented with the petition at a public meeting on 3 October at Silverman hall in Nelson and promised to make the House aware of the petitioners’ feelings.
The petition states:
The Petition of residents of Nelson, Lancashire and elsewhere,
Declares that the Petitioners believe that the showing in the UK of the film Innocence of Muslims, which the Petitioners believe has blasphemous contents, has deeply offended Muslims not only in the United Kingdom but also throughout the world; further that freedom of speech and the showing or publishing of material in certain instances has been restricted by the UK and that the Government in recent legislation e.g. The Anti-Terror laws, restricted such where it was thought best for the public interest and that this evidences that freedom of speech can be restricted in certain cases; further that the Petitioners believe that the effects of this film have caused racial and religious relations in an already troubled world to deteriorate and has caused people to suffer upset and injured feeling and is an infringement of their religious rights and beliefs; further that, the Petitioners believe films such as this one merely serve to damage efforts to rebuild community relations at time when all communities should be working hard to do so; further that the Petitioners believe such films are therefore not in the interests of public or society as a whole and that the Petitioners believe it is the social responsibility of any government in modern times to prevent such material from being shown or published as it goes against all efforts of promoting world peace.
The Petitioners therefore request that the House of Commons urges the Government to legislate to ban the showing of the film Innocence of Muslims in the UK and urges the Government to conduct a comprehensive enquiry to consider and re-introduce a new law against blasphemy, with a view to passing legislation aimed at protecting all religions and races from being subjected to mocking and ridicule.
And the Petitioners remain, etc.
[P001123]
Armed Forces Pensions
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John Glen (Salisbury) (Con)
The purpose of calling this evening’s debate is to bring to the Minister’s attention a group of former spouses who, due to miscalculations in their pension provision by the Ministry of Defence, now face very uncertain futures. It seems that there is a group of 126 women who have been affected by the mistake. I believe it right and proper for the MOD now to take the steps necessary to ensure that this does not happen again and to compensate the individuals affected, particularly where their financial situation and life circumstances have been substantively impaired.
Three constituents came to see me in March this year. In accordance with their wishes, I shall not be disclosing their names to the House. However, their experiences are fairly representative of the group of women affected. One individual, having made the difficult decision to divorce, asked for the details of her former husband’s pension pot from the SPVA—the Service Personnel and Veterans Agency, which administers military pensions—in March 2010. Her husband’s pension was in fact already in payment. The SPVA gave details and confirmed, both on the telephone and in writing, that my constituent would be able to take her pension from the age of 55 with no actuarial reduction being applied. Therefore, in April 2010 the judge was able to finalise her divorce, relying on the information provided by the SPVA, which had been confirmed in writing.
The pension for my constituent came into payment and she undertook a number of financial obligations, feeling certain of a definite and defined monthly income payment for the rest of her life. She bought a property and undertook renovations on it, as she sought to start her new life. It has since been discovered that in November 2010 the MOD was contacted by the Department for Work and Pensions and made aware that an error had been made in the way it had interpreted DWP legislation. It meant that actuarial reductions should have been applied to those former spouses who took a pension at the age of 55. However, none of the affected spouses was informed of the error, and their pensions continued to be paid from November 2010, when the MOD was first notified that an error had occurred, to spring 2012, when the MOD communicated the error to those affected and my constituent first approached me.
On 1 March 2012, 16 months after the mistake first came to light, my constituent was notified by phone that she would receive a reduction in her pension of over 40%, which was to take effect in three months’ time. A letter confirming that arrived a few days later, on 5 March. The stress and worry must have been unimaginable. Illness followed and she lost half a stone very quickly. She sold her car, as she was so worried about the reduction in her income and felt that she had to downsize her lifestyle rapidly. Obviously she also felt under an enormous degree of strain.
Then, two months later, on 13 May 2012, my constituent received a further communication from the SPVA informing her of another mistake, which meant that she would receive more than the reduced amount but still a 16% reduction on the amount on which her divorce settlement had been based, from which she had been receiving payments for the previous 18 months.
I am sorry to say that that individual is not an isolated example. A constituent of my hon. Friend the Member for South Norfolk (Mr Bacon), who is in his place this evening, had a similar experience. She took actuarial advice based on advice from the MOD before finalising the divorce, and acting on that advice, the judge awarded a clean break settlement comprising 40% of her former husband’s pension pot. On the basis of that guaranteed income, she secured a mortgage. She now finds herself with a 20% reduction in her income due to the miscalculation and is looking at losing her house. She has been in hospital for emergency operations and has been treated for stress, and she is now on sleeping tablets.
Mr Richard Bacon (South Norfolk) (Con)
I am grateful to my hon. Friend for raising this subject and for mentioning my constituent. Does he agree that although one can understand that the principles of good administration require that public authorities such as the Ministry of Defence and the SPVA do not make irregular payments, they also require public authorities to be held to their promises, especially when they have created a legitimate expectation upon which people have acted, as in this case? Does he therefore agree that the right route in these circumstances is generous compensation?
John Glen
Absolutely. I fully endorse what my hon. Friend says, and I will come on to some specific points to which I hope the Minister will respond.
In what is an exceedingly traumatic time for anyone—going through a divorce and facing up to a new life—it is absolutely imperative that any agency of a Government Department gets the facts right first time, particularly when dealing with issues that have painful and far-reaching implications. My constituent has told me that since the mistakes have been known, the SPVA, to its credit, has done its best to provide as much information as it can, for which she is sincerely grateful. Information is one thing, but we now need action, leading to justice.
The bottom line is that former husbands and wives, the courts, actuaries and mortgage companies all relied on the information provided to them by the MOD. They had no reason to believe it to be in any way incorrect, particularly in my constituent’s case, in which the SPVA was asked directly whether there would be an actuarial reduction if she took her pension at 55. The SPVA wrote back in black and white on 6 April 2010 to say that that would not be the case.
The mistakes have had serious repercussions for a number of divorce settlements, which were decided on the basis of erroneous information. That means that the lifestyles that the judges thought it fair for both parties to have after the divorce are now not sustainable. In most cases of a so-called clean break divorce, the court will not hear the divorce case again, so the former wife—it usually is the wife—has no legal recourse. It may be possible to go back to court under ancillary relief proceedings to re-examine the finances, but the former husband may have to agree to that. Even if a court agreed to a rehearing, which is expensive in itself, many husbands would not, quite rationally and understandably on one level.
I have figures provided by an actuary from Actuaries for Lawyers, specialising in armed forces pensions, who has estimated what my constituent’s loss will be over her expected life span. I would be happy to let the Minister see those figures, and the actuary himself would be happy to meet him and representatives of the relevant agency in the Department to explain how he arrived at them.
This evening, I would like to ask the Minister a number of questions. When exactly was the mistake made? Who notified the SPVA of the mistake? Who is accountable for it? I do not wish to have a witch hunt, but as yet I have not received a satisfactory account of why the mistake was made, and I am not yet confident that it will not happen again. I also want to know what actions the Minister and SPVA officials have taken, or will take, to ensure that there is no recurrence of the same mistake.
My most pressing question is why it took so long for the MOD to contact those affected by the error. There was a 16-month window from when the mistake was discovered to the point at which those affected were contacted. That wait was unacceptable. The strategic defence and security review has been completed and, from my recent Defence Committee experience, I know that many complex changes have taken place within the MOD, but the SPVA still had a duty of care to get things right. That is its job. The argument that it “had a lot on” cannot be used.
As I have tried to stress, this error has had a huge effect on the victims. Some have become ill, and chronic illness has ensued. Some have found it hard to cope with the paperwork involved as they try and get to the bottom of what has happened. Some are facing the risk of repossession. Many have committed themselves to expenses that they cannot now maintain, or would not have entered into had they known what was going to happen. Many face adjustments to their living arrangements that they would not have had to contemplate, had their settlements been agreed on the correct basis.
I cannot do justice tonight to the misery and upset of so many families, but I hope that the Minister will reflect fully on the circumstances of my constituent and others. I want him to give a categorical assurance that compensation will be awarded, not only to those who are able to challenge this decision, through me or other MPs, but to the whole group of women involved. My constituent was awarded the well-meant but token amount of £250 to cover the “inconvenience and uncertainty”, in a letter dated 13 September 2012. However, not everyone has been given that. Why not? Did she receive it just because she was able to pursue the MOD? Some others have not been strong enough to do so, perhaps because they have been ill or simply not as persistent. There is a principle at stake here. The MOD made a mistake and the miscalculations directly affected the choices made by this group of women and their former partners.
I am aware, from previous correspondence I have had with the MOD on this issue, that a hardship fund is available to those in need. That is welcome, but it does not address the real issue, which is one of justice. The MOD ought to honour the assumptions made by the court, which decided on what it thought to be a fair and just distribution of assets based on figures given to it by the SPVA. That decision has now been compromised through errors made not by the individuals concerned but by the MOD.
If we assume an average shortfall of £50,000 per person over their lifetime, we find that the MOD would need to find approximately £6 million in compensation. Given the lifetime of service that those spouses have given through supporting their husbands and, in some cases, forfeiting their own chances of a career through the frequent relocations necessary for many service households, I hope that the Minister will order full and complete compensation from the hardship funds. That should include all reasonable legal costs, and it would be helpful if the recoverable costs could be defined.
The Minister should also take whatever steps are necessary to establish where the error was made and to ensure those responsible are retrained to make certain that this does not happen again. This Government have taken great steps with the military covenant during their time in office, but this matter tests both the letter and the spirit of the covenant. I have the highest personal respect for the Minister. He has been in post for only just over 40 days, but he has already cultivated widespread respect among many veterans’ organisations. I now look forward to hearing his sympathetic and effective response.
The Minister of State, Ministry of Defence (Mr Mark Francois)
I congratulate my hon. Friend the Member for Salisbury (John Glen) on securing this important debate. I acknowledge his genuine concern for the individual cases he has mentioned—several members of his own constituency and one other represented by my hon. Friend the Member for South Norfolk (Mr Bacon). I am aware of the particular circumstances of the individual case on which my hon. Friend the Member for Salisbury has focused, and I would like to explain the error in pensions policy interpretation that has led to this situation and what has been done to support individuals who might have encountered financial and other difficulties as a result.
For the benefit of the House, I will set out a little of the background, but may I start by saying that when a service person divorces or dissolves a civil partnership, we acknowledge that it can be a difficult and stressful time for both parties? I fully recognise, especially in the current climate, that to have received the news that the amount of pension that was already in payment would reduce, or in the case of deferred pensions would be less than expected, would have been a great cause for concern. If any additional upset or distress has been caused as a result of errors made by the Department, I offer my own very sincere apology to those affected.
By way of introduction to this subject, pension credit members are former spouses or civil partners of members of our armed forces pension schemes who have been awarded a pension sharing order on divorce or on the dissolution of a civil partnership. They are a special category member of the pension scheme to which their former spouse or partner belongs. So while they are members in their own right, the terms of their membership do not directly mirror the pension entitlement of their former spouse or partner.
As I think my hon. Friend the Member for Salisbury well understands, the legislation in this area is complex. Occupational pensions would normally become payable from age 65. New legislation was introduced in 2009 that allowed pensions to be brought into payment from the age of 55. The Ministry of Defence’s pensions policy staff wrongly interpreted this legislation as allowing payment from the age of 55 without any reduction for early payment. However, my Department’s reading of the law was mistaken.
The legislation was intended to make early payment an option, but if the pension was to be paid early, a corresponding reduction was also required. The error was first identified in the latter part of 2010 during an exercise to review the regulations for the armed forces pension scheme. As soon as it was identified, work began to amend the regulations of all of the pension schemes affected. My Department’s pensions policy staff instructed the Service Personnel and Veterans Agency to apply the correct policy to new cases from March 2011.
Jim Shannon (Strangford) (DUP)
I am grateful to the hon. Member for Salisbury (John Glen) for bringing this matter to our attention. He said in his introduction that life circumstances have been substantially affected, so I ask the Minister whether, in the review, he would be prepared to look at those who have been awarded compensation, as it has affected their benefits? Will he consider them as well as the wives and family members as part of the review that the Minister hopes to undertake?
Mr Francois
I hope that, by the time I get to the end of my speech, the hon. Gentleman will agree that we are doing our best to look at this issue and try to put it right. He will be able to make that judgment afterwards, but I hope that what I say will address the spirit of what he has asked.
The effect of misinterpreting the legislation was that 127 pensions already in payment to pension credit members required an adjustment to be made—in the majority of cases, this would result in a reduction. In March 2012, the Department notified all those members affected and advised that the changes would come into effect from June this year. The average annual reduction to pensions in payment was approximately £783, although in some cases this will have been significantly higher.
During business questions in April 2012, my hon. Friend the Member for Salisbury asked the Leader of the House to seek an apology from the Ministry of Defence and to take corrective action that would, in effect, restore the pensions to the original amount. The Leader of the House asked for urgent inquiries to be made to establish whether any injustice had occurred. My predecessor, the Minister for the Armed Forces, my right hon. Friend the Member for South Leicestershire (Mr Robathan) wrote to my hon. Friend on 10 May, confirming that while an error had occurred in allowing the pensions to be paid on the wrong basis, legally there was no provision to continue paying the pensions knowingly at the incorrect rate.
My predecessor also confirmed that when the pensions were being adjusted to the correct rate, a calculation error was made by the Department. That further mistake was identified quickly, and revised calculations were issued to those affected as soon as was practicable. When the correct methodology was applied, the reductions in pension amounts in all those cases proved to be less than had previously been indicated. In a few cases pensions actually increased, as did the lump sums received by some pension credit members as part of divorce settlements.
As I am sure the House will agree, when there is no legal entitlement for a pension to continue to be paid at an incorrect rate, the payment must be put right without undue delay. Regrettably, in this instance the matter was not addressed as quickly as it ought to have been, and the payments were allowed to continue. Again, I apologise for that.
In the spring of 2012, when the extent of both errors had been recognised, the Ministry of Defence did its best to put things right. As a first step, approval having been sought from Her Majesty’s Treasury, overpayments to 127 pension credit members totalling more than £176,000 were waived, and no recovery action was pursued. In addition, in recognition of the need for those affected to adjust to a reduced income in future, a period of three months’ grace was given to those whose pensions were already being paid.
For the sake of completeness, the House should know that the same errors also affected 417 deferred pension credit members. Deferred members are those whose pensions have not yet been paid. Those members were also written to in March 2012, and were told that the amount of pension they were expecting to receive at the age of 55 was incorrect. They could still choose to take their pensions early at 55 or they could wait until they were 65, but the amount would need to be recalculated. Once deferred members' pensions had also been calculated on the correct basis, the vast majority of deferred members saw their annual pensions actually increase above the original estimated value.
All those affected were offered an opportunity to discuss their situation with the Service Personnel and Veterans Agency’s welfare service. In March 2012, when the original pension recalculations were completed and the reductions in pension were known, the agency identified those with the most significant reductions and those who might be particularly vulnerable, and arranged for a welfare manager to visit them personally. The visits were completed, whenever possible, throughout March, and ensured that that group of individuals could be in direct contact with a welfare manager should they require further or ongoing support. In each case involving welfare contact, a full case assessment was carried out. It examined individual circumstances, and included potential entitlement to other benefits. Further support and advice have been given to a number of pension credit members, and, when appropriate, they have been helped to apply for further DWP benefits such as disability living allowance and carer’s allowance.
The potential financial difficulties that the adjustment might have caused some individuals was also recognised. Claims for hardship that could be substantiated could be discussed in confidence with the welfare service and submitted for consideration. Five claims for financial hardship, six claims for a consolatory payment and two claims for other financial losses have been received and considered, and compensation has been paid when appropriate. That route remains open to pension credit members, including my hon. Friend’s constituents, who may be facing genuine financial hardship as a result of the changes in their annual pensions. I appreciate that making any such claim is a difficult step to take, but I assure my hon. Friend that it would be handled in a sensitive manner and in conjunction with members of our welfare service. They are there to offer support, and I urge all affected individuals to make contact to see what can be done.
I was pleased that my hon. Friend recognised the efforts that my Department has made in supplying information to his constituent. I assure the House that it has learnt some valuable lessons from its mistakes in this case. Improved processes have been introduced to enhance the training of, and more effective working between, pensions policy and operational delivery staffs. That has included a strong focus on ensuring that the potential implications of future legislative changes are correctly interpreted and fully understood.
I have listened to all that my hon. Friend has said today. While it is perfectly true that an error was made in the interpretation of legislation in this complex area, and that that was further exacerbated by errors in our calculations—for which I have already apologised—I urge the House to recognise that my Department has acted to minimise the effects that the error has caused. We have not sought to recover the overpayments, we have given three months’ grace enabling members to adjust to the reduced amount of pension, we have offered welfare support when it has been required or considered appropriate, and we have made arrangements for claims to be considered when financial hardship has been demonstrated. My hon. Friend has made considerable efforts to support this group of individuals through all possible parliamentary channels. That is evidence of his commitment to champion their cause to seek to ensure that no injustice has taken place.
My hon. Friend has suggested that some form of compensation is due to those affected by these errors. I agree. Although there is no statutory entitlement to maintain these pensions at the full amount, I can assure the House that the MOD has in place a comprehensive process to compensate these individuals where financial hardship has resulted because of the changes to their pension. The process will consider individual cases and assess the impact the errors have had. If individuals are not satisfied with the outcome, it is of course open to them to pursue the matter of any compensation through the legal system.
In conclusion, I urge those individuals who have been affected to engage or re-engage with our welfare system so that we can consider each individual case in the round and do our best to put things right. We must make amends and we will seek to do so.
Question put and agreed to.
Ministerial Correction
Council Housing
Jeremy Corbyn
Will the Minister join me in congratulating my own local authority and other Labour-controlled authorities that have managed to build council housing at the present time? Will he also recognise that until now, council tenancies have been the most secure form of tenancy in the country and have provided a stable home for many families, and that that is the best way out of the housing crisis? Will he stop using the word “affordable” and start talking about council housing at fair rents?
Mr Foster
What I will do is tell the hon. Gentleman that during the last three years of the Labour Government, the number of social houses fell by 421,000. I hope that he is delighted that the number of completions of social houses in his constituency has gone up significantly in the last 12 months, and that he will welcome the additional funds we are making available—funding that his local authority failed to join in with when the Homes and Communities Agency offered it.
[Official Report, 17 September 2012, Vol. 550, c. 633-34.]
Letter of correction from Don Foster:
An error has been identified in the answer given on 17 September 2012 to the hon. Member for Islington North (Jeremy Corbyn).
The correct answer should have been:
Mr Foster
What I will do is tell the hon. Gentleman that during the last 13 years of the Labour Government, the number of social houses fell by 421,000. I hope that he is delighted that the number of completions of social houses in his constituency has gone up significantly in the last 12 months, and that he will welcome the additional funds we are making available—funding that his local authority failed to join in with when the Homes and Communities Agency offered it.
Speed limits on passenger trains
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Agricultural Wages Board
(12 years ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Martin Caton (in the Chair)
My apologies for being late. I call Mr Jamie Reed to speak.
Mr Jamie Reed (Copeland) (Lab)
Thank you, Mr Caton, for calling me to speak. It is a pleasure to serve under your chairmanship, I think for the first time. I am very grateful to have been granted a debate on this important issue, the abolition of the Agricultural Wages Board.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
On a point of order, Mr Caton. I am sorry to interrupt the hon. Gentleman so early in his speech. Just for the convenience of the House, I think that it is important to note that I have released a written ministerial statement on this subject today, opening a consultation. That being the case, and given that the statement cannot be released until 9.30 am and hon. Members will obviously be in Westminster Hall today and unable to get to the Library to see a copy, I have arranged for them to have a copy of the written ministerial statement. I can provide further copies if other Members have need of one.
Huw Irranca-Davies (Ogmore) (Lab)
Further to that point of order, Mr Caton. I also apologise for interrupting my hon. Friend the Member for Copeland (Mr Reed) so early in his speech. I welcome the fact that the Minister has made that statement at the beginning of proceedings today; I am literally reading the written ministerial statement as we begin, having just been handed it by him. It is welcome; we have been waiting for it for some time. However, welcome as it is, I want to ask the Minister a question. The announcement on the consultation is the fundamental part of today’s written ministerial statement, but when was that announcement originally due to be made?
Mr Heath
We were planning to make that announcement today; it is coincidental that this debate was called for today. However, that being the case, I thought that it was very important that all Members had full possession of the facts, rather than debating in the dark, as it were.
Huw Irranca-Davies
Further to that point of order, Mr Caton. I will not delay proceedings any more than I need to. I apologise again for interrupting my hon. Friend the Member for Copeland. My understanding is that the announcement on this consultation was first talked about last spring, running into the summer, under the Minister’s predecessor, the right hon. Member for South East Cambridgeshire (Sir James Paice). So, welcome as the announcement is on whatever date we are today—
Martin Caton (in the Chair)
Order. I am afraid that that point is not about the statement, and therefore it is not a point of order. I call Jamie Reed.
Mr Reed
Such excitement so early on. I think that it can only be the new working hours unsettling us all. However, there will be ample time to discuss all the issues that Members wish to raise.
The Agricultural Wages Board, in one form or another, has provided good wages, good working conditions and good lives to farm workers since 1924. Before I continue, I must thank the Minister for providing early sight of the written ministerial statement today, before we began proceedings. I appreciate that courtesy.
I want to touch on three issues in my speech today. First, the AWB allows farmers to focus on farming. They do not have to be employment specialists and they have no need to negotiate with their work force over pay and conditions. Secondly, the AWB is the most effective way of ensuring that regional part-time, young and even full-time employees in the farming industry are not exploited. Without the protection of the board, they will be vulnerable to lower pay and worse conditions. Thirdly and finally, the AWB is so much more than a body for setting wages and conditions. On one level, it ensures that a shepherd has the funds to look after their most valuable asset, which of course is sheepdogs; that tenant farmers have secure homes to live in; that farm workers have good overtime and night work rates, fair stand-by allowances and sick pay; and that agricultural workers of all types are provided with suitable bereavement leave and holiday entitlements.
The Government’s planned abolition of the AWB puts all of that at risk. I welcome the appointment of the hon. Member for Somerton and Frome (Mr Heath) to his new post of farming Minister. I hope that he can bring an appreciation of the farming industry and its workers to this Government. In my view, that appreciation has been significantly lacking for too long.
This is not the first time that the Tories have attempted to abolish the AWB. Baroness Thatcher attempted to abolish it, but she changed her mind when she realised that it was a vital organisation for farmers and farm workers. Sadly and in some ways inexplicably, when I look at the Minister, this Government are proposing to abolish an organisation that even Margaret did not want to abolish.
Huw Irranca-Davies
I remind my hon. Friend that the very arguments that I suspect many people in Westminster Hall today will be deploying in defence of the AWB are the same arguments that persuaded Margaret Thatcher not to abolish it, and that were made by her own Back Benchers at the time.
Mr Reed
I thank my hon. Friend for that intervention. It is absolutely the case that there was overwhelming opposition to the proposal of the then Thatcher Government to abolish the AWB. Thankfully, the arguments against abolishing the AWB were listened to then, and common sense prevailed. Sadly, like much of what this Government are trying to achieve, whether that is the dismantling of the NHS or the destruction of local government, the abolition of the AWB is unfinished Thatcherite business, as my hon. Friend has just implied.
In a report for the Low Pay Commission in December 2011, Incomes Data Services argued that
“the agricultural sector is distinct from other sectors in that it is comprised of small employment units but with the additional feature of seasonal or casual workers”.
The AWB may indeed be an anomaly in our economy, but the agricultural sector is so different from other sectors of our economy that it is a necessary anomaly. Small farmers, who make up the majority of the industry, do not have the time, the expertise or, frankly, the funds to negotiate with their workers time and time again in what is an increasingly pressurised working environment.
The standards of pay and conditions set by the AWB enable farmers to focus on running their businesses and producing the products that we all need—increasingly so, as this year’s poor harvest demonstrates in many ways. In abolishing the AWB, the Government are not freeing farms from unnecessary bureaucracy. Instead, they are making the lives of small farmers more difficult and creating an even more bureaucratic working environment than the one that currently exists. That is the last thing that small farmers could possibly need. Instead of having to deal only with the AWB, in the future farmers will need to work with myriad different organisations, each one governing a different area of employment regulation and each, in turn, exposing every small farm business to new and different liabilities and complexities.
In their report calling for the retention of the AWB, the Welsh Government correctly noted that if the board is abolished
“pay bargaining would become instantly fragmented”.
It is important to note that, although the leadership of the National Farmers Union backs the abolition of the Agricultural Wages Board, it might not, on this occasion, be speaking for every small farmer in England, or Britain—it is certainly not speaking for those in Wales. I greatly respect the NFU and its leadership, and have very good relationships with NFU leaders in my constituency who, for the most part, skilfully, adeptly and effectively represent their members’ interests, but I think that they have got it wrong on this one.
The farming union of Wales, the young farmers of Wales and many small farmers across the UK want to retain the Agricultural Wages Board. The Government claim to be on the side of farmers, but on this issue they are making farmers’ lives much more difficult, making their businesses much harder to run, and doing the exact opposite of what the Government should be doing—at all times but particularly in these straitened times—which is supporting our nation’s farmers and making it easier for their businesses to survive and grow.
The situation profoundly affects my constituency and my home county. Across the north of England there are 28,180 agricultural workers, with 12,260 in the north-west, 3,300 in Cumbria—my home county—and almost 600 in my constituency. Copeland is the constituency that is most dependent on public spending in England. It is also the English constituency that is hardest to reach from Westminster—yes, there is a link—and more than 50% of the local economy is based on public spending.
Throughout my time in this House, I have sought to rebalance my local economy through the growth of our local private sector, but it is difficult to do that, and is becoming more so. At a time when the majority of public spending cuts are yet to bite—perhaps the Minister could tell us if he supports the additional £10 billion cuts that the Chancellor has announced—and when the budgets and services of local authorities in my area are being decimated, the removal of a body that helps small businesses to do business and maintains minimum workplace standards and minimal rates of pay surely cannot be right. This is a detached policy, from an increasingly detached Government.
Andrew George (St Ives) (LD)
The hon. Gentleman makes a good point. On what is likely to be lost, there is also the unique problem that agricultural workers are exceptionally isolated in terms of their negotiating and bargaining power. On the abolition, and the consultation that has been announced today, does the hon. Gentleman not share my disappointment? We should not be obsessed with organisational structure—I am not going to die in a ditch defending the existence of the Agricultural Wages Board—but the board provides protections, and without it the only safety net that agricultural workers will be left with is the national minimum wage. A whole strand of negotiations is available through the existing regulations.
Mr Reed
I completely share the hon. Gentleman’s analysis. I must point out that I did my best for his economy over the summer when I holidayed in his area, but I am afraid that I did not write to him to let him know of my visit and I hope that that is forgivable. His points are absolutely correct.
In the written ministerial statement published this morning, it is claimed that the abolition of the AWB will help to achieve
“the Government’s objective of harmonising and simplifying employment law, and removing regulatory burdens from businesses”.
It goes on to say that it will
“contribute significantly to the Government’s programme of public body reform and support the Government’s growth agenda”,
but I think that the effect will be almost the opposite of what is intended. It is incredible and inexplicable that the analysis that is so simple and obvious for people who live in rural communities has not been brought to bear on what the Government aim to achieve.
Some 38% of all agricultural workers in England are seasonal or part-time employees—in Wales the figure is 56%—and statutory protections are woefully lacking. It is due only to the Agricultural Wages Board that seasonal and part-time farm workers enjoy the same rights as full-time workers. Without the board, young employees will have no set rates of pay, which will open them up to lower pay. Without the board, seasonal workers will not have secure contracts, which will open them up to exploitation. How often do we see stories of exploitation? Even now that we have the Gangmasters Licensing Authority, we still see egregious examples of exploitation in the agricultural industry and others around the country. How much easier are we about to make it for future incidents to occur?
Without the Agricultural Wages Board, part-time workers will not be guaranteed rest breaks, which will open them up to worsening conditions. In abolishing the board, the Government are giving bad employers the opportunity to cut pay and worsen conditions in a race to the bottom, and in whose interests is that? In the Low Pay Commission’s 2012 report, it was noted that the abolition of the Agricultural Wages Board could lead to an increase in rural poverty. Rural areas such as the eastern coast—my own constituency and across Cumbria—parts of Wales and rural areas of the south coast are already among the most deprived in the country. With the abolition of the Agricultural Wages Board, the Government—this Tory-led Government—are doing what most people already feared they would do: making life harder for the poorest.
I know that the Government and the National Farmers Union will say that farmers are not planning to reduce wages and conditions, and I have always rejected—and always will—the lazy, ignorant stereotyping of many in this House when it comes to understanding farmers and farming, but if this year’s dairy crisis has proved anything it is that farmers will continue to face downward pressures on farm-gate prices. Pay and conditions can be a soft target, even for the best farmers, when faced with rising cost pressures, such as the ones we saw this summer. The proposed abolition is bad for farmers—it will make their lives more difficult—and it is bad for employees, as it will make their jobs, pay and working conditions much less secure.
In addition, the AWB ensures housing for 30% of farm workers, provides bereavement payments and leave, ensures that new parents get child payments, gives suitable rest breaks for hard-working farm employees and provides a host of other employment benefits that as a result of abolition will be lost or greatly reduced. In his conference speech only last week, the Prime Minister said that his Government would always support those who worked hard. There are few people who work harder than farm employees; they work long hours, and many of them do literally back-breaking labour day in, day out, all of it to make products we all need and enjoy each and every day of our lives. Yet it appears that the Government insist on making their lives more difficult, reducing their protections and changing the agricultural industry from one often characterised by good working relationships to one in which wage negotiations are fragmented, and jobs, pay and conditions are no longer secure. After abolition, farmers who have for generations lived in secure homes will face possible eviction, and hard-working people will lose payments that make their lives just a little easier, as the economy gets worse and worse.
The Government’s decision to abolish the Agricultural Wages Board has not been followed by the Scottish or Northern Irish Governments, and the Welsh Government want to retain the board in Wales. Once again, it appears that this Government are pursuing a path of action with which very few people agree, and even fewer want to see. Even the NFU cannot claim to be speaking for every small farmer. Indeed, evidence suggests that only the biggest of farmers agree with the action; smaller farmers and farm workers do not want to see the AWB abolished. The board must be retained; it is not in the interests of farm employees, of farmers, of the agricultural industry, or of rural communities and economies to abolish it.
Andrew George
On my point about an obsession with organisational structure, I generally agree with the broad thrust of the Government’s approach, which is to abolish or amalgamate as many quangos as possible. We should always be bearing down on the proliferation of Government agencies and quangos. The important regulations and the six grades that are available, and the other protections for agricultural workers, could be transferred from the AWB to an existing body such as the Low Pay Commission. Does the hon. Gentleman agree that we should perhaps not be obsessed with the board itself but look at ways in which the regulations could be overseen or protected by an existing Government agency?
Mr Reed
Again, I am grateful to the hon. Gentleman, and I understand the point he tries to make. The issue, however, is whether the abolition meets the Government’s own criteria? Does it pass the Government’s own test, and will it cost more to undertake the functions that the hon. Gentleman outlines within other bodies than to retain the Agricultural Wages Board? Let us see the evidence—that is my request to the Government.
Finally, and in a way leading on from that intervention, in the event of abolition of the Agricultural Wages Board, what checks will the Government introduce to ensure that wage levels and working conditions do not collapse? How will the checks be undertaken, and how will they be paid for? Will the Government undertake an economic impact assessment of how the abolition will affect each English region, particularly those that depend heavily on public spending? If so, will the Minister undertake to publish such an assessment, and if not, can he tell us why not? I look forward to his reply.
Chris Evans (Islwyn) (Lab/Co-op)
I am surprised you called me so early, Mr Caton. I expected to wait a bit.
We are in the American election season, and listening to my hon. Friend the Member for Copeland (Mr Reed) reminded me of what Ronald Reagan said to Jimmy Carter in 1980: “There you go again.” The one thing I have learned since coming to the House is that the Government seem to think that there are simplistic solutions to complex problems. With the most complex problems, it sounds nice to say, “We are cutting red tape by getting rid of the Agricultural Wages Board.” But the problem seems much more complex than that.
I have read this morning’s written ministerial statement, which states that with the introduction of the minimum wage, the Agricultural Wages Board is now obsolete. Again, that is a bit simplistic considering what the Agricultural Wages Board does. Twenty per cent of people are only 2p above the minimum wage. If the Agricultural Wages Board and the setting of wages are abolished, wages might be driven down, rather than up. That means people in the countryside, including farm workers, would be earning less.
I also worry because many of the 12,000 agricultural workers in Wales are of school age, working through their summer holidays. As my hon. Friend says, they are seasonal. They are not entitled to the minimum wage. What is going to happen to them? Are they going to be exploited from an early age?
The other thing I am deeply concerned about is that farmers have it hard. Let us be straight about that. Farming is not easy. It is tough out there. We cannot give farmers the further burden of having to negotiate with staff individually on things such as dog allowances for shepherds, which will go with abolition, and statutory sick pay. I fear that not only are those farmers too small to negotiate, but that this is another extra burden that they do not need. There could be different employment rights in different regions. In some places there might be a good level of statutory sick pay; in others there might not. Some people might have more rights than others.
Huw Irranca-Davies
I want to pick up on the points raised by the hon. Member for St Ives (Andrew George) on the transfer of the AWB’s functions to some other organisation. The Low Pay Commission observed, on the abolition of the AWB:
“The level of sick pay will be significantly less than provided for under the Order.”
Unless the Minister stands up and says that all the functions will be transferred to some other organisation to retain the protections, we have failed to do what the hon. Member for St Ives said, which is to protect agricultural workers.
Chris Evans
That is interesting. My hon. Friend will know of Hazel Spencer’s letter to the shadow ministerial team for the Department for Environment, Food and Rural Affairs:
“I have been in horticulture for nearly 25 years, working for the same nursery since 1987. During this time, as you can imagine, I have seen many changes. The work is sometimes hard, sometimes repetitive and often carried out in less-than-pleasant conditions.
I initially started as part-time staff, at a time when we had very little right to sick pay, holiday pay and certainly no Bank Holiday pay. Over the years and mainly due to the negotiations carried out by the AWB on behalf of us ordinary workers, conditions within our industry have improved. We have received wages in alignment with those recommended by the AWB: SSP has been supplemented by Agricultural Workers Sick Pay, to bring it in line with a weekly wage during illness, and we received a tax allowance towards providing suitable clothing to cope with the conditions of our workplace.
Basically, what sustains most of the people who work in this industry is the fact that we are earning a fair day’s pay for what we do.”
My concern is that we are asking small farmers to become employment specialists of some sort. Are they going to go to solicitors? Are they going to make mistakes? Are we going to see more people before tribunals? Those are real concerns that the Minister has to address.
If I might be mischievous for a moment, I draw attention to an early-day motion signed by the Minister in 2000 that called for the then Labour Government to
“retain the Agricultural Wages Board as it is currently constituted.”
Does he still think that should be the case?
Ultimately, everyone in the Farmers Union of Wales is opposed to the abolition of the AWB. They are concerned that the removal of the AWB will leave farmers exposed when having to negotiate pay and conditions. The AWB is a very good model that could be used by employers and unions across the board. The model has worked since 1924, and the Attlee Government established the AWB in 1945. Again, as often with the current Government, all we see is a drive for cuts in mythical red tape.
I say this whenever we talk about employees’ rights: happy workers are the best workers. The real issue that has to be addressed in society, whether in the countryside or in the urban world of banking and finance, is fear of job insecurity, which is the thing most people worry about. When employment rights are taken away, people are less secure, less productive and do not perform as they should.
I know we are going through a consultation process, but if the Government do not put something in place, we will start to drive wages to the bottom. Yes, as the written ministerial statement highlights, farming has massive opportunities because of the growing world population, but those opportunities will only be fulfilled with productive workers.
Andrew George
The hon. Member for Copeland (Mr Reed) and the hon. Gentleman have both quoted the farming unions. The hon. Gentleman has particularly emphasised the difficulties that abolition of the AWB might cause small farmers. My impression is that although, without question, the National Farmers Union is phenomenally good and very effective, one of its weaknesses is that it is primarily a large farmers’ union. I do not think that small farmers necessarily have their voices represented through the NFU as effectively as possible. If I had heard from farmers that the AWB needs to be abolished because it constrains them from being more progressive in their treatment of workers, I might have considered that a stronger case for the abolition of the regulations and the AWB.
Chris Evans
As we heard from the Minister this morning, it is important that small farmers are involved in the ongoing consultation. My concern is still for the small farmer. If he or she gets into bother with employment law and finds themselves in front of a tribunal simply because they do not know the law—they have done nothing wrong—or something like that, it would be an extra burden that they do not need. They also do not need the extra burden of negotiating things such as SSP, which we have talked about, wages and certain allowances. Those people do not need further burdens.
We have already heard from the Government and the Secretary of State for Business, Innovation and Skills that they do not want to burden employers further, but all I can see is the driving down of wages and the burdening of employers. The AWB takes away that burden, and I hope the Minister sees the sense of my argument: first, we do not want to drive down wages; and, secondly, we do not want small farmers to face further burdens by being tied up with red tape. If the small farmer has to negotiate and is concerned about employment rights, first, they are not going to employ more people and, secondly, they might exit the business altogether, which would be a tragedy.
I hope the Minister will say something about what will be put in place to ensure that wages stay at the higher standard, rather than falling. What is he going to do? If the Government go ahead with the abolition of the AWB, what support will be available for small farmers on things such as employment rights?
Huw Irranca-Davies
There is one other part of the AWB jigsaw puzzle that has not been mentioned yet. I am sure my hon. Friend is aware of upland farmers in his area; many small farmers use the provisions of the AWB when they tender their services to other farms. The AWB provides set agreements and set rates without individual negotiation; everyone knows the code and the agreement. Without the AWB there will be many individual, complex and time-consuming negotiations and a lot of additional bureaucracy. That is why we want to preserve the functions of the AWB.
Chris Evans
Quite simply, a lot of my farmers will not bother with it. The practice will end because they will not be interested in getting down to the nitty-gritty of the code. There is a code in place.
I wonder what the Minister’s thoughts were when he signed that EDM 12 years ago, and what has changed. There is no argument for abolishing the AWB as it stands: it works for farmers and for workers, too. When he responds to the debate, I hope he will tell us what was going through his mind when he signed the EDM all those years ago, and what has changed significantly in the past 12 years to make him change his mind. I look forward to that.
Jim Shannon (Strangford) (DUP)
It is not often that I speak on an issue that is a devolved matter in Northern Ireland. It is not often, either, that I disagree with my Labour colleagues, and I have spoken to them to make them aware of that.
I wish to make a few comments. I will reflect on the position in Northern Ireland, as that may bring something to the debate that other hon. Members are unable to provide because they do not represent a Northern Ireland constituency.
I hail from a strong agricultural constituency. Agriculture is a major employer, with additional employment coming from processing the food that the land produces. There are some excellent companies that farm the land, produce and package the product, and sell it on to the United Kingdom and Europe. Mash Direct, which employs approximately 100 people, and Willowbrook Foods, which employs 260 people, are just two examples.
The debate is about an issue close to my heart. I have spoken to many farmers in my constituency and it is clear what must be done for the benefit of all. The Agricultural Wages Board is an independent body that sets agricultural wages. It was established after world war two to encourage people to stay and work locally. In the area I represent, we are fortunate that people have done just that for many years. As the hon. Member for Copeland (Mr Reed) illustrated very clearly, agricultural work is hard. Many workers started when they were 16 and are now in their 50s and early 60s. The pains that come from picking vegetables take their toll, but those people enjoy their work. They currently have a good agricultural wage, and I believe that in my constituency they are happy with the process.
The AWB is no longer necessary. As we cry out for Europe to cut red tape and get rid of useless and costly quangos, it is time we started doing so on our own front. The Government have put forward a proposal on which my party is very clear. In the Northern Ireland Assembly, my party led the campaign to abolish the AWB. Michelle O’Neill, the Minister with responsibility for agriculture, has deferred to that as that is how the Assembly works. Even though the majority of people can ask for something, the nature of partnership Government means that the Minister has some say about what happens.
A DUP Assembly colleague of mine recently stated that Northern Ireland should follow the proposals at Westminster:
“It is fairly obvious that the AWB is now nothing more than yet another level of unnecessary, expensive bureaucracy. The finances ploughed into the AWB by the Dept would be far better invested in delivering frontline services to farmers. Reducing bureaucracy and freeing up resources and money for real and beneficial change is what is needed especially at a time when farmers are being financially disadvantaged”.
The hon. Member for Islwyn (Chris Evans) made that point as well. The situation in my constituency is the same as it is in Wales and in other parts of the United Kingdom—many farmers are finding it very tight when it comes to trying to make ends meet. As a representative for the rural constituency of Strangford with my ear to the ground, I have a heart for ensuring that farming remains a viable option in Northern Ireland, and I have pursued that as an elected representative over many years as a councillor and as a Member of the Legislative Assembly in Northern Ireland. Farming is the biggest single employer in my constituency. It must also be highlighted that only 20% of the work force are on the basic rate, which means that the other 80% are in the higher brackets already. Those people are protected by their contracts, and that issue also needs to be taken into consideration.
I drive an eight-year-old jeep that costs as much to keep running as it would cost to buy a new one. If my young son wanted to take it for a spin I would be protective, as we would be for any of our children. That is my nature. I was recently informed that a new tractor costs in the region of £75,000. I would certainly want to ensure that skilled workers were in charge of a tractor, not simply someone on minimum wage. Farmers have assured me that this is their view. It is horses for courses, if I can use that terminology, Mr Caton. Those who have the skills and abilities will do different jobs on the farm. Those who do not have the skills to drive the tractor, or whatever it may be, will do the manual labour, but I agree that they deserve a minimum wage.
Farmers will pay for experience, and taking away the AWB does not mean that wages will drop and people will lose their protection. Farmers must be free to set their wages in a competitive manner and ensure the survival of their farms at a time when many farmers are only able to take the minimum wage themselves. A great many farmers in my area are taking a wage that is equal to that of their agricultural workers, because of necessity and because the banks are on their back. These are hard times for farmers and we have to be very careful about what we do. They farm the land because they love it. The land is the blood in their veins, and it is clear that they will always seek to do their best to get the best from their farms. That will only come through having skilled workers who know what they are doing and who are worth their weight in gold.
I am not alone in agreeing about the abolition of the AWB. In fact, the Ulster Farmers’ Union—hon. Members have spoken about the National Farmers Union; this is the branch in Northern Ireland—has recently questioned the need for the AWB in Northern Ireland, following Michelle O’Neill’s decision to retain its structure in Northern Ireland. That is her decision at this moment in time, to be deferred but also to be looked at again. The UFU is clear in its belief that the AWB is
“an unnecessary and unwanted quango which is costing local tax payers money and is serving”—
with respect—
“no useful purpose.”
That comes from a union whose sole role is to represent farmers and ensure that their voice is heard. I stand as that voice for the UFU. Its spokesperson Robert McCloy, chairman of the employers representatives on the AWB, said:
“We have repeatedly called for the AWB in Northern Ireland to be abolished. The AWB is an additional layer of bureaucracy on top of existing employment laws which are already in place to protect workers. The National Minimum Wage covers the minimum rate of pay, holiday entitlement, sick pay and rest breaks and this, together with the Working Time Directive and a plethora of other employment laws now provide significant protection for employees”.
That is what the people I represent tell me through the UFU and farmers who give their workers good wages. I am aware that the UFU is continuing to lobby for the removal of the AWB in Northern Ireland to save farms throughout the Province and I stand in agreement with them. I understand the fear that workers might have, but I agree with the spokesperson from DEFRA who recently said:
“Agricultural wages laws are more than 60 years out of date, difficult to understand and entirely out of step with modern work practices. Changing them would free numerous small farmers from unnecessary burdens while keeping farm workers, like all other workers across the economy, well protected by national minimum wage legislation.”
To back up that statement, I use the example of those who work on farms, growing the vegetables, potatoes and arable crops and then processing them in factories to sell on. We have many people who come from other parts of Europe to work in the fields and the factories. We have young boys and young girls who leave school at 16 and go straight into this work, which they have been doing for many years. They are protected by the farmers who employ them.
In conclusion, it is unclear to me why farmers should be the only private sector employers who have wage rates set by anything other than the minimum wage structure. It is past time that this ancient body was removed to let farmers pay the wage they determine, as any other business does. I support fully the abolition of the AWB in England and Wales. In Northern Ireland, my party has already stated its opinion. I hope that the Department will follow suit. It is not often that I disagree with my colleagues. I look upon them as friends, because we vote together on many things. On this issue, however, I am sorry that I cannot agree with them.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I was not intending to speak in the debate until I noticed today’s statement on the Order Paper, but now I want to make a couple of quick points.
I often agree with the hon. Member for Strangford (Jim Shannon), so I will reciprocate by disagreeing with him in this debate. In Scotland, this area is devolved and a few years ago the Scottish National party—I am not surprised that no one from the SNP is present—sought to abolish the Agricultural Wages Board in Scotland. John Swinney, the Finance Minister, was pushing that. When the Scottish Government looked at the evidence and were responding to the issues, however, they realised that it was not the sensible thing to do. Given that, I now have a sense of déjà vu, as I do from one of my previous lives: 14 years ago I was an adviser in what was then the Ministry of Agriculture, just after the minimum wage was introduced, and there was an internal debate about whether the AWB should therefore continue. Again, after going through the evidence and looking at all the issues, it was concluded that it should.
The written ministerial statement talks about something being outdated, but what is outdated is the continual campaign to undermine the terms and conditions of people working in the agricultural sector. We are coming back to that. Unless spectacular new evidence is available, the case for the AWB in England is as strong as the case was for the AWB in Scotland a few years ago or throughout Britain pre-devolution, back in the 1980s and before.
I should have declared an interest in the sense that my father started his working life as a farm labourer in a part of Kent and he benefited from the AWB. It has a big impact on huge numbers of people throughout the UK—in this context, throughout England, in all regions.
I cannot see any new evidence that will change the position established each time that the AWB has come up for review. I understand that some people in Whitehall every now and again push the case for abolition—it has happened a number of times—but the arguments that my hon. Friend the Member for Copeland (Mr Reed) and others have made this morning are absolutely right.
It is a shame that the hon. Member for St Ives (Andrew George) is no longer present. For the most recent reshuffle, part of the discussion among the Liberal Democrats was about recalibrating where they had Ministers in the coalition. They quite rightly saw that rural and environmental issues were important, so it is good that the Minister is in the Department for Environment, Food and Rural Affairs, even if that means that the Liberal Democrats do not have Ministers in other Departments. Before there was a Liberal Democrat Minister, however, the hon. Member for St Ives spoke for his party on DEFRA issues, and less than a year ago he was arguing in correspondence—presumably to one of his constituents—against the idea that the national minimum wage is sufficient protection for people working in the rural economy:
“It would therefore be wrong in my view to conclude that National Minimum Wage legislation is sufficient to maintain these protections for agricultural workers. As already noted, a minority of agricultural workers are on grade 1 pay; the vast majority are on grade 2 and above, and as such on wages higher than the National Minimum Wage.”
A little more than a year ago, the hon. Gentleman made another point which he repeated in an intervention earlier in today’s debate:
“Rural workers are exceptionally isolated and in an exceptional position that I think justifies exceptional protections.”—[Official Report, 12 July 2011; Vol. 531, c. 270.]
That is absolutely correct.
Unless great new evidence suggests that such protections can be maintained through some body other than the AWB, the desire to abolish it—as originally legislated, with a whole load of other bodies—for the sake of what will probably work out at some £250,000 or just over will end up as a false economy, particularly for the many people who work in farms throughout Britain and especially, in this context, in England. My hon. Friend the Member for Copeland made it clear that the AWB is relied on by labourers for their wages; however, because of the often difficult nature of agriculture and farming, farmers, too, effectively contract out their services to others. Those are vital points. Any examination of the evidence suggests that pushing again for the abolition of the Agricultural Wages Board is more outdated than the idea that it is an outdated institution.
Huw Irranca-Davies (Ogmore) (Lab)
I thank my hon. Friend the Member for Copeland (Mr Reed) for securing and introducing the debate. He opened with such an erudite analysis of why the AWB and its functions have been so important over a long period and continue to be important, not least against the backdrop of declining economic activity throughout the country and in rural areas. The issue is indeed to do with the protections afforded not only on pay but on conditions, such as bereavement and all the things mentioned by my hon. Friends. It is also to do with ensuring that we have a good supply of keen, enthusiastic and well-skilled people coming into the industry in future. I shall return to such points because I do not agree with what was said in the written ministerial statement, although we thoroughly welcome it, and I appreciate the courtesy of receiving it before the debate started.
As I looked through the statement, I noted:
“The functions of the Agricultural Wages Committees are now largely redundant”.
I shall return to the comments made by the hon. Member for Strangford (Jim Shannon), who made a good contribution, but the points made by my hon. Friends make it clear that it is far from a settled issue that such functions are redundant. I will go through some of those arguments in detail.
I ask the Government and the new Minister in post, who has this opportunity, to think again about the abolition of the AWB. I ask him to do so because it is not without precedent for this Government to think again. Uniquely, it would be the first time that the Government have thought again in October. In every other month, we have had thinking again and U-turns, so the Minister could make a bit of history today by being the first Minister, although new in post, to think again in the month of October.
DEFRA has done much thinking again on many countryside and coastal issues. We have had U-turns on proposals to destroy buzzards’ nests to protect pheasant shoots, on pasty taxes—thanks to nationwide outrage led by the good people of Cornwall and the south-west—and on the great forestry sell-off of 285,000 hectares of state-owned woodland. We have had a partial U-turn on proposals to close coastguard centres and, unfortunately, a U-turn the wrong way on circus animals, dropping the previous commitment to a ban down to a commitment to new licensing conditions.
I do not want to be exhaustive, but my argument to the Minister is that he could think again because doing so is not unprecedented. We have had tax U-turns on caravans, video games and charitable donations, and other policy U-turns—some welcome, some not—on housing benefit, the mobility parts of the disability living allowance, financial inclusion fund debt advisers, the chief coroner, the military covenant, softer sentencing discounts, strike fighters, Ofsted inspections, school sports, rape anonymity and free school milk. I am dizzy from thinking about the number of U-turns.
In November last year, given opposition to the Government’s proposals, there was a U-turn on the decision to scrap the Youth Justice Board as part of the bonfire of the quangos. Suddenly, that bonfire had one less log on it. I ask the Minister to leave the fire burning brightly without the little log of the AWB as well—it will crackle nicely without it. The Minister can—independently, with independence of mind, new in his ministerial position—make his mark, a welcome mark, by performing one little pirouette of a U-turn on the AWB, a graceful and elegant pirouette. We would applaud his skill and his general loveliness. Other U-turns have been clunky and begrudging. Let the Minister, new to the role, manoeuvre artfully and delicately about-face.
I am not asking the Minister to do something that he does not want to do. In his heart of hearts, he is on the side of farm labourers and smaller farmers, and he has many in his constituency. Does he know how many agricultural workers in his constituency may be affected by the proposals to abolish the AWB? Of course he does. According to Library statistics, there are 1,020. Does he know that that puts him into the elite club of constituencies in the UK with more than 1,000 agricultural workers, many of them low paid and subject to the provisions and protections that we have talked about today? Of course he knows that. The figures are even starker when comparing the number of agricultural workers with the overall population in areas such as the south-west, where there are nearly 23,500 agricultural workers. His constituency might be hit hardest by abolition of the AWB, which may affect 152,000 workers in England and Wales.
I am convinced that the Minister wants a U-turn for his constituents, small farmers and farm workers. Before he attempts that pirouette, I will helpfully warm him up by reminding him why the AWB is so important. This is not, as he may later want to persuade us, just a matter of minimum pay. That would wilfully misconstrue the nature and purpose of the AWB, which is so much more. The Agricultural Wages Board involves
“representatives of farmers and agricultural workers together with independents, negotiating legally enforceable minimum wages and conditions which are significantly superior to those set by the National Minimum Wage and Working Time Regulations”.
The quote continues:
“the Agricultural Wages Board also sets a series of rates of pay to reflect the varying qualifications and experience of farm workers, thus providing a visible career structure for recruits going into agricultural work and is used as a benchmark for other rural employment… average earnings in rural areas are considerably lower than in urban areas… any weakening of the Agricultural Wages Board or its abolition would further impoverish the rural working class, exacerbating social deprivation and the undesirable indicators associated with social exclusion”.
I could not agree more. Those fine words are from early-day motion 892 in 1999-2000, to which the Minister was a signatory. What, I wonder, has changed since then?
During our early and youthful days in Parliament, we all had foolish fancies—we would not be human if we had not—and we would prefer not to be reminded about some of them. However, we also had strong and unwavering beliefs, and I know that the Minister has such beliefs, to which he stays constant. We deviate from such principles at our mortal peril. The Minister should stay true to his course and abide by the pledge he rightly made in that early-day motion. It was not a foolish fancy; it was his principles in writing. He said that the AWB provides a
“visible career structure…a benchmark for other rural employment”
and that abolition would result in “social deprivation” and “social exclusion”.
The Minister was right then, and we are right now, so he should return to the right side of the argument. The AWB streamlines and simplifies decision making for small farmers, so avoiding the time-wasting and complexities of drawn-out negotiations with individual farm workers one by one. Its abolition will increase bureaucracy for small farmers. Furthermore, as was said earlier, some small farmers market their own skills to others in a straightforward way with pay and conditions set and agreed by the AWB. They do not have to hammer out deals at each and every turn. I thought that the Government wanted to make things easier for businesses, especially small businesses, in which case they should keep the AWB.
The Minister may, as his predecessor did, pray in aid the National Farmers Union, for which I, like other hon. Members here, have a great deal of time. It does a sterling job in trying to synthesise a wide variety of views on a wide variety of issues. The manager of a large agri-industrial concern farming 10,000 or 20,000 acres may have slightly different motivations and needs than those of a small upland hill farmer on a couple of hundred acres. I declare an interest because 40% of my constituency is upland hill farmland, and I have family who are upland hill farmers. However, I am not speaking just for them; I am speaking for young farmers.
The Welsh Assembly Government had a cracking debate last week that was supported not just by the Farmers Union of Wales, but by young farmers of Wales who are worried that abolition of the AWB will hamper their access into the industry. Through this debate, I ask the NFU whether it is really saying that none of its farmers, not even tenant farmers, smaller farmers and those who want entry to farming want the AWB to be retained?
I will not go through all the reasons why the AWB is so important. They have been brilliantly articulated by my hon. Friends the Members for Copeland, for Islwyn (Chris Evans), and for Rutherglen and Hamilton West (Tom Greatrex), and have been made in previous debates by me and others.
I turn briefly to some of the messages from the Low Pay Commission. Its factual observation is that minimum rates will not cover pay for skilled workers. There is no statutory minimum wage for workers under the age of 16, and there is concern about the overtime premium, the night premium and the on-call allowance. It notes that holiday entitlement will be reduced if the AWB is abolished and that sick pay will be significantly less. It also notes that the number of days of bereavement leave will not be specified and that there will be no statutory right for such time off to be paid. Rest breaks will be less favourable for adult workers, and so on. There will be no statutory entitlement to a birth and adoption grant. Piece rates will be lower. At the moment, they are at least the minimum hourly rate of pay applicable to the grade. What is a fair rate, if it is not what is currently being paid under the AWB?
Northern Ireland and Scotland will retain AWBs. The hon. Member for Strangford said that he has his ear to the ground. I say with conviviality and friendliness that the problem of having an ear to the ground means hearing lots of different things. I have my ear to the ground in different places throughout the UK, and farmers have told me that they treasure retention of the AWB and/or its functions. The hon. Member for St Ives (Andrew George) is not in his place, but he made a valid observation: if not the AWB, what? The Minister should answer that, because the issue is not just the minimum wage aspect, but the protection of a broad range of functions.
I say in all honesty that most farmers are absolutely well-intentioned towards their employees. Most want to do the right thing, and they want skilled people in the industry. They want to ensure good rewards, because they realise that farm labouring is back-breaking work. It has the highest mortality rate of any industrial sector in the UK, and sickness levels are high, so workers need protection. The hon. Member for Strangford says that he has his ear to the ground, but he opposes the position in Northern Ireland, so if not the AWB, what will protect those workers?
Jim Shannon
We have heard about having an ear to the ground and hearing many stories, but my responses on this issue have been clear. The AWB is unnecessary and does not provide the support that it should to workers. The hon. Gentleman is right in saying that farmers are interested in their workers and want to do the best for them, which they do. I tried to reflect, in my contribution, that that is what the people are saying, and that is what the majority of elected representatives in the Northern Ireland Assembly are saying. Unfortunately, although the majority of people want the AWB removed, under the partnership Government, the Minister can overrule us. That does not reflect the opinion of all those in Northern Ireland, which is the point I am trying to make.
Huw Irranca-Davies
I fully appreciate that point.
In all debates on this matter, I have striven, in my position as a shadow Minister, to speak not only for England, but for other parts of the UK in which what is happening with the AWB is mirrored or contradicted. I want to ask the Minister how negotiations are going with Wales. How are they progressing, or not progressing? The Welsh Assembly Government, the Farmers Union of Wales, the young farmers of Wales, Unite the Union, GMB and others have lined up alongside individual farmers to demand the retention of the AWB’s functions in Wales. To that effect, an excellent debate, which I mentioned earlier, was held last week, spearheaded by Mick Antoniw, the Assembly Member for Pontypridd, who is a brilliant advocate for all workers, including agricultural workers. The only dissenting voice in the whole of that debate was not a Liberal Democrat or a Plaid Cymru Member; it was a Conservative, who had been sent out as a token to speak against the retention of the AWB’s functions in Wales.
Huw Irranca-Davies
I genuinely cannot. We have heard the hon. Member for St Ives and the Minister will speak for the Government. The contribution made by the hon. Member for Strangford is welcome, as we should be having that sort of debate, but the complete absence of any Conservative voice strikes me as staggering. Even if Conservative Members wanted to argue against our position, they should come and do so. However, perhaps low-paid agricultural workers somehow disappear below the radar. When we have had debates in Westminster Hall on the common agricultural policy, these Benches have been full of Members from all parties. Here, we are speaking about low-paid agricultural workers, but in the absence of any Conservatives to defend themselves, I will hold back my comments.
Will the Minister update us directly on discussions with the Welsh Assembly Government? I ask him because rumours have been circulating all summer that the discussions are in deadlock and have been like that for some time, and that DEFRA was perhaps attempting to refuse to respect the current constitutional settlement for Wales. Worse still, it has been suggested that the UK Government—the Government of whom he is a Minister—will try to undermine the Welsh Assembly by seeking to circumvent the constitutional settlement and the need for consent, and that they would try to devise a way to avoid the necessity of full and frank engagement with democratically elected Welsh Government Ministers.
This is a technical matter of legislative competence, but it is also a matter of respect for the Welsh Government and for the people of Wales. Let me explain to the Minister why I firmly believe that that must be the case. The proposal to abolish the AWB is made under section 1 of the Public Bodies Act 2011. Section 9 of that Act requires the consent of the National Assembly for Wales when exercising the power under section 1 on any matter that would fall within the legislative competence of the Welsh Assembly. The Welsh Government can therefore choose to retain an agricultural wages board for Wales if they consider that such a decision would benefit the agricultural industry in Wales, in accordance with their devolved responsibilities under schedule 7 of the Government of Wales Act 2006. That screams out to me that the Welsh Assembly Government must be a full party to this process and that there should be no attempt to find some parliamentary procedure or back-corridor operation to circumvent full and frank discussion on the impact of the AWB’s abolition in Wales.
The view of Wales—the Welsh people and the Welsh farming community—is clear, and it needs to be debated and voted on. The Welsh Government must have their consent sought. That final point is vital in terms of respect for the Welsh Assembly Government and the National Assembly for Wales, and with it, I close my remarks. I hope that the Minister will assure us that what I have described is not happening and that the wider functions of the Agricultural Wages Board, beyond simply low-pay protection, will be protected in whatever thoughts and proposals he brings forward.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
It is a pleasure to serve under your chairmanship, Mr Caton. I express my genuine gratitude to the hon. Member for Copeland (Mr Reed); as it turns out, it is useful and timely to be having this debate today.
From the start, I should say that I entirely understand hon. Members’ concerns. It would be odd if I did not, and that is not just because of what the hon. Member for Ogmore (Huw Irranca-Davies) described as my general loveliness. I have represented, grown up and lived in one of the most rural parts of the country for a long time. I know that this issue is not only totemic for a lot of people but important to get right for a lot of people who work in agriculture.
Before coming to the more detailed points of my speech, I want to say first that I have introduced the consultation today because I am convinced that the proposals are in the interests of people who work in the agricultural industry. We simply cannot look at agriculture today through the eyes of somebody in 1948, or indeed, of someone 20 years ago. Agriculture has changed massively, and for the better, in many respects. It is a highly skilled industry in which people have to adapt to new ways of working all the time. I genuinely believe that the present set-up, which is unique in this particular area of employment, is grounded in times when agriculture and social conditions were very different. Most important, employment law was very different too, which we have to keep reminding ourselves. As a House, we have made huge changes to employment law over recent years, which has transformed the landscape in which we approach such discussions.
Huw Irranca-Davies
I acknowledge the Minister’s good intentions in speaking for his constituents and the farming community, and I accept that employment law has changed. However, we are currently faced with new proposals for changing employment law, including watered-down versions of the Beecroft proposals on hiring and firing, under which people can buy shares in companies in exchange for giving away their employment rights. Does it not worry the Minister, as a Liberal Democrat, that the employment rights that have been put in place over the last 20 years are now being denuded at the same time that we look to abolish the Agricultural Wages Board?
Mr Heath
The hon. Gentleman will not tempt me into commenting on other Departments’ areas of responsibility. I am dealing with what falls within my ministerial responsibilities, and as I have indicated to hon. Members, we gave a commitment to consult on the board’s future. The written ministerial statement that I have issued today, and made sure that Members had before them, informs the House of the launch of the public consultation on the abolition of the Agricultural Wages Board for England and Wales, as well as the related 15 regional agricultural wages committees and 16 regional agricultural dwelling house advisory committees in England. The hon. Member for Ogmore picked up on the fact that my written ministerial statement describes the agricultural wages committees as “now largely redundant”. It does so because they are now largely redundant. I hope that he will look carefully at exactly what they do.
The point that underlies all this is that, in the absence of the Agricultural Wages Board, agricultural workers will be protected by the national minimum wage and working time regulations. I accept entirely what hon. Members have said—that that is not the sum total of the Agricultural Wages Board regime. It is not simply a safety net underneath the least well-paid workers. I shall come on to the other aspects, but that is certainly an important part of why it was set up in the first place. It was set up at a time when people working in rural areas were the least well-paid of the least well-paid and had very few protections. It was right, at the time, to give that protection. The question is whether it is still right to have that arrangement in this unique sector of employment when in other areas it has been abolished.
The hon. Member for Copeland talked about Baroness Thatcher’s Government removing a raft of wages boards, and that is correct—they did remove them—but surely he is not suggesting that that was necessarily a bad thing. I am not trying to reduce this debate to the absurd, because I know that there are genuine and important issues, but did he think that the Aerated Waters Wages Council, the Coffin Furniture and Cerement-making Wages Council, the Flax and Hemp Wages Council or the Ostrich and Fancy Feather and the Artificial Flower Wages Council really had a place in the 1990s?
Mr Heath
In that case, I shall not tempt the hon. Gentleman further down that road, but the reason why I raised those other, perhaps flippant cases—I do not think that anyone would seriously suggest that those councils were relevant now—is that other wages councils that were abolished at the time had an effect on industries that would certainly be described as current industries and that are not entirely dissimilar to agriculture. I am thinking of the Licensed Non-residential Establishment Wages Council, the Licensed Residential Establishment and Licensed Restaurant Wages Council and the Hairdressing Undertakings Wages Council. Those were dealing with business that was often carried out by small enterprises, where many of the arguments that the hon. Gentleman and his hon. Friends have advanced today would have applied and where I do not think that a disbenefit from the abolition has been apparent in terms of comparative performance with other areas of industry. It is important that we recognise that.
We are now engaging in a consultation that will allow stakeholders and interested parties the opportunity to make their views known on the future of the Agricultural Wages Board before we make a final decision. I want to make it clear—because I genuinely think that this is the case—that the aim of the proposal to abolish the Agricultural Wages Board is to secure the prosperity of the agricultural industry for the future by encouraging growth and employment. I think that it will do that. I think that it will benefit all those who work in the industry, both employers and workers, as well as the wider rural economy.
Chris Evans
Will the Minister give a guarantee that this is not a fait accompli and that if the consultation comes back with the view that the Agricultural Wages Board should be saved, the Government will follow that, rather than just proceeding with the plans for abolition anyway?
Mr Heath
The job of Ministers when responding to a consultation is to listen to all the voices that are raised, to try to understand the points that are put forward and then to make a decision on whether to introduce appropriate legislation. It is then for the House to decide whether it supports that legislation, so let us be clear about the process. It cannot have come as any great surprise that we were going to go ahead with the consultation. Indeed, the hon. Member for Ogmore chided me gently for not having brought it forward earlier. I say to him that I would have brought it forward slightly earlier if there had not been a recess, but we are now ready to consult and ready to listen.
An impact assessment of the abolition of the Agricultural Wages Board has been published as part of the consultation package. I hope that hon. Members will take the opportunity to consider it carefully and to comment on the document and provide their own evidence on the likely impact for both individuals and the industry as a whole. The impact assessment suggests that abolition of the Agricultural Wages Board could lead to increased employment, which would have potential ripple-effect benefits for the wider rural economy.
Let me deal with some of the specific issues that were raised. A lot of hon. Members were understandably concerned that the proposal might mean workers losing their existing rights. Of course, that is not the case. Anyone in permanent employment will be protected by their contract. They will have exactly the same rights after the day on which the legislation is passed as they had before. They do not lose any of their contractual rights and the employer loses none of their contractual obligations simply by the passage of the measure. Of course, it would apply to new entrants and new contracts being negotiated, but it would not apply to anyone who was already in employment. It is very important that people understand that. Let us also recognise that permanent workers constitute about two thirds of agricultural workers, so for the vast majority of workers, there will be no change in terms and conditions as a result of the board’s abolition.
For new contracts, yes, I accept that there may be an impact. That is reflected in the estimates in the impact assessment. However, it is difficult to assess what that impact will be until we see it in action. My feeling is that there is a high level of competition for skilled workers in some sectors of the agricultural industry, and it is important that people attract workers who have both the necessary certification and the necessary skills, given that they are operating, as one hon. Member said, incredibly expensive bits of machinery, let alone dealing with livestock, which requires husbandry skills. It is important that people attract and retain the best workers. Therefore, I am clear that we shall not see a drift towards the national minimum wage in contracts in the agricultural industry. In addition, new entrants to the industry will have exactly the same levels of employment protection as workers in all other sectors of the economy.
In fact, there are potentially some direct benefits from abolition of the rigid structures of the Agricultural Wages Board, let alone the bureaucracy, in terms of what is permitted under contract. One example involves annual salaries. It is extraordinary that at the moment it is difficult to provide an annual salary basis for a contract under the rather rigid systems in place. In today’s employment market and particularly because I am optimistic about agriculture—we have a growing sector and there is huge potential in agriculture—farmers need to offer attractive remuneration packages that are competitive with those in other rural sectors if they want to retain skilled and well-qualified staff. I would be very surprised if employers did not recognise that they had to pay appropriately for skills and experience. That is already reflected, of course, in the banding in the Agricultural Wages Board system. The majority are paid above agricultural minimum wage rates. In 2010, about half of workers were paid more than 10p above the agricultural minimum wage. I do not see any reason why that should change in the absence of the board.
Of course, there are other protections as well. The gangmasters licensing legislation is both relevant and important in this debate. The hon. Member for Copeland talked about the Agricultural Wages Board specifically providing protection for migrant and seasonal workers, but he will find that it is the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 that provide such protection—passed by a Government that he, of course, supported. I recall supporting those regulations too. They will continue to provide protection, and it is important to know that that is the case.
Huw Irranca-Davies
I thank the Minister for reminding us of that fantastic piece of legislation. Will he comment on the future of piece-rate workers should the ABW be abolished?
Mr Heath
I am not sure I recognise that abolition of the Agricultural Wages Board will necessarily affect those workers. The hon. Gentleman is right to raise the issue and we will look at it closely in the consultation. Let us look at it in more depth and when we come forward with legislation, we will consider whether we need to look at it further.
We know that the agricultural work force are an ageing population, and that is not sustainable in the long run. I want to attract young people into farming, agriculture and horticulture. There are signs that more people are taking up courses at agricultural colleges, which is a good thing. We want to attract and retain new entrants—young workers—and to do that, farms must offer wages and conditions competitive with other sectors.
The hon. Member for Ogmore made an important point: most farmers and farming employers are good employers and want to do the best for their workers. Let us get away from the slightly Dickensian view that the only purpose of an employer is to grind down the workers. That is not the case and not the relationship that he and I see every day when we talk to people in farm businesses and those engaged in the sector.
What will happen to advice for farmers if the Agricultural Wages Board is abolished? The NFU has already indicated that it intends to provide economic indicators, which I hope will help.
I am not sure that I entirely accept the point about contractors, which I think was made by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex). People subcontract their work in lots of other businesses and industries without experiencing the difficulties that the hon. Gentleman anticipates. It has been said that such arrangements will simply stop. I do not believe that is the case, because I do not believe that agriculture works that way. People will find an appropriate level for such employment, as they do in the building industry and other industries where plant and specialist skills are often needed by contractors on a wider front. We will find ways of accomplishing the same objective without the bureaucracy involved.
I stress that we will specifically instruct the Low Pay Commission to include the agricultural sector in its range of indicators. If we go ahead with abolition, it will watch closely to ensure that we do not see a detriment at the lowest end of workers’ pay and conditions.
The board is the last remaining wages council. Does it serve a useful purpose? The hon. Member for Strangford (Jim Shannon) says, with his knowledge of what happens in Northern Ireland, that it does not. I have looked carefully at the issue, and provided that we have other protections, which we do, across all sectors, it is difficult to argue that there should be a lone system for the agricultural sector providing separate minimum employment terms and conditions.
The regime is overly complicated at the moment. Its provisions are wide-ranging and restrictive, hampering the ability of the industry to offer modem, flexible employment packages. It effectively dissuades employers from offering annual salaries, which is disadvantageous for workers as it hinders long-term financial planning. It is a one-size-fits-all approach that imposes a rigid structure on a diverse and diverging industry.
If we lose the Agricultural Wages Board and the agricultural minimum wage regime, farmers will be able to agree terms and conditions with workers that fit particular circumstances and take account of the specific requirements of the farming sector. It would make it easier for farm businesses to employ workers, encourage longer-term employment, boost growth and create job opportunities. It would also simplify employment law.
An issue that has not been raised in the debate is the confusion for farm businesses around whether activities fall within the national minimum wage regime or the agricultural minimum wage regime. For example, livestock and poultry rearing would normally be considered agricultural activities and covered by the agricultural wages order, but that is not necessarily the case for slaughtering operations. In farm packing businesses, the agricultural wages order covers the packing of produce grown on the farm, but not the packing of bought-in produce. There are strange anomalies at the boundaries of what is and is not covered.
Huw Irranca-Davies
Before time runs out, I should like to say that I have not met a small farmer—certainly not in Wales—who has been confused by the current functioning of the AWB.
Will the Minister address a point of real significance? Under Section (9)(7) of the Public Bodies Act 2011 consent is required from the Welsh Assembly Government. Alun Davies, the Agricultural Minister, made a brief statement on social media this morning:
“Welsh Govt are determined to maintain the AWB structures in Wales. We have not consented to any abolition in Wales”.
I ask the Minister directly: will he commit now not to abolish the AWB and the functions of the AWB in Wales without the consent of Welsh Ministers?
Mr Heath
I work closely with Welsh Ministers and I am always happy to do so. I share information with them; for instance, before the event, I shared the fact that we were bringing forward the written ministerial statement and the consultation process. I had the advantage of meeting Alun Davies only yesterday to discuss the matter, and I will continue to discuss with him and the Welsh Assembly Government what they have in mind. I will not go into the constitutional issues, because they are outside the scope of today’s debate.
It is clear that the matter is not a devolved one at the moment. The hon. Member for Ogmore looks askance—agriculture is devolved, but wage control is not. However, that does not stop us having a perfectly sensible dialogue with Welsh colleagues on the subject or stop them having a dialogue with the Wales Office on the constitutional issues. He says that we are obliged to use the 2011 Act, but we are not. There is a range of different legislative processes that we could use. He was firmly against the Act, so it would be strange if he now insisted that it is the only way that we can reform public bodies.
Mr Heath
We are running out of time. I will continue dialogue with the Welsh Government to find a way forward. I am clear that it is perfectly proper for us to consult as we are doing on the abolition of the Agricultural Wages Board for England and Wales. We shall listen to the responses, including those from the Welsh, and will take appropriate action when it comes to legislation.
I again thank the hon. Member for Copeland for initiating the debate. We will return to the subject. I hope that hon. Members will take advantage of the opportunity to express their views in the consultation, as many outside the House will. It is a serious issue and I want to get it right for the prosperity of all who work in the agricultural industry, with a view to reducing unnecessary regulation, without reducing necessary protections.
Scottish Separation (BBC)
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Anas Sarwar (Glasgow Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. Yesterday was an historic day for Scotland, as we heard that we will possibly have to make our biggest decision in 300 years —it is certainly the biggest decision of our lifetimes. As we finally begin to move past the processed arguments, we must now be sure that we have the substantial, honest and transparent debate that Scotland deserves.
As the independence debate continues, the First Minister, Alex Salmond, has been making all sorts of assertions about what a post-independent Scotland would look like: the Queen would remain as Head of State; we would keep the pound sterling; the Bank of England would be Scotland’s lender of last resort; we would automatically have a seat on the Monetary Policy Committee; and we would remain a member of the EU under the current terms. Even last night, one of Mr Salmond’s closest allies was saying that the Scots would remain part of the United Kingdom and still be British. All those are assertions, not facts. It is the usual claim that all the things that we like will stay the same, and all the things that we do not like will not happen any more. However, that is not the case with the BBC. Alex Salmond says that he has a plan. He intends to break up the BBC and establish a separate licence fee-funded public service broadcaster in Scotland. He wants to model the Scottish broadcasting corporation, or the SBC, on the Irish RTE model. Scots viewers, he asserts, will see no change. He says that we will still have the same access to the existing BBC output: BBC 1, BBC 2, BBC Three, BBC Four, BBC News 24, BBC Parliament, CBBC, CBeebies, which I understand is the Minister’s favourite channel, Radios 1, 2, 3, 4, 5 and 6, the iPlayer, some of the best nature programmes ever produced, fantastic sporting coverage, as we had with the Olympics, and news packages from BBC journalists around the world.
On news coverage, the BBC is a trusted source across Britain and the world. In Scotland, we have always been internationalists and we take a keen and impassioned interest in what is happening across the world—whether the US elections, the middle east conflict, famine in Africa, or international disasters such as the tsunami or events in Haiti. Coverage of such events requires significant sums of investment, and Scots would be all the poorer for the loss of access to that trusted information.
The BBC remains the single most trusted source of information across the UK, and we should value its impartiality. The claim is that we could keep all the current breadth and quality of output of the BBC, as well as increasing investment in locally created content. The First Minister asserts that he will do all that on the licence fee income from Scots viewers. Let us look at the facts. There are 2.2 million licences in Scotland. If everyone paid the full amount, that would be approximately £320 million, but the real figure is less. By the time we take out the collection costs and discounts, such as those for the over-75s, the real figure is closer to £300 million, as opposed to the UK-wide BBC budget for all platforms of around £3.5 billion. It is fantasy to suggest that the current range of TV, radio, website and iPlayer content will be available to viewers in an independent Scotland.
What programmes are under threat and would not be available in a separate Scotland after the break-up of the BBC? There will be no “Strictly Come Dancing”, “Frozen Planet”, “Holby City”, “Match of the Day”, “Doctor Who”, “News at 10” or “Question Time”. I will not read out the entire list as it is endless.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I have been with my hon. Friend all the way through his speech until he mentioned “Strictly Come Dancing”. I know that I hold a minority view, but he would be in danger of convincing me of the opposite case if they were to get rid of “Strictly Come Dancing”. Seriously, “The Culture Show” is a good example of a BBC programme that is made in Scotland for the whole UK. In the past couple of years, it has been noticeable how it better reflects the whole UK. Is not the real future of the BBC to be much more British, rather than London-centric?
Anas Sarwar
I thank my hon. Friend for that. He implied that he was not being serious when he made the point about “Strictly Come Dancing”, but he did look rather serious. In a moment, I will reveal the figures that illustrate how popular the programme is in Scotland. Even though I do not watch it, I am sure that many others do. He also makes an important point about “The Culture Show”. We are proud of the fact that the British Broadcasting Corporation celebrates the history of Scotland, England, Wales and Northern Ireland, and we would like to see that strength continued and not put under threat by the Scottish National party’s proposals.
It is also asserted that licence fee income will be used to support Scotland’s media and creative industries to a greater extent than is the case now. That means more spent on programmes such as “River City” and still all the UK content.
Ian Murray (Edinburgh South) (Lab)
My hon. Friend will be pleased to hear that I am asking him to give way and not to dance. Let me unpack that bit about the BBC’s input in Scotland. As a public sector broadcaster, the BBC supports independent production companies. Has he had any indication of what the impact will be on that? BBC shows that are produced in Scotland, which inject money and skills into the Scottish economy, can only be supported by that national level.
Anas Sarwar
I thank my hon. Friend for his contribution. Scotland’s creative industries support more than 60,000 jobs and contribute £5 billion to the Scottish economy. Across the whole UK, 43% of all commissions for independent television producers come from the BBC. In Scotland, the network commissions are the main source of revenues for independent production companies, and that will be put under threat by these proposals.
In Scotland, we are used to the SNP making things up as it goes along, but from this evidence it is not even good at that anymore. It is inconceivable that the quality, quantity and breadth of output could be maintained with just 10% of the current available resource. In the First Minister’s speech to the Edinburgh international festival in August, he laid out his plans for the SBC. He gave the example of Denmark and Norway. Let us compare their licence fee rates. For Denmark, it is £264.27; Norway is £277.94; and the UK is £145.50. That is 40p per day across all formats. Radio costs 6p per day for all programmes and all channels. TV costs 24p per day for all channels and all programmes.
The SBC proposals include commercials and a higher licence fee. Some might ask whether there is any evidence of interest from Scottish viewers in the programmes that I set out earlier. I am happy to set the record straight. The figures show that Scots take a keen interest in UK output. Despite the dislike of “Strictly Come Dancing” expressed by my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), some 910,000 people in Scotland watch the programme every week. That is 39% of the audience share in Scotland. Some 750,000 people watched “Frozen Planet”, which is 28% of the audience share. “Match of the Day” English premiership highlights pull in 262,000 viewers, compared with 186,000 for “Sportscene” highlights. Perhaps that is because the Rangers fans are not able to watch their great team in the premiership, which is a source of great pain for me personally. However, we should not worry because the First Minister told Jeremy Paxman in an interview recently that SBC will purchase from the BBC the likes of “Newsnight”. In that very statement, he actually makes the case for the BBC—we Scots already purchase “Newsnight”, and every other TV and radio programme, and it is called the licence fee. Why on earth would we want to break up the BBC then spend money buying the exact same programmes back again? Is that just because it is called the British Broadcasting Corporation?
Sadly, the hon. Member for Perth and North Perthshire (Pete Wishart) is not in the Chamber today. In fact, there is not a single SNP representative present. Perhaps they are too busy thinking about 16 and 17-year-olds being able to vote or about how to gerrymander the Electoral Commission proposals. What they should be doing is engaging in the debate about the future of the country.
Perhaps the hon. Gentleman, the SNP’s broadcasting spokesperson, exposed the true face of the Yes Scotland’s positivity when he said in March this year that the BBC is the institutional enemy of the party’s drive for separation. “Institutional enemy” are his words, not mine.
The hon. Gentleman went on to claim that the SBC would spend £75 million a year importing popular UK programmes, which viewers could then view for free in Scotland. However, the ability to purchase is yet another assertion, not a fact. It is another statement rooted in myth, not in reality.
Setting aside my concerns about any Minister—especially Alex Salmond—dictating the schedule of a broadcaster, he will simply not have the funding to do so. When he makes the assertion on “Newsnight” that we would purchase output from the rest of the BBC, he does so on the basis that the funding would be available to do that and that an independent, free-from-Government-control broadcaster would choose to do so. Both assertions are false.
It is also ridiculous and fanciful to make the claim that nothing would change. Let us examine the claim that the SBC would be able to use the money that it had to purchase programmes. Is there any indication of what it would cost to provide, say, the current package of sports or news for Scottish viewers? This year alone, the BBC will spend £479 million on sport, so we would have no British Open or Grand National and—I can see the SNP breaking out in a cold sweat at the mention of the word—no Olympics in Scotland, and certainly no red button coverage.
The BBC will spend £390 million on news, so there would be no coverage of the US elections or the Arab spring. It will spend £116 million on children’s programmes, so no CBBC, no CBeebies and—I understand of particular relevance to the Minister— no “Nina and the Neurons”. The BBC will spend £336 million on factual programmes, so no “Frozen Planet” and no David Attenborough in Scotland.
The Scottish Broadcasting Corporation’s budget would be, at best, £300 million. The BBC spend on sport is £479 million a year; on news, it is £390 million a year; children’s programmes, £116 million a year; and factual programmes, £336 million a year. So, after spending on buying the BBC programmes that it wants, the claim is that that would leave at least £100 million to produce quality programmes in Scotland. That is roughly equivalent to a single HBO mini-series: a series of “Game of Thrones” costs $60 million to make; “John Adams” cost $100 million; and “The Pacific” cost $200 million. Even then, that is one hour on one night a week. What about the other 167 hours that the SBC would need to fill? That exposes the quality gap of the proposals.
The impact also spreads to the BBC website and the iPlayer. Internet users in the Republic of Ireland, France, Germany and the US do not have access to the website output and iPlayer that the Scots do, for one simple reason: they are not part of the United Kingdom. So Scots would have no access to the existing output: no radio, no iPlayer. Scots would have access to the international iPlayer, but when we compare the two, a quick glance shows what is missing. Also, the international iPlayer has a subscription fee—an additional cost to Scots. Of course, there is no mention of that in the separatists’ proposals.
Web content would be geo-blocked, as it is in every other foreign country, but there would also be other losers from the SNP proposition: Scotland’s creative industries. There are 100 TV production companies based in Scotland, and 15,000 people are employed in the industry. “Waterloo Road” alone, a fantastic production for the BBC, represents a £10 million a year investment and 200 jobs.
Let us consider the current spend in Scotland: it has 8.4% of the population, 8.7% of total licences, and the SNP’s Scottish Broadcasting Commission recommended 8.6% of spend should be local. However, 9% of BBC TV production spend is now in Scotland. High-profile productions such as “Question Time” and “The Culture Show” already happen in Scotland. Scotland has a proud record in the cultural and creative sector, fantastic festivals and world renowned actors. I must mention the tremendous regeneration in my constituency in Glasgow on the Clyde. The BBC capital investment in its Pacific quay headquarters is approaching £200 million. That is a real success story for Scotland, but it is all at risk from the SNP’s plans.
Not only Scots would lose out; the rest of the UK would lose out, too. There is a licence fee freeze until 2016. On top of that pressure on BBC income, losing Scottish licence fee income would mean an off-the-top cut of almost 10% in BBC income. That risks decimating the organisation. The position put forward by the SNP is not only not credible, but downright misleading.
In summary, the proposals mean a higher licence fee; loss of the iPlayer; more adverts; fewer popular programmes; and fewer channels. It is yet another gulf between the rhetoric of the SNP and the reality of what their proposals mean for Scottish viewers, producers and the wider creative industry. Instead, what we need in Scotland is to look beyond the narrow constitutional debate and to continuing to use the collective strength of the United Kingdom and the BBC to support the industry, attract investment, create jobs and wealth, invest in both our present and future talents, and develop the quality programmes that we can enjoy here in Britain and also export around the world.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
It is a pleasure to serve under your chairmanship, Mr Caton. I am grateful for the chance to respond to this important debate. I congratulate the hon. Member for Glasgow Central (Anas Sarwar) on securing it and on making such an eloquent speech setting out his concerns about the future of the BBC and the potential impact of an independent Scotland. His speech was so good that I am tempted to simply sit down, because he covered a range of issues so comprehensively. I have noted his deep commitment to the unity of the BBC and the importance of national public service broadcasting, as well as to the Union itself. I also thank the hon. Members for Rutherglen and Hamilton West (Tom Greatrex) and for Edinburgh South (Ian Murray) for their contributions.
It might be helpful if I remind the House of the Government’s very clear position on the wider question of the Union. We believe that Scotland is stronger in the UK and the UK is stronger with Scotland in it. The United Kingdom is one of the most successful and longest standing political, social and economic unions in history. Our economy, as the hon. Member for Glasgow Central indicated, is stronger as a result of the ties that bind the UK. Its size and diversity drive its success and provide protection during periods such as the financial and eurozone crises.
The close ties and history of the nations of the United Kingdom mean that we can project significant influence and face global challenges together, as well as providing services, benefits and protections across the whole of the United Kingdom’s population. The Government are not making any plans for independence. We are absolutely confident that, in any referendum, the Scottish people will continue to support being part of the United Kingdom.
It is the current Scottish Government who are proposing independence, but in the matter of broadcasting, along with the many other issues set, they have not set out what independence would look like and what it would mean for Scotland, as the hon. Gentleman’s speech so eloquently made clear. I confirm not only that the UK Government are not thinking about independence, because we are confident that the Union will remain, but that I and other Ministers with responsibilities in this area have not had any discussions with the BBC Trust about the devolution of broadcasting.
Anas Sarwar
Any company in the run-up to a big decision will take a risk assessment about what the consequences of the decision could be for that company or business. Has that been done for the BBC or is it likely to happen in the coming two years?
Mr Vaizey
As far as I am aware—I will expand on this later—the BBC has not said what the position would be for BBC Scotland and other services in the case of independence. I understand it does not want to comment, because it wants to remain impartial throughout the debate. However, I can speak for myself and the Government and say that we have not had any discussions with the BBC Trust about the devolution of broadcasting or the outcome of a referendum on Scottish independence. Let me also be absolutely clear that the Government remain committed to keeping broadcasting as a national responsibility—a reserved matter—and not devolving it.
We have not undertaken any analysis of the potential impact on the BBC of independence for Scotland. However, there is no evidence to suggest that independence for Scotland would benefit licence fee payers. There were and still are very good reasons why broadcasting as a whole was not devolved in the devolution settlements. To pick up on some of the points made by the hon. Member for Glasgow Central, essentially the country as a whole benefits from pooling the licence fee, as well as from the advertising revenue and subscription fees that go to fund the excellent broadcasting output of this country. Pooling the licence fee allows major investment to be made in a range of programmes that we can all enjoy, whether they are made in Scotland, England, Wales or Northern Ireland.
As a country, we share immense pride in the BBC for the quality and independence of its output, which is respected and admired globally. The hon. Gentleman referred to it in his speech, but there could not be a better example of that output than the BBC’s coverage of the London 2012 Olympics and Paralympics. Sorry—I should say that Channel 4 covered the Paralympics. However, the BBC’s coverage of the London Olympics delivered the biggest national television event since current measuring systems began, with 90% of the UK population tuning in for at least 15 minutes. There is a greater net benefit to the nation and all our constituent parts in having broadcasting remain a reserved matter.
It is also important to take this opportunity to note the excellent service provided by the BBC to Scottish viewers; the hon. Gentleman referred to it in his speech. Equally, we should celebrate the high-quality productions that BBC Scotland provides to the whole BBC network, for the enjoyment of viewers the length and breadth of the British Isles. Viewers and listeners in Scotland benefit from a range of high-quality services. Both BBC1 and BBC2 provide opt-outs for Scottish programming as well as the usual network offer. BBC Alba provides a Gaelic language service. BBC Radio Scotland and BBC Gaelic radio provide services in both languages throughout Scotland, as well as employment in rural Scotland. There is no question but that a significant proportion of the licence fee is already being used specifically to serve Scotland through those services.
It is also worth noting the major investment that the BBC made in Scottish broadcasting when it opened the state of the art Pacific Quay broadcasting centre in 2007; the hon. Gentleman referred to the centre, which is in his constituency. I was lucky to visit Pacific Quay earlier this year and it was an incredibly impressive outfit. It is a significant employer in Scotland, providing jobs for about 1,250 people, and as the hon. Gentleman noted, I was lucky enough to pick up two signed photographs of Nina from “Nina and the Neurons” for my two children.
Such facilities have helped to make sure that BBC Scotland has been responsible over the years for some of the most enjoyed original content available to viewers throughout the UK, from children’s classics such as “Balamory” and the aforementioned “Nina and the Neurons” to acclaimed comedies such as “Mrs Brown’s Boys” and the new series of the very popular “Waterloo Road”, which was also mentioned by the hon. Gentleman.
Through Audience Council Scotland and the BBC Trustee for Scotland, Bill Matthews, I am pleased to say that the BBC Trust takes very seriously its role to ensure that the voice of Scottish listeners and viewers is heard and is at the heart of decision making in the BBC, and also looks at how well the BBC is performing for audiences in Scotland.
Anas Sarwar
The Minister is quite rightly pointing out the fantastic benefits that Scotland receives from the BBC, in terms of representing and promoting its culture, as well as being the trusted resource that it is. How would he respond directly to the comments by the SNP broadcasting spokesperson that the BBC is the institutional enemy in Scotland?
Mr Vaizey
I have not heard those remarks or seen the context in which they were made, but as I have made clear in my remarks, I think that the BBC is as loved in Scotland as it is in other parts of the UK. The viewing figures that the hon. Gentleman referred to indicate how popular its programmes are in Scotland, and the key policies that I have just rehearsed—in terms of the Audience Council Scotland and a specific trustee for Scotland—show that the BBC takes extremely seriously the matter of ensuring that its output in Scotland appeals to Scottish viewers and listeners. Furthermore, the fact that it has such a significant base in Scotland, with such significant levels of employment, tells all of us that the BBC is a friend of Scotland and that the Scottish people are admirers of the BBC.
As I said earlier, all that underlines why the Government actively encourage broadcasters, as indeed the previous Government did, to undertake production in all parts of the UK. The principle of having a geographically broad production base is enshrined in the Communications Act 2003, which imposes quotas to encourage licensed broadcasters to undertake television production outside the traditional base of London. The whole country benefits from the policy; it is good for viewers, it is good for local economies and it is good for our cultural diversity. Much of the country’s best television comes from the nations and regions, because pooling our talents and resources means that we get the best outcome.
The SNP specifically raised establishing a new public service broadcasting channel for Scotland and separating BBC Scotland from the rest of the BBC. I am sure it will come as no surprise to hon. Members that we see absolutely no basis for supporting those proposals. As I have already said, the Government are satisfied with the existing level of public provision and funding for broadcasting in Scotland. Not only does the BBC provide a wide range of services but STV provides it with keen competition for public service broadcasting within Scotland. Scottish licence fee payers are not, as the First Minister claims, disadvantaged by the UK-wide public service broadcasting system. In fact, like licence fee payers throughout the UK they benefit from it, in terms of investment, choice, quality and diversity. Our new proposals for local television will also benefit Scotland, with decisions imminent on the awarding of licences for local TV stations in Edinburgh and Glasgow.
Let me also talk about the BBC’s independent status, because that is very important in this debate. We remain fully committed to an independent BBC that forms the cornerstone of public service broadcasting in this country. Nothing we do will undermine that position, and the current licence fee settlement is grounded on that premise. This approach has ensured that the BBC remains a national asset of extraordinary importance and continues to bring great benefits to our country’s culture, to its democracy and, as the hon. Gentleman mentioned earlier, to our creative industries, which thrive in Scotland with many successful independent production companies.
The fundamental reason for our commitment to the independence of the BBC is the benefit that it brings to the whole of the United Kingdom. The independent status of the BBC supports the important principle of freedom of expression, which in turn supports a healthy and well-informed democracy. Any potential for political interference in the BBC’s day-to-day operations or output would dilute the corporation’s freedom of expression, with the outcome that the BBC’s contribution to the quality of life in this country would not be as great.
Crucially for this debate, political interference would impair the transparent and open discussion about our shared future that the BBC provides so effectively and intends to continue providing. The BBC is now entering a new era under the direction of its new director-general and I congratulate the BBC Trust on his appointment. I look forward to hearing what his vision for the BBC will be as we move forward.
Let me reiterate the key points that I wanted to make this morning. I again congratulate the hon. Member for Glasgow Central on securing this very important debate and on setting out so eloquently his position, which I suspect is the position of his party. The BBC quite rightly remains independent from Government and politicians. The BBC remains a broadcaster for the whole of the UK; and we as a Government believe, as the previous Government did, that it is important not to devolve broadcasting matters, so that we continue to provide a broadcasting system for the whole of the UK. The BBC continues to invest significant sums in basing itself in Scotland, making programmes in Scotland and providing specific output for the viewers and listeners of Scotland. Long may that remain the case.
Sentencing (Female Offenders)
(12 years ago)
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Philip Davies (Shipley) (Con)
I am grateful for the opportunity to bring this debate to the House today.
One of the starkest examples of how politically correct this country has become is the issue of women in the justice system and, more specifically for this debate, women in prisons and in courts. About 5% of the prison population at any one time in recent history has been female. The other 95% has been male, yet much time, effort, concentration and brow-beating has taken place over the very small number of women in prison. There are countless groups and organisations calling for the number to be reduced. Far too many politicians—male as well as female—are willing to trot out politically correct nonsense on the subject, repeating facts that do not bear any scrutiny at all, and there are far too many calls for something to be done about a problem that, by anybody’s standards, is hard to see exists based on the actual evidence.
Let us imagine that the male population in prison represented just 5% of the total and that women made up the remaining 95%. Would there be an outcry on behalf of the men at the expense of the women? Of course not. There is absolutely no chance on earth that that would happen, so why is there all this concern over 5% of the prison population? How can normally thoughtful, intelligent people have taken such leave of their senses over the issue? The answer is simple. It is all about being politically correct, and not many people in public life like to challenge it, but I do, Mrs Osborne, and today I want to take the opportunity to scotch some myths about all types of sentencing for women. I want to bust five particular myths.
There is an old political maxim that if someone tells a lie often enough, people will believe that it is true. I can only conclude that has happened in this case. I heard the lie that women are more likely to be sent to prison than men and that they are treated much more harshly by the courts, and I was taken in by it. I presumed it was true, because I had heard it so often, and I thought it was an absolute outrage. I was so outraged by the inequality in sentencing that I decided to do some research into it. As many people know, I spend a lot of time researching matters to do with prisons, sentencing and justice, and I wanted to get to the bottom of why women were being treated so badly.
Imagine my surprise when, having looked at all the evidence, I found it was not the case that women are treated more harshly by the courts. The unequivocal evidence is that the courts treat women far more favourably than men when it comes to sentencing. I want to expose five myths today.
The first myth is simple: women are very likely to be sent to prison and are more likely than men to be given a custodial sentence. That is simply untrue. Everyone I have spoken to who is involved with the justice system confirms anecdotally that it is not the case, but let us not just take their word for it. Let us look at the facts. I asked the Library to provide evidence that more women than men were being sent to prison, as I had been told. Not only did it not provide that information, but it confirmed that the exact opposite is true. The Library stated:
“The published statistics show that a higher proportion of men are given a sentence of immediate custody than women, irrespective of age of offender (juveniles, young adults or adult) and type of court (magistrates or Crown). This has been the case in each year between 1999 and 2009...For each offence group, a higher proportion of males are sentenced to custody than females...In 2009 58% of male offenders who entered a guilty plea for an indictable offence were given an immediate custodial sentence compared to only 34% of women.”
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the hon. Gentleman clarify whether the information he received from the Library also looked at statistics by type of offence?
Philip Davies
Absolutely. It looked at every category of offence. For every single category, women are less likely than men to be sent to prison.
Kate Green (Stretford and Urmston) (Lab)
I congratulate the hon. Gentleman on securing this important debate. I hope that at the end of it we will not be peddling myths, but facts. Will he comment on the fact that although 70% of men are in prison for a non-violent offence, 81% of women are, which suggests that although some statistics may favour women, that one most certainly does not.
Philip Davies
It does not mean that at all. The figures that the hon. Lady quotes, which groups are fond of quoting, show the exact opposite of what they think the figures show. They show that women are treated more favourably by the courts. If she will let me continue with the speech, that will become evident to her, I hope. If she still has queries towards the end, and if the figures do not make sense, I will happily give way to her again. I am sure that the figures will make perfect sense, even to the hon. Lady. I will continue with the quote from the Library:
“In 2009 58% of male offenders who entered a guilty plea for an indictable offence were given an immediate custodial sentence compared to 34% of women. For each offence group a higher proportion of males pleading guilty were sentenced to immediate custody than females.”
The Ministry of Justice’s publication, “Statistics on Women and the Criminal Justice System”, published in November 2010—it is produced to ensure there is no sex discrimination in the system—states:
“Of sentenced first-time offenders (7,320 females and 25,936 males), a greater percentage of males were sentenced to immediate custody than females (29% compared with 17%), which has been the case in each year since 2005.”
People have had a briefing from the Prison Reform Trust, which tries to persuade them that women with no previous convictions are more likely to be sent to prison than men, but that is categorically not the case, as the Ministry of Justice’s own publication makes abundantly clear.
Jenny Chapman (Darlington) (Lab)
I congratulate the hon. Gentleman for providing us with an opportunity to help him understand the issue. Women convicted of a first offence—the same offence as a man—are more likely to receive a custodial sentence. I do not think he has the figures for that.
Philip Davies
No, they are not. That is the whole point. For every category of offence, men are more likely to be sent to prison than women. According to the Ministry of Justice’s own publication, of first-time offenders, men are much more likely—not just slightly—to be sent to prison. That is a fact.
Jenny Chapman
May I explain again? I am talking about the first offence and the same offence. The hon. Gentleman has figures for first-time offending overall and for different categories of offence. However, if we take the same offence for men and for women—the first conviction—women are more likely to get a custodial sentence.
Philip Davies
No, they are not. For the benefit of the hon. Lady, I have every single category of offence. I have figures for the likelihood of men and women being sent to prison for exactly the same offence. What she is saying is simply not the case.
The Home Office undertook statistical research some years ago to try to ascertain the best comparison for similar situations. Home Office Research Study 170, “Understanding the sentencing of women”, edited by Carol Hedderman and Loraine Gelsthorpe, looked at 13,000 cases and concluded:
“Women shoplifters were less likely than comparable males to receive a prison sentence...among repeat offenders women were less likely to receive a custodial sentence. Women first offenders were significantly less likely than equivalent men to receive a prison sentence for a drug offence”.
The Ministry of Justice publication I mentioned earlier also covers the issue of pre-sentence reports and their recommendations for sentences in the courts. It says:
“In 2009, a lower proportion of women who had a pre-sentence report that recommended immediate custody went on to receive this sentence than men (83% compared with 90% for males). For all other sentence options recommended in pre-sentence reports (Suspended Sentence Order, all community sentences or fines), a higher proportion of males received custodial sentences than females.”
Even probation officers, and we all know how soft on sentencing they are, recommend a higher number of custodial sentences than are actually given, and women again are on the receiving end of that particular benefit.
Guy Opperman (Hexham) (Con)
I congratulate my hon. Friend on securing the debate. I am not sure, however, that I agree with the entire thrust of what he is saying. What he is driving at, and the argument behind his thesis, is that women are being treated more preferentially, but would he accept at the very least that one of the reasons why women should be treated more preferentially is that, as mothers, they are in the position of having to look after those who might, if their mothers are not present to support them, lapse into the criminal justice system? I am sure that that is one thing with which he would wish to agree.
Philip Davies
I will come to the issue of women looking after children. As it happens, a large number of mothers who are sent to prison are no longer looking after their children when they are sent to prison. None the less, my hon. Friend makes a reasonable point. There may well be good reasons for women to be treated more favourably in the criminal justice system in the courts than men. That is a perfectly legitimate argument to follow. If people want to use the facts to prove that women are treated more favourably than men and then actually give reasons why that should be the case, I am perfectly content for them to do so. What I cannot allow to happen is for the myth to perpetuate that women are treated more harshly in the sentencing regime than men, because that palpably is not the case. If we can start having a debate along the lines that my hon. Friend suggests, I would be perfectly happy, but we are a long way from even getting to that particular point.
In addition to the undeniable evidence that women are less likely to be sent to prison than men is the fact that their average sentence length is shorter than that of men, too. Again, I refer to the Ministry of Justice’s own published figures of November 2010. “Statistics on Women and the Criminal Justice System”:
“In 2009, women given an immediate custodial sentence for indictable offences received shorter average sentence lengths than men (11.0 months compared to 17.0 months for males).”
That is not a minor difference. The figures show that the average male prison sentence is over 50% more than the average female prison sentence. That is something that those who allege to be so keen on equality should think about.
Kate Green
It is important to understand some of the factors behind those figures. For example, a substantially higher proportion of women in prison are first-time offenders—29% compared with 12% of men. Naturally, therefore, we would expect the sentencing for first-time offenders to be set at a lower level than for those with a pattern of offending behaviour. I am not suggesting that that explains all the difference in the figures, but it is important that the hon. Gentleman gives us the full analysis and not just the headlines.
Philip Davies
It is equally important that the hon. Lady listens to what I am saying rather than wrapping herself in her brief from the Prison Reform Trust. We have all heard it once but I will repeat it for her benefit. The Ministry of Justice’s own publication, “Statistics on Women and the Criminal Justice System” says:
“Of sentenced first-time offenders (7,320 females and 25,936 males), a greater percentage of males were sentenced to immediate custody than females (29% compared with 17%), which has been the case in each year since 2005.”
To suggest that more female first-time offenders are more likely to be sent to prison than men is not the case. The hon. Lady says that a higher proportion of women in prison are first-time offenders, but that is because they are less likely to be sent to prison unless they commit particularly serious offences and leave the courts no option but to send them to prison. It is a complete distortion of the facts, and the Ministry of Justice publication makes that perfectly clear.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
Will my hon. Friend clarify whether all those statistics take into account the type and gravity of offence, previous offending history and all relevant mitigating factors, which sentencers are required to consider? It would be an unjust system if they failed to do that.
Philip Davies
Yes, they do. I will happily supply the Minister with the relevant information from the House of Commons Library, which goes to show, beyond all doubt—I am sure that she trusts the figures from her own Department—that for every single category of offence, for all ages and in all types of court, men are more likely to be sent to prison than women. There is not one blip anywhere. For every single offence, for every age and in every type of court, women are less likely to be sent to prison than men.
Mr David Nuttall (Bury North) (Con)
The point raised by the Minister is important. Surely these other factors that have to be taken into account on sentencing would not affect the statistics, because they would be taken into account whether it was male or female. In fact, one assumes that they would be taken into account for both sexes, so they will not affect the statistics.
Philip Davies
My hon. Friend makes a good point and he is right. Not only are women less likely to be sent to prison than men, and more likely to be sentenced to a lesser term than their male counterparts, but they are also more likely to serve less of the sentence they are given in prison. In its offender management statistics, the Ministry of Justice says:
“Those discharged from determinate sentences in the quarter ending December 2011 had served 53 per cent of their sentence in custody (including time on remand). On average, males served a greater proportion of their sentence in custody – 53 per cent compared to 48 per cent for females in the quarter ending December 2011. This gender difference is consistent over time, and partly reflects the higher proportion of females who are released on Home Detention Curfew”.
Seema Malhotra
To what extent are family circumstances, especially circumstances of children, taken into account in sentencing? Every year, 18,000 children see their mothers go to prison and only 5% of those children stay in their homes during that sentence. There are also statistics to suggest that a third of women in prison are lone parents, and it is more likely that their children will lose their homes or be placed in care as a consequence of their mothers’ custody.
Philip Davies
The hon. Lady is right. That is a fact that is given in the courts, which is why women are less likely to be sent to prison than men. That was a point that my hon. Friend the Member for Hexham (Guy Opperman) made earlier. Let me emphasise my point with a case from earlier this year. Rebecca Bernard, who had 51 previous convictions for crimes including violence and threatening behaviour, led an all-girl gang that brought terror to her town. She has been the subject of two antisocial behaviour orders for making the lives of her elderly neighbours a misery. When this 23-year-old attacked two innocent men in a night club with a champagne bottle, it was thought that a custodial sentence was inevitable. However, she walked free from court after a judge decided that she was a good mother to her three young children. Bernard had smashed a bottle over one victim’s head and then stabbed the other in the arm with its jagged neck. A court heard that she had launched the attack because she believed wrongly that the men were laughing at her. Quite clearly, those factors are taken into account by the courts, which explains why someone such as Bernard, who clearly should have been sent to prison, and who, if she had been a male, would definitely have been sent to prison, was not sent to prison. That is the explanation. I am perfectly content for the hon. Lady to say that that should be the case, but at least let us argue from the facts, because then we will be acknowledging that men are more likely to be sent to prison than women.
Guy Opperman
I understand the basis on which my hon. Friend is making his case. Will he address the nature of the sentence for female offenders and the degree to which they are required to work, take literacy lessons and address drug and alcohol addiction as part of the offending management programme?
Philip Davies
No, I will not, because that is a debate for another day. These are all important issues, but this particular debate is about the sentencing of female offenders, and I am concentrating on the likelihood of people being sent to prison. If my hon. Friend was listening carefully at the start of the debate, he would know that the myth that I am currently exposing is that women are more likely to be sent to prison than men. As the figures that I have just quoted show, that is palpably not the case. I will go through other myths as we go through the debate, but there may not be time to go through every aspect of the criminal justice system at the moment.
Mrs Grant
It is important to clarify something. Regarding mitigation, does my hon. Friend not accept that there may be some factors that are more relevant to women than to men and hence the difference—for example domestic violence, self-harm, mental ill-health and caring responsibilities?
Philip Davies
I will come on to some of those points later. However, as the Minister will know from her Department’s own figures, quite a lot of victims of domestic violence are men. In fact, for certain ages—I think that it is between 20 and 30—there are more male victims of domestic violence than female victims. The point is that all the things that apply—
Philip Davies
The Minister shakes her head. I know that she has not been in her post for long, but I advise her to go and look at the figures from the Ministry of Justice on domestic violence for different age ranges, because they were the figures that the MOJ quoted to me in a parliamentary answer about three or four years ago. They may well have changed, but I urge her at least to go and look at them before she shakes her head.
Andrew Stephenson (Pendle) (Con)
I secured a 90-minute debate on domestic violence here in Westminster Hall just before the recess, which a number of Members contributed to. I completely agree that there are many men who are victims of domestic violence. However, a number of studies have shown that as many as half of all the women in jail at the moment—I think that is the figure—have been victims of domestic violence and almost a third of all female prisoners have been victims of sexual abuse, so those factors are very relevant. I do not want to get into a statistical argument with my hon. Friend, but I hope that this debate will broaden to discuss some of the other challenges faced by female prisoners and some of the factors that must be taken into account in sentencing.
Philip Davies
I am elated, because we now appear to have a consensus in Westminster Hall, which is an acceptance at last that men are more likely than women to be sent to prison. What we are now hearing from a variety of people are reasons why that should be the case. Those reasons may well be true—that is a debate for another day—but at least we are getting to the nub of the purpose of this particular debate that I have secured, which was to show that men are more likely than women to be sent to prison.
I will come on to discuss the women who are in prison and perhaps my hon. Friend might like to explain which of the women in prison he would like to see released; perhaps other Members could do the same. However, that is the second myth; I will just finish off on the first myth that I am discussing.
All other MOJ figures confirm that men are treated more harshly by the courts than women, and that there is quite a disparity. In the past few years for which the figures are published, women had 50% more chance than men of being released from prison early on home detention curfew. So it is perfectly clear that on the likelihood of being sent to prison, on the length of sentence being handed out and on the proportion of sentence served, women are treated more favourably than men, and that applies to all ages and all categories of offences, in Crown courts and magistrates courts. At least we have made that particular point clear.
The second myth that I want to discuss, and my hon. Friend the Member for Pendle (Andrew Stephenson) may well be interested in hearing about it, is that most women are in prison for petty or non-violent offences, and are serving short sentences. Many campaigners say that far too many women are in prison and should not be there; that instead, they should be serving their sentences in the community.
We can take a snapshot of the sentenced female prison population at a moment in time. The last figures that I have are for June 2010. Let us just look at the detail of all these “poor women” who are serving prison sentences and who—apparently—should be out and about. Which of these women prisoners do those who advocate reducing the female prison sentence want to let out? Frances Crook, the director of the Howard League for Penal Reform, was quoted in The Guardian in 2007 as saying that
“For women who offend, prison simply doesn’t work. It is time to end the use of traditional prisons for women.”
Perhaps she might explain which of these particular women she would like to see out and about, and not serving a prison sentence. Maybe it is the 211 women serving sentences for murder; maybe it is the 135 women in prison for manslaughter or attempted homicide; maybe it is the 352 women convicted of wounding; maybe it is the 142 women convicted of serious assault or other violence against the person; maybe it is the 58 women imprisoned for cruelty to children; it could be the 83 women who are in for rape, gross indecency with children or other sexual offences; maybe it is the 272 women who are in for violent robbery, or the 151 women who are in for burglary; or maybe it is the 398 female drug dealers who should not be in prison. The total of those figures is about 1,800, which is a figure often bandied around as the target for women offenders in prison. Maybe people would say, “Those people should be in prison; it is the others who shouldn’t be in prison.” As I have indicated, there are some people who say that no women should be in prison at all, but that argument is just so ridiculous that I hope nobody here is in favour of it.
Kate Green
I am sure that the hon. Gentleman will agree that prison serves a number of purposes. One is the protection of the public. Another, though, is of course to rehabilitate offenders and prevent reoffending. It is pretty clear that prison is not doing a very good job at those things—for all sorts of reasons—both for women and for men. And the protection of the public could be better achieved through dedicated secure units for women rather than putting them into a system that is predominantly designed for a male lifestyle and male behaviours, and therefore incarcerates them in masculine-led regimes.
Philip Davies
These women are in women’s prisons, which are not “masculine regimes”. They are in female prisons, for goodness’ sake.
Guy Opperman
Everybody accepts that those women are in women’s prisons, but at the same time we cannot ignore a statistic that says that upwards of 70% of offenders—male or female—reoffend. Therefore, does my hon. Friend accept that we have to look at a different approach, not only to sentencing male offenders—both Governments in the last five to 10 years have tried to do that—but to sentencing and dealing with female offenders.
Philip Davies
My hon. Friend might be right if it was not the case that according to the MOJ—so I am sure it is true—the longer people spend in prison the less likely they are to reoffend, and quite markedly. The high rates of reoffending that he mentions only relate to people who spend short periods of time in prison. The longer people spend in prison, the less likely they are to reoffend. The figures are something like this: for those sentenced for up to 12 months, 61% of people reoffend; for one to two years, the figure goes down to about 47%; for two to four years, it is about 37%; and for more than four years, it is down to about 17%. So the longer that people spend in prison, the less likely they are to reoffend. If my hon. Friend and other people are suggesting that—
Philip Davies
Hold on, hold on. If my hon. Friend and other people are suggesting that the 5,442 women who are sent to prison each year for up to six months should not be in prison, presumably they must also be saying that the 51,588 males who are sent to prison each year for less than six months also should not be in prison.
Philip Davies
The hon. Lady may well send me a copy of her election address at the general election. If she would like to go round her constituency emblazoning the message that those who are sentenced to up to a year in prison—that is 70,000 people each year—should not be sent to prison, I will look forward to her issuing a leaflet to that effect. If she will not do that, I may well do it for her.
Kate Green
As the hon. Gentleman knows, I represent a Manchester constituency where we have been piloting intensive alternatives to custody. In other words, those people who would otherwise meet the custody threshold and receive a short prison sentence of less than six months are diverted to community penalties. I must tell him that not only is that approach producing lower reoffending rates but it is very popular in Manchester, so he should not make a simplistic assumption that my constituents are not prepared to look at the deeper arguments about when custody works.
Philip Davies
I will make an offer to the hon. Lady today: I am happy to go to Manchester and debate sentencing with her, any time that she wants to fix up a debate, and we will see what the majority of her constituents think. I think that the point that she makes is nonsense, but if she wants to argue it, that is perfectly fair. However, the point is that those things apply to men more than women, so this argument that this is all about women is complete nonsense. All of these issues relate to men just as much as they do to women.
Guy Opperman
All of us in this House would agree that those who are convicted of serious offences should go to prison. That is not in dispute, and neither is the desire to make prison more effective at rehabilitation. The statistics that my hon. Friend has produced show that longer sentences produce a lower likelihood of reoffending. Does he not accept, therefore, the overwhelming logic that if short sentences do not stop reoffending, short sentences are not necessarily working?
Philip Davies
We are getting slightly off the point, but I will respond to my hon. Friend’s intervention. The statistics do not suggest that. They suggest two things. The first is that people should perhaps have longer sentences, for which the reoffending rate is lower, not that they should have no sentences at all. The high reoffending rate for short sentences is an argument for longer sentences, not for no sentences.
The second point is that, in the main, someone has to have committed many offences to get to prison. If someone goes to court with more than 100 previous convictions they are more likely not to be sent to prison than to be sent there. People have community sentence after community sentence, and the only reason they go to prison is that those community sentences have not worked—they have not prevented them from reoffending. The reoffending rate for that cohort of people in prison, therefore, is lower than for those people when they were on community sentences.
Philip Davies
I am very conscious of time, Mrs Osborne. I will give way one last time, otherwise no one will have spoken in the debate, bar me.
Mrs Grant
I understand. My hon. Friend has been very reasonable. Clearly, he has worked extremely hard on collating the statistics. I wonder, however, whether he has actually visited a female prison, or some of the alternatives to custody, one of which was referred to by the hon. Member for Stretford and Urmston (Kate Green).
Philip Davies
I have indeed. I have visited the intensive alternatives to custody in my part of the world and have visited 12 UK prisons, including Holloway and a women’s prison up in Yorkshire—so I have visited two women’s prisons in the UK. I have also visited prisons in Denmark and the USA, to see what they do. If my hon. Friend was trying to suggest that I did not know what I was talking about, I hope that I have made her aware that I have some experience in this field.
Interestingly, no one has, as yet, managed to tell me which of those people I listed should not be in prison. Perhaps we have a consensus that they should be in prison. If people want to limit the debate to the 1,800 women I have mentioned, let us continue to consider which of them should be let out. Perhaps it is the 91 arsonists, the 24 people convicted of violent disorder, or the 45 serving time for kidnapping and blackmail. Perhaps it is the 192 people who are in for serious fraud and forgery, the 320 who have been convicted of importing drugs that end up being sold onto our streets, or the 111 serving time for other serious drug offences. If we do not want to let all of them out, we appear to be running out of options. Perhaps people will tell us which of those women they think should not be in prison.
Philip Davies
I will be delighted to hear from the shadow Minister which of them the Labour party does not believe should be in prison.
Jenny Chapman
The Labour party believes, and I think we have the agreement of the Minister—who is from the hon. Gentleman’s own party—on this, that it is not about letting people out of prison, but about preventing them from going there in the first place. We want to see interventions that work and are properly resourced earlier on in people’s criminal careers, to prevent them from having to go to prison. That is the point we are trying to make.
Philip Davies
With respect, that is not the point that people are making, because it applies equally to men as to women. In debates and in questions we hear all this thing about women being treated more harshly than men. It is no good talking about these things, because they apply equally to men and women. No one, as yet, has been able to identify where women are treated more harshly in the criminal justice system, and that is the whole point of my debate.
Perhaps we are coming down to the other numbers. Perhaps it is the two dozen who are in for perjury—
Philip Davies
No one has yet been able to tell us which of those people should not be in prison, so I presume that we can conclude only that all of them should be in prison. Therefore, we do not really have a problem.
I want to decouple one other thing. The number of women who receive short sentences in any one year is a completely different figure from the female prison population at any one time. Looking at recent figures as an example, just under 16% of female prisoners are serving sentences of less than six months, which is clearly a minority. If that is not classed as a short sentence, a further 6% are in prison for up to one year, so 22% of female prisoners are in custody for up to 12 months, which covers all cases heard in magistrates courts and some cases heard in Crown courts. All other female offenders are serving sentences of more than one year, which means their offences were so serious that they had to be dealt with by a Crown court. Those women, 78% of the total female prison population, are not serving short sentences for not-so-serious offences, as people would have us believe, but are serving much longer sentences for the most serious crimes. The figure of 78% of the female prison population comprises 34% serving between one and four years, 28% serving sentences of four years to life and 11% serving indeterminate sentences. A further 5% of offenders are in prison because after previously being released, they have either reoffended or breached their licence conditions. That is the second myth: women are imprisoned for short sentences and not very serious offences.
The third myth is that women are often remanded in custody but then are not sentenced to custody. I have heard the misuse of many statistics over the issue of remand and female offenders, so I want to introduce the House to the facts. The Ministry of Justice’s own figures show that women are more likely than men to get bail. The figures are in “Statistics on Women and the Criminal Justice System” of November 2010:
“In 2009 80% of females were bailed, compared with 62% of males; 20% were remanded in custody compared with 38% of males. The percentage remanded for both males and females is at a five-year low.”
Those figures yet again back up the fact that more men than women are sentenced to custody. The document goes on:
“Of those remanded in custody, 66% of females were then sentenced to immediate custody in comparison with 75% of males.”
When people complain about women being more likely to be remanded in custody and then not sent to prison, it is solely due to women being treated more favourably when they are sentenced. It is not that they are more harshly treated when the decision is made to remand them in custody or give them bail. The figures are perfectly clear—it is yet another deliberate myth.
The fourth myth is that prison separates mothers from their children, which unfairly punishes them. It is said that 17,000 children are separated from their mothers and that 60% of women in custody have children under the age of 18. It is also suggested that about 700 of more than 4,000 women are in prisons more than 100 miles away from their children. Let us take that in stages. First, it is not the system that separates any mother from her children. It is that individual’s actions in breaking the law that have led to prison and that is almost certainly 100% their fault and their responsibility alone. As we already know from the evidence, they are less likely than men to go to prison. In addition, recently updated sentencing guidelines also incorporate consideration of the effect that custody would have on others, when the defendant is the primary carer for another. That again is likely to benefit further more women than men when they are sentenced.
If we are so concerned about the children of women offenders, what about the estimated 180,000 children who are separated from their fathers who are in prison? In this age of equality, what about that much higher figure? Should we not be more, or at least equally, outraged about that? If not, why not? Some women may be further away from their children than others in prison, but let us turn to the main point about all those women who are allegedly being so unfairly dragged away from their poor children by over-harsh magistrates and judges. That is another big myth.
My understanding is that a senior civil servant at the Ministry of Justice has helpfully confirmed recently that two thirds of the mothers sent to prison who have children were not even looking after them at the time. She apparently said of the women being sent to prison:
“Two-thirds of them didn’t have their kids living with them when they went to prison.”
Why on earth is there such a huge outcry about separating mothers from their children, when most of the mothers in prison were not being mothers to their children anyway?
Jenny Chapman
I congratulate the hon. Gentleman; he marshals his argument well. He makes good use of statistics up to a point. However, on this I must differ. Only 5% of children with a mother in custody are able to stay in their own home. That is not the case for men. What does the hon. Gentleman think about that? What is the effect? We know that people who have parents in custody are much more likely to commit offences in future. We are trying desperately hard to break that pattern of offending, so it seems an obvious step to try to keep those relationships alive. We know that, especially with women, that is one of the single most important factors in preventing their reoffending.
Philip Davies
My point is that men are parents as well as women. The problems that the hon. Lady articulates apply to men as well as women. The argument goes that this is all about women; it is not all about women. Let us not focus just on the very small proportion of women who are in prison. Let us also think about all the men, too. The whole point of the debate is to make people aware that where there are issues they apply equally to men, and that some of the issues are not even issues at all because the facts do not back them up.
Mrs Grant
On mother and baby units, it is not, with the greatest respect, all about the mother. The principal criterion for entering a mother and baby unit is that it must be in the best interests of the child. That is the most important criterion. Does my hon. Friend not accept that?
Philip Davies
The point is that 66% of women sent to prison who have children are not actually looking after their children when they are sent to prison. That is the point I am making, so I am not entirely sure why we are all pulling our hair out about people who are not even looking after their children. Those children have probably either been put into care or are being looked after by other family members, probably because the mother is considered unfit to look after the children. Why should the courts treat her less harshly when the children have already been removed from her? It is a completely spurious argument.
When it comes to the minority who are looking after their children, we should not assume that they are all fantastic mothers and role models for their children. Many will be persistent offenders with chaotic lifestyles. Some will end up dragging their children into their criminal lifestyles and some will scar their children for life along the way. We presume it is in the children’s best interest to stay with those mothers. It may not be in the best interest of the child for the mother to be released. It may be in their best interests for their mother to go to prison in some cases.
Others will have committed very serious offences. The same official from the Ministry of Justice said recently of women offenders:
“They can be very damaged and also very damaging.”
That is absolutely right. Sarah Salmon of Action for Prisoners’ Families said:
“For some families the mother going into prison is a relief because she has been causing merry hell.”
That is another worthy point we should consider. Let us, finally, not forget those who are in prison for being cruel to their children—for abusing their own children.
The final myth is that women are generally treated more harshly than men in the justice system. It is clear that women are less likely than men to be sent to prison. Therefore, we need to look at other court disposals to see if they are then treated more harshly than men in other areas. If they are not being sent to prison as frequently as men they are presumably being sentenced at the next level down—a community order. They are not. The Ministry of Justice’s figures yet again show that men are more likely than women to receive a community order: 10% of women sentenced are given a community order compared with 16% of men. The Ministry of Justice goes on to confirm that
“these patterns were broadly consistent in each of the last five years”.
Women are less likely than men to go to prison and less likely to be given a community order. That is not all. Of those who are given a community order the ones given to men are likely to be much harsher. The Ministry of Justice says:
“The average length of all community sentences for men was longer than for women…For women receiving a community order, the largest proportion had one requirement, whereas the largest proportion of men had two requirements.”
I do not want to veer into the realms of domestic violence that my hon. Friend the Member for Pendle tried to go down; that is a debate for another day. However, one thing worth noting about sentencing is that despite all the evidence that shows women as the perpetrators of domestic violence in far more cases than some would like us to think, the community requirement imposed on those who commit an offence in a domestic setting is imposed only on men and cannot be handed down to women. As usual, this shows that the whole issue of equality works only one way, even when we are dealing with exactly the same offence.
Given the more severe sentences for men at the higher end of the sentencing spectrum, it is unsurprising that women are more likely to receive low levels of punishment at courts. It is a fact that a higher proportion of female defendants receive fines. All of that shows that throughout the court sentencing regime men are on average treated more severely than women.
Before I conclude there is another interesting statistic that is worth sharing. There is even an imbalance in the number of women reaching court compared with men, as more females than men were issued with pre-court sanctions. That has been consistently the case in recent years according to the Ministry of Justice. That is the evidence.
All the hysteria surrounding women in the justice system is completely without foundation, yet people want to be seen to be doing something about the so-called problem. We have the Together Women project, women-only groups for community sentences, a criminal justice women’s strategy unit, women’s centres, a proposal for women-only courts and, just the other day in Manchester, the right hon. Member for Tooting (Sadiq Khan) proposed a women’s justice board. That is all on top of the Corston report, which looked at the whole issue of female offenders and came up with even more suggestions.
Looking at the evidence, there appears to be sex discrimination in the sentencing of offenders, but the people being discriminated against are men not women. Women cannot have it both ways. They cannot expect to be treated equally in everything in society except when it comes to being sentenced by the courts for the crimes that they commit. People may want to argue that it is reasonable for women to be given lighter sentences than men, and that it is right that fewer women are sent to prison than men. That is an argument for another day, but at least when we have these debates about sentencing for men and women let us stick to the facts as they are and not what we would like them to be. Men are treated more harshly by the courts than women. If we can at least have debates that flow from that, based on the facts, we will have made a good start today.
Jenny Chapman (Darlington) (Lab)
It is a pleasure to take part in the debate, and I congratulate the hon. Member for Shipley (Philip Davies) on securing it. It is useful for debates to be formed on the basis of fact, and I think that we will all go away and have another look at some of the statistics. However, I do not think that we will all necessarily jump to the same conclusion as the hon. Gentleman.
I take exception to the charge of inappropriate political correctness and hysteria on my part and on the part of the Minister. We are trying to devise a criminal justice system that is sensible, just, effective and helps to reduce reoffending and the number of victims. I think that that is something that we all share, and we are trying to do it within a very tight budget. In the past, I have agreed with the hon. Member for Shipley on issues such as indeterminate sentencing. It is slightly rich for him then to say that we are all getting a bit woolly-headed and soft. We are not; we are trying to deal with these issues sensibly.
If we take a look at what we know about women in the criminal justice system, the first thing that we see is that there are far fewer of them than there are male offenders. As the hon. Gentleman said, women make up only 5% of the prison population. However, being a minority has meant that in the past they have not been served as appropriately as the male population. For example, as well as committing less crime, the female population tends to commit different types of offences. Importantly, they are less likely to commit violent crime. Conversely, we know that they are more likely than their male counterparts to be given a custodial sentence for their first offence. We will all go away and frantically try to check that out. Their most common offence appears to be theft, particularly shoplifting. Once there, women experience prison differently from men. Despite inhabiting only 5% of our cell spaces, female offenders account for nearly 50% of all incidents of self-harm that happen inside prison walls. The majority of women in prison are serving short sentences of six months or less. Once out, the majority of them reoffend and are back within one year. Clearly, something is not working.
Philip Davies
I can only conclude that the hon. Lady did not listen to what I said. The fact is, at any point in time, 78% of women in prison are serving a sentence of over one year. It is simply not true to say that the majority of women in prison today are serving a short sentence—they are not.
Jenny Chapman
The majority of women who are sentenced serve less than six months. It goes without saying that serious and violent offenders, whether men or women, should be punished and imprisoned to protect the public. However, it needs to be said that the majority of women, viewed by sentences, have committed minor, non-violent offences. We are aware that our new Secretary of State for Justice is keen to tell us that prison works, but when 62% of women who serve a short custodial sentence get out and quickly reoffend, it is a sure sign that something is not working. I am sure that the hon. Gentleman would like all classes of offender to serve longer sentences, but I am curious to know where the budget will come from.
Philip Davies
There are plenty of areas from which the extra resources for the prison budget could come. A starter would be the £19 billion that we give to the European Union. Perhaps the recent vast increase in overseas aid—the money that we give to India—would be a good place to start, actually to have some prison places in this country.
Jenny Chapman
I really should have thought before I said that; I should have predicted that answer. I look forward to the hon. Gentleman raising that point with the leader of his party.
In 2007, the Labour Government published the Corston report, which was commissioned precisely to consider this cohort of offenders. Irritating though it is to the hon. Gentleman, we still believe that specific things can be done for this group of offenders to reduce their reoffending that are not currently taking place, and they are different from those interventions that may be successful for male offenders.
More than 50% of the women in prison report that they have experienced domestic abuse. One in three of them have suffered sexual abuse, and a quarter of the women in prison were in care as children. They are disproportionately more likely to suffer from serious mental health problems than either male offenders or the wider population. Some 37% of women sent to prison say they have attempted suicide at some point in their lives, and 74% left school before they were 16. Drugs and substance misuse are also disproportionately a factor in women’s offending before entering custody—75% of women had used illegal drugs. I have already mentioned the appallingly high amount of self-harm that occurs in this population.
Baroness Corston was led to describe these women as “troubled” rather than simply “troublesome”, although they certainly can be troublesome. A short prison sentence, mandated on top of an already chaotic life, does little to address the root causes of offending. The problems that were there before a female offender entered the gates will be there when she leaves them, only then there might be more. Some 30% of women lose their accommodation while in custody. Many of them had inadequate housing or were homeless before arrest, and they are not the only ones at risk of losing their homes due to imprisonment.
Nearly 18,000 children are separated from their mothers every year by a prison sentence. Female offenders are often the primary or sole carer in a family—this is where they differ from male offenders. Some 66% of women in prison have dependent children under the age of 18. Only 5% of children with a mother in custody are able to stay in their own homes while their mum is inside. The burden often falls on extended family members or on the care system. We cannot afford inappropriately to sentence female offenders who do not pose a serious risk to the public. It costs children their family and their homes. It makes it harder for women, who are often vulnerable or victims in their own right, to get their lives back on track. It condemns communities to have offenders returned to their streets without any meaningful preventative work done; and on top of it all, it simply costs too much.
The Prison Reform Trust, which I know the hon. Member for Shipley holds in very high regard, reports that it costs an average £49,000 per year to hold a woman in prison. The Independent, which I am also sure that the hon. Gentleman reads very carefully, recently ran an article about a woman who had been sent to prison for stealing a lasagne. The ex-governor of Styal women’s prison tells a story of a woman who was given a custodial sentence for stealing a sandwich when she was hungry. In a women’s centre in Manchester earlier this month, I talked to a woman who had been made homeless due to domestic abuse and had been sent to prison after committing petty theft to survive—she had stolen a sandwich.
I reiterate that of course there are crimes where a custodial sentence is the most appropriate punishment for an offender, female or not. However, a disproportionate or ineffective custodial sentence, as is clearly suggested by current reoffending rates, is an awful lot to pay for a solution that solves very little.
Baroness Corston made a series of recommendations about changes that needed to be made to the content and provision of women’s sentences. Her report was greeted with strong support by all parties, including the two—or the one—that now sit opposite me.
Philip Davies
Is the hon. Lady claiming that someone was sent to prison for stealing a sandwich as a first offence? Is that really what she is claiming? If so, I find that very hard to believe. If people are sent to prison for what she considers to be minor offences, I can guarantee that men are more likely to be sent to prison for those offences because, for every category of crime, men are more likely to be sent to prison than women. This applies equally to men—it is not only women.
Jenny Chapman
Of course, that is true. If something positive can come out of this debate, it might be a sense that in raising issues concerning women we are not solely concerned about women offenders. What is true, however, is that we could have much more success with that group of offenders if they were dealt with slightly differently. Given that we have such a problem with reoffending, it makes perfect sense to break offenders down into groups to be dealt with and with whom we could first have some success.
The Labour Government accepted almost all of Corston’s 43 recommendations, and a lot of good progress was made. Five years on, some of the achievements that we should be most proud of are the end to mandatory strip searching and the targeted investment in community and diversion services for women. I pay tribute to my hon. Friend the Member for Garston and Halewood (Maria Eagle) who, according to my right hon. Friend the Member for Blackburn (Mr Straw), argued ferociously for change and did not stop until she got her way—a fine example of the effectiveness of a women’s justice champion, a role that has, sadly, been conspicuous by its absence in the first two years of this Government.
Progress, I am disappointed to report, has stalled. I have already noted that the current Secretary of State for Justice did not find time to make women a priority in his conference speech, although, to be fair to him, he is simply following the example set by a Government who did not include a single mention of female offenders in a Bill with the size and scope of the Legal Aid, Sentencing and Punishment of Offenders Bill. The Secretary of State has made much of his desire to be tough on crime and, even more perhaps, of his fractious relationship with community sentencing. This is not about being hard or soft, however, but about what works, and smart community interventions are the most effective way to sentence and rehabilitate the majority of women who enter the criminal justice system. Such reform is tough on crime, as it reduces it. When I asked staff and service users at the Pankhurst women’s centre in Manchester what needed to change, they answered that politicians needed to grow a backbone—they were actually a lot less polite, but I think we know what they meant.
In opposition, Labour has continued our commitment to such reform—this month my right hon. Friend the Member for Tooting (Sadiq Khan) announced plans to set up a women’s justice board. Reducing the number of women in prison, he argued, should be a priority for any Government. The Secretary of State for Justice is not known for his desire to reduce the prison population, but if our criminal justice system is to be sensible and effective and provide value for money, it may be time for the Government to think outside the gates.
The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)
It is a pleasure to serve under your chairmanship today, Mrs Osborne. I congratulate my hon. Friend the Member for Shipley (Philip Davies) on securing this important debate, and I welcome the opportunity to update the House on the steps that justice agencies are taking to address women’s offending. Before doing so, I want to set out two important parts of the wider context on female offenders: to explain how our current sentencing framework deals with gender and to show how important it is to look carefully at the evidence on how women are sentenced by the courts.
To begin with, therefore, it is important to be clear about how our sentencing framework is gender-neutral: everyone is absolutely equal before the law. The same criminal offences and maximum penalties apply to every case, regardless of the offender’s gender. Alongside that, however, we also need to remember that every offender who is brought before the courts is unique. A long-standing principle of our justice system is that courts should consider the full circumstances, not only of the offence but of the offender, when sentencing. A sentencing framework that did not allow courts to take into account individual circumstances would not be a just one.
In many cases, an offender’s personal characteristics, such as previous convictions, failure to comply with earlier court orders or abusing a position of trust, can all be treated as aggravating factors when sentencing. Other personal characteristics, however, may provide mitigation. Previous good character, age, physical or mental health and caring responsibilities are all factors that courts can take into account when deciding the appropriate sentence.
All such factors may apply to both male and female offenders. For example, that an offender is a primary carer for dependent relatives is the important fact for the court, not whether the offender is the mother or the father. Probation pre-sentence reports give courts the detailed assessments that they need to make informed judgments about the factors that they should take into account.
I should make it clear that courts need to weigh mitigating factors against the others circumstances. For example, although it is recognised that parental imprisonment can have considerable effect on the lives of children, caring responsibilities will not necessarily mean that an offender will be spared prison. The overriding aim of the courts will always be to impose a sentence that reflects the seriousness of the offence and that is proportionate to the culpability of the offender and the harm caused.
We need to bear in mind all such issues when looking at the sentences imposed on male and female offenders. Differences in the type and severity of sentence given to men and women may be attributable to a wide range of factors, such as the type and gravity of offence committed and the individual’s previous offending history.
Philip Davies
Is the Minister therefore conceding—the main purpose of my debate—that for each category of offence men are more likely to be sent to prison than women? She did not say so explicitly, but she was about to give reasons for that being the case.
Philip Davies
I will give the Minister one more chance, because I do not want her to mislead the House inadvertently. She can use her Ministry of Justice figures for the answer. Does she accept that, for each category of offence, men are more likely to be sent to prison than women? We can take all the reasons why that may be the case and we can put in all the mitigating factors, but will she confirm for the benefit of the House, as the Minister in this Department, that for each category of offence men are more likely to be sent to prison than women? The reasons are irrelevant; it is only the facts that we want at this stage.
Mrs Grant
We could go round in circles, but I shall repeat myself: the sentencing framework and guidelines are gender-neutral and everyone is equal before the law. The sentencer has an obligation to take into consideration all factors relating to the offence and to the offender. In our judicial system, if the sentencer failed to do so, we would have an unjust system.
We need to be careful when interpreting the statistics, many of which have been cited by my hon. Friend today. At a high level, for example, the figures show that 10% of male offenders and 3% of female offenders were sentenced to immediate custody in 2011. The average custodial sentence length for males was longer than for females, at 15 months and 10 months, respectively. Equally, however, proportionally more males than females received sentences in 2011 for serious offences such as violent crime, sexual crime and robbery. There were also differences in the severity of offences committed within the groups. For example, 343 offenders were sentenced in 2011 for murder, but only 23 were female offenders.
The available statistics on aggravating factors suggest that a similar proportion of males and females sentenced to short custodial sentences are persistent offenders. In June 2011, around half of both men and women serving sentences of six months or less in prison had 15 or more previous convictions.
A number of mitigating factors are particularly associated with women offenders, including the high prevalence of mental health needs and child care responsibilities. Prisoner surveys tell us that more than a quarter of female prisoners reported having been treated for a mental health problem in the year before custody, compared with 16% of male prisoners.
Women are also more likely than male offenders to have child care responsibilities, and 60% of mothers with children under the age of 18 lived with those children prior to imprisonment, compared with around 45% of fathers. So there is a nuanced story behind the statistics, which reflects the fact that every offender, whether male or female, is a unique individual. Whether offenders are punished in custody or in the community, the Government are committed to ensuring that both men and women who offend are successfully rehabilitated.
For those offenders who are best dealt with out of court, we are piloting mental health and substance misuse liaison and diversion services in police custody and at courts by 2014. We are also developing intensive treatment options in the community for offenders with drug or mental health problems, including four women-only services in Wirral, Bristol, Birmingham and Tyneside.
In prisons, we are piloting drug recovery wings for short-sentence, drug and alcohol-dependent prisoners at three women’s prisons: HMPs New Hall, Askham Grange and Styal. We are also ensuring that courts have the right mix of punitive and rehabilitative requirements available when sentencing female offenders to community sentences. The National Offender Management Service is providing £3.78 million in this financial year to fund 31 women’s community services that can be used as part of, or in conjunction with community sentences. To protect the provision of services for women in these times of financial challenge, that funding will be embedded within the baseline for future probation trust settlements with a requirement that it results in enhanced services for women.
We have issued gender-specific standards in all areas of the prison regime, including training for staff working with women offenders in prisons, now extended to services provided in the outside community, and new search arrangements, ending routine full searches of women prisoners.
Seven mother and baby units in England and Wales provide an overall total capacity of 77 places for mothers, with capacity for up to 84 places for babies to allow for twins. Mother and baby units provide a calm and friendly place within prison for babies to live with their mothers. They enable the mother and child relationship to develop, thereby safeguarding and promoting the child’s welfare.
In closing, I thank the hon. Members for Stretford and Urmston (Kate Green) and for Feltham and Heston (Seema Malhotra), and my hon. Friends the Members for Pendle (Andrew Stephenson) and for Hexham (Guy Opperman), as well as the hon. Member for Darlington (Jenny Chapman), for contributing to the debate. We can continue to improve how we tackle offending together only if we continue to address the wide range of factors associated with offending, whether the offenders are male or female. I welcome the constructive and knowledgeable contributions from all hon. Members this afternoon, as they have highlighted how important it is to continue to focus on responding to the specific circumstances of women offenders.
Tonbridge Hospital/Edenbridge Hospital
(12 years ago)
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Sir John Stanley (Tonbridge and Malling) (Con)
It is a pleasure to see you in the Chair, Mrs Osborne.
My constituents are most fortunate in that they have within my constituency geographical boundary not one community hospital, but two. We have the Edenbridge and District War Memorial hospital, and Tonbridge Cottage hospital. Both were founded between the two world wars with the outpouring of philanthropic and generous donations in remembrance particularly of those who suffered terrible injuries on such a huge scale during the first world war.
Of all the public assets in Edenbridge and Tonbridge, those two hospitals are the most highly prized by the two communities. The support for Edenbridge and Tonbridge community hospitals is far reaching and profound. In the forefront of that support are their two leagues of friends. Edenbridge Hospital’s League of Friends, chaired by Mrs Jo Naismith, and Tonbridge Hospital’s League of Friends, chaired by Dr David Goodridge, voluntarily and in an unceasing and dedicated way provide outstanding support to the two hospitals. I stress particularly the quality of the care and treatment provided at the two hospitals, and I pay tribute to the NHS nursing staff and doctors, and all the others who work in them for the quality of provision for local patients.
I want to raise two issues. First is the proposed transfer of the assets of both hospitals in April 2013 in accordance with the Government’s policy of relieving the former primary care trusts of their property assets. The Government’s policy in this area is seriously misguided. It is a major failure and misconception of policy to divide those property assets into the sheep and the goats with property from some community hospitals being transferred to mainstream NHS providers when that of other hospitals—the goats—is being transferred to NHS Property Services Ltd.
Despite all the soothing words and honeyed letters that I have received from Ministers about the issue—I am grateful to the Minister for the letter she wrote to me yesterday, which I received this morning—I am in no doubt whatever from the statements by the previous Secretary of State for Health that the main reason for the creation of NHS Property Services Ltd is to set up a vehicle inside the Department of Health that will count among its main objectives asset realisation, or asset stripping as some might say. To make the point clearly, it is necessary only to go back to the former Secretary of State’s original written statement in which he outlined the objectives of NHS Property Services Ltd, which included to
“deliver value for money property services; cut costs of administering the estate by consolidating the management of over 150 estates; deliver and develop cost-effective property solutions for community health services; and dispose of property surplus to NHS requirements.”—[Official Report, 25 January 2012; Vol. 539, c. 19WS.]
It is quite clear, therefore, that NHS Property Services is an asset realisation and disposal company being set up within the NHS.
I also find some of the criteria used by Ministers for whether community hospital assets go to NHS providers or to NHS Property Services Ltd seriously flawed. For example, why should a community hospital, simply because it shares parts of its property with another NHS trust, as is the case with Tonbridge Cottage hospital, automatically be sentenced to going to NHS Property Services Ltd? I see absolutely no justification or rationality for that criterion.
My anxieties about the policy were, if anything, increased when my hon. Friend the Minister gave the following reply in a debate initiated by my hon. Friend the Member for Totnes (Dr Wollaston):
“NHS Property Services Ltd will own and manage buildings that are needed by the NHS. However, it will also be able to release savings from its properties that are declared surplus to NHS requirements.”—[Official Report, 6 September 2012; Vol. 549, c. 485.]
Therefore, many other MPs may be in a similar position to me: will I wake up one morning, as will my constituents in the Tonbridge and Edenbridge area, and find that Tonbridge Cottage hospital or Edenbridge and District War Memorial hospital have been declared “surplus to NHS requirements”? That is a worrying and apparent possibility, and I hope that the Minister will be able to relieve me of my anxiety on that score. I appreciate that she cannot give any assurances beyond the lifetime of the present Government, but will she give a categorical, unequivocal, unqualified assurance in Hansard, in black and white, that during the lifetime of the present Government, neither of those hospitals will be declared surplus to requirements?
My other criticism of the whole policy is the lack of proper consultation. General statements have been made, but we as constituency MPs are deeply concerned about the specifics. So far, there has been no consultation with MPs, local councillors or local people on the specific intentions of the Government about the property assets of individual community hospitals. Here we are today, with less than six months to go before April 2013, and I, local councillors, leagues of friends, and local people have not received any official information about whether the two hospitals will belong to NHS providers or go off to NHS Property Services Ltd. As far as I am concerned, that lack of consultation with the public and their elected representatives is unacceptable. I hope that in her reply the Minister will convey this request to the Secretary of State, urging him to ensure that before final ministerial decisions are taken on whether individual hospitals go to NHS providers or to NHS Property Services Ltd, the public and their representatives are consulted, so that they can express a view on the Government’s proposals.
The second issue that I want to raise is equally serious: the failure of the West Kent primary care trust to discharge its statutory consultation obligations when it put into effect a major change of use recently at Tonbridge Cottage hospital. I stress that I am not here to debate the merits or otherwise of the change of use; I have come to discuss the legality or otherwise of the process that was followed, and whether there was a breach of statutory consultation obligations.
However, in brief, and by way of background, the change of use has arisen because the West Kent primary care trust had to find a home for the stroke rehabilitation unit that was at the Kent and Sussex hospital when the hospital was closed relatively recently. The unit was not incorporated in the main buildings of the hospital; it was in temporary buildings—so-called pods—placed on the car parking area of the Kent and Sussex hospital. The West Kent primary care trust had the option of moving those pods, which clearly had been working perfectly satisfactorily and to NHS standards, lock, stock and barrel, and putting them in the car parking area, which has recently been expanded, at Tonbridge Cottage hospital. Instead, it took the easy option, deciding to shut down half the community beds at Tonbridge Cottage hospital and move the stroke rehabilitation unit there. That process, which involved a major change of use at the hospital, was carried out with no statutory consultation whatsoever.
I make it clear to the Minister that I am perfectly happy, as are the Friends of Tonbridge Cottage hospital, to have stroke rehabilitation at the hospital. However, we are profoundly unhappy that instead of its being an additional facility at Tonbridge Cottage hospital, the change was achieved at the expense of cutting in half the number of very valuable community beds there. That has now left Tonbridge Cottage hospital with the smallest number of community beds in Kent, among all the community hospitals there; I have the figures from the West Kent PCT. Notwithstanding the fact that Tonbridge Cottage hospital is the one and only community hospital serving the entirety of Tonbridge, Tunbridge Wells, Southborough and the surrounding areas, it now has the smallest number of community beds in Kent.
I have to make it clear that the policy runs directly contrary to the stated policy of the Government. The Minister, in her reply of 6 September said
“this Government support improvements in community hospitals across the country. That is because we know that community hospitals make it easier for people to get care and treatment closer to where they live.”—[Official Report, 6 September 2012; Vol. 549, c. 483.]
The action taken by West Kent primary care trust has made it significantly more difficult for people in the Tonbridge, Tunbridge Wells and Southborough area to get care and treatment closer to where they live.
I come now to the statutory requirements. I raised them originally in my letter of 17 June 2011 to the former Secretary of State for Health. My right hon. Friend the Member for South Cambridgeshire (Mr Lansley), in his reply of 18 July, set out very clearly the two statutory obligations falling on NHS trusts to consult. He referred me to sections 242 and 244 of the National Health Service Act 2006. The key provision in section 242 is subsection (2):
“Each body to which this section applies must make arrangements with a view to securing, as respects health services for which it is responsible, that persons to whom those services are being or may be provided are, directly or through representatives, involved in and consulted on—
(a) the planning of the provision of those services,
(b) the development and consideration of proposals for changes in the way those services are provided, and
(c) decisions to be made by that body affecting the operation of those services.”
In my view, the breach of that statutory consultation obligation by West Kent primary care trust is absolutely clear. There was no consultation, directly or through representatives, in the Tonbridge area about those significant changes. It seems to me entirely clear that section 242 was not complied with.
Even more stark is the failure of West Kent primary care trust to comply with its obligations under section 244. That is the section of the 2006 Act that places on NHS trusts a statutory duty to consult local authority overview and scrutiny committees—in this case, the overview and scrutiny committee of Kent county council. The key document in this respect is “Overview and Scrutiny of Health—Guidance”, which was published by the Department of Health in July 2003 and which is now statutory guidance, as the former Secretary of State made clear to me. The key paragraph is 10.4.1, which states:
“Where an NHS trust plans to vary or develop services locally, it will need to discuss the proposal with the overview and scrutiny committee to determine whether the proposal is substantial. If the outcome of those discussions is that it is a substantial development or variation, the trust must consult the overview and scrutiny committee.”
I therefore asked the leader of Kent county council, County Councillor Paul Carter, if the council’s overview and scrutiny committee had been consulted on whether the change was substantial. In his letter to me of 18 September 2012, he replied that
“there was no formal consultation on the specific decision relating to stroke rehabilitation beds at Tonbridge Cottage Hospital…Nor was the issue specifically brought to the attention of the Committee. Therefore the Committee has not been in a position to determine whether the proposal was substantial.”
That, I suggest, is starkly clear evidence of a breach of the statutory consultation obligation.
I do not expect the Minister, in her reply to this debate, to give an instant response to and judgment on the legal case that I have advanced for there having been a breach of statutory consultation obligations. It would be unreasonable of me to expect that when I have only just presented the evidence, but I do request that in the light of what I have said in the debate, she consults the Secretary of State, and I hope that my right hon. Friend will take his own legal advice. I wish to hear in writing—I hope from the Secretary of State himself, following the legal advice that he has received—whether he agrees that West Kent primary care trust failed to discharge its statutory consultation obligations in bringing about a substantial change of use at Tonbridge Cottage hospital.
I hope that if the Secretary of State comes to the same view as I have done that there has been such a breach and that therefore the change of use process was unlawful, he will tell me what action he believes is appropriate. I hope that he will tell me what action he would see fit to take in relation to the individuals in the former West Kent primary care trust who were responsible for non-compliance with statutory duties. I hope most of all that the Secretary of State will take this action: I hope that he will issue a direction to the successor body to West Kent primary care trust, NHS Kent and Medway, and that that direction will instruct NHS Kent and Medway to carry out—admittedly belatedly—the statutory consultation on the change of use at Tonbridge Cottage hospital that has occurred.
If the consultation takes place, as I earnestly hope it will, it will give me, the Friends of Tonbridge Cottage hospital and, most important of all, the people of the entire Tonbridge, Tunbridge Wells, Southborough and surrounding area the opportunity to make it clear to the NHS and to the Secretary of State that although we welcome the stroke rehabilitation facility at Tonbridge Cottage hospital, we want the half of our community beds that have been removed to be restored for the benefit of the people of the local community.
The Parliamentary Under-Secretary of State for Health (Anna Soubry)
First, I congratulate my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) on securing the debate and on the many questions that he has raised. As the clock is against me, I shall deal at the beginning of my response to his speech with some of the issues that he has specifically asked me to deal with.
It strikes me that these matters should and could have been dealt with locally. As my right hon. Friend will appreciate, one of the Government’s aims has been to ensure that national politicians do not get involved in the stuff of sorting out the NHS locally. He raises concerns about his local PCT and calls into question procedures undertaken by it. He says that decisions that it has made should have been referred to the overview and scrutiny committee. I do not know whether that is right or wrong. What I do know is that it is incumbent on local politicians to raise such matters, as they do the length and breadth of England. It may be that the horse has bolted from the stable and it is too late, but I think that I can say with some certainty that it is not the role of the Secretary of State for Health to seek legal opinion on whether the PCT has acted lawfully.
With respect to my right hon. Friend the Member for Tonbridge and Malling, I suggest that those are local matters, to be determined locally, and it is for the league of friends, himself, councillors and other concerned people to look into the legality of the decisions that have been made and the processes that have been chosen. It is for the local NHS and local politicians to deal with that. It is not the role of Whitehall and Ministers to get involved in the stuff of local NHS decisions and those processes.
Sir John Stanley
The league of friends and I have pursued these issues in detail over a considerable period with the local PCT. Does the Minister not agree that under primary legislation, the Secretary of State ultimately has a responsibility for addressing issues of NHS trusts’ compliance with statute?
Anna Soubry
I am grateful to my right hon. Friend for his comments. I will look further into the matter. I cannot give a definitive answer, but in my experience such matters are invariably taken up by local politicians, often led by their local Member of Parliament, who go to the overview and scrutiny committee of the county council to urge upon it all the reviews and challenges that he has sought and raised in this debate. I will, however, look into this further, and if he will forgive me, I will come back to him probably by way of a letter or a meeting between the two of us. May I move on to the future of his community hospitals?
I am reliably informed that there are no plans whatsoever to close either of the two hospitals. I will get through as much of my speech as I can in the time available—I will be guided by you, Mrs Osborne, but I think I have to sit down at half-past 4. I make it absolutely clear again that the future of hospitals is not determined by national Government, but is in effect determined by the local commissioning process. From what I am told, there is no reason to fear for the future of either the Tonbridge Cottage hospital or the Edenbridge and District War Memorial hospital, because the services that they provide will be commissioned by the local clinical commissioning group. They are doing a grand job now, so there is no reason to think that they will not continue to do a grand job, and therefore their services will continue to be commissioned.
Many Members have great affection for their community hospitals, and rightly so. As my right hon. Friend alluded to, they provide a wide range of vital services, from minor injury clinics to intensive rehabilitation. They inspire much love and respect in their communities. They are fiercely defended and rightly inspire loyalty.
My right hon. Friend and the local league of friends have raised the issue of the beds at Tonbridge hospital. I am not the PCT’s mouthpiece, but as he will appreciate, inquiries are made and I am supplied with information. I am assured that the 12 community beds in question were designated as general rehabilitation beds. They were then redesignated as stroke rehabilitation beds and are now housed in the new £400,000 purpose-built stroke unit, which opened at the hospital in September 2011. The PCT then created 12 additional general rehabilitation beds across west Kent, to replace the 12 community beds that had been redesignated. Of those 12, two, as he mentioned, are at Tonbridge hospital. We do not agree that there was a loss of beds, because 12 of the beds became stroke rehabilitation beds. I take the point that there were 12 community beds previously and now there are two community beds, but we should not forget that there are an additional 12 stoke rehabilitation beds.
It was the opinion of the PCT at the time that there was no real change in the use of the beds at Tonbridge hospital, because their primary function had been rehabilitation. The 12 community beds were designated for rehabilitation, and the 12 stroke beds are obviously for rehabilitation, too. The hospital has gained two extra beds for community rehabilitation that were designated specifically for older people. The PCT therefore considered that there was no real service change, so it did not deem formal consultation necessary or appropriate.
The Government have pledged that in future all service changes must be led by clinicians and patients, not driven from the top down. That principle has been at the heart of our reforms for the NHS. To that end, we have outlined and strengthened the criteria that we expect decisions on NHS service changes to meet: they must focus on improving patient outcomes, consider patient choice, have support from GP commissioners and be based on sound clinical evidence.
Everything that we do in central Government is designed to support local clinicians and patients changing the local NHS for the better and to ensure that improvements are made to primary and community services. As a result of the Health and Social Care Act 2012, primary care trusts will be abolished from April 2013 and responsibility for commissioning services will move to clinical commissioning groups, so local doctors, clinicians and experts are in control. I see no reason why they would not commission services from those two excellent community hospitals.
My right hon. Friend mentioned the community hospital estate and its future. The 2012 Act requires new ownership arrangements for current PCT estates. In August last year, the Department of Health announced that NHS providers would have the opportunity to acquire parts of the estate. Therefore, providers, such as community foundation trusts, NHS trusts and NHS foundation trusts, will be able to take over those parts of the PCT estate that are used for clinical services. That of course includes the community hospital estate. We have put safeguards in place, so that providers cannot just dispose of newly acquired land and make a quick profit. I hope that that satisfies him.
Sir John Stanley
Before the Minister concludes, will she respond to my request that before Ministers take a final decision on whether individual hospital properties go to NHS providers or NHS Property Services Ltd, they consult on the proposed final destination of the properties, so that local people have an opportunity to express a view?
Anna Soubry
I cannot give that undertaking. The point is well made; I will take it back to the Department and ensure that the Secretary of State is aware of it. Many such decisions will be taken locally. My right hon. Friend and the league of friends should continue to make all the representations that they have already made, and I know that they will do so.
The safeguards have been put in place. As my right hon. Friend knows, where any former estate becomes surplus to NHS requirements, 50% of any financial gain made by the provider must be paid back to the Secretary of State for Health and will go straight to front-line NHS services. Based on what I have been told and what I have seen in the 2012 Act, I am of the view that if a community hospital—if this is what occurs—is transferred to NHS Property Services Ltd, it will not in some way be deemed surplus to requirements by NHS Property Services Ltd.
The two hospitals that my right hon. Friend rightly champions would only ever become surplus to requirements if the CCG stopped commissioning their services. I am told that that is extremely unlikely to happen. He should have no fear at all that NHS Property Services Ltd will sit and looking at its assets and simply decide to sell things off for a quick buck. The hospitals’ future is secure. I thank him for securing the debate and for the points that he has made. I have not answered them all, but I will, in either a meeting or a letter.
Remploy
(12 years ago)
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Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to serve under your chairpersonship, Mrs Osborne, for what I believe is the first time—I hope that it is not the last time—and it is a pleasure to have secured this debate on behalf of the more than 1,421 people at Remploy factories across the country whose jobs have gone, or will be at risk by the end of the year, in particular the staff who have worked so hard in the Springburn factory in my Glasgow constituency.
Stage 1 of the Department for Work and Pensions process is set to lead to the closure of up to 30 factories by the end of the year, with decisions still due on Barrow, Bridgend, Bristol, Chesterfield, Poole, Croespenmaen and Springburn, as well as on the Cook with Care business. A further 18 factories are under threat of closure by 2015. With as many as 6 million people across the country trapped in joblessness or under-employment because they are unable to find full-time work, and with the Office for Budget Responsibility reporting this morning that the Chancellor’s austerity measures may have stripped even more demand out of the economy than even it expected in June 2010, sustaining good-quality, full-time jobs in manufacturing, particularly for disabled workers, must be a priority for any Government.
In my constituency, 19 people are chasing every vacancy advertised in local Jobcentres Plus, but the situation is even worse for people with a disability. According to the labour force survey, the employment rate gap between disabled and non-disabled people has narrowed slightly over the past decade, by about 5.8%, but it still stands at a staggering 29.9%, in 2012. Only 46.3% of disabled people are in employment, compared with 76.2% of non-disabled people, and disabled individuals are twice as likely as the rest of the work force to need full-time rather than part-time jobs. Without alternative jobs for disabled people to go to, the effect of closing Remploy factories will be to consign those people to a greater likelihood of a future of long-term unemployment, and a greater chance of ending up in poverty, when what they want and deserve is the opportunity to work.
When the Government began the process of factory sales and closures, they relied on the figure that each job supported by Remploy involved a taxpayer subsidy of £25,000 a year, and the Sayce report came up with a figure of a £22,700 annual subsidy per job. The methodology, however, which is based on dividing the total Government subsidy for each scheme by the number of employees, has been queried as a crude measure of the cost per employment place, by the fact-checking organisation Full Fact, among others. It does not account for the different infrastructure costs and asset values that each model is likely to accrue and, similarly, the Government cannot provide data on whether those whose jobs are at risk at Remploy would necessarily find work under the Access to Work programme.
Members are already encountering testimony from constituents who have been laid off by Remploy that shows that the measures promised by the Minister’s predecessor to support them back into work have simply not yet appeared on the ground. Sacked workers with severe learning difficulties are turning up at Jobcentres Plus without a clue about what to do or what the future will hold. Surely disabled workers who have offered years, and in some cases decades, of service, deserve better than that. Should not a Government with a proper moral compass be moving more quickly to end the appalling scandal of sacked workers being given emergency tax codes and suffering the indignity of paying more than half of their final pay packets out in tax, at a time when the Government are cutting taxes for the super-rich?
Like many Members with Remploy factories in their areas, or with constituents employed in a nearby factory, I have been working with the management, the work force and excellent local GMB and Unite trade union officials to reach a settlement that will ensure a durable future for the factory. In the tendering process, the priority has to be to guarantee the viability of the job of every disabled person working for Remploy. I remain hopeful that the strength of the record of the skilled work force in Springburn, in productivity and innovation, will ensure that, once the due diligence stage is completed by Remploy Ltd, the factory will have the opportunity for long-term growth under new ownership.
The local factory in my constituency specialises in the assembly and manufacture of high-quality wheelchairs for use by NHS patients. Once the issue of ownership is settled, there is much that this Government and the Scottish Government can do to help grow the business for the future by better use of procurement processes, within the rules set by the European Union, to ensure that through the application of article 19 of the EU public procurement directive, supported employment workplaces can properly compete for public sector contracts. The Scottish Government could be more creative and proactive in their use of procurement processes within the NHS in Scotland and other public agencies to generate more contracts and more work for the Remploy factory in Springburn.
The UK Government could undertake a similar process to boost demand in supported employment workplaces elsewhere in the UK.
Toby Perkins (Chesterfield) (Lab)
My hon. Friend has been working incredibly hard on behalf of his constituents in Springburn, and we have been speaking a tremendous amount about this matter because both our factories—his in Springburn and mine in Chesterfield —are under the Remploy Healthcare banner. We agree entirely about the role of Government, but does he also agree that there needs to be a real collective working together by the management, the Government and the trade unions to ensure that the work force, who are under tremendous stress at the moment, feel empowered and involved in this process and have an understanding about what the long-term future might hold? Recent events have been incredibly stressful for those people, and have led to difficult working circumstances for them.
Mr Bain
I entirely agree with my hon. Friend. There has been an impression of a lack of transparency about the way in which this tendering process has operated, which means that lessons could be learned for stage 2 for the other factories that are under threat.
I am aware that the Minister cannot provide guarantees that there will not be any compulsory redundancies, but I hope that she will be able to assure us that the Government will strive to ensure that as many as possible of the disabled workers at Remploy Springburn and the other factories involved in the current tendering process keep their jobs under any new ownership.
Will the Minister also provide a guarantee that TUPE regulations will apply to any sale of the Springburn Remploy factory and any of the others involved in the current tendering round and in any future round of tendering for those factories potentially involved in stage 2?
The right to a fair and stable pension matters greatly, especially to disabled people with higher living costs. Will the Minister guarantee that the current accrued pension entitlements up to the point of transfer will be honoured by any new owners of Springburn Remploy and the other factories in the current tendering round? Will she further outline what minimum criteria for future pension entitlements of current staff and of any new staff in the future the Government will insist on from future Remploy factory owners, mutualisations, leases, or employee buy-outs if the fair deal for staff pensions policy is not to apply to this tendering process?
There are some serious questions to answer about the conduct of this tendering process. Given the shambles that we have seen elsewhere in government over railway franchising, is the Minister content that this process has been conducted in a procedurally and legally watertight manner? Is she sure that there are no grounds for disappointed bidders to challenge the way in which this has been conducted? Will there be a full external audit of the process that both the public and the Members of this House can have confidence in? Is she satisfied that the 90-day consultation is anywhere near adequate? The Sayce report makes it clear that a consultation period of no less than six months is required to help bidders or employee-led buy-outs put together proper business plans to save factories. Why, for example, did the Minister’s predecessor not provide me with any information on the Springburn factory’s profitability, despite repeated requests in writing, whereas she was happy to comment on the financial position of other factories in her original statement? What lesson have the Government learned about providing additional support for management-led or employee-led mutualised ownership of Remploy factories beyond that which her predecessor was prepared to offer earlier this year? Will greater consideration be given to leasing factories to local authorities, other public agencies or even the devolved Administrations, if that might help save jobs or reopen factories, as is hoped in Wrexham?
Households with a disabled person are more likely to live in poverty than those without a disabled person. The hundreds of disabled people who work for Remploy deserve more certainty about their future than the Government have been able to provide to date. The critical thing is not only the ownership of the factories and finding jobs for those Remploy workers who have already, tragically, been laid off after the Government’s wilful refusal to listen and protect proper rights at work for Remploy staff. It is also the procurement procedures that public bodies apply to ensure that supported employment workplaces get a fairer deal for the future. That is the challenge for the Government and their devolved counterparts elsewhere in the UK.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for bringing this matter before the House. In Northern Ireland we have an organisation called Accept Care, which is similar to Remploy. Accept Care is partially funded by the Northern Ireland Assembly and creates jobs for disabled people, gives them the training they need and, afterwards, employs them. Does he feel that perhaps the Government need to spend a wee bit now to help those people find jobs and make those businesses profitable?
Mr Bain
Absolutely. My hon. Friend has illustrated that the Government have not done enough to learn lessons from other jurisdictions that have had more progressive policies on care for the disabled and support for disabled workers than, sadly, this Administration have followed in recent months.
If we are truly to build a society that values the disabled, it is critical that we do more to protect the right to the dignity of a good job for those able to work and provide proper lifelong skills and training and a decent standard of living for all. That is no less than my constituents who work in Remploy Springburn and those who work in the other Remploy factories across the country deserve, and it is the Government’s duty to deliver.
The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
I congratulate the hon. Member for Glasgow North-East (Mr Bain) on bringing this important debate before the House. It is also a pleasure to serve under your chairmanship, Mrs Osborne.
I have met the hon. Gentleman and other hon. Members who are present on various occasions—if we did not meet in person, we have spoken on the phone—about their Remploy sites. Everything he says is correct, but I want to consider everything in its entirety, because we all want the best support for Remploy staff, not only now but in the future.
We have to be open and honest about why we have this case for change, which is about sustainable work and sustainable jobs. We have to consider all disabled people of working age, which at the moment is 6.9 million people, 2,200 of whom work in Remploy factories. A fifth of the £320 million supports those in Remploy factories. Those are the finances.
However, we are also considering sustainable employment, what disabled people and disabled organisations want and what Liz Sayce’s report says. Many people want to work in mainstream employment. They want to look at different ways of engaging and moving forward. We have taken all that into account, and also looked at the losses that were being accrued year on year—£70 million. I appreciate that four years ago a £555 million package was put in over five years for a modernisation plan. However, targets were not met. They were not realistic and they did not allow the factories to continue, because they required an increase in public sales of 130%, and that just did not work.
I know that 28 factories were closed in 2008. We hoped that that could be the end and that the others would move forward, but that has not happened. As an additional way of mitigating the risk of redundancies to employees, Remploy was looking at how to put a commercial process in place. That process had to work with the Remploy staff; it had to work as a proper business model, work with Government and work with everybody whom it would touch. That is what we were trying to do, so the commercial process for stage 1 was open and transparent. It was published on the Remploy website on 20 March. That process was developed using expert advice on its design and structure and it took into account the need to ensure that employees and employee-led groups had an opportunity to take part actively and develop robust bids. The process has taken in excess of five months, and it continues.
Mr Frank Doran (Aberdeen North) (Lab)
I am grateful to the Minister for twice giving me the opportunity to meet her and discuss the process in detail. The latest meeting was yesterday. One concern that I did not raise with her is the persistent belief, at least among the staff of Remploy, that the best factories will be cherry-picked by the management. When I raised the issue with her predecessor in the House, I was assured that there would be independent oversight of the whole process. First, who is conducting the independent oversight of the process, and, secondly, will a report of their findings be made public?
Esther McVey
Recognising the need to ensure proposals were robustly addressed, an independent panel was set up to provide independent assurance to the assessment process, and the panel is playing an active part in what went on. I can write to the hon. Gentleman with further clarification on that, but that was one of the key facts.
There was also encouragement of employees and employee-led groups to take advantage of a £10,000 support fund for expert advice, and also a time-limited tapered wage subsidy of £6,400 to successful bids to keep on disabled members of staff. That came about because of Remploy and the Department’s responses and the various people who came forward to look at that.
On the factories that the hon. Member for Chesterfield (Toby Perkins) mentioned—Chesterfield and Springburn —discussions are going forward. Information was put on the Remploy website in September. Nothing has been finalised yet. It is going through due diligence at the moment, but it is in best and final offer stage and getting all the support it needs. We are still waiting on facts.
Toby Perkins
To return to the process, my hon. Friend the Member for Glasgow North East (Mr Bain) asked whether the Minister was satisfied that there was no threat of legal recourse from disappointed bidders and that the process was robust. I want to clarify whether the Minister is satisfied that the process was robust and that she is happy to take responsibility for it going forward, and that, as far as she is concerned, we are not going to come back to a west coast main line situation in which everyone says, “It was not my fault”. As long as she is happy and the process is robust, she can take responsibility for it.
Esther McVey
I have held numerous meetings on the matter. I have asked the very same questions that the hon. Gentleman has asked. I have felt reassured by the answers I have been given. Remploy announced and published the commercial process on 20 March and the company has been following that process. We are aware that some people and some bidders may be disappointed, but we are content that the commercial process has been followed. So I hope that gives the hon. Gentleman suitable comfort about what is going on.
A substantial package of help and support for employees has been put in place. An extra £8 million has gone into that package. People will get their own personal caseworker, who will give them tailor-made support and help them to move forward.
The hon. Member for Glasgow North East asked several questions. One was about the emergency tax code. That was brought to my attention last month and immediately my team and I worked with Her Majesty’s Revenue and Customs to get it sorted so that the Remploy staff and their caseworkers knew what would happen and they would have their money back as soon as possible, so special measures were put in place absolutely immediately. I also checked that the staff would have money and would not be short. They would all have had their redundancy pay packages, so they would have money to live on—it would be fine—but this was put through as a special concession.
Graeme Morrice (Livingston) (Lab)
I am grateful to the Minister for giving way. I congratulate my hon. Friend the Member for Glasgow North East (Mr Bain) on securing this very important debate on a subject about which I have received many representations from constituents and others. On the issue of support for the work force and for those who are losing their jobs, will the Minister confirm how many people from Remploy who have lost their jobs have found alternative employment to date?
Esther McVey
So far to date, 35 staff immediately found work. But we are content that with the support, the packages and the monitoring that we are hoping to provide for everyone, we will get that number up as soon as possible.
I actually got figures that I again hope will put the hon. Gentleman’s mind at ease. In Scotland, there were 111 people—that does not seem quite right. I apologise; I will look again. I will go back to the hon. Member for Glasgow North East and say that in his constituency a total of 14,600 people are disabled, and 43 of them work at the Remploy site. However, in the last year, under the Remploy employment services, 534 people had got into work. So, if we look at those figures, we can see that incredible support has gone in there to help find work for people similar to the staff working in Remploy.
I will continue with the Springburn site. Remploy communicated via its website in September that it had selected a preferred bidder for the site and that that preferred bidder is now entering a period of due diligence, which will hopefully end in Remploy’s successful exit from the business. A final decision on Springburn will be made as soon as the commercial due diligence process is complete, which we understand will be some time at the end of October.
Going forward, for Springburn and Chesterfield to secure future health care business as part of the commercial process, the Scottish Government would have the opportunity, under their devolved powers, to support medical contracts and help to secure the continuing viability of those sites. Again, that is possibly something that hon. Members can work on together.
Graeme Morrice
The Minister mentioned the Scottish Government. Have the UK Government had any consultation with the Scottish Government on this issue?
Esther McVey
We have indeed, and I will be in Edinburgh on Monday. We will have continued dialogue on that subject. I also hope to meet the factory workers in Edinburgh and while I am there I would like to see as many staff as possible—those who do not have their job now and those who do. There is an open invitation for people to come and meet me, and I will be in the factory.
The hon. Member for Glasgow North East also raised the issue of TUPE. Any purchaser of a Remploy site will have to offer a pension scheme in which transferring employees can accrue future rights. If TUPE regulations apply to a transfer, purchasers will have to match employees’ contributions up to 6% of pensionable pay, in line with pension legislation. We understand that for the Springburn site TUPE regulations will apply to the transfer.
I hope that I have answered as many questions as possible.
Esther McVey
I will find out and let the hon. Gentleman know. If there is, he will be the first to know.
Esther McVey
Absolutely. It is not just inspiration, but the support of a good team. The independent panel has considered the comments of Scottish and Welsh representatives. I think a report will be coming out on that. The hon. Member for Aberdeen North (Mr Doran) and I met yesterday, and I hope that he now has a meeting with the CEO of Remploy. Straight away, I asked what we could do in the Aberdeen factory. All the points he raised with me about the assets, the factory and site ownership were dealt with this morning. I do not have the answers, but we are on to that. My phone lines are open. I am always here. If anybody wants to know anything more, I will be available to answer their questions.
Jim Shannon
As I said earlier, we have something similar in Northern Ireland. Do the Government intend at least to seek it out and see how it works? The finance comes from the Northern Ireland Assembly and it does the same thing that Remploy does in England and Wales. A new Accept Care is opening in the north-east too, in Darlington, so some things are happening that could benefit us all.
Esther McVey
I will take advice from wherever it comes and that could possibly play a part in stage 2. I do not know how it could possibly go backwards and affect stage 1, but I will listen and consider what can be done for stage 2.
Question put and agreed to.
Written Ministerial Statements
Hillsborough
(12 years ago)
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The Attorney-General (Mr Dominic Grieve)
Following the publication of the Hillsborough panel report I have been considering whether to apply to the High Court for an order quashing the original inquests and ordering new inquests to be held. The High Court will have the power to grant such an order if I place before it evidence that persuades the Court that new inquests are necessary or desirable in the interests of justice.
My consideration of the evidence is far from complete but, given the anxiety further delay may cause the families affected by the Hillsborough disaster, I have decided to take an exceptional course and state at this stage that, on the basis of what I have already seen, I have determined that I must make an application to the Court.
In doing so I should make it clear that further work will need to be done before any application can be made. In particular, there was not one inquest but 96. My current view is that I will apply to have every one of those 96 inquests quashed. I believe that these deaths, arising as they do from a common chain of events, should all be considered afresh. However, before reaching any final view on the scope of the application, I want to give the families affected the opportunity to make any representations in respect of the family member or members they lost. I will therefore be in contact with each family seeking views.
The application is not simply a matter of putting the Hillsborough panel report before the Court. The application will need to be fully prepared and the evidence that underpins the report’s findings will need to be carefully considered. I want the application that is made to be as persuasive as it can be. While I make this statement at this stage to reassure the families that an application will be made, it must be understood that there are legal as well as evidential issues to be considered. Although this work is being given a high priority, further time will be needed to prepare the application.
The Freedom of Information Ministerial Veto
(12 years ago)
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The Attorney-General (Mr Dominic Grieve)
I have today given the Information Commissioner a certificate under section 53 of the Freedom of Information Act 2000 (“the Act”) both as it applies for the purposes of the Act itself, and as it applies to the Environmental Information Regulations 2004 (“the Regulations”) by reason of Regulation 18(6). This certificate relates to the Upper Tribunal’s judgment dated 18 September 2012—Evans v (1) Information Commissioner (2) Seven Government Departments [2012] UKUT 313 (AAC). It is my view, as an accountable person under the Act, that there was no failure by the seven Departments1 joined as additional parties to this appeal at the tribunal to comply with section 1(1 )(b) of the Act, or to comply with any obligation under the regulations, as a result of those Departments withholding the correspondence between the Prince of Wales and Ministers in the previous Administration.
The consequence of my giving the Information Commissioner this certificate is that the tribunal’s judgment, which anticipates that the Information Commissioner’s decision notices will be amended so that the documents identified in the tribunal’s judgment be disclosed, ceases to have effect.
A copy of the certificate has been laid before each House of Parliament. I have additionally placed a copy of the certificate and a detailed statement of the reasons for my decision in the Libraries of both Houses, the Vote Office and the Printed Paper Office.
My decision to exercise the veto in this case was not taken lightly. I have taken into account the statement of Government policy on the use of the executive override as it relates to information falling within the scope of section 35(1) of the Act. Although that policy is not directly applicable to this case I have applied the principles in it in coming to my decision.
I have taken into account the views of Cabinet, former Ministers and the Information Commissioner, in considering both the balance of the public interest in disclosure and nondisclosure and whether this is an exceptional case. My view is that the public interest favours nondisclosure. I have also concluded that this constitutes an exceptional case and that the exercise of the veto is warranted.
In summary, my decision is based on my view that the correspondence was undertaken as part of the Prince of Wales’ preparation for becoming King. The Prince of Wales engaged in this correspondence with Ministers with the expectation that it would be confidential. Disclosure of the correspondence could damage the Prince of Wales’ ability to perform his duties when he becomes King. It is a matter of the highest importance within our constitutional framework that the Monarch is a politically neutral figure able to engage in confidence with the Government of the day, whatever its political colour. In my view, there is nothing in the nature or content of this particular correspondence which outweighs that strong public interest against disclosure.
A detailed explanation of the basis on which I arrived at the conclusion that the veto should be used is set out in my statement of reasons.
1Department for Business, Innovation and Skills, Department of Health, Department of Children Schools and Families, Department for Environment, Food and Rural Affairs, Department for Culture, Media and Sport, the Northern Ireland Office and the Cabinet Office.
ECOFIN
(12 years ago)
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The Chancellor of the Exchequer (Mr George Osborne)
The Economic and Financial Affairs Council was held in Luxembourg on 9 October 2012; the informal Economic and Financial Affairs Council was held in Nicosia on 14 and 15 September.
On 14 and 15 September Ministers discussed the following items:
Fiscal implications of the implementation of banking union
There was a presentation on this topic by the Bruegel think tank, followed by an exchange of views by Ministers.
Economic situation and recent developments in banking and sovereign markets
There was a de-brief to Ministers on issues discussed at the earlier Eurogroup discussion. The European Banking Authority then presented on progress made with the recent banking recapitalisation exercise and looked forward to the next stress test exercise. Following this, Ollie Rehn, Commissioner for Economic and Monetary Affairs, gave a summary of the economic outlook and ongoing structural adjustment.
IMF Board representation
Ministers discussed taking forward the 2010 IMF quota and governance reform agreement, whereby advanced European countries are required to reduce by two their number of seats on the IMF board. The reduction does not directly affect the UK, which continues to have its own single seat.
Facility for Euro-Mediterranean Investment and Partnership (FEMIP)
There was a presentation by the European Investment Bank on this subject, followed by an exchange of views.
Follow-up to June European Council (JEC) on banking union in general and the establishment of an effective single supervisory mechanism
The Commissioner for Internal Market and Services, Michel Barnier, introduced the European Commission’s recently published proposals on banking union and plans for the European Central Bank to take on a supervisory role for banks in the euro area. Representatives from the European Banking Authority, the European Central Bank, the chair of the Economic and Financial Affairs Committee, and member states responded. The discussion raised a number of issues that would need to be addressed going forward, including the viability of the time line.
I intervened to set out the UK view, emphasising the principles behind the Government’s approach and their commitment to work with European partners to help resolve the euro area crisis and support the single market. The UK supports measures that are designed to break the link between sovereign debt and instability in the financial sector, provided the single market is preserved as the new structure is implemented. I stressed the importance of ensuring that this objective is integrated into the single supervisory mechanism and banking union as a whole and raised concerns on the impact on the functioning of the European Banking Authority (EBA) under the new arrangements including in relation to voting arrangements in the EBA. In particular, we must ensure that and the European Central Bank’s relationship with the EBA is the same as for national supervisors in non-participating member states.
Ministers also had a discussion on how to best reform the shadow banking sector and it was agreed that further work needs to be undertaken.
On 9 October Ministers discussed the following items:
Financial Transactions Tax
Ministers were updated on developments since this was discussed at ECOFIN in June. The June European Council had suggested adoption of the enhanced co-operation proposal by the end of the year, and the presidency suggested it would be helpful if those member states willing to participate would indicate their intentions and for the Commission to set out a time line for next steps. Eleven member states indicated their willingness to participate: formal representations in writing are required, after which the European Commission will assess the request.
I intervened to confirm that the UK would not be joining. I stressed that the UK is not against taxation of the sector and already has a bank levy. We would not seek to stand in the way of enhanced co-operation: however this must be done in the context of a clear proposal and in line with the treaty. Currently there remains uncertainty over the likely scope and the purpose for which the revenues would be used. I pointed out that the Commission’s own original assessment had foreseen a GDP reduction of between 0.5% and 3.5% for the European economy: the impact on all 27 member states must be considered and therefore we want to see a specific proposal.
Revised capital requirements rules (CRDIV)
The presidency stressed the importance of making progress but noted there are some key outstanding issues for negotiation with the European Parliament. A vote of the European Parliament plenary has been scheduled for November. The presidency undertook to work to get political agreement to full compliance with the Basel III agreement by the end of the year.
Proposal for a Directive on the fight against fraud to the Union’s financial interests by means of criminal law
The Commission provided information on the proposals. The proposal has three objectives: to harmonise definitions of fraud and related offences; to set minimum sanctions in order to render fraud more unattractive; and to address different statutory limitation periods. I intervened to support the overall idea of tackling fraud but also to express strong concerns about the inclusion in the proposal of VAT administration, as the application of VAT rules and investigation of fraud falls solely under member states’ control and competence. I also questioned the choice of legal base and warned that we might want to assert our opt-in right. Others shared our concern regarding the legal base; the Council legal service expressed a view which supports our position.
Current legislative proposals—economic governance, Deposit Guarantee Schemes Directive (DGSD) and bank resolution and recovery (RRD)
The presidency said the DGSD and RRD proposals are vital elements of the single rulebook for financial services and should be adopted as soon as possible. They will seek a general approach on the RRD by December; informal negotiations with the European Parliament on DGSD will continue in parallel with the RRD, as they are closely linked.
On economic governance, the Commission noted the importance of the so-called “two-pack” legislation for the euro area to strengthen fiscal governance: agreement needs to be reached with the European Parliament on outstanding issues including the scope of the regulation and the role of independent bodies.
Follow-up to the Informal ECOFIN held 14-15 September 2012
The presidency summarised the exchange of views on the single supervisory mechanism at the informal meeting. They had taken note of the concerns expressed, including the balance of powers between national supervisors and the ECB, the strict separation of the ECB’s supervisory and monetary functions, accountability mechanisms, and EBA voting rules. The presidency noted that meeting the proposed 1 January 2013 deadline will require everyone, including the European Parliament, to co-operate.
European Semester 2012
Ministers considered possible changes to the European semester process. The presidency highlighted some issues for consideration including time constraints, implementation of the “comply or explain rule” introduced by the “six pack” economic governance legislation, how to ensure that country specific recommendations (CSRs) are robust while allowing member states to make their own policy choices, and strengthening member states’ ownership of CSRs.
Implementation of the Stability and Growth Pact
The presidency asked ECOFIN to endorse a recommendation to extend by one year the deadline given to Portugal for reducing its excessive deficit. The Commission advised that unforeseen circumstances including the rebalancing of the economy and a Constitutional Court ruling had given rise to the need for the extension.
The UK intervened to say that while we supported the changes to the Portuguese programme, we had concerns about the process. The decision to amend the conditionality underlying the programme required the consent of the Council in accordance with the regulations governing the use of the European financial stabilisation mechanism (EFSM), but the decision was announced publically without first seeking Council’s agreement. For this reason, the UK abstained, though the Government remains supportive of Portugal’s reform programme and efforts to address its deficit. In addition, the Government raised their concern at the insufficient time made available, between Council being asked to consider the decision and the ECOFIN meeting, to allow for proper parliamentary scrutiny. The presidency concluded that Council endorsed the decision and noted the UK abstention.
International meetings: follow-up to the G20 Finance Deputies meeting on 23-24 September and preparation of the G20 Finance Ministers and Governors meeting on 4 and 5 November; and preparation of the annual meeting of the IMF and World Bank Group on 12-14 October
Ministers endorsed the terms of reference document for the G20 meeting in Mexico and the draft EU presidency statement for the IMF meeting.
Local Government Finance
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
In the 2010 spending review, the Government announced plans to localise council tax benefit and this is being taken forward through the Local Government Finance Bill currently before Parliament. From April 2013, these reforms will localise council tax support and give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people back into work.
These reforms contribute to the Government’s deficit reduction programme, delivering savings of £470 million a year of taxpayers’ money in Great Britain from 2013-14. Welfare reform is vital to tackle the budget deficit, as council tax benefit expenditure in England increased from £2 billion to £4.3 billion from 1997-98 by 2010-11.
Localisation will give local authorities the flexibility to design council tax support schemes for working-age claimants in their area. We have been clear that councils have the scope to help manage the impact of the reduction in council tax support funding through securing sensible savings. To help the transition to these changes, my Department has already provided £30 million of funding to help councils draw up local support schemes.
There is a real incentive for councils to make savings in the new localised system from cutting fraud and error, where an estimated £200 million was paid out unnecessarily in 2011-12. However, we appreciate that these savings may not be delivered immediately in the first year.
Consequently, to further assist the transition process, my Department is today announcing an additional £100 million of funding for councils to help support them in developing well-designed council tax support schemes and maintain positive incentives to work. This is new and additional funding for local government.
As councils draw up their local schemes, it is clear that many are delivering savings using their local flexibilities and discretion, without unfairly increasing the burden on those who are currently on benefits. Equally, there are some councils which are asking for very large additional contributions from those on benefits.
The new £100 million transition grant will seek to encourage best practice. The voluntary grant will be available to councils (billing and major precepting authorities) who choose to design their local schemes so that:
Those who would be on 100% support under current council tax benefit arrangements pay between zero and no more than 8.5% of their council tax liability;
The taper rate does not increase above 25%; and
There is no sharp reduction in support for those entering work—for claimants currently entitled to less than 100%, support, the taper will be applied to an amount at least equal to their maximum eligible award.
In allowing flexibility over aspects of the scheme, we would not expect local authorities to impose large additional increases in non-dependant deductions. Councils will rightly want to avoid collecting small payments, and it may consequently be better value for money for councils to avoid designing schemes which seek to do so.
The amount of funding for which councils will be eligible to apply and the time scales and process for making an application will be published shortly. We anticipate that councils will make applications after 31 January 2013, and that funding will be paid in March 2013. The grant will be a simple one, easy to apply for and swiftly paid out, to help those councils who choose to do the right thing.
The Government have a clear goal in tackling the deficit, and reducing spending on benefits. This measured, transitional approach will help deliver an important programme of welfare reform, while still protecting taxpayers’ broader interests.
Armed Forces Pension Scheme
(12 years ago)
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The Secretary of State for Defence (Mr Philip Hammond)
On 31 July 2012, I published the outline scheme design of the new armed forces pension scheme and invited comments from service personnel and interested external organisations by 7 September. This followed an initial consultation exercise between March and May. Over 25,000 members of the armed forces have participated overall in the consultation process, which included presentations, focus groups and questionnaires.
Having considered the response to both periods of consultation, I am announcing today the final agreement on the new armed forces pension scheme. This sets out the Government’s final position, which will form the basis for detailed implementation. The new pension scheme will remain among the very best available in either public or private sectors.
The main parameters of the new scheme design are set out below:
a. Members will continue making no contributions;
b. A pension calculated on career average revalued earnings (CARE);
c. An early departure payment (EDP) scheme, available to members who leave before normal pension age (NPA), on completion of 20 years service having reached a minimum age of 40 years, comprising an annual income of at least 34% of the value of the deferred pension and a tax-free lump sum of 2.25 times the value of the deferred pension service personnel will also have the option to convert their total EDP lump sum into additional monthly income payments.
d. A NPA of 60 and a deferred pension age (DPA) linked to the state pension age (SPA);
e. A pension accrual rate of 1/47th of pensionable earnings each year;
f. Revaluation of active members’ benefits will be in line with average earnings;
g. Pensions in payment and deferred benefits to increase by CPI;
h. The option to convert pension income into a tax-free lump sum at transfer rate of £12 lump sum for £1 per annum pension income up to HM Revenue and Customs limits;
i. The option for scheme members to pay additional voluntary contributions calculated on an actuarially fair basis;
j. Abatement will not apply to service in the new scheme. Abatement rules for the current scheme will remain unchanged;
k. No maximum service and no upper age limit for the earning of benefits;
l. Members transferring between public service schemes to be treated as having continuous service;
m. Members rejoining after a period of deferment of less than five years can link new service with previous service;
n. Early retirements from age 55, with benefits to be actuarially reduced;
o. EDP monthly income ceases at the deferred pension age, when it will be replaced by the deferred pension in full;
p. Ill-health, death and survivors’ benefits (ancillary benefits) based on those currently provided in AFPS 05;
q. No additional transitional arrangements beyond the Government’s 10-year promise; and
r. An employer cost cap to provide backstop protection to the taxpayer against unforeseen costs and risks.
There will be full protection for accrued rights for all members as follows:
a. All benefits accrued under final salary arrangements will be linked to the member’s final salary when they exit service, in accordance with the rules of the members’ current schemes as follows:
The armed forces pension scheme 2005:
The armed forces pension scheme 1975;
The reserve forces pension scheme;
The full-time reserve service pension scheme 1997 (Full commitment and limited or home commitment);
The non-regular permanent staff pension scheme.
b. Members will be able to access their benefits from these schemes when they expected to do so based on current rules.
There will also be statutory-based transitional protection for those closest to retirement in these schemes:
a. All active scheme members who, as at 1 April 2012, had 10 years or less to their current normal pension age, will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current normal pension age. This protection will be achieved by the member remaining in their current scheme until they retire or leave the armed forces.
There is a requirement for further work on accrued rights and transitional arrangements for the Gurkha pension scheme and Gibraltar regiment pension scheme.
The design of the new scheme has been the subject of an equalities impact analysis and equality issues will continue to be considered as the implementation details are progressed.
I believe this final agreement represents a generous outcome for service personnel and a fair solution for the taxpayer and meets the operational requirements of the armed forces. In particular, the EDP will continue to meet the need for a predominantly young work force. The new scheme will remain among the very best available in the public or private sector in recognition of the unique commitment which the armed forces make to the defence of the nation.
Copies of the final agreement, the scheme costing and the equalities impact analysis have been deposited in the Library of the House.
Agricultural Wages Board and Associated Bodies
(12 years ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
DEFRA is today launching a consultation exercise on proposals to abolish the Agricultural Wages Board for England and Wales and the 15 agricultural wages committees and 16 agricultural dwelling house advisory committees in England. The removal of the agricultural wage regime imposed by the Agricultural Wages Board and the introduction of the national minimum wage in the agriculture sector will be an important step forward in achieving the Government’s objective of harmonising and simplifying employment law, and removing regulatory burdens from businesses. The abolition of these bodies will also contribute significantly to the Government’s programme of public body reform and support the Government’s growth agenda.
The Agricultural Wages Board and its related English committees are now outdated and obsolete bodies, dating back to the beginning of the last century. The existence of the Agricultural Wages Board adds administrative burdens to farm businesses, hampers the introduction of flexible modern working practices and causes confusion with the national minimum wage. Abolition of the board and the agricultural minimum wage will mean that there is a single employment regime across all sectors of the economy. It will make it easier for farmers to employ workers and will encourage growth and employment in the agricultural sector. Existing workers will retain contractual rights in place at the time of the abolition of the board and will have the same level of employment protection as workers in all other sectors of the economy. The majority of farm workers are already paid above the agricultural minimum wage and farmers will need to continue to offer competitive and rewarding packages to attract and retain workers with the right skills and qualifications.
With the challenges of feeding the rapidly growing world population, there are huge opportunities for British agriculture to prosper. The changes which we are proposing to introduce will free-up farmers from unnecessary administrative burdens, allowing them to invest in their businesses and support the economy. I am determined to ensure that those who work in farm businesses can share in that success with the benefit of modern contractual arrangements.
The functions of the agricultural wages committees are now largely redundant, and following changes to housing legislation in the 1980s the number of requests for advice from agricultural dwelling house advisory committees (ADHACs) has fallen significantly. The abolition of ADHACs will not remove statutory protection from tenants in tied accommodation, nor will it remove the ability of a farmer to apply to a local authority for a tenant to be re-housed where there is a need to provide accommodation for an incoming worker. In making a decision on a re-housing application, the local authority will still need into account whether it is in the interests of efficient agriculture to re-house the worker and the urgency of the application. Given their reduced and limited functions, it is difficult to justify the continued public resource in retaining these 31 regional committees.
The Government’s proposal to abolish the Agricultural Wages Board and the regional English agricultural wages committees and agricultural dwelling house advisory committees has been known for some time and stakeholders and interested parties have already been able to make their views known. However, they now have the opportunity to respond to the formal consultation exercise. An impact assessment and equality impact assessment on the abolition of the agricultural wages board are published as part of the consultation package. The consultation documents are available on the Gov.uk website
Iraq Network Strategic Review
(12 years ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Today the Government are publishing a new Iraq strategy, a copy of which I will place in the Library of the House.
Iraq is changing. After years of conflict and uncertainty, it has a democratically elected Government and is becoming gradually more stable, although a serious threat from terrorism remains.
Our Government are committed to a broad and enduring relationship with Iraq. We want to support a stable, prosperous and democratic Iraq that is a positive and influential regional actor in a region that is vital to UK security and prosperity. We wish to strengthen our commercial ties with a regional economy of growing importance.
To that end we have taken several steps to strengthen the UK’s partnership with Iraq.
Over the past 18 months, there have been 15 ministerial visits between the UK and Iraq, covering our foreign policy, security and commercial interests, including a visit I made in September.
The Foreign and Commonwealth Office has supported visits to the United Kingdom by the Iraqi Parliament’s committees for security and defence, human rights, finance, and foreign affairs. This has helped to develop links between the United Kingdom and Iraqi Parliaments and to support Iraqi democracy.
We have taken steps to increase our economic relationship with Iraq. Our embassy in Baghdad has supported numerous delegations of British businesses seeking to re-enter the Iraqi market. We will shortly open a new visa application centre in Baghdad, meaning that Iraqis will no longer need to travel outside of the country to obtain a UK visa, which will make it easier for British businesses to do business with Iraq. During my recent visit to Baghdad, I also agreed to establish a ministerial trade council of British and Iraqi Ministers and business leaders to increase trade and investment links between our two countries.
Following my visit to Iraq in September I have reviewed our diplomatic presence across the country. I have decided to focus staff and resources where they will support the United Kingdom’s partnership with Iraq as efficiently and cost-effectively as possible, and with the greatest impact in the areas of our relationship of the most importance. We will do this by strengthening our embassy in Baghdad, increasing our diplomatic presence in Erbil and moving our representation in Basra onto a different footing.
First, we need to increase the amount of diplomatic resources we are able to concentrate in Iraq’s capital Bagdad. We are therefore expanding our political section to increase its reach across all of Iraq’s 18 governorates and help address some of the main issues preventing British businesses from entering into the Iraqi markets. We are recruiting additional staff in Baghdad to strengthen our UKTI office and help British businesses access markets throughout Iraq.
Secondly, the review of our resources in Iraq has confirmed that the Kurdistan region continues to attract significant interest from British businesses. I am therefore increasing our staffing levels in Erbil. Today, for example, over 40 British companies are attending the Erbil international trade fair, with support from UK Trade and Investment (UKTI). We will recruit a new UKTI commercial attache to expand the consulate-general’s already successful commercial section. I have also made clear my firm intention that the Government should maintain the British consulate-general Erbil on a permanent footing.
Thirdly, we will maintain a British embassy office in Basra to support our work with all of Iraq’s central and southern governorates. However, this will not be staffed permanently.
Because of the improving security situation, it is now easier and safer for staff to travel from Baghdad to Basra and around the country more generally. In particular, embassy staff can now fly direct to Basra airport in one hour, rather than having to undertake a 48-hour trip as was the case previously. This means that we can support UK interests in Basra effectively without the need for staff to be permanently based there. In turn, this allows us to reduce the cost of our presence in Basra, currently £6.5 million per annum. This is significantly more than the cost of, for example, our much larger embassy in Kuwait City.
Her Majesty’s ambassador, his deputy and other diplomatic staff will continue to make frequent visits across Iraq, including to Basra, to ensure that we continue to maintain the strength and depth of our relationship with Iraq.
I am confident that these are the right decisions. They will enable the Foreign and Commonwealth Office’s Iraq network to achieve the Government’s ambitious strategy for improving commercial ties with Iraq and supporting a stable, secure, democratic Iraq that is a positive and influential regional actor.
The savings we make from a more efficient Iraq network will also allow us to strengthen the United Kingdom’s presence in key emerging powers. This involves opening 11 new British embassies and eight new consulates by 2015 and deploying 300 extra staff to 22 countries, including Burma, Thailand, South Korea, North Korea, Mongolia, Malaysia, Nigeria, Angola, Botswana, Chile, Argentina, Columbia, Panama, Peru, Pakistan, Vietnam and the Philippines with the biggest increases in China and India. This is in line with the statement I made to Parliament on “The Future Diplomatic Network” in May 2011.
Report on Sport and Exercise Science and Medicine (Government Response)
(12 years ago)
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The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
My noble Friend Earl Howe, the Parliamentary Under-Secretary of State, Department of Health, has made the following written ministerial statement:
We have today laid before Parliament the “Government Response to the House of Lords Science and Technology Select Committee Report of Session 2012-13: Sport and exercise science and medicine—building on the Olympic legacy to improve the nation’s health” (Cm 8452).
We welcome the Committee’s report and its focus upon the quality and application of sports and exercise science and medicine. The effective translation of scientific breakthroughs in this area into health benefits for patients and the public represents a major opportunity as a legacy of the London 2012 Olympic and Paralympic games. We are therefore targeting investment to support the translation of biomedical research.
Today’s publication is in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
Environment, Food and Rural Affairs Committee Report on Desinewed Meat (Government Response)
(12 years ago)
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The Parliamentary Under-Secretary of State for Health (Anna Soubry)
We have today laid before Parliament the Government’s response (Cm 8462) to the House of Commons Environment, Food and Rural Affairs Committee Report on Desinewed Meat, which was published on 24 July 2012.
On 28 March 2012, the European Commission issued demands, in accordance with its interpretation of European Union (EU) food law, that the production of desinewed meat from ruminant bones in the UK should cease. Desinewed meat produced from non-ruminant bones should be categorised and labelled as mechanically separated meat (MSM), which has significantly less commercial value and cannot count towards the meat content of products in which it is used.
In response to these demands, which required the UK to take action within five working days, the UK Government decided to implement a moratorium to achieve compliance with the Commission’s interpretation of EU food law. The alternative was to face the prospect of emergency safeguard measures which would have prohibited UK-produced meat preparations, meat products, minced meat and MSM from being placed on EU and domestic markets. This would have had significant negative economic and reputational impact on the UK meat industry and supply chain.
The Environment, Food and Rural Affairs Committee launched an inquiry into the circumstances surrounding the moratorium. The report of this inquiry was published on 24 July 2012, providing a detailed assessment of the chain of events and the implications of the Commission’s decision.
The Government welcome the Committee’s report and its recommendations. Some of the issues that have been raised by the Committee are specific to the Food Standards Agency (FSA) while others are wider in scope. The Food Standards Agency has liaised closely with the Department of Health, the Department for the Environment, Food and Rural Affairs and counterparts in the devolved countries in considering the Committee’s recommendations and developing the overall response.
The Committee rightly highlights the need to continue to press the Commission on this matter. The Food Standards Agency has been working and will continue to work closely with other Government Departments and with industry to press for the Commission to ensure a level playing field across the European market. The European Food Safety Authority has been mandated to provide an opinion on MSM which is due at the end of March 2013 and, in light of this, the FSA will push for discussions with the Commission and member states to be re-opened with a view to developing a more proportionate and risk-based approach to the production of desinewed meat and MSM.
Today’s publication is in the Library and copies are available to hon. Members from the Vote Office.
Nursing and Midwifery Council Grant
(12 years ago)
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The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
The Government have made an offer to the Nursing and Midwifery Council (NMC) of a one-off grant of £20 million to support it in improving its performance in dealing with fitness to practise cases.
The NMC is an important organisation with a vital role to play in protecting patients. The offer comes after a period when the NMC has experienced many years of financial and performance difficulties. This year, under new leadership, the NMC has already begun to make improvements to its operations and financial management, but much more still needs to be done.
The NMC has recently consulted on increasing its annual fee to £120. This would mean nurses and midwives would have to pay an extra £44 every year, at a time of significant pay restraint in the public sector.
The Government expect that this grant will provide the extra financial support required for the NMC to properly tackle a backlog of fitness to practise cases, as well as to allow it to reduce the effect of a fee rise for hard-working nurses and midwives.
It is a decision for the NMC Council whether or not to accept the Government’s offer of a grant.
House of Lords
Unemployment: Older Women
(12 years ago)
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Baroness Thornton
To ask Her Majesty’s Government what steps they are taking to address unemployment among older women.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the Government, through universal credit, the Work Programme and Jobcentre Plus flexibilities, are reforming the welfare system to improve incentives and provide more effective support to those without work. Advisers now have the flexibility to offer all claimants, including older women, a comprehensive menu of help which includes skills provision and job search support. All claimants who are long-term unemployed can access the tailored, back-to-work support on offer from the Work Programme.
Baroness Thornton
I thank the Minister for that reply. Indeed, this Question is by way of my 60th birthday present to myself—
Baroness Thornton
—asking the Government what they intend to do about the fact that older women are losing their jobs at a much faster rate than men. Indeed, unemployment rocketed by 27% last year. This is further evidence that this Government really do not understand the issues which are important to women. Does the Minister acknowledge the disproportionate and negative impact that the austerity agenda is having on the lives and employment of all women, but particularly older women?
Lord Freud
My Lords, I must congratulate the noble Baroness on her birthday. However, I must also commiserate with her as she has been completely bamboozled by her colleagues in another place. I have never seen a more misleading use of data for years, not since the 1970s when Denis Healey discussed inflation. If you take a very small figure and add 27% to it, you will find that it is still a very small figure. The actual level of unemployment of women in the 50 to 64 age group is 3.9%. That is the lowest rate of unemployment of any group of women. It is the lowest rate of unemployment of any group of women or men. Therefore, I do not think that the noble Baroness has pinpointed a particular point of concern in terms of unemployment.
Baroness Brinton
My Lords, one of the major challenges facing many older women in preparing for their retirement is the current complexity of the pension and pension credit system, which puts women at a disadvantage. Figures suggest that some women on average receive £40 a week less state pension than men as a result of changes. What is the department doing to simplify the system and give clarity to women as to what level of state pension they will receive?
Lord Freud
My Lords, as my noble friend will know, we are making big strides on pension provision. We have introduced the triple lock and we are talking about introducing a single tier of pensions, which will massively simplify the overcomplex pension provision in this country.
Baroness Greengross
My Lords, have Her Majesty’s Government looked at not just the salaries of those older women who are in work but at the terms and conditions of their employment—for example, the use of zero-hour contracts? Is there full recognition among government inspectors and so on that for many this is the primary, not secondary, source of income in the family?
Lord Freud
My Lords, the crude facts of the matter are that more older women are employed than ever before—3.5 million—and the rate of employment is also at an all-time high of 60.6%. Older women are doing extraordinarily well in the workforce and the reason for that is that they are very valuable employees. Even the BBC seems to have got round to recognising that.
Baroness Turner of Camden
My Lords, does the Minister not appreciate that many older women have not only the job of going out and trying to build up the family income but a valuable role as carers in many families? What can be done to assist women who have this double responsibility, both of working to boost the family income and providing much-needed carers in the family?
Lord Freud
My Lords, this is clearly of great concern to this Government and all Governments. We are taking significant steps to help carers. About one in six of older women who are inactive are inactive because they have caring responsibilities. Creating a far more flexible carer’s allowance and a universal credit element is one of the ways in which we are looking at that issue. We are also introducing flexibility in our conditionality regime at Jobcentre Plus.
Baroness Afshar
My Lords, is the Minister aware that a large number of minority older women do not register as unemployed but get employed in the black market and so do not have a pension from the jobs they have done? They are the people who are most unlikely to be employed in the formal labour market because, although they have extensive experience, they do not have the necessary paper qualifications. They are submerged in the data that are being presented.
Lord Freud
Noble Lords will all be aware of our concern to reduce the level of inactivity in the economy and the level of unemployment is only one way of looking at the figures. The most important thing is how many people are employed and what is happening to the level of inactivity. I am pleased to say that the level of inactivity for this group is going down quite sharply. Since the election, 110,000 fewer people are inactive, and that is something we are continuing to drive.
Lord Wigley
My Lords, is there not a danger of being a little complacent in this matter? Does the Minister accept that between August 2011 and August 2012, there was, over the UK as a whole, an increase of 7% in the unemployment rate for women over 50, but in Wales the increase was 14%, which is quite worrying? Does he accept that there is cause for concern and that we should take steps to minimise those figures?
Lord Freud
My Lords, when you have scarce resources, you must direct them efficiently. When you look at other groups with high rates of unemployment—the rate is 16% for women in the 18 to 24 age group while in this group the rate is 3.9%—you have to consider where you can most efficiently direct support. Do not forget that in the time we are talking about pension age has been increasing. The element of the impact of the increase is very small on a figure of unemployment that across the economy as a whole is probably below the rate of frictional unemployment.
Olympic and Paralympic Games 2012: Trade and Investment
Lord Foulkes of Cumnock
To ask Her Majesty’s Government what trade and investment successes were achieved as a result of contacts with representatives of Governments attending the Olympic and Paralympic Games.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, during the 2012 Games, UK Trade and Investment ran an extensive business programme at the British Business Embassy at Lancaster House. The programme specifically targeted UK and international companies and is expected to deliver £1 billion of additional sales to the UK companies that attended the British Business Embassy. We will report progress in April 2013. The Olympics also gave an opportunity for Ministers to build good relationships intergovernmentally with our cross-party people to benefit trade.
Lord Foulkes of Cumnock
My Lords, that is a very welcome and encouraging response. However, does the Minister share my concern and alarm at reports today that the consulate in Basra is to be closed? It is a centre of British influence that is vital for British investment. Will he inform the House whether these reports are true and, if they are, will he seek to have that very unwise decision reversed as quickly as possible?
Lord Marland
I can confirm that reports about that decision are true. The decision was made after a lot of business plan reviews, which one would expect from any government organisation. Things have improved dramatically out there. It used to take 48 hours to get from Baghdad to Basra; it now takes an hour by plane, so it is much easier to get to. As regards the future in that part of the world, we believe that we should have an office in Erbil for the Kurdistan region and boost our office in Baghdad. This is being done with great consideration and I think that the noble Lord will be able to see the effects of it later.
Lord Razzall
My Lords, bearing in mind the criticism generated against the department that the noble Lord has recently joined, will the Minister take the opportunity to explain to the House the efforts that he and others have been making to improve trade and investment?
Lord Marland
I am very grateful for that question because it opens up an extremely nice opportunity. Bringing this matter back to the Olympics, the Prime Minister, the Deputy Prime Minister, my noble friend Lord Green and even I have been to Rio. We have also all been to Qatar, and two or three people have been to Russia to ensure that we fully benefit from the wonderful warm glow of the Olympics. I myself am catching a plane to sub-Saharan Africa tonight.
Lord Marland
I am just trying to keep the sun tan up. My noble friend Lord Green is in Europe as we speak, and everything that the Prime Minister does when he goes abroad is with the aim of incentivising trade.
Lord Hughes of Woodside
My Lords, is there not a case for a coherent policy? Much has been done in terms of the Olympics and the follow-up to them, yet we are now closing the office in Basra. Surely the Minister must realise that it is ease and quickness of access that gets business, not waiting for somebody to phone the office in Baghdad and say, “Can you get on a plane and come and see us?”. The Chinese are not going to do that.
Lord Marland
The noble Lord provokes a couple of questions. The first is: what did the Olympics do for British business? I believe it is true that it showed Britain to be safe and secure, it showed us to be an engaging nation and it showed us to be a nation capable of delivery, of which we should be proud. Having been in business all my life, I can say that those are three criteria that are attractive for businesses. If we add to that the rule of law, transparency, our place in the global world and the fact that we speak English, to my mind that makes Britain an absolute global centre. How will we benefit from it? In relation to the noble Lord’s question about the office in Basra being closed, we have announced that a new visa entry programme will be enhanced out there to allow Iraqi people to come to Britain, whereas before they would have had to get their visas from places such as Jordan. A lot of prosperity initiatives are going on and that is just one of them.
Lord Forsyth of Drumlean
My Lords, in view of the enormous success brought by the Olympics and the fantastic advert around the world for Britain, is my noble friend not surprised that we have had such churlish supplementaries in response to his excellent Answer?
Lord Marland
I shall be bathing in sunshine tomorrow and I am now bathing in sunshine here, so I thank the noble Lord for that kind remark.
Lord Jones of Birmingham
I declare an interest as a chairman and an adviser to many of the exporters who benefited from UK Trade and Investment at Lancaster House during the Olympics. I start by congratulating Her Majesty’s Government on a very good business programme linked to the Olympic Games. Can the Minister give three assurances? First, will the business club, started at the Commonwealth Games in Manchester in 2002 and promulgated through Lancaster House during the Olympics and Paralympics, be continued in Glasgow in 2014, notwithstanding all the efforts of certain people who might think to the contrary? Secondly, will the Minister, as all Ministers and parliamentarians of all parties should, fly the flag around the world to generate jobs and tax-generating profit in this nation? Thirdly, will the Minister follow up on all the contacts made at Lancaster House with taxpayers’ money to generate jobs?
Lord Marland
I am very grateful to the noble Lord for his supplementary on his supplementary on his supplementary question. Time will allow me to deal with only one of them, but I thank him for everything that he did, and of course I thank people for everything that they did cross-party to promote British business. I am leading something called the GREAT campaign, which I hope has been well advertised in this country and abroad. That is a good platform for showing people our great country.
Lord Stevenson of Balmacara
My Lords, there has been welcome news and we on this side congratulate all those concerned. Will the Minister please give us some facts? What proportion of the sales or trade that took place at those meetings is arms-related? Will he also give a sense of what proportion of what was left went to SMEs in this country?
Lord Marland
The noble Lord will know that arms-related sales do not happen overnight. There are long congestion periods. If we look at the activity on Typhoon, decisions about such huge amounts of money are not made quickly. Clearly, we have a remarkable defence industry, of which we are proud and which is at the cutting edge of world technology. I have no doubt that it will be making sales throughout the world. On the defence front, I can say that I was privileged to lead a mission advising people on cybersecurity around the Middle East and orders are coming in thick and fast.
Riots, Communities and Victims Panel
Baroness Tyler of Enfield
To ask Her Majesty’s Government what plans they have to take forward the recommendations of the Riots, Communities and Victims Panel on building character and personal resilience.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, many aspects of the panel’s report chime with the Government’s ambitions on reform. The panel’s focus on character is reflected in the Government’s Positive for Youth statement, which stresses the importance of personal and social development and the building of resilience. An accompanying outcomes framework is aimed at supporting local practitioners working with young people, including schools, and it sets out the capabilities that together help foster character and how that might be measured.
Baroness Tyler of Enfield
My Lords, I thank the Minister for her response. Given that the report of the Riots, Communities and Victims Panel, which I thought was extremely good, contains nine specific recommendations to help build character and enhance the personal resilience of young people relevant to schools, youth services and local organisations such as scouts and guides, does the Minister share my disappointment that there was no mention of whether or how these would be taken forward in the Secretary of State’s Statement back in July? Will she confirm that there will be a further Statement from the Secretary of State explaining what has happened to those recommendations, and when might that Statement be made?
Baroness Hanham
My Lords, as I said previously when I answered a question about the riots, there will be a further response in due course. The Government are already taking quite a lot of action that chimes with the report. We are already funding cadets, summer schools, the National Citizen Service, and Myplace, which is a national programme to build world-class youth centres. All of those will contribute to helping young people develop their resilience and character.
Baroness Sherlock
My Lords, in their response to the riots panel report—I declare an interest as a panel member—the Government were kind enough to agree with us that when it comes to children, early intervention is crucial. Given that, will the Minister reassure the House of the inaccuracy of the reports that are abroad that the Government’s plans to fund nursery places for deprived two year-olds are to be funded not from an underspend but by raiding £1.6 billion over three years from the early intervention grant, thus putting Sure Start intervention at risk?
Baroness Hanham
My Lords, I am not in a position to confirm that. However, it is worth saying that one thing that the Government are doing is to provide and support parenting courses. One aspect of this is that young children need a family background; they need the support of parents; and they need nursery education. All of that will start to build the resilience mentioned over and over again in the report, to help them resist things later in life when they may be faced with problems such as riots.
Lord Elton
Do the Government recognise, as the panel did, the importance of providing support to young people at weekends and in the school holidays? Has the Minister picked up on the enormous importance of volunteers in providing this cover, and in monitoring during school terms as well? If so, will the Government undertake some means of supporting the employer volunteering encouragement schemes that produce the people to do this at minimum cost and maximum efficiency?
Baroness Hanham
My Lords, I endorse entirely what my noble friend said about volunteering. The more volunteers we have, the more we can do. The volunteers at the Olympic Games showed how valuable they can be. We already support summer schools where young people have an opportunity to develop. We also support the National Citizen Service, which will be supported by volunteers as well. There is plenty going on. The Myplace scheme for developing youth clubs will also need volunteers to help with it. I hope that my noble friend will understand that this is an area where there is room for expansion.
The Lord Bishop of Ripon and Leeds
My Lords, have the Government noted the way in which youth workers from churches, voluntary organisations and local authorities helped prevent riots in so many places? What plans do they have to ensure that funding for such youth services does not decline in future, thereby increasing the possibility of a repeat of the riots?
Baroness Hanham
My Lords, as I indicated, we are supporting the creation of new youth centres through Myplace money. I emphasised that it was absolutely vital that people who were responsible for young people and had an effect on them should help them build resilience and character. That is a major part of the report to which the noble Baroness, Lady Sherlock, and my noble friend Lady Tyler referred. It demonstrates that even within the same school there are some children who can develop that character, leadership and resilience against actions such as the riots, and some who cannot. I accept the point of the right reverend Prelate about the need to have youth services. We are funding them.
Lord Northbourne
Is the noble Baroness satisfied that maintained secondary schools—and all secondary schools—are doing as much as should be done to stimulate character and resilience in pupils, which they have the opportunity to do when the pupils are at school?
Baroness Hanham
My Lords, the aim of the Department for Education is that all schools should create a framework to enable teachers to take control of a classroom. That includes taking control of the behaviour of young people and being able to influence how they grow up, against a framework and parameters. I mentioned the parenting classes that are being set up. The noble Lord, with all his experience, will understand that that is a great step forward for the future.
Energy: Costs
Lord Kennedy of Southwark
To ask Her Majesty’s Government, in the light of the announcement of price rises by British Gas, what action they will take to protect consumers from rising energy costs.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, protecting consumers from rising energy costs is a priority for this Government. Programmes such as the Carbon Emissions Reduction Target, Warm Front, Green Deal and the Energy Company Obligation make or will make homes more energy efficient. The Warm Home discount provides £1.1 billion of support until 2015 and helps around 2 million low-income and vulnerable households. The Government have also instigated the Big Energy Saving Week, to be held the week of 22 October, when there will be up to 400 events across the country providing direct advice on reducing energy bills.
Lord Kennedy of Southwark
Whenever energy companies announce their price hikes they always blame wholesale price increases. However, when wholesale prices fall, customers rarely see their bills fall. When are the Government going to stand up for hard-working families, the grafters and people struggling to make ends meet who are suffering at the hands of these companies?
Baroness Verma
My Lords, this Government do stand up for hard-working families, the grafters and the strivers. What we cannot do, of course, is tell big energy companies what prices they should set. Artificially reducing retail prices to levels below competitive levels would be unsustainable and discourage investment in new infrastructure. We need to make sure that energy companies are doing more by making them make their bills easier for consumers to understand and, where they can, by directing consumers to cheaper tariffs.
Lord Teverson
My Lords, between 2003 and 2011 the retail price index went up 30 per cent but the index relating to the energy price per household went up 120 per cent—four times more. Over that time, from 2003 to 2010, the number of households in poverty went up from 2 million to 5 million. Can the Minister explain how this Government are tackling that blemish on our society, inherited by us from the previous Government?
Baroness Verma
I thank my noble friend for affording me the opportunity to show our commitment in helping low-income and vulnerable households to keep their homes warm at an affordable cost. We have in place a strong package of measures to help the most vulnerable through the Warm Home discount scheme, which I have mentioned, which will help 2 million households receive support during 2012-13. This will include more than 1 million of the poorest pensioners, who will receive an automatic discount of £130 off their electricity bills by December this year.
Lord Willoughby de Broke
My Lords, would not the simple way to reduce consumers’ electricity costs be to stop paying huge subsidies to wind farms? The cost of those subsidies falls directly on to the consumer, particularly, as the noble Lord, Lord Teverson, mentioned, those in fuel poverty.
Baroness Verma
My Lords, this country needs a mix of different energy sources. Wind happens to be one of them and is carbon free. However, we recognise that we need to look at all sources and the subsidies we are providing to them, and we have taken it upon ourselves to reduce wind subsidies by 10 per cent.
Lord Geddes
My Lords, as regards the excellent house insulation scheme, can my noble friend persuade the department concerned to inform those who are installing the insulation that they are allowed to go up portable ladders and not to claim health and safety regulations to refuse?
Baroness Verma
My noble friend raises a very important point. I need to direct it to the department to which his question belongs.
Lord Grantchester
I congratulate the noble Baroness on her new ministerial position. I am sure that she will be able to keep her boots dry and need neither wellies nor huskies. Against last year’s downward trend in wholesale prices between 2011 and 2012, the energy companies are passing on price rises over a two-year period, claiming that that is when they last purchased their supplies. If a company makes a mistake on its forward buying policy, why is it that the consumer suffers and not the company? Does this look like a competitive market to the noble Baroness, especially when all energy companies seem to coalesce around similar price hikes and coincide with the timing of price rises?
Baroness Verma
My Lords, the noble Lord raises an important point, but in anticipation of someone asking this question, I have looked at the net margins of energy companies. By and large, their net margins have remained at around 3.4%, so they are not working with huge margins. Perhaps I may say once again that I want energy companies to direct people towards better tariffs if they are available or make it much easier for consumers to change suppliers. That gives consumers choice and puts energy companies in competition.
Lord Cormack
My Lords, can we go back to these ghastly wind farms? They produce indeterminate amounts of energy, they cost a great deal of money and they shut down when the wind blows too hard. What real justification is there for onshore wind farms?
Baroness Verma
My Lords, I know that my noble friend is greatly concerned about wind farms, but perhaps I can reassure him that on 20 September last we called for evidence to see how well we are doing in terms of our targets on wind farms. I can also assure him that, by and large, we have reached our capacity for onshore farms through what we have already done and what is in the pipeline. My noble friend can rest assured that there will not be a burst of wind farms across the landscape. We are taking wind farms as part of the energy mix that this country needs.
Lord West of Spithead
My Lords, I am sure that the noble Baroness would agree that surety of supply of gas is an important part of keeping costs down. Some 14% of our energy comes from Qatar through to Milford Haven, and that is set to rise to 30%. Does she further agree that 19 destroyers and frigates might be a little too few to ensure the security of that supply?
Baroness Verma
My Lords, that is a very important question to which I know the noble Lord will want a fuller answer.
Business
(12 years ago)
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Baroness Royall of Blaisdon
My Lords, I rise to intervene on two separate points rather than make two separate interventions. The first is on the conduct of Members of your Lordships’ House and the second is on the Local Government Finance Bill, which the House is about to consider this afternoon.
On the first issue, allegations have been made in the media about a number of former senior service personnel and their readiness to lobby current Ministers and officials in the Ministry of Defence about defence procurement—in other words, paid advocacy. Two of those named are Members of your Lordships’ House. When similar allegations were made in January 2009 by the same newspaper, the Sunday Times, about a number of other Peers, the House took action against those individuals and toughened up our Code of Conduct in relation to paid advocacy. I wrote to the Leader of the House on this matter yesterday, asking him to make a statement.
These are serious matters. They were when we suspended Members of this House previously and they are now. The reputation of this House and Members of this House, and the conduct of Members of this House, is again being called into question. Experience of these matters shows that the best way to consider and resolve these issues is through the improved mechanism that we now have available, including the Lords Commissioner for Standards. I believe that Members of your Lordships’ House should be kept informed about issues such as these, and that is why I am raising this matter now.
The second issue is the Local Government Finance Bill. Based on a briefing given to Peers yesterday by the noble Baroness, Lady Hanham, we understand that the Government propose to make an announcement in this House this afternoon on transitional funding in connection with council tax support schemes. We do not yet know the detail, but it is clear that the changes to the Bill, at this late stage, will be material. I understand that there was a Written Statement yesterday, but today represents the first opportunity for Members of this House to debate these issues. Accordingly, yesterday we wrote to the Leader of the House asking for assurances that at Third Reading, which is due next week, all Members of your Lordships’ House, including the Opposition, will be able to table and, if necessary, vote on amendments—new and substantive amendments —driven by the Government’s announcement today. We received a reply from the Leader of the House rejecting such an easement of usual procedure, with the result that Members of this House will not be able to table such amendments following today’s announcement by the Government. We do not believe that this is correct. We do not believe that such an insistence is to the benefit either of Members of this House or of this House carrying out its role of properly scrutinising this Bill. Accordingly, we ask the Leader of the House to reconsider his response and provide Members of this House with the opportunity to carry out their constitutional role.
I apologise for having to intervene in this way, and on two separate points, but I believe that both are important matters which are of concern to this House.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I am surprised by the intervention of the Leader of the Opposition, particularly on the first question. These are enormously serious allegations that have been made against Members of this House. I happen to know that the noble Baroness asked the Lord Speaker for a PNQ on this matter and the request was turned down. I think that it is discourteous of the noble Baroness to have raised this issue because our rules do not provide for the second-guessing of a ruling on a PNQ by the Lord Speaker.
Since the noble Baroness was Leader of the House, this House has created a new code of practice and a new independent Commissioner for Standards. We should allow the new independent Commissioner for Standards to do his job, given his responsibilities, and to carry out any inquiries that he sees fit.
Secondly, on the Bill that we are dealing with today, it is completely standard practice for Governments to react to suggestions that have been made, to amendments that have been put down and debated in this House, in an attempt to be helpful to the House. That was the reply that I gave the noble Baroness. It is much better for the Report stage of this Bill to continue and for my noble friend the Minister to make whatever case she wishes to make as to why the Government have made this statement, and for the amendments to be taken in the order in which they were put down.
Lord Laming
My Lords, I am disappointed that the noble Baroness raised the first point, because she knows that the matter has been referred to the independent Commissioner for Standards. It is absolutely right, and in fairness to my colleagues involved in this, that the matter is handled in accordance with the procedures agreed by this House and away from the Floor of the House. I hope that all Members of the House will respect that.
Baroness Hollis of Heigham
My Lords, perhaps I might comment on the second part of the noble Lord’s reply to my noble friend the Leader of the Opposition, on the Local Government Finance Bill.
Yesterday afternoon we learnt from the noble Baroness, Lady Hanham, that the Government were making available £100 million. It was courteous of her to give us a briefing session; we were very pleased that she did so and we are grateful for that. However, a number of the amendments today were based on the assumption that no such transitional moneys would be forthcoming. Because they are, it raises serious issues; for example, about whether local authorities that have already gone out to consultation on their schemes, which the Bill says they must do, would now be required to go out or possibly face judicial review.
Secondly, with the benefit of that grant, we are now talking about collecting extremely small sums of money from reluctant and sometimes recalcitrant payers, of £1.50 or £1.75 a week, and in many cases the cost of collection will exceed the money collected. I for one wish to get guidance and steer from legal and finance officers of local authorities so that we can have a proper, informed, sensible and cool debate, while being respectful of and grateful for the additional moneys coming to local authorities. But we cannot do that overnight. As a result, I shall be withdrawing at least one if not two amendments in my name because I cannot argue them until I have got the information we now need in light of these changed circumstances.
In previous times, when many of us have been Ministers, we have made arrangements perhaps to go from Report back to Committee or from Third Reading back to Report, because this is a self-regulating House. All that my noble friend is asking—and we were given assurances by the noble Baroness, Lady Hanham, yesterday that this would happen—is that we have the flexibility at Third Reading to table amendments that may introduce new material, because new material was introduced by the Government yesterday.
Lord Strathclyde
My Lords, I think that what the noble Baroness is saying is that if the Government had not made a statement yesterday or this morning we would not have had this little debate at all, because we would have carried on with the amendments as they were. The Government are trying to be helpful. Surely the right time for this debate to continue is when we move into the Report stage. My noble friend can then make her position utterly clear and the House can take a view.
Baroness Royall of Blaisdon
My Lords, I rise to speak on both issues again. On the first point, these are of course deeply serious allegations, which is why I believe that the House should be informed. The process that we have now is absolutely correct; I am delighted that the procedure was changed; and I have the utmost confidence in the Commissioner for Standards. I just think that it is important that the House knows what is happening. I am glad that the noble Lord the Convenor of the Cross Benches was able to tell us what he has done; I am sure that the House is glad to know what has happened. We need to be open and transparent on these issues for the sake of the reputation of this House and its Members.
On the second point, I was merely being courteous in alerting the noble Lord to the fact that we would wish to table amendments at Third Reading and vote on them. I think that that is what the majority in the House would wish to do, which is why I wrote the letter yesterday.
Infrastructure (Financial Assistance) Bill
Welfare of Wild Animals in Travelling Circuses (England) Regulations 2012
(12 years ago)
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Lord De Mauley
That the draft Welfare of Wild Animals in Travelling Circuses (England) Regulations 2012 be referred to a Grand Committee.
Extradition
(12 years ago)
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The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, with the leave of the House, I shall repeat a Statement made earlier today by my right honourable friend the Home Secretary. The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement about the case of Gary McKinnon and the Government’s response to Sir Scott Baker’s review of our extradition arrangements.
I will turn first to Mr McKinnon’s case. I should explain to the House that the statutory process under the Extradition Act 2003 has long ended. Since I came into office, the sole issue on which I have been required to make a decision is whether Mr McKinnon’s extradition to the United States would breach his human rights.
Mr McKinnon is accused of serious crimes, but there is also no doubt that he is seriously ill. He has Asperger’s syndrome and suffers from depressive illness. The legal question before me now is whether the extent of that illness is sufficient to preclude extradition.
As the House would expect, I have very carefully considered the representations made on Mr McKinnon’s behalf, including from a number of clinicians. I have obtained my own medical advice from practitioners recommended to me by the Chief Medical Officer. And I have taken extensive legal advice.
After careful consideration of all of the relevant material, I have concluded that Mr McKinnon’s extradition would give rise to such a high risk of him ending his life that a decision to extradite would be incompatible with Mr McKinnon’s human rights. I have therefore withdrawn the extradition order against Mr McKinnon. It will now be for the Director of Public Prosecutions to decide whether Mr McKinnon has a case to answer in a UK court. This has been a difficult and exceptional case and I pay tribute to all the Home Office officials and lawyers who have worked on this case over the years.
Extradition is a vital tool. In a world where criminals and crimes can easily cross borders, it is vital, in the interests of justice and public protection, that criminals cannot avoid justice simply by sheltering behind a border. But concerns about the working of our extradition law have grown over recent years. There has been public concern about the extradition regime operating in the European Union—the European arrest warrant—and about the extradition arrangements outside the EU, principally with the United States. That is why in September 2010 I commissioned a review into our extradition arrangements. That review was undertaken by Sir Scott Baker—a former judge in the Court of Appeal—and a distinguished and expert panel including David Perry QC and Anand Doobay. I am extremely grateful to them for the professional and thorough way they went about their work. Nobody who has read their near 500-page report can be anything but impressed by the depth and clarity of its analysis. At the same time, there has been considerable parliamentary interest in extradition. In a debate last December, Parliament agreed unanimously that it believed there were problems with both our US and EU extradition arrangements. In coming to a decision on how the Government should respond to the Baker review I have taken full account of the review’s recommendations as well as the views of Parliament.
Yesterday, I announced that the Government’s current thinking is that we will opt out of all pre-Lisbon treaty police and criminal justice measures. The Government will give very careful consideration to these measures, including the European arrest warrant, and will then seek to opt back into those individual measures where it is in our national interest. The European arrest warrant has had some success in streamlining the extradition process within the EU but there have also been problems. There are concerns in particular about the disproportionate use of the European arrest warrant for trivial offences and for actions that are not considered to be crimes in the UK. There are also issues around the lengthy pre-trial detention of some British citizens overseas. We know these concerns are shared by other member states. We will therefore work with the European Commission and with other member states to consider what changes can be made to improve the EAW’s operation. I believe this is necessary to ensure that the EAW provides the protections that our citizens demand.
There are also concerns about our extradition arrangements with countries outside Europe. A key reason for the loss of public and parliamentary confidence in our extradition arrangements has been the perceived lack of transparency in the process. I believe extradition decisions must not only be fair, they must be seen to be fair and they must be made in open court where decisions can be challenged and explained. That is why I have decided to introduce a forum bar. This will mean that, where prosecution is possible in both the UK and in another state, the British courts will be able to bar prosecution overseas if they believe it is in the interests of justice to do so.
I have been conscious, however, of Sir Scott Baker’s concern that the introduction of the existing forum legislation would lead to delays and satellite litigation. So, rather than commence the existing provisions, as soon as parliamentary time allows I will bring forward a new forum bar which will be carefully designed to minimise delays. In parallel, the Director of Public Prosecutions will independently publish draft prosecutors’ guidance for cases of concurrent jurisdiction, and a bilateral protocol governing the approach of investigators and prosecutors in the UK and the US is being updated alongside this guidance.
Turning to the United States/United Kingdom extradition treaty, I agree with the Baker review that our arrangements are broadly sound and that the treaty brings benefits to both of our countries. Less than two weeks ago, for example, we saw the extradition to America of Abu Hamza and four other terror suspects. Although there is a perception that the evidence tests used by the US and the UK—probable cause and reasonable suspicion respectively—are unbalanced, Sir Scott Baker found that there is no significant difference between those two tests.
I have also accepted the Baker review’s recommendations that a prima facie evidence test should not be reintroduced for those countries where it is not currently required. The courts are already able to subject requests from all countries to sufficient scrutiny to identify and address injustice or oppression. Reintroducing prima facie evidence would be likely to lead to further delays. It is absurd to propose that we should require prima facie evidence from countries such as the United States, Canada and Australia when we do not require such evidence from other countries with far less mature judicial systems.
I also agree with the Baker review’s recommendation that the breadth of the Home Secretary’s involvement in extradition cases should be reduced. Matters such as representations on human rights grounds should in future be considered by the High Court, rather than by the Home Secretary. This change, which will significantly reduce delays in certain cases, will require primary legislation.
Finally, I propose to reduce delays in the extradition system in the light of the recent extradition of terrorist suspects to the United States. In addition to the measures that I have just announced, the Government will look further at proposals in the Baker review to introduce a permission stage for appeals to the UK courts. We will work closely with the European Court of Human Rights on a programme to reduce the wholly unacceptable delays which have occurred there. We have also been considering how we can reduce delays in the deportation of foreign nationals who pose a threat to our national security. There is scope for reforming rights of appeal, streamlining the stages, expediting cases through the court and looking again at the provision of legal aid for terrorist suspects.
As Sir John Thomas, the judge in the Abu Hamza case, said, it is in the overwhelming public interest that our extradition arrangements function properly. They must also be fair. We must balance strong safeguards for those accused of cross-border crimes with assurance that justice will be done. That is the Government’s aim, that is what our proposals will produce and I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Smith of Basildon
My Lords, I thank the Minister for repeating the Statement. I do not think that I have had the opportunity to welcome him to his new position; I do so and look forward to working with him.
I entirely concur with our shadow Home Secretary, the right honourable Yvette Cooper, when she said in the other place that this was a serious decision and, as the Home Secretary explained, had to be based solely on the judgment as to whether Gary McKinnon’s extradition to the US would breach his human rights. It is testament to how serious a decision this is that the Home Secretary has taken two years to reach it. Within that time, she has commissioned further medical and legal advice. Can the Minister clarify whether the most recent psychiatric report commissioned by the Government was a separate and new medical opinion of Gary McKinnon or a review of the existing medical reports?
I focus on three specific issues in the Statement today: the Home Secretary’s announcement following Sir Scott Baker’s review; the implications that the Home Secretary’s decision may have for outstanding and future cases; and the European arrest warrant.
On the Baker review, it is clearly unacceptable that any case can be delayed for over 10 years pending a decision on extradition. I cannot overstate the difficulties and stress within this case but it is also a terrible burden on the victims and families; neither does it serve justice. We accept and agree with the conclusions of Sir Scott Baker’s review: that removing the role of the Home Secretary from human rights decisions in future will prevent cases languishing without decision for so long again.
In relation to the Government’s announcement of their intention to introduce the new forum bar the Minister will be aware that, when in government, we included the option for a forum bar in the Extradition Act. That has never been introduced. We understand and share Sir Scott Baker’s concerns over introducing further delays in the process, with the risk of endless satellite legislation. We will therefore be happy to work in co-operation with the Government on future legislation to resolve some of the outstanding practical concerns. We know that the expertise of your Lordships’ House will be especially important in that process. However, there is a wider problem that the Government have not addressed and I would be grateful if the Minister could help me on it. We are all becoming increasingly aware of cybercrime—a crime that can occur across several jurisdictions at the same time. As the legislation stands, a forum bar would not make any difference in dealing with the difficult decisions about whether extradition should take place. What efforts are the Government therefore making to work with the US, and other countries where we have existing extradition arrangements, on the development of new arrangements to deal with these emerging crimes?
I know that the Minister will also be aware of the case of Richard O’Dwyer, whose extradition was approved following charges brought in the US for conspiracy to commit copyright infringement and criminal copyright infringement following his creation of a website. Not being particularly technical myself, I understand that the site included links to other websites where the copyright infringement was alleged to have taken place. In Richard O’Dwyer’s case, it has been noted that had the forum bar been applied at the time his extradition may not have been approved. Does the Minister feel that the proposals announced by the Home Secretary today fully address the issues raised by the O’Dwyer case, including when offences may have been committed in the UK at the same time as in another jurisdiction?
I have just one further point, which comes back to the discussion we had yesterday about the European arrest warrant. I understand the concerns that have been raised but I also understand and appreciate that this is incredibly valued, as I highlighted yesterday and as law enforcement agencies in this country have highlighted as well. I worry about losing those powers without having anything immediately in their place. The Minister said in repeating the Statement that the Government wanted to work with other European countries to seek changes to the European arrest warrant. Is he aware that work is already ongoing to make changes to and review the operation of that warrant? Does he know what contribution the UK Government are making to those discussions and deliberations at present? My fear is that when other European countries see that we want to withdraw from the European arrest warrant, it will make our power to influence discussion and deliberation of that issue at this time more difficult. If we decide to opt out and then try to opt back in, we may lose the opportunity to influence the changes that—there is some acceptance of this—need to be made. I hope that the Minister is able to address some of the questions I have raised.
Lord Taylor of Holbeach
I thank the noble Baroness, who has been very generous in her welcome for this Statement. Indeed, I welcome her support on a number of the issues that she refers to. Perhaps I can help her on those specific questions that she asked me. The latest medical report that the Home Secretary received, which enabled her to come to this decision, was a review of other reports. It was not a report on or an examination of Mr McKinnon but a fresh report on the evidence that was available to the Home Secretary. I hope that that helps the noble Baroness.
I am very grateful on a number of issues. The Baker review recognised that one of the most difficult issues facing Governments on extradition was the delay in the process. Much of what the Government are seeking to do with the new arrangements on extradition that we intend to negotiate and put into place is meant to reduce delay. On the forum bar, for example, we know that it is going to be a different arrangement from that laid down in the 2006 Act, which was introduced by the previous Government but actually promoted by opposition Benches at the time. Clearly, that will not be fit for purpose for what we now see as the important issue of ensuring that the process is both fair and speedy. If I may say so, it would be good—I know that the Home Secretary welcomed this in the other place—to have cross-party co-operation on the construction of new arrangements for the forum bar.
The question of cybercrime was also raised in another place. I reassure the House that the Government are working with other countries on cybercrime; it is an international crime and clearly fits in closely with issues of extradition and the forum for the hearing of cases so that justice can be done and this insidious crime can be dealt with properly, in both the national and international interest.
On the European arrest warrant, yes, there is an ongoing review, as the noble Baroness implied. There are aspects of that warrant that are extremely useful, and none of us in government wishes to suggest otherwise. However, the previous Government made arrangements whereby we could deal with some of these matters by a withdrawal from the pre-Lisbon sections involving these things to enable us to renegotiate the details. We intend to do that in parallel with a number of other countries that share these concerns, and we do not see this as being a negative process at all. It is about making the European arrest warrant much more fit for purpose, introducing some proportionality into the issue, trying to avoid triviality and ensuring that there is no unnecessary delay in the process.
Baroness Stowell of Beeston
My Lords, I am grateful to the clerk for not starting the Clock so I do not eat into any of the precious time available to noble Lords on the Statement today. I know that there will be great demand to contribute today and that my noble friend will want to respond to as many noble Lords as possible. Because of that, I am sure that the House will find helpful if I remind noble Lords how the Companion guides us on Statements. The point that it makes is that this is an occasion for brief comments and questions.
Lord Lloyd of Berwick
My Lords, I must express some surprise that this seems to be the first occasion on which the Government have expressed gratitude in any public way for the excellent report by Sir Scott Baker on the subject of extradition. Perhaps the Minister might remind us of the date of that report.
Like opting out of pre-Lisbon police and criminal justice matters, which we discussed yesterday, extradition is a subject that has been surrounded by myths. I had hoped and indeed thought that those myths had been dispelled by Sir Scott Baker’s report. I am therefore particularly glad that the Government have at long last accepted his view about the alleged inequality between United Kingdom and United States extraterritorial arrangements, so I hope that we will hear no more about that particular canard. However, I am disappointed that the Government are differing from Sir Scott Baker on the question of a forum power. Does the Minister not agree that if a suspect can be prosecuted in two or more countries, the essential question is where he can best be prosecuted—that is, where he is most likely to be convicted if guilty? In almost every case, that depends on where the bulk of the evidence is. Does the Minister not agree that that is a question that is best decided by the prosecuting authorities in the two countries involved, not by Parliament?
Lord Taylor of Holbeach
I thank the noble and learned Lord for his reinforcement of the esteem with which Sir Scott Baker’s report was received. As the noble and learned Lord will know, it was presented a year ago in 2011. I think it is right that an issue as complex as extradition is properly considered, and I think that if the Government disagree with Sir Scott Baker, they have done so because they have considered the issues that the report raised. The noble and learned Lord implied that perhaps the most important thing is the place in which there is the maximum chance of a conviction being achieved. There is also a matter of justice. Justice requires that people are tried where justice may be seen to be done. It will be for the courts to judge this matter. A Home Secretary will not deal with this matter. I believe the courts in this country are quite capable of determining that.
Baroness Hamwee
My Lords, this is a welcome Statement. Does my noble friend agree that it is welcome in part because it confirms the importance and relevance of human rights in our law, and that they are not something foreign that is nothing to do with us? The Minister referred to the interests of justice in the question of the forum. Does he agree that that may also raise questions about the burden of proof and prima facie evidence, which were somewhat contentious with regard to the Baker report? Can he confirm that he will use all the expertise of this House, notably on the Cross Benches, as well as in the parties? The Minister referred to parties, but I hope he will agree that in this House “parties” means all sides of the House because there is a lot to contribute on this very difficult issue.
Lord Taylor of Holbeach
I thank my noble friend for that very important reminder that this House has an enormous asset in the Cross-Bench contributions, particularly from the noble and learned Lords who sit on them. Nobody, not even the Government, is going pass up the opportunity of free legal advice. I am sure that noble Lords will be very carefully listened to on the matters that have been raised. The Government recognise the complexities of the issue, but we feel that there is now an opportunity to change the arrangement and rebuild public confidence that extradition is properly and transparently conducted. It has been troubling the wider electorate, and this is an opportunity to put it right.
Baroness Stowell of Beeston
The only group we have not yet heard from is the Conservative group.
Baroness Browning
My Lords, I refer to my interests in autism listed in the Members’ register. I welcome this Statement today about Gary McKinnon, but will my noble friend agree that the Home Secretary had the advantage of seeing medical reports from psychiatrists who have a working knowledge of Asperger’s syndrome, which made an enormous difference to the decision that she has made today? Over the past few years, I have had the privilege of reading Gary McKinnon’s medical reports. On moving decision-making from the Home Secretary to the High Court, will my noble friend discuss with his colleagues in the Ministry of Justice the need also for courts to be much more particular about where they source and commission such medical reports? The difference between a generalist psychiatrist assessing Asperger’s syndrome and those who have a working knowledge of it is the difference between justice and injustice.
Lord Taylor of Holbeach
I thank my noble friend for raising Asperger’s and autism in general, conditions which are extremely complex and difficult. She has been prominent in bringing that to the attention of Parliament. I am only too grateful to take her advice and recommendation, and to pass that on to colleagues in the Ministry of Justice.
Lord Morris of Aberavon
I welcome the reduced involvement of the Home Secretary in human rights cases and in the kind of case with which we are dealing. It is usually a sound step, and the perception as well as the reality of political involvement is reduced. Hence, I welcome it. However, will the Minister indicate what is meant by a significant reduction in “delays in certain cases” by transferring these matters from the Minister to the courts?
Lord Taylor of Holbeach
I thank the noble and learned Lord for that question. It is quite overt that in a number of instances, there have been considerable delays. The main thrust of our changes will be to try to expedite the legal process. The process will be speeded up by retaining cases within the legal system and not bringing them back into the political system. I hope that I have been able to answer him.
Lord Pannick
Does the Minister accept that delays have been caused primarily by Strasbourg rather than London? Will he express agreement with the views of the Lord Chief Justice last month that these delays would make any reasonable person furious? Will the Minister share with the House the communications that the Government have had with the European Court in Strasbourg, expressing concern as to those delays? I should also declare an interest in that I was counsel for Mr McKinnon during an appeal to the Appellate Committee of this House.
Lord Taylor of Holbeach
I thank the noble Lord. The question from the noble and learned Lord, Lord Morris, was about delays in the normal process and not about delays in the European Court of Human Rights in Strasbourg. I hope that I understood that correctly. Perhaps I may inquire about correspondence with this Government to see whether it is possible to release any of that for the noble Lord. If so, I will place a copy in the Library.
Lord Hodgson of Astley Abbotts
My Lords, I need to begin by declaring an interest as a trustee of Fair Trials International. I congratulate my noble friend and the Government on having introduced a forum bar. It will end the unattractive process of forum shopping, which is a search for judicial procedures that offer the greatest chance of conviction and the highest possible penalties. When the Government come to examine and review extradition arrangements, could they make sure that they include opportunities for common bail procedures and access to interpretation? Very often people operating overseas are unable to understand of what they are being accused, and access to interpretation is a critical part of their access to justice.
Lord Taylor of Holbeach
I am not in a position to comment in detail on those particular points, but I thank my noble friend for those suggestions. They will be borne in mind as we undertake a review of the process.
Lord Davies of Stamford
An important point was made by my noble friend on the Front Bench that goes to a matter of elementary competence. Have not the Government put themselves in a quite ridiculous position, announcing that they wish to renegotiate the regime for the European arrest warrant and almost in the same breath that they intend to withdraw from the whole structure of justice and home affairs in the European Union? You do not have any influence on the rules of a club if you have announced in advance that you intend to leave it. As for opting back in, we should then be asking our EU partners to do us a favour. In that position we would have no leverage at all in changing the rules. Is that really the Government’s best idea of how to conduct an international negotiation?
Lord Taylor of Holbeach
I am not sure whether the noble Lord was in the Government or the Opposition when the then Government introduced this provision within our statute law. It provides us with an ideal opportunity to work alongside our European partners and with the Commission to seek a change in the European arrest warrant, which we are not alone in seeing as very useful and important but none the less deficient. The procedure for doing that is to give notice that you intend to withdraw and then to seek to reapply on the terms of the revised arrangements. That is perfectly straightforward. It was discussed yesterday after the Statement repeated by my noble friend Lord McNally, and I do not see any difficulty whatever. I am surprised that the noble Lord makes the point that he does.
Lord Maginnis of Drumglass
My Lords, I thank the noble Lord for having repeated the Statement in this House. He will recall the almost innumerable times that I have raised the issue about Gary McKinnon. Despite the fact that we have had a good outcome today, it is quite concerning that it has taken 10 years to get to this stage; and the best that we can get now that we have decided we are not going to extradite him is that at some undefined stage in the future this matter may come before our courts. What does that mean? Is that going to be another 10 years for this young man who suffers from Asperger’s syndrome, the autism spectrum disorder? I chaired an independent review of autism services in Northern Ireland, and I know the strain with which not just the sufferers of the autism syndrome but their families have to live. I implore the Minister to ensure that on top of this Statement this House gets an early indication of the final outcome.
Finally, I note that in line with the Baker review, the Home Secretary’s involvement in extradition cases should be reduced. On a general principle, this suggests to me that we are moving more and more towards government by caucus. There are some 600 Back-Benchers in the other House and some 800 noble Lords in this House. We want to have direct access to government, not access by proxy to some delegated power that we cannot identify.
Lord Taylor of Holbeach
The noble Lord will know that separation of powers is an important part of our constitution. The Home Secretary is saying that this particular power belongs more properly in the judicial process. I think the sentiment around the House suggests that she has that issue right. On the question of Mr McKinnon and what happens to him now, he will be able to apply for release from his bail conditions but it will be for the Director of Public Prosecutions to decide whether he should be tried in the UK. That is not a matter for government.
Lord Jones of Birmingham
Will the Minister shed some light on an aspect of the Statement? I am not a learned Lord but I was a practising lawyer for 20 years and I was always taught that one is innocent until proven guilty and should be treated as such. I refer to extradition to the United States on a whim whereby a businessman or businesswoman can now languish in a jail in America without transparent evidence having been provided. They are then pressurised to enter into a plea bargain on the basis that the case will go all the way to trial. They are not granted bail as they are treated as a security flight risk because they had the temerity to fight extradition. They are in a cell and are told, “All this can go away. All you have to do is plead guilty. You can get two years, two years at home in an open prison after that and this can all go away. Or you can sit here in a jail in America while we get the case together over something like two to three years. You will get no costs for your defence. If you are found guilty, you will go down for 30 years and you will never see home again”. The person concerned has had no evidence presented against him that has been tested in any way, shape or form in a transparent open court of law on either side of the Atlantic. I would welcome the Minister shedding some light this afternoon on how that situation is the pursuit of justice of which he speaks.
Lord Taylor of Holbeach
I am not in a position to comment on the judicial procedure in the United States. It is a sovereign country and makes its own laws and conducts its own affairs. Having said that, the noble Lord will appreciate that this country has good and close relations with the United States; indeed, its legal system is founded on our common law. Therefore, we have a shared purpose. Scott Baker managed to show that there was no substantial difference between the test that was applied in a US court for extradition to this country and that which was applied in a UK court for extradition to the United States. He came to the conclusion that it was a reasonable arrangement that fitted with the legal processes in both countries. We are not aware of any extradition cases in the United States where somebody has waited three years for their case to come to trial.
Local Government Finance Bill
16:55 - Division on Amendment 98A - Ayes: 201 / Noes: 242 - Amendment 98A disagreed.
19:17 - Division on Amendment 103ZA - Ayes: 139 / Noes: 185 - Amendment 103ZA disagreed.
Baroness Hanham
“Estimates of amounts to be disregarded39A (1) The Secretary of State may by regulations make provision for—
(a) calculations of a kind mentioned in paragraph 37(1)(d) or 38(1)(d) to be made on the basis of an estimate of an amount or proportion that is to be disregarded under regulations under that paragraph; (b) for the making of a payment by the Secretary of State to a billing authority or vice versa where it is subsequently determined that the amount or proportion to be disregarded is more or less than the amount of the estimate. (2) Regulations under this paragraph may make provision about the administration of payments under the regulations, including as to—
(a) the time and manner in which a payment is to be made, and(b) the consequences of non-payment.”
Baroness Hanham
“Regulations about calculations and supply of information40A The Secretary of State may by regulations—
(a) make any provision that could be made by a direction under paragraph 40;(b) make provision for the Secretary of State to give a direction that could be given under that paragraph;(c) make any provision made by that paragraph in relation to a direction under it—(i) in relation to provision made by regulations under this paragraph, or(ii) in relation to a direction given by the Secretary of State under regulations under this paragraph.”
Baroness Hanham
“( ) In subsection (1)(b), after “major precepting authority” insert “or the Secretary of State”.”
“( ) under provision made by regulations under paragraph 9A of that Schedule (regulations about payments by billing authorities to major precepting authorities out of deductions from the central share),”
“( ) under provision made by regulations under paragraph 39A of that Schedule (payments by Secretary of State following estimates of amounts relating to designated areas or classes),”
“( ) In subsection (2)(b), after “major precepting authority” insert “or the Secretary of State”.”
“( ) under provision made by regulations under paragraph 9A of that Schedule (regulations about payments by billing authorities to major precepting authorities out of deductions from the central share),”
“( ) under provision made by regulations under paragraph 39A of that Schedule (payments to Secretary of State following estimates of amounts relating to designated areas or classes),”.”
“(2B) The Secretary of State may by regulations make provision requiring a billing authority to transfer from its general fund to its collection fund such amounts as may be specified in or determined in accordance with the regulations by reference to sums received by the authority in respect of non-domestic rates under this Act.””
( ) In subsection (1)(c), after “97(2) or (4) above” insert “or regulations under section 97(2B) above”.
( ) In subsection (3)—
(a) in paragraph (b)(i), for “major precepting authorities” substitute “one or more relevant authorities”,(b) in paragraph (c), for “any major precepting authorities” substitute “prescribed relevant authorities”,(c) in each of paragraphs (d) and (f), for “major precepting authority” substitute “relevant authority”.”
“( ) Before subsection (4) insert—
“(3C) In subsection (3) “relevant authority” means—
(a) a major precepting authority, or(b) the Secretary of State.(3D) Regulations under subsection (3) may make separate provision in relation to council tax and non-domestic rates, with the effect that—
(a) more than one estimate is to be made by a billing authority of whether there is a deficit or surplus in its collection fund for a financial year and, if so, of the amount of the deficit or surplus,(b) each estimate takes into account different amounts to be paid into or met from that fund, and(c) each estimate has different consequences as to the payments to be made, or other functions to be exercised, by the billing authority, major precepting authorities or the Secretary of State.””
( ) at the end of paragraph (b) insert “or”, and( ) omit paragraph (c) and the “or” at the end of that paragraph (which provides for certification of calculations under Schedule 8 to the LGFA 1988).”
Lord McKenzie of Luton
“Council tax benefit scheme
Nothing in this Act shall prevent billing authorities retaining the provisions of the existing national council tax benefit scheme, such schemes to be fully funded by the Secretary of State.”
Lord McKenzie of Luton
My Lords, I did not know whether we were going to get a quasi-statement from the Minister at the start of our proceedings, but perhaps I may comment on the Written Statement we received yesterday and then move directly to my amendment.
We should thank the noble Baroness for her Written Statement, if not the entirety of its content. This is an astonishing state of affairs. Just 24 hours before we are due to commence our final day on Report, we are told that there is, after all, just a little more funding for local council tax support schemes. Of course we should welcome any new money for councils, even if it is just a fraction of the endless cuts they have endured, added to by an extra £1.1 billion cut in formula grant that has emerged from recent edicts. The extra money, £100 million, comes with strings. Yesterday’s Written Statement said that it was about “best practice” and that the money,
“will be available to councils … who choose to design their local schemes”,
according to certain criteria.
However, the design of the schemes has been going on for months. They have been consulted on by local authorities up and down the country. Councils have been agonising over the impossible choices with which many of them have been faced, trying to juggle the near impossibility of protecting the most vulnerable and maintaining vital services. The Government have been sitting back and watching all this happen, denying that the councils needed more time, refusing to accept that there was insufficient funding in the system for all councils to produce decent schemes, and letting them go through the agony. However, this announcement is not, even at this late hour, really about protecting vulnerable people or having good work incentives. The cynical reality is that this is about the Government trying to get political cover as the consequences of their policies strike home.
What does this mean for local councils who wish to access this funding? Some may not have to change their proposed schemes to access the pot, presumably but not necessarily including those who have opted for the default scheme. Some may have to make considerable changes, although they do not yet know how the pot is to be distributed and how this relates to the cost of any changes they may have to make. Some richer councils, through the use of increased flexibility from the empty properties and second homes provisions of the Bill, are in a position to have already funded a compliant scheme and will get a windfall from it.
Minor changes to draft proposals consulted on may not require reconsultation, but more substantial changes might, and we need proper advice and the opportunity to research this. Councils will have to grapple with the sustainability of all this. The funding is for one year only. Using this money to fund improvements in year one and for what would otherwise be affordable for the council may just mean reverting to the original scheme in year two. However, of course, the risk is that political blame will be visited on the council rather than the Government.
Quite apart from the content of the Written Statement, the process has been a disgrace. Springing this on our deliberations at the last moment does not make for a considered legislative process. Perhaps we should not be surprised, because the record shows that the Government have failed to live up to commitments to have full information, including draft regulations available, in good time.
As for our business today and as already mentioned, we have a number of amendments that affect vulnerable people and relate to tapers and work incentives that, in addition to this announcement, need to be considered fully in the context of schemes already consulted on by councils. We need to consider whether to push these today or at Third Reading. We would be grateful if we could have a clear statement from the Minister on the approach that will be taken to Third Reading and whether what we took to be the Minister’s position from our meeting on Monday will become the reality.
For us, of course, this approach is irksome and inconvenient but councils are having to deal with the practicalities of it now. This is not a good way for government to do business. Ultimately, it is abundantly clear that, even after this 12th-hour panic measure, the Government are still not prepared to insist that all the most vulnerable, including those currently passported to full council tax benefit, should be fully protected. It is to their shame that they eschew this responsibility.
I now turn specifically to the amendment, which requires the Government to fund local council tax support schemes up to the level of the proposed default scheme—that is, as now. In seeking agreement to this, we reject the notion that the Government’s newly announced transitional funding is an adequate response to the challenges that local councils face in creating local schemes. I acknowledge up front that the amendment would deny the Government the savings that they are seeking—some £400 million—but, when they are so minded, the Government have a happy knack of finding resources for a council tax freeze, bin collections and even tax cuts for millionaires.
We have made it clear that we consider the move away from a national scheme to be wholly misguided and, ultimately, not sustainable. However, in the interim, the underfunding of the task given to local government has put many councils in an impossible position—one which the transitional funding does not fully address. Even with this transitional funding, which is to last but one year, millions of people around the country will face rises in their council tax from April next year. At the very time when the Secretary of State is lecturing councillors that they have a duty not to increase council tax bills, his own actions are forcing up the bills to be paid by people on the lowest incomes. The Secretary of State is delegating the responsibility of providing council tax support but with 10% less funding than the cost of the current national council tax benefit scheme. As my noble friend Lord Beecham said at Second Reading, it is passing the buck without passing the bucks. However, as we know, the 10% cut in funding is greater because it assumes that claimant numbers for council tax benefit will fall when they are rising, and it will not protect councils to the extent that the benefit is attributable to council tax increases.
Of course, because councils have properly to keep the benefit to pensioners whole and are cynically reminded by the Government of their duty under equalities legislation and—would you believe it from this Government?—child poverty legislation, the burden of the cut has to fall on others: the working-age poor. This awful dilemma is being presented to councils at the same time as they face unprecedented cuts in their funding—bigger than the cuts imposed on any government department. The latest cuts facing local government are significantly higher than those anticipated in the 2010 spending review.
As things stand, we know that some councils are being pushed to financial collapse by all this, and the cuts in council tax benefit funding will hit the poorest areas the hardest. Those that have already endured the largest cuts will suffer the greatest reductions in council tax benefit funding: Manchester will lose £5 million; Liverpool, £6 million; Birmingham, £10 million; and the City of London, to which we gave special consideration just last week, £27,000.
Through the consultations that local authorities are undertaking, we have a glimpse of how, before the one-year transitional money, they are seeking to address these challenges. The LGA tells us that of some 200 councils surveyed, nearly 90% are looking to require a minimum from all working-age claimants. Half will seek a minimum payment of 20%. The transitional funding may impact favourably on this for one year, but this permits—even encourages, one might say—a minimum payment of 8.5%.
Of course, we acknowledge that the Bill presents some councils with additional revenue-raising possibilities from empty properties and second homes but these are not equally spread across authorities. There are not many second homes in Luton. Securing maximum revenue from these sources will not always be possible anyway. According to the LGA, if half the additional potential revenue could be garnered, it would still leave some 307 councils needing to reduce council tax discounts. One way or another we are faced with the prospect of hundreds of thousands of citizens who do not currently have to pay council tax having to do so. Whatever amelioration comes from some one-year funding, it will not dramatically change that. These, of course, will be the poorest citizens. They are likely also to be those most likely to suffer other cuts, especially those in receipt of housing benefit. The Government have seemingly still not woken up to the problem of collecting a relatively small amount of council tax from poor people who have not previously been required to pay. The amounts may be smaller for one year as a result of the extra funding but it potentially makes the problem worse. It seems that the lessons of the poll tax have been forgotten.
There are other admirable amendments before us today, which one way or another seek to lessen the harm that the Bill will inevitably inflict. In our view they do not go far enough. This amendment would require the Government to fund as now, without the 10% cut. We have seen time and again proposals that have a profound impact on the lives of our fellow citizens. We are instructed that they have to be accepted because the deficit must be addressed. The impact is invariably measured on a stand-alone basis without the accumulative consequences being laid out. The alternative is invariably measured in a narrow juxtaposition and not across the whole sweep of what government can really do. It is time to say no. The 10% cut is too far and it is time for us to stand up for poor people. I beg to move.
Baroness Hollis of Heigham
My Lords, I take pleasure in seconding the amendment. What do Westminster and West Oxfordshire District Council have in common? Not much you might think. One is a prosperous inner-city London borough and the other is a prosperous leafy, rural district council, although admittedly the Prime Minister lives in both of them. However, they are very different local authorities. If the localism agenda means anything at all, one might expect two very different schemes in two such very different councils—Westminster and West Oxfordshire.
Both councils are going for the same scheme—the identical scheme and existing national default scheme. Is that because their local needs are the same? Hardly. Is it because they have identical insights into their locality? Unlikely. Is it because they have a similar demographic make-up? Doubtful. Is it because they have similar economies? Of course not. So what then? What they have in common is that they are both prosperous. As they are prosperous they can afford the existing scheme. That is welcome news for their poorer residents, but elsewhere, as my noble friend has said, councils are leaving the existing national default scheme not because they want to but because they have to—not because of vacuous and deeply cynical mantras of localism but because of the reality of the cuts.
These authorities tend to be the poorer authorities, which do not have the pretty second homes to levy or the comfortable reserves to cover their funding gap. Poorer authorities, with poorer residents, will be cutting their council tax benefit, and those with second homes or deep comfortable reserves who can afford not to choose not to. Some of the poorer authorities may try to revise their schemes for one year, but if they do in the light of the transitional grant, and if it is legal to do so, it will mean that their residents will have three different schemes in three years: this year’s scheme, next year’s scheme at 8.5%, and the third year at 20%.
Local authorities did not want to cut their money for their poorer citizens. Councillors of whatever political complexion did not come into local government to make the poor poorer. Not many want to spend hours, unless they are anoraks, fiddling with various models of tapers, capital limits and contribution levels. Nor—and I am certain of this—do they want to undermine the work incentives of the Welfare Reform Act, as some of these local schemes undoubtedly do, as my noble friend Lady Donaghy will explore. That is why Mr Cameron’s West Oxfordshire District Council, for example, has denounced the Pickles plan as damaging to work incentives, and was absolutely right to do so.
Lord Smith of Leigh
My Lords, I support my noble friend’s amendment. I remind colleagues that I am a serving leader of a council and it is therefore my job to introduce a council tax support scheme. We have sent out our consultation, which contains things I can hardly believe I am supporting. We have a gap of £4 million in the amount we can raise through the council tax adjustments. We are already facing £30 million of cuts in our budget, and if I was to put more cuts into the system it would impact only on the same people because it is the poor who rely on our services.
In introducing our scheme for council tax benefits, we tried to work on principles—it was sometimes difficult but we tried to do that—and clearly we wanted to use what we could of any technical changes. We wanted to protect vulnerable groups, but that is not possible in total, and we wanted to make sure that we did not undermine incentives to work. However, that is very difficult with this scheme. I have also set up a discretionary hardship fund because we know that, however we design the system, some people will slip through and I want to be able to do something about it.
Despite the protestations of the Government that they want to help people get back into work, the Bill is an attack on the working poor; it is an attack on people who take low-paid jobs—not because they want to take low-paid jobs but because often they are the only jobs available. If you have low skills or poor education attainment, if you live in areas where pay levels are low or work in industries where profitability is difficult, you are in a low-paid situation. I thought this House wanted to keep people in those jobs and support them.
With apologies to my noble friend Lord Beecham, I wonder sometimes whether the coalition, like Newcastle United, is being sponsored by Wonga.com. The impact of this and the other changes that are taking place is to drive the poor in our community towards payday lenders. It is a growth industry in our country and we ought to be ashamed that a legal lender can charge rates of 4,000% a year on an annualised basis when the bank rate is 0.5%. How can we justify that when it is the poorest who have to pay that amount of money? It is a tragic situation. This change to council tax benefit will force many hard-working, decent families who are trying to do the best for themselves by taking jobs and doing what they thought the Government wanted them to do into the hands of those payday lenders. There are, of course, other lenders in Wigan, Newcastle and Luton who are not legal and whose collection methods are somewhat different. Even so, people go to them.
In Wigan, the average increase in council tax benefit is £3 a week. To noble Lords that sum may represent a glass of champagne in a bar so it is not significant, but if you are among the poor in places like Wigan, it is. It can tip people who are able to survive financially over the edge, and poor families will be put in that position. I should remind noble Lords that the low paid are already suffering under the Government because of the impact of inflation. Since the coalition came to power, the rate of inflation has been 7.1% for the average person. However, food prices have risen by 8.5% and household costs including fuel by 11%, and now even more with what British Gas and the others are up to. When we look at household budgets, we can see that the poor spend disproportionately more on food and household items. The average percentage of income spent on food is 13.2%, but the poorest 10% spend 16% of their income on food, while the richest 10% spend under 10%. The average spend on household items is 19.1%, but for the poor it is 25%—and that on items which are going up by 11%. Again, that is a further squeeze on a low budget. The rich only spend under 10% on household items. It is clear that the working poor are already suffering, and we ought to be helping them more, not targeting them with this increase in council tax benefit.
From my perspective, as my noble friend said, we have already put our consultation out only to discover suddenly at this stage that the Government have found in their back pocket or behind the sofa £100 million that can be put into the system. That is cynical politics and it will not work, because I will make sure that the people who I represent know who is causing this problem and know whose fault it is. We are not going to let them get away with it.
Lord Tope
My Lords, the reference to cynical politics has finally brought me to my feet. Remarkably, we are now on the second to last day of your Lordships’ consideration of this Bill, but we are in fact having a Second Reading debate. I want to give us a bit of a reality check because those listening who have not been part of the proceedings of the Bill through Second Reading, the Committee stage and so on will have much sympathy with all that has been said. I certainly do.
The 10% reduction, which most of us recognise in reality is actually going to be more than 10%, is not part of this Bill. It was one of the deficit reduction measures announced some time ago. It certainly sets the context for the Bill, but it is not a provision of the Bill. The noble Baroness, Lady Hollis, has said many times that she would prefer a national scheme and for council tax support to be part of universal credit. I said at Second Reading, “so would I”, because I believe that that is the sensible way forward. But Parliament has decided otherwise and it has passed the Welfare Reform Act. It may be that in years to come a future Government will change that, but it is not going to happen during the passage of this Bill. That is the reality check I am talking about. We have to deal with the situation as it is, not as we might wish it to be.
We all share the concerns that have been expressed by the speakers to this amendment. I would just say that, recognising where we are rather than where we wish to be, the next amendment we are going to debate provides a very much better solution to all problems that have been described by every speaker thus far. I look forward to the debate, and I particularly look forward to support for that amendment from all sides of the House.
Lord True
My Lords, I associate myself with my noble friend’s remarks, although perhaps not his final point. Those who have heard me take part in these debates will know that I, too, regret very much that the benefit was not included in the universal credit. I think there is very wide agreement in the House on that but, as my noble friend has pointed out, that is not what Parliament has determined, and we must address the situation that we find ourselves in.
As my noble friend Lord Tope also said, there is an expectation for local authorities to deliver reductions in public spending. As I have often said in your Lordships’ House, the state is overspending by roughly £14 million an hour and it is legitimate to ask local authorities to consider playing a part in addressing that problem. We are doing so and, as I have said before in these debates, I would have preferred the Bill to not be too prescriptive in this area.
I agree with the first part of this amendment, that:
“Nothing … shall prevent billing authorities retaining the provisions of the … council tax benefit scheme”.
My problem with the amendment is that it asks your Lordships’ House to make a frontal assault on the principle of deficit reduction. The second part of the amendment effectively gives a put option to any local authority in this country, including the prosperous, leafy authorities that the noble Baroness, Lady Hollis, referred to, such as West Oxfordshire, Westminster and the Royal Borough of Kensington and Chelsea.
If the House passed this amendment, the Government would suddenly have to pick up the costs of Westminster, West Oxfordshire and the royal borough, which are prepared to sustain the existing scheme out of their own resources. This amendment says that your Lordships’ House should ask Her Majesty’s Treasury to pick up those costs, which those boroughs are prepared to meet. Similarly, any local authority in this country, rich or poor, would be able to ask for resources from the Treasury, and the whole effect of seeking to make a reduction in the welfare budget in this area could be negated. That is the fatal flaw in this amendment.
Baroness Hollis of Heigham
I am puzzled by the noble Lord’s remark. He says that if this amendment were carried, it would mean that prosperous authorities such as Gloucestershire, Oxfordshire and some of the inner London boroughs we have mentioned—Wandsworth, Westminster and so on—would be getting moneys from the national scheme that they do not need because they are ready to fund it themselves. Of course, given the council tax rebate scheme, they could still fund it themselves from the 90% grant, but is it not the case that under the transitional arrangements they will be entitled to apply for money they do not need, which they will no doubt keep and which will go to their reserves? In fact, the very thing that he is deploring about this amendment is going to be embodied in the transitional grant arrangements.
Lord True
The noble Baroness presents another possible wrong to defend the particular wrong that I am addressing.
I am sorry that I was slow coming into the Chamber when the noble Lord, Lord McKenzie, started his speech; I heard it on the monitor and I agreed with many of the things he said about the timing of this announcement, which is also implicit in what the noble Baroness has said. But I return to the fundamental point that if your Lordships pass this amendment, the Royal Borough of Kensington and Chelsea can ask the Treasury to go on funding the scheme as it now is. The noble Baroness thought it was absurd that those leafy boroughs should be funded, and I rather agree.
The other thing one has to accept is that surely there is somewhere between no saving from council tax benefit, which is the potential position if this amendment were passed and every local authority put that upon the Treasury, and the extent of saving, the problems of which we have heard described; there must be some amount that can be saved under this heading, because I believe—I do not have the figures before me—that spending on council tax benefit doubled during the Administration of the party opposite. I do not accept that there cannot be reductions. Therefore, because of the technical flaw in the second part of the amendment and because I think that there is scope for making reductions, I cannot support the amendment if it is put to a Division.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I thank everybody for their contributions and the noble Lord, Lord McKenzie, for the way in which he moved the amendment, which was rather through gritted teeth.
We listened carefully in Committee to what was said about the implementation of this council tax scheme. During the Recess—noble Lords will recall that we have been back in this House for only one week—we looked at whether there was any amelioration that we could offer to local authorities to help them through the first year of the new scheme. That arose from discussions in this House, so, rather than being traduced for that, perhaps people would recognise that we have taken some notice and are setting about trying to help. I grant that the transitional scheme is for one year, but, during that one year, we would expect local authorities to have a much better idea of how they might “smooth in” the scheme.
We were also told that many local authorities were looking to charge people who have 100% benefit at the moment anything up to 30%. Noble Lords have spoken about the difficulty involved in collecting sums of money, but that is just an absurd way of looking at this scheme. We have therefore limited the amount that can be charged to people who are on 100% benefit to 8.5% and effectively enabled local authorities to do that by helping them with a grant along the way.
Local authorities do not have to collect 8.5%; they do not have to charge it. They can accept that it will cost more to collect it than to say, “We will let that go for this year while we look further into our schemes for the future”. That is quite correct. As has already been said, some local authorities will not implement that aspect that all.
However, it is pretty rich of noble Lords opposite to suggest that this is somehow an absolutely dreadful imposition. We are giving money to local authorities to help them through a first year which we have recognised may not be very easy to handle. Rather than noble Lords opposite gasping and continuing to tell us that this is just awful, perhaps they might have given us a little bit of credit for listening and trying to help.
The deficit is serious. The increase in council tax benefit during the past 10 years has been enormous, being, as my noble friend Lord True said, well over 100%. That is just ridiculous. We cannot go on like that and we have to make some room for bringing that down. There are a number of ways of doing it, as noble Lords have pointed out.
I have given the House a Written Statement. I have given the broad outlines of how the scheme will operate. It is not very difficult. It is being made very easy for local authorities to fulfil the criteria and to claim the money. I have already said that we will give fuller details on the amount of money that local authorities are likely to be able to retrieve. I hope to do that this week or, if not, at the beginning of next week.
I do not accept that all the grumbles here are justified. I do accept that local authorities are having quite a difficult time. I also accept that the country is having a more-than-difficult time with its finances and the economy. That is why, as my noble friend Lord True said, everybody, sadly, is having to play a part. I just add that to what has been said. I am sure that this will come in again in other amendments that are on the way. This is not an amendment to the Bill but a transitional relief to the council tax scheme.
Those councils which have already consulted on the scheme or are consulting at the moment will need to decide, when they see about this grant, whether they wish to reconsult. It is very unlikely that that will be necessary because they will have a scheme that is slightly better than the one they were looking at, but it is up to them. If they want to do that, they need to take legal advice on whether the changes to their scheme justify them consulting again in any way, even on part of the scheme. That is up to them. We are giving them a helping hand. We hope that that will at least ameliorate for some of them the concerns expressed here today. As I said, I gave the Written Ministerial Statement at a time when I could really do nothing much about the change because there was not the ability to lay it. This has not been going on for months; we have not been considering it for months. We have considered it ever since we were in Committee in this House.
Amendment 98A would make it explicit that billing authorities can run a local scheme along the same lines as the existing council tax benefit scheme. It is not necessary for this amendment to do that or to put it in the Bill. If a local authority wants to have the default scheme, it may base its local scheme on that, retaining the criteria and allowance of the council tax benefit regime. Of course, it will do that against the background of the 10% reduction, so nobody will make up that 10% if they do that. The amendment would also require central government to continue funding council tax support schemes to the same levels as the existing council tax benefit scheme. As I said, that would be minus the 10% and would not be funded to the full amount.
The reforms we are making provide a vital contribution to our deficit reduction. To requote the figures, council tax benefit expenditure in England increased from £2 billion in 1997-98 to £4.3 billion in 2010-11. It might be interesting for noble Lords to hear and take note of the fact that in 2010-11, we spent more on welfare than on education, defence and health combined. Our reforms give councils stronger incentives to support local firms, promote local enterprise, cut fraud—there is plenty of that within the system—and get people back into work. I heard what the noble Lord, Lord Smith, said, that when people start working they can progress if they wish and are able to. On the noble Lord’s question, I slightly challenge what he said about inflation. My understanding is that inflation fell to 2.29%. I think the noble Lord said that it was 11%. Our reforms give councils stronger incentives to promote local enterprise and help people into work. We are moving on that basis.
From now on, local authorities will have real control over how they design their council tax support scheme for people of working age, enabling them to offer council tax reductions that match local circumstances and funding. This amendment potentially removes any saving and as such would constitute a spending commitment. I am not sure whether noble Lords opposite have cleared that with their Front Bench in the other place. If so, it might be helpful to know that. Local authorities already have choices and levers to design and manage their schemes, making their essential contribution to this deficit reduction.
As I think noble Lords will understand from that, I cannot accept the amendment, though I have listened to the concerns raised—as I did in the past. One reason that we have a transitional scheme today is that we as a Government have listened.
The noble Lord, Lord McKenzie, asked how we were going to manage the handling of the transitional scheme. The answer, as I understand it, is that given by my noble friend Lord Strathclyde. There are very precise ways to come back at Third Reading. I do not think that bringing this issue back at Third Reading would constitute one of them. Noble Lords must take that into consideration. I hope that the noble Lord will feel able to withdraw his amendment.
Lord Smith of Leigh
Before the noble Baroness sits down, perhaps I can clarify what I said. I was using cumulative figures of inflation to show the impact on different items. We heard from the noble Lord, Lord True, and the Minister that the problem was that council tax benefit doubled under the previous Government, and, in a financial sense, it did. However, underlying those figures is the fact that the number of claimants did not rise; it fell between 1997 and 2002 and then began to rise, reflecting the changes in the economy, as one would expect. If we look again at the figures for the difference in council tax—if we smooth out the increase in council tax—there was a decrease in payment on council tax benefit, not an increase, so the problem is not council tax benefit, it is council tax.
Lord McKenzie of Luton
My Lords, I am grateful to all noble Lords who have spoken in the debate on the amendment. I am particularly grateful to my noble friend Lord Smith for his interjection on some of the data.
As for procedure at Third Reading, I was not suggesting that we would necessarily consider bringing back this amendment at Third Reading. I was referring to some of our other amendments—on issues such as tapers and vulnerable people, for example—which are affected by a greater understanding of the transitional funding that has just been announced. From the briefing session that we had on Monday we very much took it that there would be some flexibility because of the timing of the announcement. If the noble Baroness is saying that that is not the position then we will have to take account of that as we proceed later today.
Baroness Hanham
It may help the noble Lord if I repeat what my noble friend Lord Strathclyde said. As the noble Lord knows, it is my noble friend and the Whips who guide business in this House, as well as the Companion. The Companion states:
“The principal purposes of amendments on third reading are: to clarify any remaining uncertainties; to improve the drafting; and to enable the government to fulfil undertakings given at earlier stages of the bill”.
Those are the three purposes for coming back with amendments.
Lord McKenzie of Luton
Well, my Lords, it seems that clarifying remaining uncertainties could keep us going for a month of Sundays, given what is outstanding on the Bill and the tardiness with which some of its provisions have been made available.
The noble Baroness talked about the 8.5% maximum that would be required for people to access the scheme. She referred to it meeting the cost. What we do not know is the extent to which it will cover the costs for councils which move from the existing scheme on which they have consulted to the new arrangements. We do not yet even know how it is to be allocated and apportioned. We may know that later in the week; we may not.
The noble Baroness said that it is easy to fulfil the criteria of the new scheme. It may be easy to identify what those criteria are, but how you move from where you are on the scheme on which you have consulted to that position is a completely different matter. There will be a whole variety of arrangements on which people have consulted. I doubt whether the Government have done any analysis on how practical or easy it will be or how costly it will be for people to move from where they are to where the Government want them to be. In any event, even if that were accomplished, that does not deal with the issue of what will happen in year two. I do not see the connection between knowing that this is available in year one and having a better idea of how councils can smooth it in for subsequent years if the plug is to be pulled on the transitional funding.
The noble Lord, Lord True, went on about the deficit and of course the deficit has to be addressed. Our point is: why does this have to be a component of it? Does every line in the government accounts have to cough up some sort of proportion? Why this one? Surely it is right that the Government have to evaluate the consequences of each cut that they are trying to make—and not only each cut. What the Government have singularly failed to do is to look at the cumulative effect of cuts on people. My noble friend Lady Hollis made the point about housing benefit and council tax benefits. We know that those two things often go together and that some people will get dramatic reductions in housing benefit because of underoccupancy provisions: an average of £14 a week. My noble friend Lord Smith referred to the importance of £3 a week for people in some of the poorer areas for which he has responsibility. How are those judgments made? The reality is that they are not, which is why we are justified in bringing forward an amendment on this basis.
The noble Lord, Lord Tope, said that this really was not something for the Bill but if we want to constrain the Government and cause them not to create the upset that they are going to cause by this legislation, what other mechanism do we have? He referred to the amendment of the noble Lord, Lord Best, which we will come on to in due course. We believe that this amendment is a better way of dealing with the situation. The noble Lord, Lord Tope, may disagree but, at the end of the day, the root problem that we are trying to deal with here is the so-called localising of council tax benefit and the massive cut that goes with that process. So long as the colleagues of the noble Lord, Lord Tope, support that approach, they cannot challenge us on where we end up on these issues.
When we heard from my noble friend Lord Smith, your Lordships heard then the voice of somebody who has to deal with these issues on a day-to-day basis and in challenging circumstances. It is not only about the council tax costs that people are suffering and the increases that this will bring but about housing benefit, about what is happening on food prices and about inflation generally. As my noble friend put it, there is also the growth of payday loans and worse forms of lending. That is the authentic voice of someone who is dealing with the chaos that these measures are creating. As he put it, there are no more cuts that can be made in the system and the Government should recognise their responsibility for that. My noble friend Lady Hollis spoke with her usual passion and the great analytical approach that she has to things. Again, that is the authentic voice of someone who is dealing with housing on the ground and knows local government through and through.
We do not have a meeting of minds on this. We see this as a very important issue—
Lord True
Before the noble Lord sits down, will he answer the central point that I put to him? I accept all his strictures about wishing to reduce spending on welfare. However, the effect of his amendment on every council in this country, including my own, is to have responsibility for this decision transferred from where it has been decided—in the other place and in the Cabinet room in Downing Street—to cabinet rooms and town halls up and down the country. If this were passed, I might well say to the Chancellor of the Exchequer, “Right, you pay for it, mate”. I do not think that your Lordships’ House should give the power to local authorities to take those decisions away from the Chancellor of the Exchequer. Is that not the effect of this amendment? Will the noble Lord answer that point?
Lord McKenzie of Luton
Does the noble Lord think that the House should have the opportunity to say to some councils, “You have the right to slash people’s council tax benefit and put them into further poverty”? Does he think that that is the right equation? Of course there are consequences if you have a scheme that covers all councils, just as you would have the same consequences if you went back to a unified system through universal credit or otherwise. However, I would put the obverse to the noble Lord, who seems to be arguing that because some councils should not benefit, we have to hit the poorer councils to stop that. I do not think we can have a meeting of minds on this. To us this is a line in the sand, as my noble friend said, and I would like to test the opinion of the House.
“Power to make discounts discretionary
(1) Section 11 of the Local Government Finance Act 1992 (discounts) is amended as follows.
(2) In subsection (3) leave out from “or” to the end and insert “such other percentage as the billing authority may determine”.
(3) Omit subsection (4).”
Lord Best
My Lords, I declare my interest as president of the Local Government Association, which has formulated this amendment, and I pay tribute to the LGA and its leadership for its commitment to progressing this important issue. Noble Lords may have seen the letter from the group leaders of all the political parties at the LGA urging the Secretary of State to give local authorities the discretionary powers which this amendment would provide.
Amendment 98B is in my name and that of the noble Lords, Lord Jenkin of Roding and Lord Tope. I am extremely grateful to those two supporters and their colleagues on the Conservative and Lib Dem Benches who have given invaluable backing to the amendment. It is my strong impression that this is an example of your Lordships’ House drawing the attention of the Government and all Members in the other place to a matter that, earlier in the life of the Bill, did not have the recognition that it deserves.
I have been thrown a bit by the Minister’s announcement of a new transitional grant, to which I shall return. However, ignoring it for the moment, the situation can be set out quite simply. In localising the council tax benefit scheme, the Government will reduce by 10% the amount they currently pay to fund support for poorer households. This will contribute some £460 million towards deficit reduction in England. However, no changes are to apply to those in receipt of council tax benefit who are pensioners, which means that if the overall 10% cut has to be paid for by non-pensioners, they will face a reduction in their support not of 10% but of an average of nearly 20%, and up to 30% in areas where very many recipients of the benefit are currently pensioners. This payment of tax, which is equivalent on average to 20% of the local council tax, from around £3 per week to more than £5 per week, will have to come out of the very low wages or benefits calculated to be barely sufficient to cover people’s food, heating, clothing, et cetera.
The Bill gives local authorities discretion to raise council tax, which could compensate for this loss of their income by reducing the discounts currently available for empty properties and second homes. In some cases, these sources of additional income will raise much of the lost funding, particularly in more affluent areas where there may be many second homes and relatively few people receiving council tax benefit. For example, we heard earlier that the Royal Borough of Kensington and Chelsea, where the Minister was a distinguished leader, will be able to leave the council tax position alone and raise enough money from other sources to cover this loss of central government support.
In the vast majority of places, however, using discretion to vary discounts for empty and second homes will not raise enough to balance the books if councils wish to preserve the level of council tax support currently going to the poorest households. Many local authorities will therefore find themselves having to tax those on very low incomes. Quite apart from their concern for those households struggling with rising food and fuel bills, as the noble Lord, Lord Smith of Leigh, spelt out, those local authorities are deeply worried that this new requirement imposed on them raises enormous difficulties in extracting taxes from people who do not have the money to pay. It is true that local authorities have the powers to go to the courts and send in the bailiffs, but chasing the poorest households for small sums of money each week is a nasty business that is fraught with administrative and moral hazards.
I am delighted that pensioners are to be protected from this new benefit cut. I want to see the same support continuing for people with disabilities who are dependent on benefits, those working on the lowest wages, those on jobseeker’s allowance looking for work, and single parents with young children, all of whom are trying to get by through difficult times. A number of these households are already facing reductions in the support that they receive for their housing costs; and many hundreds of thousands will be charged the new bedroom tax—averaging £14 per week for those deemed to have one spare bedroom and £25 per week for those deemed to have two—from the same day, 1 April 2013, on which they could have to start to pay council tax for the first time.
The lesson we learnt clearly when this House expressed concerns over the similar issue of that bedroom tax was that there was no point in simply opposing a benefits cut since the other place would immediately claim financial privilege and throw out the offending amendment, even where your Lordships’ passed an amendment with a very large majority, as it did before Christmas when there were two iterations of amendments to diminish the impact of that other measure. The amendments were not even considered in the other place because of their financial implications. Amendment 98B, therefore, is not intended to have any cost implications for central government. It is cost-neutral.
The saving of £460 million in England will still be achieved. As I understand it, this actually represents a better contribution to deficit reduction than would now be the case next year following the Government’s new announcement of the transitional £100 million grant for 2013-14. However, this amendment would enable local authorities to raise the funds to bridge the gap in their funding without having to pursue those on the very lowest incomes. How can this saving be achieved? The amendment would give local authorities the discretionary power to vary the single person discount, currently fixed at a standard 25%, which goes to all single person households, including some who may be in this House. Indeed, this discount gives proportionately more to those living in the most valuable homes. The amendment provides local authorities with the flexibility to raise the money needed but to do so without taxing those who currently receive the council tax benefit.
The Bill already gives councils the discretion to reduce discounts for empty properties and second homes. This amendment would also give them the discretion to vary the single person discounts. If across the piece these SPDs were to be reduced from 25% to 20%, those single person households would still get four-fifths of the discount they currently receive, and the extra revenue for councils would almost exactly compensate for the loss of £460 million of central government grant and would enable local authorities to maintain support with the council tax at current levels for all households. In fact, because councils will be able to raise extra revenues from their other discretionary powers in respect of second homes and empty properties, the LGA’s calculations show that pensioner single households at all income levels could continue to receive their full single person discount. That includes some Members of this House, I mention again. A reduction in the SPD for non-pensioners from 25% to 20% would still raise enough—some £313 million—to balance the books.
Lord Jenkin of Roding
My Lords, the noble Lord, Lord Best, has made an extremely good case and has made it very clearly. It is a case which, when he first put it to me, attracted me. Although there are disadvantages—and we shall no doubt hear some of them during this debate—I took some heart from what the noble Lord, Lord McKenzie, said in the first debate this afternoon: this could be one way to address the problem to which the noble Lord, Lord Best, referred and was identified in that debate.
As he said, we need to address the problem of councils seeking to extract small sums from large numbers of people who have never paid council tax before. That seems to be at the heart of what we have to address. I say this with some awareness of the past. I was the Secretary of State who, with my colleagues, the noble Lords, Lord Baker and Lord Waldegrave, devised what became known in the press and by everyone as the poll tax. We called it the community charge. For various reasons, one of which was that we never effectively had the support of the Treasury, it had a lot of very rough edges. However, one thing that it did was to ask councils to collect very small sums from large numbers of people who had never before paid a local tax—they had always had the benefit of the relief. Of course, then it was the rates but the principle is the same.
We all know how that ended—with riots across the major cities and particularly here in London. I am in no doubt whatever that one of the major causes of the distress that provoked the riots was councils trying to collect what were inevitably small sums of money from large numbers of very poor families who had never before paid rates. I think that my noble friends in government are running the same risk with the current situation.
Of course, there are other ways that one could address this problem. One was proposed by the Front Bench opposite in the previous debate but the House clearly disapproved of it. However, of any proposal that I have heard, this solution put forward by the noble Lord, Lord Best, seems to come the nearest to avoiding having to go to large numbers of people who have never paid council tax before and trying to extract money from them. I have heard it suggested that if councils find that they have to collect one or two pounds a week from families, they will not bother. To my mind, that is a counsel of despair. I see that an article in today’s Guardian suggests that a very large number of councils will be asking themselves whether it is worth the cost of collection. We cannot put local authorities in that position.
The amendment of the noble Lord, Lord Best, to which the noble Lord, Lord Tope, and I have put our names, proposes giving councils an extra discretion which they can use in appropriate circumstances, subject to local conditions, to help to close the gap which would otherwise have to be closed by removing council tax relief from people who would find it very difficult to pay, by putting up council tax generally or by cutting expenditure. Of course, one knows that if local authorities cut expenditure, that often affects the poorest people, whereas the proposal here is for a discount. It is a discount that has existed for many years and one understands the logic of it—that single people impose fewer burdens on local authorities and therefore it is not unreasonable that they should pay a lower council tax. It is not going to be all taken away but, even if a reduction from 25% to 20% were adopted across the board, that would go a very long way to closing the gap that we are talking about.
The other argument that I have heard is that the discount has been part of the system from the beginning and it is not the same as applies to second homes or empty properties and so on. However, it is still a discount. It is exactly the same as where local authorities give relief under certain circumstances but in this case it is for single households.
I totally agree with those who say that we have to look at the situation we are in and not the one that we might want to be in, but this is the problem that we face. If the measure as set out in the Bill goes ahead, then I am afraid we shall be heading—I am not saying that we shall have riots in Grosvenor Square—to many of the problems that provoked those earlier riots. The benefit of experience is that you learn from it. I think that those of us who lived through those years will not forget the problem. I am not proud of having launched the community charge—the poll tax. It is not one of the more lambent chapters of the book that I will never write but nevertheless it is there and there are lessons to be learnt. To support this amendment would be to learn those lessons and avoid making the same mistake twice.
Lord Tope
My Lords, my name is also added to this amendment. The noble Lord, Lord Best, has introduced the amendment characteristically fully, clearly and precisely. Equally characteristically, the noble Lord, Lord Jenkin, has once again confessed to his errors of the past, but more particularly, pleaded with us eloquently to learn from experience. That is so important.
Our discussions on this part of the Bill through all its previous stages have been characterised by the number of speeches that have begun by people saying, “I don’t know anything about local government finance, but”. We will probably hear quite a number of figures quoted and quite a number of complex issues will be raised. It is a complex issue. None of us who has had a lifetime in local government will pretend that local government finance is anything but complex. But what we face today is a very simple and basic question. There is a shortfall. Many councils are facing a shortfall in having to introduce the council tax reduction scheme. Is it fair that the shortfall is met by those who can least afford it in our community, such as those on benefit? As has been explained, they will be affected even more because, quite rightly, pensioners and the most vulnerable, however defined, are excluded from this. They will face a huge disadvantage in terms of their income. Is it fairer that they should meet the shortfall or should it fall on the wider community? I think that everyone here would agree that it is fair and right that that shortfall should be met by the wider community. It is a complex issue but it is a simple question that is at the heart of the debate today.
I was a little surprised at the rather churlish response from the Opposition to the, albeit very late, announcement from the Minister on the transitional funding. I can well understand that there are many questions and difficulties about that, but I would much rather have Ministers coming forward at a late stage saying, “We have been listening and we want to try and help so this is a change”. From that point of view I welcome this move, but is it a solution? Well, £100 million is always welcome to local government. It will help but it will help for one year only. It is not a solution to the problem, as the noble Lord, Lord Best, has rightly said. It will help perhaps for one year. There are a lot of complexities. We will get further details about it later this week or, as I think I heard the Minister say, maybe next week. I hope that it will be here by Monday morning as we certainly need it in time for Third Reading. I hope that it will be this week, otherwise what will be doing next weekend?
The transitional relief will not solve the problem. The amendment, as explained very clearly by the noble Lord, Lord Best, will give local authorities the discretion—it is not a requirement—in the light of their local circumstances, priorities and demographic make-up. In all of those things it will give them the discretion to vary the single-person discount. That will be different across the country. That is the nature of localism. I said earlier that I might have preferred still to have a national scheme with universal credit, but that is not what we will have. We have a localisation of council tax. What could be more in keeping with localism than giving local authorities the discretion and the power to produce a scheme that best suits their local circumstances? That is what this would do. As the noble Lord, Lord Best, said, some may wish to put limits on that discretion. The Liberal Democrats would certainly support a limit on the 20%—no lower than 20% on the single-person discount—so there would be a variation of between 20% and 25%. That alone would solve the problem that most local authorities are facing. Some may feel that pensioners should be exempted. All that is possible but it is only possible if there is some movement and some negotiation on the issue.
One of the surprises is that the Government have thus far been unwilling to negotiate at all on the single-person discount. The Secretary of State has firmly set his mind against any change. That contrasts starkly with the Localism Bill that we spent so many happy hours on in your Lordships’ House last year when we managed to achieve 440 amendments by agreement, albeit on rather a bigger Bill than we are discussing today. Not one of those amendments needed to be carried on a vote. Therefore, I am very disappointed that this year we cannot even negotiate on finding a solution to this issue.
If this amendment is carried today, as I very much hope it will be, obviously it will go to the other place and those negotiations will have to take place before it comes back to this House. I regret that we will have to come right at the end of this to force negotiations in this way, but if that is how it has to be done then so be it. The noble Lord, Lord Best, made this point and I want to stress that this amendment and the relaxation on single-person discount is strongly supported by every political group in the Local Government Association. I stress that that includes the independent group—I am never quite sure whether it is a political group or not, but the party leaders of all four groups have signed a letter to the Secretary of State urging him to accept it. It has all-party support. Nowhere is that support stronger than in the Labour group and on the Labour councils which are facing the real pain of this. It is inexplicable to me, after a lifetime in local government, that the Labour Benches have been unwilling to sign up to this amendment or even to discuss the wording to make it more acceptable to them. That is genuinely quite inexplicable. I hope even at this late hour, having made their stand on the previous amendment, and the House having decided on it, they will reflect on that and recognise that if we can pass this amendment today we can negotiate on it when it eventually comes back to our House.
To summarise, the amendment is fair. It is a far more equitable solution to the problem that local authorities are facing. That is why every local authority of every political complexion that I know of strongly supports it. It is localist, and this is supposed to be about the localisation of council tax benefit. It trusts local authorities and gives them some discretion—perhaps limited—on how to devise the scheme to face what we are legislating for. Above all, it is practical. It can be implemented quite easily even at this late hour. Local authorities have to publish their draft scheme by the end of January although it does not come in until April. They can do that now. Councils choose to vary the single-person’s discount which will be collecting very small sums of money. The figure being quoted by the Local Government Association is 30p a week from people who are already paying council tax and who are already on record, rather than larger sums of money from people who can much less afford it and who in many cases are not paying council tax at all because their income does not justify it.
In our debate on the previous amendment, the noble Baroness, Lady Hollis, referred to a red-line moment. That was perhaps a red-line moment in an unreal world; this is the real red line. It is perhaps an appropriate colour. It is the real red line in the real world and I urge noble Lords on all sides of the House—perhaps particularly those on the Labour side of the House—to support the amendment, as I do.
Lord Bichard
My Lords, I support the amendment and declare an interest as a vice-president of the Local Government Association, as many of us are. I support it for two very simple reasons. First, in the light of the previous vote, this is perhaps the last opportunity to offer some help to protect the most vulnerable in our communities, who stand to suffer most from the proposed legislation if it is passed as drafted. Like the noble Lord, Lord Tope, I implore all noble Lords who I know have a passion to protect the interests of the most vulnerable in our society to support the amendment. I suggest that this is not the time for political tactics. Nor could a vote for the amendment be taken as supporting in any way the policy in the Bill. It should and would be taken as a practical way of helping those most in need when they need it most.
The second reason is that I support the cause of localism and devolution, which is after all a key priority of the coalition Government. For me, devolution always involves the devolution of power. It is not just about the devolution of responsibility or, on occasion, of the right to be blamed. The devolution of power is what the amendment moved by the noble Lord, Lord Best, offers.
Devolution is also about devolving choice, and giving local authorities the chance to make a choice about where money is spent and what their priorities are. Once again, that is what the amendment is about. It gives local authorities the chance to make a judgment, taking into account their local knowledge, about what their priorities are and where their money should be spent. For those two simple reasons I implore the House to support the amendment.
Lord Palmer of Childs Hill
My Lords, I was pleased to hear the noble Lord, Lord McKenzie, say in debate on the previous amendment that we must stand up for poor people. That is what I, in supporting the amendment of the noble Lord, Lord Best, ask noble Lords to do today. I hope that noble Lords from all sides of the House will do that.
Like other noble Lords, I welcome the £100 million. It is good, but it is transitional. It is good for this year, but it is not the solution for the future.
Points were made about the collection of small sums from people who could least afford it. Comparisons were made with the suggestion that a single-person discount should be varied if the local authority concerned wished to do so. Perhaps noble Lords should look at the simple arithmetic. Let us say that someone who is paying council tax lives in an authority where the council tax is £1,000 per annum. I will keep the figures simple. With a 25% discount, the single person will have a bill for only £750. If the local authority changed the 25% to 20%, instead of having a bill for £750, the council tax payer would have a bill for £800.
If their house was more valuable and highly rated, for example at £2,000, the council tax payer who got a 25% discount would pay £1,500. Under the 20% solution of the noble Lord, Lord Best, they would pay £1,600. One does not have to break one’s brain to see that they would accept this. They would probably not even look at the calculation. They would see that on a bill of £1,000 they were paying £750 and now have a bill for £800. Perhaps they would realise that they had a bill for an extra £50. However, they are used to paying council tax, which does not normally stay the same every year. On £2,000 the bill would be £1,600 rather than £1,500.
Lord Shipley
My Lords, I first declare my interest as a vice-president of the Local Government Association. This is a helpful debate. I agree entirely with the noble Lord, Lord Bichard, that this is not a time for political tactics. That is because it is a time to help those most in need.
Last week the Deputy Prime Minister stated that as we have to tighten our belts and,
“as we have to make more savings as a country … you start at the top and work your way down, not the other way round”.
I agree with him that those who are poor should be protected. The reason I give my full support to the noble Lord, Lord Best, is that his amendment does that: it protects the poor far better than the Bill does.
We are about to enter the third year of a council tax freeze for most councils, amounting to a 9% reduction in real terms over that period. The Government have paid more than £2 billion to keep council tax bills down. Rightly, this has been widely welcomed by council tax payers—but it is causing higher cuts now because the sums granted to local councils this year and next are for one year only. The baseline is not built up. Crucially, this has meant that those with high incomes, living in a high-band property, have benefited in cash terms much more than others.
Today, around 750,000 people work but get council tax benefit. They get it because their income is low. However, in future a very large number of them could have to pay between £3 and £5 a week because of benefit loss, while higher earners will have no increase at all. As proposed, this will be a regressive step on the working-age poor and it has to be wrong. The amendment of the noble Lord, Lord Best, provides a solution.
We have heard that the £100 million transitional grant is welcome, but it is also the case that the 8.5% cap is underfunded for some councils, which will have to make other cuts to deliver it—and it is only one-year money. We have heard about empty and second homes and that the Government have argued that a 100% levy on empty and second homes could meet the 10% cut they have imposed—except that, with rising demand, it is not a 10% cut but nearer 12.5%. The truth is that whereas some councils can make up the difference on empty and second homes, many councils simply do not have enough empty and second homes to make up the loss, even if they do charge 100%.
The evidence collected by the Local Government Association demonstrates this. More than 100 councils are now in this position and the vast majority of schemes propose to introduce a minimum payment for working-age claimants. Half propose to set the minimum payment at 20% or more, about another quarter propose to set it between 10% and 20%, and the £100 million announced yesterday will make little practical difference because of rising demand.
A deliverable, fair solution is needed which can be introduced with minimum loss to any individual. That solution is to give councils the option to reduce the single-person discount from 25% to 20% while maintaining a pensioner’s current entitlement. It costs the Government nothing. It costs single people very little: just £1 per week for those in bands A and B and just over £2 per week for those in the top two bands. Given the council tax freeze over the past three years, for most of these people these sums seem modest.
The noble Lord, Lord Bichard, raised an issue of principle about localism. Despite ostensibly being localist—having passed the Localism Act and decided that council tax benefit would not be part of universal credit but would be devolved to councils—surely it should follow that policy on exemptions to discounts should be localised too. Too often the Government seem to want to prescribe and proscribe when localism means giving away power and responsibility. We are ending up with part localism, whereby the Government choose some bits that they want to regulate but not others and leave crucial issues unresolved, such as a definition of “vulnerability”.
We have heard that local government is united: all parties on the Local Government Association have signed up to this amendment. The chair of the Local Government Association, Sir Merrick Cockell, said in June:
“The poorest regions and the most vulnerable people will be hardest hit by this cut unless the Government offers councils more flexibility over all forms of council tax discount. It is the only way that councils can ensure that the greatly reduced funding for council tax benefit is targeted at the local people who need it most”.
Would single parents be better off or worse off under the amendment of the noble Lord, Lord Best? They would be better off. Seventy per cent of lone parents are in the bottom two income deciles. They could lose a little from the reduction in the discount to 20% but they would lose far more if they have to pay 20% of the overall charge, albeit 8.5% in year one.
There will be a clear impact on child poverty. In a letter to the noble Lord, Lord McKenzie, in July, the Minister said:
“Local authorities should design localised council tax schemes in a way that best suits local circumstances and consideration should be given to child poverty in the local area”.
I agree entirely with the Minister that council tax schemes should be designed in a way that best suits local circumstances, but it begs the question of how the impact on child poverty should be considered. The noble Lord, Lord Best, has produced the answer. His amendment would require a modest reduction in the single person’s discount for non-pensioners and would then prevent a further, larger burden being placed on the poor.
My final point relates to income tax gain and council tax loss. The Government have done excellent work in removing low-income earners from income tax by raising the threshold before tax needs to be paid, and another tranche of this will occur in April next year. I am still puzzled as to why they are proposing that some of the very same low earners should have to pay more council tax as a consequence of the Bill. From the perspective of the recipient, it amounts to giving with one hand and taking away with the other.
I hope the amendment will pass. It is fair, deliverable and prevents the introduction of a regressive tax. It reflects the experience from the poll tax days. As I have said, all parties on the LGA are signed up to this amendment and I hope that all in your Lordships’ House will be signed up to it too.
Lord True
My Lords, I declare an interest: I am not a vice-president of the Local Government Association, and after the remarks that I am about to make, I am unlikely to be invited to become one because I intend to challenge the unanimity that we have had so far on the amendment.
I pay tribute to the Local Government Association for the work that it has done on the Bill. On this issue, however, I think that it is wrong. I also disagree with a considerable number of my fellow council leaders, including Conservative council leaders, who see this proposal as a kind of 5th Cavalry which is coming over the hill to deal with a problem that, as I have repeatedly said in the House from Second Reading onwards, should not have arisen in the first place. I have lately been described by people inside the Government—or my authority has been described—as a “serial offender”, so I am sure that my noble friend on the Front Bench will be surprised to hear me speaking in this way. I am part of the serial offences, but I also think that, in policy terms, the construction of this Bill is unwise
My old grandmother always told me that two wrongs, as noble Lords know, do not make a right. What is proposed here is effectively a new tax—a broadening of the tax base and an increase in council tax. The amendment proposes that to address a problem which should be addressed, we should challenge the central structure of the council tax as it was first conceived. I can go down memory lane as well, because I was deputy head of the policy unit in No. 10 when John Major formed his Government. At that time, one of the things that we had to do was wrestle with the legacy of the community charge, the poll tax. We had another legacy in our minds at that time—the rates. I have not heard the word “rates” mentioned in this debate but the existence of the rates was thought by many to be a profound injustice. That is how the Government of Margaret Thatcher got into conceiving the solution of the community charge.
One of the central principles agreed across the political spectrum when council tax was created was that the perceived injustice in the rates—that everyone paid the same; that single persons had to pay the same as everyone else—should be addressed. Masquerading under the guise of flexibility, this proposal detracts from that central principle. There is nothing in the amendment about 20% or saying that some can do it, or whatever. As Amendment 98B is written, it is a licence to tax. It is a licence for any local authority. My noble friend Lord Tope said that it is an opening shot in a negotiation. If my noble friends on the Lib Dem Back Benches want to propose a further property tax—in effect, an increase in council tax for every person and household in the country—then, given the time interval in the transitional arrangements, we can have that debate inside the coalition and inside the country. However, I do not know of any public debate about the principle of removing the single-person discount.
It was right that the anomaly in the rates should have been addressed, and addressed well, in the council tax, and I would defend the principle—and it should be defended centrally—that was established in 1992. If we pass the amendment, it will mean a broadening of the tax base. We have heard that this tax is easy to collect. My goodness, yes, of course it is—and I am afraid that some local authorities will think they are quids in. The figures from my finance director show that if we were allowed to get rid of the discount in my local authority, we could cash in £8.5 million. I would not do it but, given the powers in this amendment, will every local authority say, “No, we will restrain ourselves. We will take only the little bit needed to offset the other elements in the Bill that the Government have brought forward”? No, single-person households across the country could suddenly find themselves facing an increase in council tax which no party ever put to them in a manifesto, and no party ever put to them as a point of principle. Perhaps it is because I was involved in the original design of council tax that I do not think we can resile from this principle so lightly.
I do not wish to trespass too much on the time of noble Lords but I am the first person to put the opposing case in reply to five other noble Lords. There has been talk about helping the poor but, as I understand it, the single-person discount goes primarily to low-band households, those in bands A to D. From memory, I think that the percentage might be as high as 90%. I have no doubt that the Minister has the figures. It is not a question of the Rolls-Royce classes suddenly having to stump up an extra bob; council tax increases will be experienced by many. If the discount was abolished in band D in my own authority, it would cost those who are affected £6.40 a week. We are a high-tax authority because we are poorly funded centrally. Even at 20%, however, it would be £1 a week. That is not a negligible sum. Even in my leafy authority, of the 23,000-plus people who would lose the discount as the amendment threatens, 14,000 live in households in bands A to D—and we are rather heavy on higher band households. I would counsel against the easy view that adopting this amendment would help the poor. We might find instead that it hits them.
I may be wrong or I may be right, but taking away a central core of the structure of council tax is a major switch in tax policy. In effect, it would represent a return to the old rates system without public debate. For my part, I could not support that principle without much further and deeper debate than the remaining stages of the Bill will allow.
The Earl of Lytton
My Lords, I rise to speak in support of this amendment. I do not have any function in the Local Government Association, but I am the president of the National Association of Local Councils, which is the parent body of parish and town councils. However, that is not a particular interest here because they are not billing authorities.
I believe that flexibility is desirable within certain rules. A large number of issues come into play here: wholesale reductions in local authority funding, a reorganisation of the benefits regime, moving the process away from central government to local government and, perhaps I may say, a considerable increase in the complexity that attends us in relation to the measures in this Bill. There is an increased risk of turmoil, uncertainty and unpredictability of revenues and indeed of benefits, and how the reliefs are going to apply.
Like the noble Lord, Lord Jenkin, my memory goes back to the unified system of general rates—and, yes, I can fulfil the desire of the noble Lord, Lord True, by mentioning the rates. He very appropriately drew attention to the fact that they had not yet been mentioned. As I say, there was a unified system under the General Rate Act 1967, but of course that has now been split asunder. However, the tax base that represents council tax on the one hand and business rates on the other has never been subject to the care, maintenance, management and upgrading that is necessary. In short, it is an outdated tax base, and we are using it as the basis for implementing this ostensibly desirable change as the financial expression of localism and a reduction in centralist government. I support that move in terms of localism, and the implicit re-engagement of local people and businesses with local tax raising, so I take it as read. However, I question the use of some seriously worn out components as part of the process.
I am grateful to the noble Baroness’s department for allowing me to take some fellow professionals to meet with officials, but I am bound to say that I had the impression that the issues I have been raising are not ones for this particular Bill. I do not want to rehearse that again because I get the message and I have taken it on board. None the less, that has implications for what we are trying to do in the context of this Bill. It seems that the coalition wants to have its cake and eat it. It wants to hand things over to the billing authorities but not to relinquish the levers of control. The noble Lord, Lord Shipley, mentioned this point and I certainly relate to it. It does not seem to be true localism. It perpetuates what I see as an essential incoherence in top-down government in this particular area of endeavour.
I understand the messages of the past, some of which were mentioned by the noble Lord, Lord True. It predated my existence on the planet, but in the 1930s a well-known south coast local authority paraded itself as having the lowest rates in the country while conspiring to achieve the highest level of property values. That was part of the reason why, for the general rates, which then covered both residential and non-residential property, the assessment of property values was taken out of the hands of local government.
I can also well remember the arguments about the community charge, the poll tax, on which I made my maiden speech in this House. I recall the many issues around trying to attach a tax to a highly mobile group of individuals and the problems that that would incur. I recall the discussions on council tax when it came in, particularly in connection with banding and the defined relationship between the top and the bottom band. There was the case of a single person rattling around in the former family home or a single person living on their own in a smaller or, indeed, a larger property, but either with greater means or, more particularly, using the services of local government to a much greater extent. I understand the issues, and we have not plumbed the depths of how to approach local taxation, although it is part of where these arguments seem to be coming from. Is it for services supplied by local government or is it a tax according to the value of a property? We still have not worked out what we are going to do. We are trying to set up a unified system, whether it be for residential properties in terms of council tax or the business rate, which is the non-domestic rating system, but we are trying to look in two directions at once. We have not rationalised how to deal with the contradictions.
Here I depart a little bit from the views of the noble Lord, Lord True. I well remember the rates being paraded as the unjust and unfair system. In a sense it was but it was highly efficient and nothing else that we have produced since would have survived to this day were it not for the information technology that now enables us to manage a highly complex system. I do not think that it has become any fairer, for all that complexity.
Only central government has the power to resolve the contradiction between a tax on property values and a tax for services provided, and that resolution still eludes us. The reality is that neither council tax nor business rates achieves either of those objectives particularly effectively.
So what do we do? I have tried, in the context of this Bill, to suggest that something needs to be done about the management of the tax base. I accept that I am not going to get a comprehensive review of either business rates or council tax this side of this Bill coming into force and being implemented. I am not expecting any concession on that at all, but it seems to me that the only thing that this House can deliver is to give some sort of discretion and flexibility in how these things are organised. If we are to rejuvenate business, if we are to re-engage the electorate, we have to have some sort of local flavour to that. Otherwise, it is simply central control of the type that we have had for many years.
This piece of legislation is going to bring into sharp focus bills as against benefits. I do not put that forward as a mantra of any sort; I just feel that that is what is going to happen. If we are going to see this justified locally, we have to remove some of the stranglehold of the past and allow issues such as poverty, deprivation and need not to be laid down from on high but assessed locally. I see no option but to do that, and it is for that reason that I support this amendment.
Baroness Sherlock
My Lords, I was not going to speak to this amendment but I have been provoked into doing so by the debate. I will be very brief because I know that noble Lords are anxious to move on.
I want to lay down a couple of markers, having been prompted by the reference to lone parents. As many noble Lords will know, I spent some time as the chief executive of the National Council for One Parent Families, and I have very strong memories of more than one lone parent coming to me and saying, “The toughest thing is that my husband walked out and overnight our income dropped but my bills did not go down by a single per cent. The rent stayed the same, the electricity bills stayed the same and we didn’t need a smaller house, but one of the very few things that at least made some allowance for the fact that there was only one adult in the house was the single person discount for council tax”.
I understand that the distribution of single parents tends towards the bottom, but the reality is that if the council tax liability for a single parent rises, the minute she moves into work, especially with what is happening to tapers around the country, she will find it very hard to be better off in work. At a time when the Government are forcing more and more lone parents into work, the reality is that the very, very poorest may not benefit from this, but these people are still very poor and this does not seem to be the way forward.
Finally, we had a debate some time ago about child benefit and whether or not people in the higher income group should have child benefit taken away from them. That was advocated as being justice, but it is a very narrow view of justice, which sees justice as being only between the rich as a group and the poor as a group. Of course, child benefit is actually a horizontal redistribution, a transfer from the population as a whole to those who have children because society recognises that their costs are higher. Any simplistic view of the tax system that takes no account of anything other than income seems to be heading for difficulty. If we are going to revisit the whole basis of council tax, which of course was meant to take account of individuals as well as property, we need to do so in a much more systematic way than this debate will allow us to do.
Lord Smith of Leigh
My Lords, I think I should make a contribution on this as well. I declare my interest as a vice-president of the LGA and, in view of the remarks made by the noble Lord, Lord Best, about the discussion he had with the chairman, I should say that I am also the vice-chairman of SIGOMA.
As I said in the debate on the previous amendment, I am having to make some very practical decisions on this matter, and I still think that it ill behoves Members opposite to say that Members on this side are not interested in poverty issues, when they voted Not Content on the previous amendment. Putting that to one side, I found the contributions really interesting. It has been confession time. One noble Lord confessed to being the author of the poll tax and another to being the author of the council tax. Had we time, I am sure that we could debate those issues to a great extent.
However, I agreed with the noble Lord, Lord Jenkin, when he said that one issue about what is being proposed here is that local authorities are going to have the agonies of collection that we had under the poll tax. In fact, before coming down this morning, I spoke to the North West Legal Consortium, which is a group of local authority lawyers. I said I was coming down to your Lordships’ House to participate in this Bill and I assured them that while one outcome may well be that it creates more poverty, it will also create more work for lawyers.
We are getting round to the fact, as I said earlier, that this is actually the poll tax mark 2. We are now in a situation where we are going to take money from the poorest, and to collect it will be very expensive. Local authorities will have that dilemma of whether and how to collect very small sums, when the cost of collection will outweigh the amount of money they will get. But we will have to make those decisions.
I would not have thought that an adjustment in the single person discount would be something that I would be able to support, except in the most exceptional circumstances. I have to tell your Lordships that these are those most exceptional circumstances. This is not a panacea by any means. In Wigan, the shortfall in the council tax support scheme is about £4 million. About a third of households receive the single person discount, just under 50,000 properties, and they get the benefit of about £10.4 million. In my area, a band D property is regarded as something that is not a poor household, but it obviously depends on where you live. The vast majority are in bands A and B, which are poor properties. If I was to try to raise the £4 million simply out of the single person discount, I would be reducing the single person discount by a very significant amount, which would be far more than I could do. So it is not a panacea to the problems that authorities like my own face.
However, and this is probably where I part company with some on my own side, we have already got our hands tied behind our backs because we cannot do anything about pensioner discounts, and we are now having them further tied behind our backs in the sense that we are not allowed to look at flexibilities in other areas. I am having to make really tough decisions about the working poor. Some of the decisions that I might make, such as reducing the single person discount, would not have as great an impact on the poor people of the borough and I would like the flexibility to do so.
As the noble Earl, Lord Lytton, said, there is an interesting contradiction here, where, on the one hand, the Government want to support a single person discount, which allows people to be rattling around in properties that are perhaps too big for their actual needs but, on the other hand, we have agreed to a system where if you are on housing benefit you have to pay bedroom tax. If you want the privilege of that, you actually pay more for living in a property that is deemed too big for you, and here we are giving people money to support them doing that. That seems to be a lack of coherence in policy.
We should trust local authorities. If we believe in localism, local authorities should be trusted to implement the scheme in a way that best meets the needs of all the people in their area. I would not want to reduce the single person discount by a significant amount, but it would help me make more palatable some of the cuts that I shall have to make in council tax benefit.
Lord McKenzie of Luton
My Lords, we have heard from the noble Lord, Lord Best, an authoritative case. As ever, he approaches the issue from the point of view of protecting the poorest in our society. I guess that that makes my task slightly more difficult than it otherwise would have been, because, to be clear, we are not convinced that the proposition is the best solution to the problem that local authorities face. I can understand—my noble friend Lord Smith has just emphasised the point—that local authorities, desperate for some source of funding, could see it as a ready means of getting that, but, as my noble friend Lady Sherlock and the noble Lord, Lord True, said, to change the structure of a tax system just for that reason without a broader approach and analysis is not the right thing to do.
We are concerned that the wording of the amendment does not exclude pensioners. It gives local authorities the discretion to exclude pensioners but does not of itself exclude them. It does not exclude a reduction in the single person discount which is greater than 5%; it would be up to local authorities to do that.
We broadly accept, on the basis of numbers that we have seen and the LGA analysis in particular, which picks up some of the IFS data, that the proposition would in comparison to what is in the Bill produce a generally better redistribution outcome, particularly for poor people. However, if you look at that outcome in the context of the debate that we have just had and the adverse decision that we now face, you see that it is not so favourable. I have not seen from the data that have come across my desk how the proposition works at individual authority level. I concede that, when you look at things in aggregate, you have a less regressive, or perhaps a more positive, redistribution, but what is the impact down at individual authority level? If an authority has lots of second homes and is very rich, it is more likely than a poorer authority to be in a position where it does not have to change the single person discount. In terms of redistribution, that is going in the wrong direction. I accept that the proposition would result in a redistribution that is better than is in the Bill, but it is not as good as we can get and where we should leave it.
The noble Lord, Lord Palmer, charged that we want poor people to suffer. If I may say so, that is a disgraceful thing to say. If he were to look at the record of this side of the Chamber, the propositions that we have advanced, what we have voted for and what we have voted against, I hope that he would see that that is not true. We have just tried to stand up for poor people more positively and more strongly than the noble Lord is seeking to do now. The noble Lord, Lord Tope, said that it was quite inexplicable that we could not put our name to the amendment and engage in the wording. We find it quite inexplicable that the Lib Dems, who have in many ways a proud tradition of liberal thinking and action, should allow the Government to put in place a system that leads to the problem that we are trying to ameliorate with the amendment. That is the fundamental problem that we face. As the noble Lord said, we know that the Government are not going to move on the single person discount. We seemingly know that the Government are not going to move on the 10% cut, so where do we go? This amendment seeks one route to break that logjam; we have tried another which would have a better outcome. That is why we have some concerns with this approach. I accept the strong intent behind it and I accept that there are circumstances where it could lead to a better outcome because the pain is being spread over more people, but that pain would still be spread to some who are fairly low down the income scale, which is not the right thing to do.
I agree with the noble Lord, Lord Jenkin, about collection issues, as I think does pretty much every noble Lord who has addressed this issue. That will be a real problem with the system that we face. Dealing with the single person discount might change that a bit at the margins, but it, and certainly the transitional funding, do not change the problem fundamentally—arguably, they make it worse, because authorities are encouraged to reduce council tax benefit by 8.5% rather than 20% or 30%. They therefore have a smaller sum to collect with at least the same, and arguably greater, costs because of the problems with collection. That is the real issue which I hope will cause the Government to wake up and say that we should deal with this differently.
It is a pity that we did not pursue the issue of a report on the tax base, a theme returned to by the noble Earl, Lord Lytton, and how it would operate in practice, because it would have served us well in due course. The noble Lord, Lord Shipley, talked about child poverty. I simply make the point again: if the noble Lord and his colleagues are seriously concerned about child poverty in our country, they will know that there have been plenty of opportunities during the past couple of years for them to stand up and address that issue in a far more positive way than just supporting this amendment would do. The Lib Dems need to think strategically about where they are going on this rather than pick at something which I accept is very well intentioned and would ameliorate the problem to a certain extent but which in the wider scheme of things is just a sticking plaster on the problem when we need to address the problem itself. We cannot alone cause the Government to change their mind. We and the Lib Dems, with help from Cross- Benchers, arguably could, so that ball is in the noble Lord’s court.
I always hesitate to disagree with the noble Lord, Lord Best, because my colleagues and I have been shoulder to shoulder with him on many important issues where we have challenged and overturned the Government’s wishes even if they have subsequently been pushed back to us. I know that he raises this issue with the best intent, but there are some technical problems, if none other, with his approach which mean that this amendment cannot be supported. It is with some regret that I say that.
Baroness Hanham
My Lords, I thank the noble Lord, Lord Best, for introducing this amendment. I do not like not agreeing with him either—he is someone whom I think everyone admires in this Chamber and whom I have known for a long time—but disagreement there is going to be. I note that the noble Lord opposite said the same thing.
I start by declaring an interest in that I receive a single person discount, and very welcome it is, too, but I am not starting out from that basis today. The amendment is about the local authority’s discretion to change the rate of council tax to a single person, which it can discount by 25% at the moment. The noble Lord suggests that that could go down to 20%. As has been pointed out, that is not what the amendment says. It says that you could remove the discount. Local authorities could be left going from 25% to 0% on the back of it. There is nothing in it at all to limit this to a reduction to 20%. If the noble Lord did that, I am absolutely certain that there would be objections from all around that that was not localism, it was restrictive, and that if we wanted to go further down this discount route the right thing would be to have the full range. We have to be very careful about this.
It is also true, as my noble friend Lord True said, that we have never consulted on reducing council tax discounts. This is a tax and there has been no consultation on that at all. In effect, even if we accepted that the discount would go down to 20%, it would be a potential tax increase for over 8 million people who at present receive the single person discount. It would hit them. There has been some sort of idea all through this debate that this would have no effect on people who are poor. That is ridiculous. Lots of people who are poor pay council tax. They are in a position of being in property, having to pay council tax and getting suitable benefits for that. They might be single parents, lone pensioners or—there was an aside about this—people living in a big house. People live in big houses because they start in them. They do not particularly want to sell that house, and would probably get to the state where they do not know how to because it is so complicated. Why should they move? Why should they not be entitled to that single person discount? That does not mean that they are rolling in money. They are not. We have to dispel the idea that everyone who receives a single person discount can afford to give it up. That is a false impression and we cannot allow it to go on.
To reinforce that, over three-quarters of the claimants of the single person discount live in bands A to C, with over a third living in band A. Only 10% of claimants live in properties that are band E or above. This is not a tax that can be reduced just for the rich. It is very much a tax borne by people who are not particularly well off. However much we might say that they “only” have to lose a certain amount of money, they would only have to lose, as other people would, money that they cannot afford.
The amendment would undermine the fundamental principle behind council tax. I was fascinated by how the noble Earl, Lord Lytton, trailed through all the forms of property and council tax that there have been. Rates were certainly not popular. The principle behind council tax is that it is part property and part personal tax, and is based on two people in occupation. It is clearly defined. The discount reflects the fact that there is only one person in the property, where it is clear that one person does not make as much use of services as a family would. It also has a wide range of support. It is clear and easy, and people understand that it is a relief just for a single person. As my noble friend Lord True and I said, the Government did not consult on changing this discount, as it is a tax, in the consultation on technical reforms to council tax and have no plans to change that.
Noble Lords have previously commented on the amount of revenue that might be raised by reducing the rate of discount. I sound a note of caution on that. People losing the single person discount under this amendment, such as single pensioners and lone parents, might ultimately find themselves in greater need of help to pay their council tax. They might need benefit, so that would not be very helpful. This would mean curtailing the impact of any additional resources, putting more people in need of state support and creating unintended pressures on councils. I am sure the House would agree that that is not quite the hoped for consequence of the amendment.
The technical reforms to council tax in the Bill change the way empty properties are treated with a view to bringing them more quickly back into use. That may also generate welcome additional revenue for local authorities. However, as I said, changing the single person discount would lead to a significant hike in tax on a very large number of people. The amendment would also affect the operation of council tax discounts for empty dwellings. The default discount that applies where there is no resident of a dwelling could be varied by the billing authority. This change is not necessary as the Government already plan to extend authorities’ discretion over discounts for empty dwellings. We discussed that in Committee.
I understand that noble Lords have concerns about local authorities’ ability to make savings and to raise revenue from the flexibilities in the system at the moment. We have offered transitional support, which has been sneered at a bit today. I hope that with a little more time and consideration noble Lords and local authorities might appreciate that that is a helping hand, even if it is for a year at this stage. It is important that we recognise that the Government have made a significant move here. As a result of what I and other noble Lords have said, and the fact that this is a government initiative—so the coalition is wrapped up in it—I cannot support the amendment of my friend the noble Lord, Lord Best. I am sad about that because I normally like to do so. I hope he will withdraw the amendment.
Lord Best
My Lords, I am enormously grateful to all noble Lords who have participated in this debate. I will pick up on one or two points that have been made. I am deeply grateful to the noble Lord, Lord Jenkin, who reminded us of the poll tax riots and told us to learn from experience. Those were wise words. I am extremely grateful to the noble Lord, Lord Tope, who made the point that there is a shortfall that must be met. Can it not be met by people other than the poorest? I was grateful to my noble friend Lord Bichard, who felt that this was a practical way of helping those in most need and was a last chance to do something. My noble friend Lord Palmer had done the arithmetic and made the point that it would be very easy to collect a reduction in the single person discount as opposed to the incredible difficulty of trying to collect from people who have never paid tax before. The noble Lord, Lord Shipley, made the point that with no increase in council tax because of the freezes, the better off will be paying no more tax next year, but the poorest, rather paradoxically, will pay for the first time. He emphasised the value of localism.
The noble Lord, Lord True, was the first voice contrary to the mood of the House at that stage that this amendment was well worth pursuing. His comments were reflected in some of what the Minister said. I will take those points together. The noble Lord made the specific point about Richmond that if the single person discount was abolished altogether, people would face a council tax increase of £6 per week. He pointed out that that would clearly be significant. However, he mentioned that if the reduction was confined to a reduction from 25% to 20%, the worst situation for those people would be nearer to a £1 a week rise, which does not sound as bad. That was certainly the intention behind the amendment.
The noble Earl, Lord Lytton, gave us a wonderful history lesson and supported the whole essence of localism that is built into the arrangements that we would be extending with flexibility under the amendment. The noble Lord, Lord Smith of Leigh, with some reluctance, felt it important to support the amendment. There are better ways, but we have to be careful that we do not go for the best and drive out the good. This is our best shot to make a significant difference. The noble Lords explained that the amendment would be very helpful to places such as Wigan, even if it is not a panacea that would solve all the problems there.
I turn to the noble Lord, Lord McKenzie. I fully recognise that without the support of the opposition Benches, the arithmetic of this House means that it is impossible for me to carry an amendment tonight. I am sorry that political differences came into play outside the scope of Cross-Benchers. The noble Lord makes the point that a broader approach is needed. No one would disagree with that. He makes the same point as the noble Lord, Lord True, and the noble Baroness that the amendment could mean more than a reduction from 25% to 20%. Because it is an open amendment, it could mean abolishing the single person discount altogether. That could be painful to people on lower incomes. He makes the point that the amendment does not exclude pensioners. Many would argue that, at whatever income level, they should be removed from the equation. He is not sure about how the distribution from council to council would work. Richer local authorities may do better, and we need some more work on that. However, the better amendment proposed from the noble Lord’s Benches has failed to get support. Therefore, I hope that something lesser might find acceptance on his Benches. It has not so far.
The Minister also made the point that some restriction on such an amendment, so that it could not lead to the single person discount being removed altogether, is important. She points out that the single person discount has a justification and a purpose. The noble Lord, Lord True, also mentioned that. It is hard to argue that a 25% reduction for single people equates with any precision to the difference between the services required by a single person household and a household with more than one person. Indeed, as pensioners are included, single pensioners require a lot of services which a household with two pensioners does not require, because those people look after each other. It does not follow that if you are on your own you necessarily cost less. If you are a single parent with several children, you may be costing the local authority a good deal. It does not follow that a single person household necessarily uses fewer services from the council.
As a general principle, I do not argue that the single person discount does not have some merit, but a reduction from 25% to 20% can be argued just as easily as the retention of a 25% line. Any amendment that would find favour in your Lordships’ House is likely to be more precise about that. It is likely to state that the level of discount should never be less than X—perhaps 20%. There should continue to be such a discount. Perhaps it should state that pensioners should be excluded. As the Minister pointed out, that would reduce the amount of localism in the amendment, but perhaps an amendment that contains such an element would be more likely to find favour with your Lordships. My colleagues and I need more time to see how the £100 million transition plays into that. Every little helps, and I know that local government is grateful for that amelioration, relatively modest as it is.
This is not the time for me to press the amendment. I, and I hope others, have learnt that different forms of an amendment might find favour across the House, and I reserve the right to return with a different amendment at Third Reading. At this stage, I beg leave to withdraw the amendment.
“( ) The Secretary of State shall issue guidance to local authorities as to what persons or category of persons shall be deemed to be vulnerable.”
Baroness Hollis of Heigham
This amendment has now been cut across by the Government’s statement about the transitional grant. I may wish to return to the issue at Third Reading, but for the moment, I ask the House’s permission to withdraw the amendment.
“( ) Any dwelling which receives a band reduction in its council tax by reason of disability adaptations (or in the case of Band A properties, the relevant discount), shall not be deemed to be under-occupied for the purposes of housing benefit.”
Baroness Hollis of Heigham
My Lords, I will be brief. Many years ago, as a Norfolk and Norwich councillor, I found that the then MAFF, the Ministry of Agriculture, Fisheries and Food, was giving grants to Norfolk farmers to drain the Broads wetlands and that the then DoE was at the same time giving the same farmers grants not to take up the grants. We have a similar problem here in the interaction of the Bill with the Welfare Reform Act. That is not helped because the interaction between the two departments, at least on this issue, is clearly fraught. That is most obvious over housing benefit, which came up in our previous debate.
DCLG has a more appropriate definition of bedrooms to families than has DWP. DWP’s new HB rules penalise couples where one has a moderate disability—asthma or arthritis—and needs a separate bedroom but will receive HB not for the two bedrooms that they currently have and need but for a one-bedroom flat, if they or their social landlord can find one. Middle-aged couples, one with disturbed and disturbing sleep, but who are reduced to a one-bedroom flat, will be sofa-surfing in their new home if they cannot afford to take the benefit cut that they would face if they stayed put. Someone with asthma or emphysema, sofa-surfing at 55 in their own home—it is awful.
We could perhaps help one small group of disabled people with more severe needs. They are those disabled people whose socially rented property has an extra bedroom and would normally be in a higher band—say, band C—but, because of their disability needs, have had their council tax banding dropped from C to B. However, for housing benefit purposes, they may well be judged to be underoccupying and have their benefit cut. The amendment states simply that anybody who has had a band reduction by DCLG should not thereby be caught by DWP’s underoccupation rules for housing benefit purposes; they should be exempt.
We are not talking about large sums here. Sam Lister from the Chartered Institute of Housing has kindly produced for me an estimate of those affected, based on top-down departmental statistics, for which I am most grateful. It is an estimate, but it accords with my own hunch work, bottom-up from several authorities and grossing up those figures. There are 125,000 properties in England with a band discount, usually on grounds of disability. Leaving aside band A, which would not normally be overoccupied, that gives 110,000 people in discounted properties. Excluding owner-occupiers, whom HB would not affect, and pensioners, who would not be affected by HB, we estimate that the number of households affected across England—and, perhaps, Wales—would be between 2,200 and 3,000. The cost of protecting their current HB levels so that they are not hit by an underoccupation charge would, including Wales, come to between £1.8 million and £2.1 million.
In some cases, their properties may have been adapted for them by the social landlord, and DWP has allowed that it would be a false economy to shuffle them into somewhere smaller and then have to readapt the new property. However, many such couples—perhaps most—are simply in large properties, such as the middle-aged couple who need all three bedrooms of their flat or bungalow, one each for sleeping and the small, third bedroom for equipment. Anyone who has cared for a disabled person, as many in this Chamber today have, knows how much equipment can be needed: the wheelchair, the oxygen tanks, the nearly new mattress that has been temporarily replaced by a water mattress, the commodes, the tray tables, the cradles, the backrests and the banana boards. I could go on.
Under the new HB rules, those 2,500 disabled families with a reduced CTB because, according to DCLG, they need that extra space, could still be hit by the bedroom tax contrived by DWP, which says that they do not need that extra space, at a cost to them of between £15 and £20 or more. This amendment would simply allow those with a reduced band by virtue of their disability, as recognised by one part of government, to be exempt from the bedroom tax imposed by another part of government. This would bring consistency between the two departments and would be the right thing to do for families who are usually poor and certainly disabled. It seems self-evidently just. It may be that the Government propose to protect such families and I very much hope that the Minister can say that they will do so, in the same way as she was helpful in Committee in telling us that council tax band reductions would continue. If not, I hope that your Lordships will support this amendment. I beg to move.
Lord Best
My Lords, I have put my name to this amendment as well. As a long-time campaigner on the famous bedroom tax, I am very supportive of this amendment, which I think affects only between 2,000 and 3,000 households. For them, however, it would be very important and to have a double whammy would be disastrous for that group. I support the amendment.
Baroness Hanham
My Lords, we discussed this in Committee and, while I appreciate and understand the intention behind the amendment, the trouble is that this would reopen debates that I know have already been had on what is now the Welfare Reform Act. The Government do not plan to revisit what is in that Act. Blanket exemptions for specific groups, including for disabled people and those living in adapted accommodation, were extensively discussed then. I appreciate that the noble Baroness has now reduced this exemption to thousands of people rather than tens of thousands, but the fact of the matter is that it reopens something which I do not think we can reopen here.
Blanket exemptions can also be an inefficient and complex way of targeting resources, so the Government favour discretionary housing payments to help meet any shortfalls between a person’s rent and a housing benefit award. Noble Lords will recall that we announced that an additional £30 million would be added to the discretionary housing payments fund from 2013-14. This is aimed specifically at two groups: disabled people living in significantly adapted accommodation and foster carers. Local councils make the decisions on them on their individual circumstances. However, I assure the House and the noble Baroness that the Government have no intention of changing the long-standing council tax disabled band reduction scheme and that anyone in receipt of a reduction will not lose it as a result of the underoccupation measure. As I say, I cannot support this amendment and I hope that the noble Baroness will feel able to withdraw it.
Baroness Hollis of Heigham
My Lords, I am extremely disappointed by the Minister’s reply. She has made two points: first, basically, that we cannot reopen something that has already been discussed. Forgive me, but that is precisely the point of the Report stage on this Bill. We are opening up issues on housing, particularly disabled persons’ right to housing support. After all, council tax benefit is part of the housing support that families receive. They pay rent and council tax, and in the past those two have been brigaded. To say that while DCLG recognises their need and reduces their council tax bands, the department’s colleagues a few stones’ throw away are perfectly able to penalise them for the very same discount that they are receiving from DCLG is really quite shocking.
The Minister said, secondly, that they could go to discretionary housing payments. By my calculations, that money has already been spent about three times over, given the number of families who will be capped and the like. I know that we are running very late for all sorts of reasons. I would dearly like to test the opinion of the House but I may leave this to Third Reading. I beg leave to withdraw the amendment.
Baroness Sherlock
“( ) No council tax reduction scheme shall, taking account of withdrawal of other benefits, have a taper which produces an overall withdrawal rate greater than that which would result from the application of the default scheme.”
Baroness Sherlock
My Lords, I do not propose to move this amendment. I would like the opportunity to revisit the analysis that underpins it in the light of the impact on tapers of yesterday’s announcement on transitional support and in the hope that I might get sight of the treatment of tapers in the revised regulations for universal credit in the new default scheme.
“( ) In exercising its powers under subsection (2)(b), the authority must have regard to the impact of the scheme on carers in the area.”
Baroness Lister of Burtersett
My Lords, the purpose of this amendment is to ensure that carers are included in the list of classes of persons considered to be in financial need for the purposes of drawing up council tax discount schemes. They were described as vulnerable people in the guidance issued by DCLG in May 2012, Localising Support for Council Tax: Vulnerable People—Key Local Authority Duties. That document states:
“The Government has been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected”.
The impact assessment, as one would expect, refers to carers as one of these vulnerable groups, yet the guidance on vulnerable people does not mention them.
When I raised this issue in Grand Committee, I was not able to get a satisfactory explanation for this discrepancy and for why a group with special needs that is currently recognised in the council tax benefit scheme is now being ignored. In our first exchanges on the issue, the noble Earl, Lord Attlee, simply said:
“The guidance is not exhaustive”,
and that a,
“competent local authority will take the needs of carers into account. Why would a local authority not? That is part of its duties”.
The whole point is that the guidance does not currently spell that out as part of its duties. I quite accept that the guidance will not be exhaustive but I am sure that noble Lords will agree that it is strange to exclude this important group who, as that Minister himself accepted,
“provide a vital role in society”.—[Official Report, 16/7/12; cols. GC 38-39.]
Given the financial pressures that local authorities will be under, is it realistic to think that having worked their way through the vulnerable groups listed—if indeed they do that—many local authorities will then say, “Let’s see if there are any other vulnerable groups we should be taking into account”? Carers UK has pointed out that in Hertfordshire, for example, of the 10 district councils there only one is proposing specifically to protect carers. It says:
“Our existing experience of councils recognising carers around Council Tax discounts and reductions is also not good”.
That does not exactly inspire confidence.
When we came back to it in Grand Committee the noble Baroness, Lady Hanham, responded:
“The difficulty is that once you include carers, you have to include a whole lot of other people, which reduces the discretion”.—[Official Report, 19/7/12; col. GC 177.]
Leaving aside the fact that the whole guidance is discretionary anyway, a whole lot of other groups are already included and I am not aware of any calls for any further groups to be added to the list. Having made no progress in Committee, I subsequently e-mailed the noble Baroness to point out that the draft care and support Bill, which had been published while the Grand Committee was sitting, will place a new duty on local authorities to meet carers’ eligible needs for support. The Care Minister has been quoted as explaining that the care and support Bill puts carers,
“right at the heart of the system”.
Well, they are currently right at the margins of the council tax discount scheme.
In a letter in response to my e-mail, the noble Baroness said that she would now discuss the issue with the Department of Health, suggesting that,
“we could, perhaps, draw local authorities’ attention to this Bill (though not as an existing statutory duty)”.
I am grateful to the noble Baroness for her helpful response. This is really a probing amendment, designed to elicit what progress has been made and to reinforce the case for ensuring that carers’ needs are properly taken into account under the localisation of council tax support. As noble Lords will be aware, these needs are significant. To take just one recent survey carried out by YouGov for the Carers Trust, as reported in the Independent:
“Britain’s army of unpaid carers are isolated, depressed, physically exhausted and broke as they struggle to cope with caring for sick and disabled relatives without adequate support”.
Some 60% of those polled reported,
“mental health problems due to the strain of caring and juggling other responsibilities”.
I fear that if they now have to find money for their council tax, that could be the straw that breaks the carers’ backs. I hope therefore that the Minister will be able to bring positive news about the outcome of her discussions with the Department of Health. I beg to move.
Baroness Hanham
My Lords, I acknowledge immediately that carers play a vital role in society. We all know of people who have provided enormous support and care to their families and others, and I accept exactly what the noble Baroness says in that some of them must feel very isolated and find things very difficult.
The Government expect local authorities to consider what provision to make for carers as part of their broader responsibilities to those with protected characteristics under the public sector equality duty. In exercising that duty under the Equality Act with regard to the design of their council tax reduction schemes, local authorities should have regard to the treatment of carers associated with those who are, for example, disabled or older people, given their general duty to eliminate discrimination. I am happy to clarify this point for the record and to bring it to the attention of local authorities that they have that responsibility.
County council tax benefit makes provision for people who are carers through a specific income disregard and a premium towards their applicable amount. Local authorities will be free to do the same under localised council tax support. To facilitate this further, the Department for Communities and Local Government, as I said last time, is working with the Department for Work and Pensions to ensure that local authorities will continue to receive data on current benefits and the universal credit. I cannot give the noble Baroness the news that I think she is asking for, but as soon as those consultations are in position I will make sure that she is made aware of them.
As I have said, local authorities already have an existing framework of statutory responsibilities in relation to individuals who are vulnerable, and I do not think it necessary to create new guidance or highlight specific groups, which would risk cutting across this. I reiterate that the introduction of the transitional grant will give those authorities that undertake to avoid significant cuts to awards in the first year time to find other, more helpful ways of managing the reduction.
Amendment 107ZD would remove the powers to make regulations creating criminal offences in new Section 14B of the Local Government Finance Act. The noble Baroness is looking slightly puzzled. Have we not got to Amendment 107ZD?
Baroness Hanham
I apologise; I noticed the noble Baroness’s face and was getting a bit alarmed.
We have been asked about how we are talking to local authorities about this and other recent legislation. We are regularly communicating with them and will use this regular communication to bring to their attention recent legislation relating to carers. I think that we had some guidance, which I am also happy to discuss with the noble Baroness and, if necessary, reissue.
I apologise to the House for not realising that Amendment 107ZD had not been moved. I hope that the noble Baroness will feel satisfied with my response and will withdraw her amendment.
Baroness Lister of Burtersett
My Lords, I thank the Minister for moving perhaps an inch further along, even if it is not quite as far as I would have hoped. We have heard that the transitional grant is for only a year and has all sorts of strings attached to it. It does not provide an answer but it will at least provide some authorities with a breathing space. Could the Minister keep this issue on the agenda and not lose sight of the needs of carers? As the scheme develops over the next year, perhaps this could be returned to. I beg leave to withdraw the amendment.
Baroness Meacher
“(2A) Schemes under subsection (2) shall include 100% council tax rebate fully and additionally funded by central government for persons in receipt of—
(a) less than the income support applicable amount;(b) the universal credit maximum award under section 1(3) of the Welfare Reform Act 2012.”
Baroness Meacher
My Lords, I shall speak briefly in view of the hour; I am sure that the Minister and everyone else would like to get away shortly. The amendment provides for a 100% council tax rebate, fully funded by central government, for people with out-of-work incomes at the income support or JSA level, or when the universal credit is implemented, at the maximum award level under Section 3 of the Welfare Reform Act 2012. I should say that the noble and right reverend Lord, Lord Harries of Pentregarth, had planned to speak to this amendment but at this time he has had to go to an appointment.
The Government may argue that this is a “money” amendment that would increase government spending, but I would refute that suggestion. The basic income of people depending on JSA, for example, as your Lordships will know, is £71 per week for a single person and £111.45 per week for a couple. This is some £20 per week below the Joseph Rowntree assessment of income required to cover the basic costs of food, heating and travel, and one has only to think that there will be a few more costs than that to realise that these people are in dire trouble and need. Such households cannot and will not pay a tax on their home out of that tiny income. I understand that already 2 million households are failing to pay their council tax, a number which will put 2010-11 in the record books for the level of council tax default—that is £1 billion lost to taxpayers, a very large sum—while 3 million liability orders are being sought annually by local authorities through the courts, a 37% increase between 2000 and 2007. The poorest citizens will simply swell these numbers. The amendment would therefore not increase public spending, and that is before we consider the subsequent costs that the Government would have to pick up when these poor households failed.
The Government’s statement refers to transitional council tax benefits between 0% and 8.5%, which to me suggests a positive number. Whatever the number, though, it will be only for a limited period and therefore, as I hope the Minister will appreciate, does not in any way address the concerns that I and others have. I know that she does not really like to be reminded that this is the poll tax mark two, but that is what it will be unless this amendment is accepted by the Government, who could then bring forward their own amendment. I suppose you could say that we are trying to rescue the Government from themselves.
The New Policy Institute refers in its recent report to the return of one of the principles of the poll tax: that every household will pay. It was surely that principle that lay at the heart of the revulsion of the country against the poll tax and which brought down the Prime Minister of the day—Mrs Thatcher, as she was then. It is not surprising, then, that John Major promised Parliament that the council tax would provide up to 100% benefit for the unemployed and those on low incomes. Council tax benefit was expected to protect the poorest in the community, particularly from enforcement action in the courts. I cannot imagine anything more distressing, when you have no money and cannot buy any food, than spending your time going to court to defend yourself.
Now, however, the principle of the DCLG seems to be that instead of a 100% council tax benefit for the poorest, all shall pay something, and the favoured minimum has been 20%. My feeling is that once the transitional plans and arrangements are over, that is the sort of figure that we will probably return to, which means something like £5 per week for these very poor households to find out of income that I believe none of us in this House could survive on. Why issue demands if it is any less than that? Why issue a demand for £1 or £2 a week when even those sums cannot and will not be paid by these people on the lowest of incomes? Already these households will be losing benefit as a result of the move from RPI to CPI as the index used to upgrade benefits. Also many will lose from the housing benefit cap, as my noble friend Lord Best always argues so eloquently. There are disability benefit cuts and lots of other cuts. It is difficult to imagine how they are going to cope.
When these poorest households default, as they will, a liability order will be issued adding £120 to the liability. Then the unregulated bailiffs will turn up with a further cost to the household of £75 or £210 depending on whether they have to make a visit. These costs are piled upon council debt of, let us say, £1 to £2 a week or perhaps £4 to £5 a week. I am sure the Minister can see the nonsense of all this. We can call it nonsense, but for the family or household at the other end, it is not nonsense. It must be absolutely terrifying. People who owe small amounts of money at the beginning can find themselves owing thousands of pounds in a relatively short period. I welcome the Government’s statement, but I ask the Minister to assure the House today that she does not want to introduce poll tax mark two and that the Government will provide a 100% council tax benefit for those at the very bottom of the heap. That is what we are asking today. As other noble Lords have said, these very poorest people are not the right target for the cuts that, as we all know, were made necessary by the banks of this country.
Lord Cormack
My Lords, coming in to listen is fatal. I was very taken by what the noble Baroness, Lady Meacher, said. As somebody who did not support the introduction of the poll tax in Scotland and voted against it on every conceivable occasion thereafter, I would hate to think that we are in any sense moving in that direction. I say briefly, but with great feeling, that I hope the Minister, for whom I have genuinely high regard, will be able to give us some comfort in her response, either now or on Third Reading, because the problems that the noble Baroness sketched are for us theoretical, but for those who suffer, they can make the difference between a life and an existence.
Lord McKenzie of Luton
My Lords, we fully support the amendment moved by the noble Baroness. It touches the issues of justice and of practicality. The noble Lord, Lord Cormack, has just emphasised the challenges of collecting small amounts and revisiting the poll tax. This is, in part, genuinely saving the Government from themselves. I hope the Minister will not pray in aid the transitional funding because that simply does not address the problem. It might ameliorate it at the margins, but it does not deal fully with the very substantial issue that the noble Baroness has raised.
Baroness Hanham
I could do that, but I notice the words of the noble Lord and for the moment I will leave out the transitional arrangements because what the noble Baroness is asking for is not transitional but permanent. I am afraid that again I am not going to be able to accept the amendment.
The noble Baroness will be aware that we have consistently made clear that local authorities must take into account the needs of vulnerable groups in designing their schemes. Our draft regulations set out how the default scheme will take universal credit into account. Local authorities may wish to take this into account as they finalise their schemes in relation to people of working age. Under our proposals for the default scheme, universal credit income will be assessed as part of the means test for council tax support. Therefore the level of income, whether from universal credit or earnings, will be calculated in the means test determining the level of award. It is open to local authorities to take a similar approach in their own schemes.
The amendment would require that central government provides sufficient additional funding for councils to cover them to provide 100% support for the groups the noble Baroness was speaking about. As I explained earlier in relation to the set of amendments on funding, the saving from localisation is an essential contribution to tackling the deficit. The amendment also completely undermines the strengthened incentive for local growth. Making councils financially responsible for providing support brings incentives to get back to work.
I note what the noble Baroness said about the small amounts that potentially have to be collected from vulnerable people. I reiterate that we have drawn vulnerable people to local authorities’ attention and indicated that we think they must be taken very much into account. These proposals leave this in the hands of local authorities, and we are not prepared to change that for this group. Therefore, I hope the noble Baroness will withdraw her amendment.
Baroness Meacher
I thank the Minister for her response. The difficulty we have is that local authorities are squeezed to pieces. I have been very close to local authorities until very recently. They are cutting CAMHS services. They are cutting all sorts of things such as care homes and support for elderly people in their homes. They are desperate. Therefore, they are not going to be able to be generous to people in the situation we are talking about today. It is only at central government level that one can make rational decisions about where the pain should strike. The argument of this amendment is that it should not strike the very poorest people any more. They have already been pinched a very great deal. On that basis, I want to test the opinion of the House.
Lord Ahmad of Wimbledon
My Lords, I beg to move that further consideration on Report be now adjourned so that the House may take its well deserved dinner break business on the Motion in the name of the noble Lord, Lord Hunt of Kings Heath. In doing so, I suggest that Report stage should begin again not earlier than 8.29 pm. In suggesting that time, I am in no sense suggesting a time limit on the debate on the Motion tabled by the noble Lord, Lord Hunt, but am assuring those working on the Bill that the dinner break will be at least an hour.
National Health Service (Clinical Commissioning Groups) Regulations 2012
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:46 - Division on the Motion - Ayes: 128 / Noes: 161 - Motion disagreed.
Lord Hunt of Kings Heath
That this House deplores the fact that the National Health Service (Clinical Commissioning Groups) Regulations 2012 (SI 2012/1631) involve the exclusion from membership of a Clinical Commissioning Group of (1) a member of a local authority, and (2) a registered nurse or a secondary care specialist if employed by a body which provides any relevant service to a person for whom the Clinical Commissioning Group has responsibilities.
Lord Hunt of Kings Heath
My Lords, I refer noble Lords to the Register of Lords’ Interests and specifically to my chairmanship of the Heart of England NHS Foundation Trust. At the core of the Government’s changes to the National Health Service are the clinical commissioning groups to which a significant part of the NHS budget is to be allocated from the next financial year.
Those clinical commissioning groups face formidable challenges. They need to be authorised and established. They take office at a time when the NHS is attempting to cope with the £20 billion Nicholson challenge. They will face major reconfiguration challenges as the health service seeks to become more efficient in the use of its services. They also will come under great pressure to encourage integration across health and social care but will face also the almost conflicting pressure of increasing the marketisation of the NHS and coping with the bringing in of competition law to a much greater extent. Whatever one’s views about the changes to the National Health Service—I am one who does not take a particularly positive view, as the noble Earl will know—what is not in doubt is that clinical commissioning groups are at the heart of those changes and that the challenge that CCGs face, as we have come to know and love them, is formidable.
These clinical commissioning groups are a curious body. They ostensibly are public bodies to be given £60 billion of public money. They also can be seen as a federation of primary care providers which are given huge financial and commissioning muscle and from which members of the primary care federation can gain considerably. Given that, and given the obvious potential conflict of interest that surrounds clinical commissioning groups, it is clear that they should have the strongest possible corporate governance and effective boards. The regulations before us are therefore of considerable importance.
As the Explanatory Memorandum points out, the regulations set out,
“requirements on CCGs in terms of their establishment and governance”,
requirements in relation to the make-up of the board and requirements in relation to,
“the initial procedure for establishing CCGs and any changes to CCG membership and geographic area thereafter”.
The statutory instrument sets out that membership must include a registered nurse, a secondary care specialist and two lay people.
As I said during our endless debates on the Health and Social Care Bill, I find the very limited lay representation to be very disappointing. It is surely contrary to all good practice in public body appointments that lay people are in such a minority on public bodies to which so much resource has been expended. I doubt that it would pass the Nolan test. I well recall the failures that we have seen in boards over the past two or three decades where it has become clear that the non-executives have failed to discharge their challenge duty. After all, that surely is one of the main lessons of mid-Staffordshire. To have only two lay people who could represent the public interest on those boards seems to me to be a vital error.
I also say to the noble Earl that he failed to respond effectively to our debates on conflict of interest. I am sure that when he seeks to defend the drafting of this statutory instrument, he will talk about conflict of interest. However, the biggest conflict of interest is the fact that GPs will be in a majority on those boards, and GPs can gain financially from the decisions of clinical commissioning groups. That is why this whole structure is flawed.
My concern about the statutory instrument—one of the most peculiarly drafted that I have ever come across—is that people with local expertise are excluded from the clinical commissioning board. Because a registered nurse or a secondary care specialist have intimate local knowledge and provide services to patients in the area of a CCG, they are not to be welcomed; they are to be excluded. That is quite a remarkable decision. For a registered nurse or a secondary care specialist to become a member of a CCG they either have to be retired and therefore completely out of date or they have to live miles away and know nothing of the local area. What a remarkably stupid decision that is. It is compounded by Schedule 4 of the regulations, which excludes a local authority member from being appointed as a lay member of a clinical commissioning group. Why? What on earth is the justification for that?
Given the issue of accountability of clinical commissioning groups, surely having an elected member of a local authority on the board of each CCG would be to the advantage of that CCG. I have yet to hear any convincing explanation as to why they are excluded. Indeed, it is so ridiculous that if you are a GP who happens to be a local councillor, you are excluded from serving on the CCG board. I have had brought to my attention the case of one GP who has been a leading light in the development of his own clinical commissioning group only to be told that he is now ineligible to become a member of the CCG board. Today I met a local authority councillor from east Cheshire who has just been appointed a lay member of a CCG, but she has now been told that because she is a local authority member she can no longer serve on the board.
There are some inconsistencies in the statutory instrument. It looks as though Members of your Lordships’ House can serve on the clinical commissioning group governing bodies, as opposed to MPs and members of local authorities. From my reading it would seem that an elected police commissioner may also serve. That seems to me a trifle inconsistent, and I would be grateful if the noble Earl could clarify that for me.
In the Explanatory Memorandum, when it comes to consultation, we are told that the proposed framework for the established governance and authorisation of clinical commissioning groups was tested with a wide range of stakeholders. Can the noble Earl say a little more about that? Who, in fact, were consulted? I had not realised until I received a briefing that the Foundation Trust Network was not consulted on the details of the regulations. We all read with great interest in Pulse magazine of 24 July that Sir David Nicholson, chief executive of the NHS, said that he was open to relaxing the restrictions that I have mentioned. Was he consulted?
Why did the department not listen to the concerns of the Royal College of Physicians, which believes that the CCG boards should always include specialist doctors who work within the area covered by a CCG in order to help the integration of services across primary and secondary care? Indeed, why did it not listen to the BMA, which feels that the regulations are restrictive and are hampering effective secondary care clinician recruitment to CCG boards? Why did it not listen to the Royal College of Nursing, which says that the guidance makes an assumption that GPs from practices in a CCG should be allowed to sit on the CCG governing body, but automatically excludes any nurses employed by any significant local provider or member in general practice? The college says that that will make it difficult to appoint nurses with the necessary skills and expertise who have sufficient knowledge of the local challenges. The Royal College of Surgeons is also concerned.
I have another concern. Again, when I read the regulations, I had not noticed that, as the Foundation Trust Network has pointed out, if you are a member of a foundation trust you are ineligible to serve on the board of a clinical commissioning group. I believe that the total membership of foundation trusts is more than 2 million. My own trust has 100,000 members in its patch, and they are all excluded from serving on the board of a clinical commissioning group. That is a bizarre decision. I really do not understand how the department could have allowed that to creep into this statutory instrument.
I believe that the regulations are badly thought out and badly constructed. Essentially they will ensure that the board of a clinical commissioning group will be bereft of members coming from the local authority, hospitals or the nursing profession who have any intimate knowledge of the patch in which they serve. I urge the noble Earl to reflect on this. It would be much better if these regulations were withdrawn and new ones brought before your Lordships’ House. I beg to move.
Lord Warner
My Lords, I begin by congratulating the Minister on surviving the ministerial defenestration at Richmond House over the summer. I recall that some years ago a younger Bruce Willis played the title role in the film “Last Man Standing”. I welcome the Minister to his new role as an action hero. However, today’s regulations do not live up to this star billing.
My noble friend’s Motion of Regret contains many important reservations and I wholly endorse his remarks but there are other concerns as well. I will not repeat my noble friend’s remarks on the inconsistency of the CCG membership provisions but I would like to supplement them briefly. It seems bizarre to me to allow GPs with acknowledged conflicts of interest in a CCG area to serve on the CCG, though with appropriate safeguards and sanctions for failing to acknowledge those conflicts—sanctions which we discussed extensively during the Bill’s passage through this House—but not to allow specialist doctors to do exactly the same. This seems to me not to be in the best interests of patients because it appears to be punishing expertise of a specialist nature in terms of the development of services by commissioners in a particular local area.
My second point, which I want to dwell on a little longer, concerns the issues relating to accountable officers, which to a great extent, to my reasonably tutored eye, look remarkably similar to the roles of chief executives in PCTs. Has the Minister seen the information about CCG accountable officers in the Health Service Journal of 11 October? This reveals that 72% of the emerging 211 CCGs have chosen managers and not GPs as their accountable officers. Only 22% of the accountable officers are GPs—a drop in the 38% expected as recently as March 2012. This is because the job of the accountable officer looks remarkably like the job of a PCT chief executive and simply does not appeal to GPs. As I recall, the Government, when pushing for this legislation and these reforms, made much of the fact that they wanted to see GPs in a leadership role driving clinical commissioning in a reformed NHS. We seem to have ended up with a situation in which GPs as a whole are walking away from a leadership role in commissioning. That leaves the Government’s strategy of increasing clinical involvement in commissioning services, which I wholly support, in a very weakened state. It suggests that after all the upheaval of the poorly constructed Bill, which we spent months discussing, we will end up with more than 200 CCGs replacing 150 PCTs, but still with about 150 PCT chief executive equivalents running the show within CCGs. This is a bizarre outcome from the time we spent on the Bill. Did we really labour through the Bill for many months to achieve that outcome? Can the Minister confirm that the Health Service Journal data are correct? What proportion of the £60 billion a year going to clinical commissioning groups will come under accountable officers who are not GPs or doctors?
I have a few questions about service integration and CCG mergers. The new Health Secretary seems very enthusiastic about integration of health and social care and that is a jolly good thing. Can the Minister explain how excluding local authority personnel—both members and officers, such as a director of adult services—from a CCG board can facilitate joint commissioning of health and social care and the pooling of health and social care budgets, which seems to be attracting increasing support? How will such an arrangement incentivise CCG accountable officers to use resources for adult social care from the national Commissioning Board in such a way as to save the NHS money and provide a better service to patients? Indeed, can the Minister confirm that CCG accountable officers will not be criticised if they use NHS resources wisely to purchase social care that better serves the needs of patients when appropriate?
As the Minister knows, I am deeply sceptical about the need for and viability of having more than 200 CCGs, particularly given the likely service reconfigurations needed over the rest of this decade. I am therefore pleased that there is some provision in the regulations for mergers to take place. However—there is always a “however”—the list of factors to be taken into account before a merger can proceed, in paragraph 2 of Schedule 1, is extraordinarily daunting. There is a page and a bit of factors that have to be taken into account before a CCG—which may find pretty quickly that it is unviable—can move towards merger. They do not encourage CCGs to face up to financial realities and speedily reduce their number when needs must. Should the Government not be cutting this list of factors substantially rather than providing for a slow CCG death, as Schedule 1 seems to do?
I understand that the Minister may not want to answer all these questions tonight but perhaps he could write to me on some of these issues. I certainly support my noble friend’s suggestion that these regulations should be taken back, rethought through and re-presented to Parliament.
Baroness Finlay of Llandaff
The noble Lord, Lord Hunt of Kings Heath, has done us a major service by bringing forward a full debate on these regulations. We have discussed at length the problem of secondary care representation. Indeed, the fact that there will be secondary care representation and nurse representation on clinical commissioning groups is welcome. However, the principle of integration seems to be blown apart by the way in which these regulations are written. The Royal College of General Practitioners and the Royal College of Physicians—I declare an interest as a fellow of both—and the Royal College of Paediatrics and Child Health produced a document entitled Teams without Walls about involving generalists and specialists to ensure a better, more seamless journey for patients.
In an area—and we are trying to have more localism and more local involvement in decision-making—the very clinicians on half of this pathway are now excluded from involvement in the planning and decision-making for those services yet they are the clinicians who have an in-depth knowledge and experience of the health economy, integrated working and, indeed, of the deficits in standards. That is where I wish to focus my remarks for a moment. The Francis inquiry has not yet reported but I understand that the Government have given a commitment to implement the findings when they come out. I do not understand why the Government have not left this matter completely open at the moment. If the Francis inquiry considers that there is not enough integration between secondary and primary care in decision-making, planning of services and so on, then allowing a secondary care clinician from the local area to be on the clinical commissioning group would provide the flexibility that Teams without Walls refers to.
The clinical governance of an area and its problems will be known to the local secondary care services, and they will know it across the board. There has been concern about conflicts of interest, yet a medical director in a trust represents a range of different specialties, and that has not been a problem. Clinicians have learnt how to do it. The Royal College of Physicians has produced guidance. It will produce guidance on a competitive appointment process whereby the best person for the job gets the job, and it has produced a clinical commissioning hub as a support for secondary care in its involvement in clinical commissioning groups. You could say that the basic rule of physics pertains—two negatives make a positive. It is difficult to understand why the conflict of interest that the GPs will experience, where they may be providing part of secondary care services themselves, does not matter in this, and yet it is completely prohibited to have a secondary care person who might understand how that interface between primary care and secondary care will work better at a local level. That person is excluded. It seems to work particularly against rural areas.
The last point I should like to make—apart from reminding the Government that the absolute reverse principle has been in place with the local education and training boards, where local people are involved in the very processes of commissioning the education—is about the people who will come forward. We already know that, to date, there is underrepresentation of secondary care. A clinician who is going to apply to be on a board and leave their clinical service, travel long distances and be involved elsewhere is not going to be the clinician who is completely dedicated to their local NHS service. The clinician who is dedicated to their local service and driving up care for patients is going to be the very person who will be most motivated to work with the clinical commissioning group to improve the services and the seamlessness across the piece. Excluding local clinicians seems unnecessarily to be closing down flexibility.
Baroness Jolly
My Lords, this is a debate about conflicts of interest and getting the right person for the job. During the passage of the Bill, my noble friend Lady Barker led the call for conflicts to be declared where a board member has connections with a provider, where GPs can provide secondary services from their practices and where there are connections with commissioning support organisations. This was deemed right and proper, and was incorporated into the Bill.
It is important that the right people sit on clinical commissioning group boards and there are clear guidelines about competence, as well as protocols about conflicts of interest. This piece of secondary legislation puts restrictions on a clinical commissioning group in the choice of its members, irrespective of their competence, in two areas. One restricts councillors from being on the board and the other restricts the clinicians to those who work for providers from whom the clinical commissioning group does not commission services.
Time restricts me from addressing both issues so my noble friend Lady Williams will address the area of clinicians. In nearly 10 years as a member of an NHS trust board, I have sat with members of all political parties and none, some of whom were councillors. Where we had conflicts, they were declared. In that time, everyone left their party allegiances at the door. They were clear that they were there to look after the interests of the NHS in their patch, and had the skills and competences required for that role. It has been like this all over the country for years. It is worth mentioning that the work of Torbay Care Trust, which has been referred to frequently, depended on both NHS non-executive directors and councillors being on the board and working together.
Clinical commissioning groups want the right person for the role. They advertise, interview and appoint. It might be that the right person is a councillor, or not. This SI restricts their choice. Councillors know the community and, furthermore, particularly in the beginning, could have given useful guidance on the workings of the council because that is an area where GPs have generally not ventured—unless of course they are a councillor and a GP. This legislation has an unintended consequence for both doctors and indeed a nurse appointed as one of the two clinicians. The LGA wrote to the then Secretary of State as soon as the SI was published. The letter was signed by Councillor David Rogers, who is chair of the LGA Community Wellbeing Board and the only councillor member of the NHS Future Forum. He wrote:
“We do not accept the case for barring councillors from the governing body who hold professional roles within the NHS, as the reason for the appointment would be their professional experience within the health service—such as the GP … The Government, if it does not listen, is in danger of creating an unintended consequence of both discouraging experienced health service personnel from getting involved in their clinical commissioning group and from discouraging them from getting involved with their local authority”.
Councillor Rogers adds:
“I know that you are fully aware that all councils have standing orders that address conflicts of interest. We expect all public bodies, including clinical commissioning groups, to have equivalent rules regarding membership of their governing bodies but the proposed statutory instrument is far too wide-reaching and disproportionate. It will not only affect GP councillors serving on the governing bodies of clinical commissioning groups but any health professional group that a clinical commissioning group decides it wants represented on the governing body”.
I also received an email from a councillor GP who had been told that he had to make his mind up. Did he want to sit on the clinical commissioning group or did he want to remain a councillor? This level of restriction was not mentioned during the passage of the Bill. He asks:
“What are the justifications for this action which makes clinical commissioning groups the most politically restricted Public Body within the UK ? Where is the evidence”—
we spent a lot of time during the passage of the Bill trying to ensure that things were evidence-based—
“that this is in the public interest? Will GPs be banned from holding political office as Councillors on the basis that they could influence Health and Well Being Boards?”.
I should like the Minister, in summing up, to reassure the House that this was indeed an unintended consequence, and that when the implementation of the Bill is reviewed in 2014, clinical commissioning group governance will indeed be part of that review. Also, for those councillors who would have wished to become engaged in the commissioning of services, will he indicate how the clinical commissioning group might still involve them, so that their skills and competences are not lost?
Baroness Cumberlege
My Lords, I declare an interest, which is in the Register of Lords’ Interests. I want briefly to address two points. The first regards the wording that the noble Lord, Lord Hunt, has tabled for the debate, which concerns the prohibition of,
“a registered nurse or secondary care specialist if employed by a body which provides any relevant service to a person for whom the Clinical Commissioning Group has responsibilities”.
My second point is simply about local authority members being members of clinical commissioning groups.
In the past two months, I have had in-depth discussions with four CCGs in different parts of the country. I will be visiting a fifth tomorrow. The impression that I get, quite understandably, is that they are very variable. Some are only just getting established and hardly have their membership in place, and others are well under way. We expect that. It is a new architecture. CCGs have a lot to do, as the noble Lord, Lord Hunt of Kings Heath, said, and some are quicker than others. We would expect that.
However, in one of the London CCGs, the consultant from a well known and respected London teaching hospital, which is outside the CCG area and its commissioning remit, is clearly playing an important part in advising the CCG—as is the very impressive nurse. Neither has any conflict of interest within the CCG because they are people from outside, but they are using their experience, as the noble Baroness, Lady Finlay, said, to explain clearly the implications of some of the decisions that could be taken in future. I thought that the CCG was getting really good advice and I could see how that was going to inform it in the future.
Lord Harris of Haringey
My Lords, I declare an interest as a vice-president of the Local Government Association and as an adviser to KPMG, which I understand also advises on health matters, although I do not advise it on those matters.
In this debate we are perhaps being asked to suspend our disbelief that the governance arrangements for the clinical commissioning groups make sense. We are being asked to suspend our belief on the question of whether pigs may fly. However, the extraordinary statement from the noble Baroness, Lady Cumberlege, that somehow locally elected councillors are incapable of making decisions which affect the livelihoods of the populations that elect them is disgraceful.
Baroness Cumberlege
My Lords, I object to that. I said that they have a role on health and well-being boards, which is where the strategy is set out, and that is where the NHS, local authorities, Healthwatch and other organisations come together.
Lord Harris of Haringey
I understand that. My point is that the noble Baroness does not seem to understand that today, all over the country, locally elected councillors are making decisions about closures because they are having to balance the reductions in budgets that this Government are forcing on them and on their local communities. They are making those decisions on behalf of the people whom they represent. Why is it being said that somehow they have a conflict of interest which means that they are incapable of making decisions along with colleagues about health matters?
There are issues of principle here and issues of sheer practicality. The issue of principle concerns conflict of interest. The noble Baroness, Lady Cumberlege, has talked about conflict of interest. Perhaps we will also hear about that from the noble Earl in a minute. However, the biggest conflict of interest will be the fact that the primary care practitioners are key elements of the boards of CCGs’ governing bodies. They are not being excluded; it is just everyone else who is being excluded. Let us be clear about who is being excluded. It is not simply elected members but any employee not just of the local authority in the CCG’s area but of any local authority in the country. Therefore, any person who, under paragraph (4) of Regulation 12, the CCG feels has knowledge about the area and who does not have the misfortune of being an elected councillor but does have the misfortune of being a part-time employee of a neighbouring local authority is exempt.
When the Minister replies, I should like him to explain to us why every single employee of every single local authority in the country is being excluded from participation in CCGs. While he is about it and we are talking about conflicts of interest, we have already heard the point made by my noble friend Lord Hunt of Kings Heath that any person who has been public-spirited enough to decide to become—and frankly it is a fairly meaningless undertaking—a member of a local foundation trust or a local NHS trust is also excluded from membership of a CCG. Again, what is the point of that? It is being said that any person who is public-spirited enough already to have had some engagement with the local NHS is not allowed to sit on the board of the CCG.
This is frankly fatuous. You have ended up with a situation in which you have enshrined one set of conflicts of interest and excluded from the membership of the CCG all sorts of other people who could make a valuable and useful contribution. I am afraid that for the first time in our considerations I agree with 99% of what the noble Baroness, Lady Jolly, said. The 1% with which I disagreed was that we should allow this instrument to go through and review it again in two years’ time. It is so flawed and riddled with poorly thought-out considerations of what would work at local level, and so dismissive of the best judgment of local people to decide who is best to be part of the board, that frankly we should endorse my noble friend’s Motion. I urge the Minister to withdraw the regulations and bring forward revised, more sensible regulations.
Baroness Williams of Crosby
I have some sympathy with what has been said, but I want to raise a slightly different issue, which arose from what was said by the noble Baroness, Lady Finlay, and the noble Lord, Lord Warner. I remember well during our long debates on the Health and Social Care Bill that one of the central issues that was brought out time and again both in the broad debates and in the amendments that were tabled were two guiding principles. One was the integration of health services that are absolutely crucial to the changes that need to be made if we are to get through the period of the Nicholson challenge and provide a better experience for patients. The second, alongside integration, was the concept all the way through of bringing together the different professions in a common approach on to how to deal with health services. In Clauses 13 and 14 of the original Bill, now an Act of Parliament, these two themes are pressed, insisted upon and underlined over and over again. Another issue was localisation and the need to try to devolve decisions about health down to a lower level.
What troubles me is that we are now seeing CCGs not as microcosms of that integration and an attempt to try to bring health services together but as being out on their own, essentially as a way of managing the general practitioner contribution to the health service. The noble Lord, Lord Warner, to whom I always listen very closely, was not wholly correct on one point. There is a section of general practitioners who have gone into commissioning. The sad thing is that the 4% or so who have done so are among the very best in the profession. GPs are losing their very best and most experienced leaders to commissioning, which may be essential but means that they are no longer able to give the same leadership to GPs that used to be the case. That is rather serious.
How does one offset that loss of leadership quality of the finest GPs? The noble Baroness, Lady Finlay, is absolutely right that it can be offset only to some extent by secondary care consultants and registered nurses to try to bring the understanding that was rather deliciously and beautifully described by Sir David Nicholson as being the element of compassion, concern and patient involvement required if one is to have CCGs become not businesses but in effect beacons of what was a great public service and that could continue to be a great public service. One cannot get that if one excludes secondary care consultants and a whole group of registered nurses from serving anywhere except on their own patch.
I hope that the Minister can tell us that the wise advice offered by Mister Nicholson—sorry, I know that he is Sir Someone Nicholson—to him and the Department of Health that there ought to be recognition of a more relaxed attitude, which should be taken on board. How does one take it on board? By recognising that the very tough conflicts of interest legislation that was put through this House with the support of all parties is strong enough to deal with people who have come from the same patch but in any way misuse or abuse that position by trying to gain financial advantage for themselves.
Lord Turnberg
I am afraid that my message tonight will be rather familiar. Although I listened carefully to the noble Baroness, Lady Cumberlege, whom I respect enormously for her experience, I am afraid that I cannot agree with her. Commissioning services in the NHS is an extremely complex activity. For CCGs to make rational decisions, they need the best data and information available about their populations and how to meet their needs.
I understand that economists talk about perfect and imperfect markets. Perfect markets exist where both the purchaser and provider know exactly what they are getting and giving. This is particularly important when we talk, for example, about packages of integrated care, especially care across the hospital community divide. Who better to provide the data and information that CCGs need than those working locally in our hospitals? CCGs should not only understand the needs of their populations; they also need to know something about what can realistically be provided locally to meet those needs. Relevant questions might include whether the local hospital provider has the relevant orthopaedic surgeons who can do specialised and complicated knee or hand surgery, whether it has the oncologists and haematologists to deal with all cancers or only some, and whether it has the relevant up-to-date scanning facilities. There will be a dozen other questions that only local knowledge can answer.
It seems obvious to many in the field that local specialists and nurses from the local trust are in much the best position to provide the answers, and to engage constructively with GPs in the provision of services. The idea that there is a conflict of interest appears to me to be nonsense. Of course there is local interest. Local consultants and nurses are there to provide local knowledge and information. The idea that consultants and nurses from elsewhere can be parachuted in to provide local information is asking too much, quite apart from the problem of whether another trust will be willing to allow its staff time off to travel around the country.
We do not want or need disinterested clinicians in the CCGs; we need interested clinicians. I hope that the noble Earl will listen if not to my noble friend Lord Hunt then to the royal colleges, which are very strongly in favour of local input from the secondary sector.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I begin by thanking the noble Lord, Lord Hunt, for tabling this Motion, which provides a welcome opportunity to clarify the Government’s intentions in making these regulations on clinical commissioning groups—an opportunity that I feel is rather necessary in the light of some of the speeches that we heard this evening.
The regulations set out the legal requirements on the size and membership of a CCG’s governing body. Together with amendments made to the National Health Service Act 2006 by the Health and Social Care Act 2012, they provide a clear legal framework within which CCGs can appoint their governing body and develop appropriate governance arrangements. CCGs will be different from previous commissioning organisations. They will be built on the GP practices that together make up the membership of the CCG. These member practices must decide, through developing their constitution, how the CCGs will operate. They must ensure that they are led and governed in an open and transparent way that allows them to serve their patients and population. It is vital that CCGs are clinically led, with the ownership and engagement of their member practices, so that they can bring together advice, as noble Lords emphasised, from the broadest range of healthcare professionals to influence patterns of care and to focus on patients’ needs.
That is a necessary preface to the subject that has been the focus of much of tonight’s debate: the role of the governing body of the CCG. Following the NHS Future Forum, we introduced measures in the then Health and Social Care Bill to strengthen governance arrangements for CCGs, primarily through the requirement for each CCG to have a governing body that would have responsibility for ensuring that the CCG operates effectively, efficiently and economically, and does so with good governance. As we discussed during the passage of the Bill, our intention was to provide the public with greater confidence that CCGs would have suitable governance arrangements in place, including independent views and strong leadership, and would have proper checks and balances for the stewardship of public money. CCGs will be the guardians of significant amounts of taxpayers’ money. It is therefore only right that there are strict requirements in relation to governance, probity and transparency of decision-making. We must balance the benefits of the clinical autonomy of doctors with a robust management of potential or actual conflicts of interest. It is essential to get this right, and that means a proportionate and reasonable approach.
The Health and Social Care Act already provides real safeguards against conflicts of interest. The CCG must make arrangements in its constitution for managing conflicts and ensuring the transparency of its decision-making process, and it must have appropriate governance arrangements, including a governing body with lay members and other health professionals. These arrangements will be scrutinised by the NHS Commissioning Board as part of the process of ensuring that a CCG is fit to be established as a commissioner.
The requirements in relation to the secondary care doctor and registered nurse are therefore part of an overall package of requirements to ensure that they operate with good governance. We made clear in the Government’s response to the NHS Future Forum in June last year that neither the secondary care doctor nor the registered nurse should be from a local provider in order to prevent any potential conflicts of interest. We did that because a conflict of that nature would be a constant issue for a secondary care provider, given that CCGs will be responsible for commissioning the vast majority of hospital services. In contrast, CCGs will not commission primary care—that will be the responsibility of the NHS Commissioning Board. Therefore, for the most part, GPs on the governing body do not have a conflict of interests, and in any case GPs will not necessarily be in the majority on a CCG governing body.
On any occasion where CCGs consider commissioning local community services, arrangements must be made to manage both actual and potential conflicts of interest in such a way as to ensure that they neither affect the integrity of the CCG’s decision-making process nor appear to do so. The NHS Commissioning Board has issued guidance and a code of conduct for CCGs to deal with that set of circumstances.
What then is the role of the secondary care doctor and registered nurse on a CCG governing body? Their primary role, along with other members of the CCG governing body, will be to ensure that the governing body exercises its functions effectively and with propriety and absolute fairness. However, each member of a governing body will be expected to bring additional perspectives to underpin the work of a CCG. For the specialist doctor and the registered nurse, this perspective will be to provide a view beyond primary care and a broader understanding of health and social care issues—specifically patient care in a secondary care setting for the specialist doctor and, for the nurse, the contribution of nursing to patient care.
That is different from the role of clinicians in commissioning. Involving clinicians in commissioning has been one of the primary goals of our healthcare reform. I need to underline that as it is very much separate from the specific role of the CCG governing body. The detailed work on service design will not be done by the governing body of a CCG: rather, it will be done by the CCG itself, working with clinical networks and other multiprofessional groups. The governing body will have oversight of the governance of this decision-making process.
CCGs have a legal duty to obtain advice from people with a broad range of professional expertise when carrying out their commissioning responsibilities. My noble friend Lady Williams was absolutely right in saying what she did on that score. This could involve, for example, a CCG employing or retaining healthcare professionals to advise the CCG on commissioning decisions. Local knowledge and an in-depth understanding of local health issues will come not only from local GPs and their member practices but from other local clinicians, including local secondary care clinicians, who will work with CCGs to review local health needs and design local services. So the arguments presented by the noble Lord, Lord Hunt, and others around excluding local secondary care clinicians from the governing body as affecting the quality of the CCGs commissioning are wholly misplaced.
As to the restrictions placed on councillors preventing them from serving on CCG governing bodies, I start with a point of principle. We have been very keen from the outset of our reform programme to limit political interference in the day-to-day activities of the NHS. We have always been clear about that. Consequently, in addition to local authority members, we are also excluding MPs, MEPs and London Assembly Members from serving on a CCG governing body. However, our proposals do not mean that councillors are excluded from CCGs. A local councillor may still serve as a member of a committee or sub-committee of a CCG governing body, with the exception of the remuneration committee, as long as a CCG has set out the arrangements for such a committee in its constitution. A councillor falls within the description of an individual “specified in the constitution” as being eligible for membership of a committee. A CCG may provide in its constitution for any function of the governing to be exercised on its behalf by a committee or a sub-committee of the governing body, or by any individual of a description specified in the constitution. These arrangements could therefore allow for a local councillor to play a pivotal role in the CCG’s decision-making without formally being on the governing body.
Lord Harris of Haringey
Regulation 12(4) refers to a lay person who “has knowledge about”. We are excluding from that category an employee of any local authority, and I want to know why.
Earl Howe
My Lords, the question I was asked was about the officers of local authorities, and I hope I have clarified that. A member of a local authority is an elected councillor, of course, and is debarred from a governing body, as we have discussed. If the noble Lord, Lord Harris, will allow me, I will write to him on the point.
Lord Harris of Haringey
Paragraph 5 of Schedule 4 refers to:
“An employee of a Primary Care Trust”.
Lord Harris of Haringey
They may be excluded from being a lay member, but one of the lay members is defined as someone who has,
“knowledge of the local area”.
However, if by chance they happen to be a part-time employee of any local authority in the country, they are excluded, and I want to know why that is. Why not leave it to the good judgment of the local people?
Baroness Thornton
Before the noble Earl leaves the issue of lay members, I have a question about having only two lay members—I am sorry that I did not jump up in time to ask it before he started summing up. The noble Earl and I sat opposite each other for several years discussing regulatory reform of the NHS, and one thing that I think we agreed on was that for all the new regulatory bodies that are now appointing lay members, 50:50 was the right balance to ensure proper regulation and accountability. Why is that not the case with the CCGs? What is different here? We felt that it was safer to have 50% in the regulatory reform of the NHS. Why do we not have 50% on the CCGs?
Earl Howe
My Lords, it will be up to local CCGs to determine their own constitutions, as I have said. What we are attempting to do in these regulations is simply to set down the bare minima. As we discussed during the passage of the Act—these provisions were well rehearsed—providing there are two lay members, a secondary care clinician, a nurse and an accountable officer, that is the extent of the prescriptiveness that we feel is appropriate from the centre. Otherwise, it looks very much like the Government dictating the governance arrangements. The Future Forum’s recommendations were very clear that we should not go down that path.
It was suggested that CCGs were experiencing difficulties in appointing secondary clinicians or a registered nurse. I understand the concerns that noble Lords have raised on that score but I have recently spoken to the NHS Commissioning Board, which has started the process of considering applications from emerging CCGs. The news I have is that CCGs have so far successfully recruited to these roles. In addition, the medical and nursing royal colleges have offered to help CCGs in sourcing appropriate candidates, which is very welcome.
The noble Lord, Lord Warner, referred to the HSJ article of 11 October. I will clarify my answer when I write to him, which I will be happy to do. We are very pleased not only that so many clinicians have chosen to apply for leadership roles, which they have, but that so many first-rate clinicians have done so, whether as clinical chairs or clinical officers in CCGs. What is important is that there is a good mix of expertise in the broader leadership team of clinicians and managers, to help the CCG discharge its responsibilities effectively, and that is what we are now seeing.
I have a number of examples of where the drive towards integration is really taking shape on the ground. My noble friend Lady Jolly mentioned South Devon and Torbay; this is a service designed by secondary care doctors and GPs working together in a clinical pathway group for urology, and the whole impetus of the CCG is to improve collaboration and get over the gulf between primary and secondary care. There is another excellent example of integrated services in Wokingham, which again I would be happy to write about.
The noble Lord, Lord Hunt, asked whether police commissioners and Peers could be members of a CCG governing body. Yes, they can. He also asked who was consulted over these regulations. As I have indicated, the proposals were developed in response to the NHS Future Forum, the listening exercise that set out requirements around the secondary care doctor and registered nurse. The proposals were further discussed with emerging CCGs, primary care organisations, the medical royal colleges and, yes, colleagues in the NHS Commissioning Board Authority.
The regulations discussed today provide a fair and transparent rules-based framework to complement the provisions in the Health and Social Care Act around the establishment of CCGs. Creating a responsible and accountable CCG with good governance is essential for good management, good performance, good stewardship of public money, good public engagement and—our ultimate goal—good outcomes for patients. I commend the regulations to the House.
Lord Hunt of Kings Heath
My Lords, I shall be brief. I thank the noble Earl, Lord Howe. He started by referring to the importance of clinical leadership and I would not disagree with him, but he has not really answered the point that the biggest potential conflict of interest is if GPs are in a majority on the boards—and I would hazard a guess that, in most places, they will be. They do not commission primary care, but their decisions can shift resources into primary and community care services. That is the essential conflict of interest.
The Government’s legitimisation of what must be some of the worst drafted regulations that I have ever come across would stand up in relation to conflicts of interest in other professions if one had any inkling at all that they recognised that CCGs carry a huge risk in relation to the GPs’ own position. The Minister said that the CCGs are about clinical leadership. As my noble friend Lord Warner pointed out, you are not even getting that, because only 20% or so of the accountable officers of those CCGs are to be GPs. The remainder are to be managers. Let us be clear: the accountable officer will in effect be the chief executive. The noble Baroness, Lady Finlay, said that the exclusion of local consultants and nurses from CCGs would mean that, in large parts of the country, the people appointed would have no local knowledge whatever. I agree that, in London, it may be more practical; in most of the rest of the country, it will not be.
I agree with all the points raised by the noble Baronesses, Lady Jolly and Lady Williams, but it is not sufficient to say that there will be a review in 2014. At this late stage, I invite them to join us in the Lobbies tonight. I could not disagree with anything that either noble Baroness has said. They tore apart the regulations. Will they not join us tonight?
I was amazed by the remarks of the noble Baroness, Lady Cumberlege. She came to the health service, as did I, through local government. Local government is having to take some immensely tough decisions. Having a local authority councillor around the board table of a CCG would help legitimise its decisions and help tie in the local authority with difficult decisions that have to be made. Excluding them is a huge mistake. I do not understand—clearly, the department forgot them—why elected police commissioners are deemed worthy of service on a CCG board when elected MPs and councillors are not. When my noble friend Lord Prescott is duly elected a police commissioner in a few weeks’ time, as one hopes, he will be eligible to serve on the whole clinical commissioning group, but no MP and no councillor. These are some of the most nonsensical regulations that I have ever seen.
The Minister said that we should not worry because local authority councillors, local doctors and local nurses can serve on the committees of a CCG—no conflict of interest there—but they cannot serve on the board. However, the board is the sovereign decision-making body of the CCG. I would have thought that most clinical commissioning groups would have wanted to have local expertise, whether it is local authority representation, a doctor or a nurse.
The Minister then said that these are only minimum requirements. Well, Schedule 4 states:
“Individuals excluded from being lay members of CCG governing bodies … An employee of a local authority in England and Wales or of any equivalent body in Scotland or Northern Ireland … A chairman, director, governor, member or employee of an NHS foundation trust”.
Excluding a chairman, director or governor of a foundation trust is fair enough, but a member? My trust has 100,000 members. Patients are automatically enrolled in membership of my trust unless they decide to opt out. We are talking about 100,000 people living in the catchment area of my hospital who are not allowed to be lay members of a CCG. Surely they are the very people you would want to be lay members of a CCG.
Lord Hunt of Kings Heath
My Lords, I am most grateful to the noble Earl for that enormously helpful clarification. The point is this: why should they not be statutory lay members of the CCG? There is no guarantee that CCGs will appoint any more lay members. I have yet to hear any rational explanation as to why this statutory instrument has been drafted in this way.
As we know, the noble Earl, Lord Howe, is a very fair man and always engages in debate. He will know that this statutory instrument has been ripped apart tonight. Even at this late hour, I ask him to withdraw the instrument. If he is not prepared to do so, I will test the opinion of the House.
Local Government Finance Bill
Lord Jenkin of Roding
“(8A) Before making regulations under sub-paragraph (8), the Secretary of State must consult with local authorities regarding any proposed requirements for schemes.”
Lord Jenkin of Roding
My Lords, I have come back especially to move this amendment, which requires the Government to consult with local authorities before they make regulations. It is a probing amendment, but I am concerned that there appears to be absolutely no limit on what the Government can require and what regulations they can make. In these circumstances, it seems that an obligation to consult is absolutely essential. Apart from anything else, it rather undermines the Government’s stated aims for,
“a policy of decentralisation that will give local authorities increased financial freedoms”.
Yet here we are with the Government still prescribing in detail exactly what local authorities can do. This is unnecessary and mildly demeaning to local authorities. I hope that the Government might think again and possibly even accept this amendment. It simply requires the Government to consult. I am sure that my noble friend will tell me that they are going to do that anyway. Well, let us have it in the Bill. I beg to move.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I thank my noble friend for his brevity. I am not sure that I am going to be able to be enormously helpful to him. This takes me back a bit to the Localism Bill, when one thing that my noble friend had a go at was regulations and the amount of powers within a Bill. Amendment 104 would retain the power to prescribe requirements in regulations but would require the Secretary of State to consult with local authorities about the proposed requirements. If we did that, it could potentially delay changes to regulations. In July we published draft versions of the regulations that prescribe requirements, so we have given noble Lords and local authorities the opportunity to scrutinise and comment on them. An update was published on 7 September.
Lord Jenkin of Roding
I understand what my noble friend is saying. This was a London Councils amendment and I should have declared an interest as one of its joint presidents. London Councils was hoping that perhaps this might have gone into the Bill but, given what my noble friend said, I beg leave to withdraw the amendment.
Lord Ahmad of Wimbledon
“( ) sections 32 to 34 of the Welfare Reform Act 2007 (benefit for persons taking up employment) so far as applying in relation to council tax benefit.”
Lord Ahmad of Wimbledon
My Lords, I shall speak first to Amendments 104A, 105A and 106B. These amendments are technical, ensuring that we, the Government, can deliver our policy to protect pensioners, enabling regulations to provide for a default scheme that largely replicates current council tax benefit, while at the same time providing reassurance to local authorities that their schemes can incorporate certain work-incentivising features of current council tax benefit, where they choose to do so. The amendments also allow such provisions to be applied in Wales.
Taken together, these amendments to Schedule 4 achieve this by ensuring that regulations prescribing requirements for schemes, prescribing the default scheme and providing for schemes in Wales may incorporate provisions equivalent to those that are, or indeed could be, provided for in or under sections of existing legislation relating to council tax benefit, with modifications. Specifically, I refer to Sections 32 to 34 of the Welfare Reform Act 2007.
The amendments will provide the Secretary of State, billing authorities and indeed Welsh Ministers with powers to draw up schemes that achieve largely the same effect as the council tax benefit system with respect to extended payments. Extended payments are a work incentive, included in both the default scheme regulations and prescribed requirements regulations. They allow for a person, for four weeks, to continue to have their council tax support calculated as if they were still in receipt of certain prescribed benefits when entitlement to those benefits ends.
These technical amendments will enable regulations prescribing the requirements for pensioner protection, and the default scheme, to make sure schemes can be constructed in a way broadly consistent with existing arrangements under council tax benefit for extended payments. In relation to local schemes, this will assist local authorities who wish their first scheme to work in a way very similar to the existing scheme.
These technical amendments will promote work incentives and ensure that the Government can give effect to their policy on protecting pensioners. They will also, under the default scheme, ensure that this type of reduction can be offered to low-income taxpayers in authorities that have failed to bring forward their own scheme in time. It also provides local authorities with the flexibility to incorporate extended payment features of the current system into their local schemes, where they choose to do so, and, I have mentioned previously, it provides for Welsh Ministers to do so in their own context.
I turn to Amendment 106ZA. This amendment is necessary to ensure that the Government’s intention to allow flexibility over the payments that must be made by authorities in regulations about funds, such as instalment of the precept, applies, as intended, only to payments relating to council tax receipts. As noble Lords will know, new paragraph 6 of Schedule 1A to the Local Government Finance Act 1992 enables billing authorities to vary the payments or instalments that are required to be made under the collection funds regulations enabling cash flow pressures to be shared with major precepting authorities, subject to their agreement. The intention is to assist with concerns over cash flow pressure that billing authorities may face if, for example, job losses in an area lead to an increase in the demand for council tax reductions. This power can be used only where the authorities concerned agree the approach. We do not plan to require local authorities to enter into any such agreement or to amend regulations about funds to prescribe the approach to reducing payments in year. However, we want to make it clear that this power enables authorities to vary the payments required to be made in regulations under Section 99 of the Local Government Finance Act 1988 about funds relating to council tax only. This is because the same regulation-making power in the Local Government Finance Act 1988 will also be used to make regulations in relation to the new business rates retention system.
As I mentioned at the start, these are technical amendments to ensure that the power in the Bill for major precepting and billing authorities to come to an agreement to vary payments or instalments applies, as intended, only to payments in relation to council tax. I trust that noble Lords will support these amendments.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lord, Lord Ahmad, for explaining the government amendments. We have no particular issue with them. In respect of the extended payment arrangements, I understood the Minister to say that they would be the subject of local discretion. Is there anything in the requirements of the transitional funding pot that would encourage or discourage the use of these arrangements, or is it neutral?
Lord Ahmad of Wimbledon
If the noble Lord is referring to the new funding, there is not.
Lord Jenkin of Roding
Lord Jenkin of Roding
I shall speak also to Amendment 106. I was caught by surprise when the noble Lord, Lord Smith of Leigh, did not move his amendment, or I would have spoken to all three of my amendments together.
Amendment 105 is very straightforward. I do not understand the need for the sub-paragraph that I want to take out. It gives the Secretary of State power to make regulations about the procedure for preparing a local scheme for council tax reliefs. The Government seem determined to get right down into minute detail controlling local authorities. I wonder why this is necessary. When rereading the Hansard report of when I moved this in Committee, I found that my noble friend said that the amendment would,
“remove the default scheme from the Bill altogether”.—[Official Report, 19/7/12; col. GC 176.]
None of us can begin to understand why that should be so. This is nothing whatever to do with the default scheme. It is simply a question of the Government wanting to have regulations to tell local authorities the procedure for introducing a scheme or an amendment. I do not understand that.
Amendment 106 is slightly more complex and may take me a moment or two longer. The sub-paragraphs on page 62 of the Bill require local authorities wanting to make revisions to the local scheme or to replace it to do so by 31 January in the preceding year. This is another amendment that I moved in Grand Committee. We were trying to understand whether the Government had considered the impact of the proposed legislation on the local authority budget and council tax setting process, particularly when there is a procedure under the Localism Act whereby an excessive increase in council tax can be the subject of a referendum.
In response, at col. GC 171 of the Official Report on 19 July, my noble friend suggested that the authorities will need to take their funding levels into account when designing local schemes. Those advising on this believe that this response simply does not reflect fully the conflict of timing between the two requirements and the impact on local authority financial freedom. By putting in a limit of 31 January, the current provisions would prevent an authority revising its local scheme after that date, even though it was necessary to reflect potential new financial realities on the outcome of a local referendum. Again, this seems to be a further and rather undesirable way of controlling local authority decisions.
I am sure that my noble friend will take the point that if you have a power in the Localism Act for the referendum, and the referendum overturns the council’s original proposal, the local authority would have to make a fresh assessment of levying council tax. I do not see how they can do that by 31 January because it would take two or three months for the referendum to come to fruition and for the result to be known. Perhaps between now and Third Reading my noble friend might look at that again in the light of the combination of having to revise the scheme and then being faced with the consequences of a referendum.
If the referendum is lost, there would be nothing to worry about and the original budget and council tax would stand. But if the referendum is successful, as I understand it, the council would have to renew it and make a new one that complies with the requirements that will follow from the referendum. I hope that my noble friend may be able to offer some comfort on that. I beg to move.
Lord McKenzie of Luton
My Lords, as regards Amendment 106, we have a deal of sympathy with the point raised by the noble Lord. My noble friend Lord Beecham thought that the referendum date was May, which in a sense just reinforces the point made by the noble Lord. I am aware that when we discussed it in Committee, the Minister said that the Government were not keen on in-year adjustments, which one can see as a general principle. However, it seems to me that a major point is being raised.
We are less comforted by Amendment 105. It depends on what is encompassed within the concept of procedure for preparing a CT scheme. One of the things that presumably needs to be addressed is the cut-off point between the existing council tax benefit arrangements and the new arrangements, particularly when people, if they are able, are making backdated claims. At the moment, someone can make a claim and it can be backdated. If you make a claim after 1 April and seek to get it backdated, you need something in place to settle those cut-off points. I do not know whether that is a procedure but you can certainly see the Secretary of State having some interest in those sorts of arrangements.
Certainly, Amendment 106 seems to make quite a powerful point. I might add that if the discovery of this £100 million and the transitional fund had happened a couple of months later than it has, that would be good cause for needing this flexibility as well.
Baroness Hanham
My Lords, Amendment 105 would remove the ability of the Government to make regulations about the process by which a council tax reduction scheme is prepared, such as requiring certain documents to be prepared, and the manner in which those documents are published. I should make clear that the Government’s intention was set out in the statement of intent published on Thursday 17 May. In that policy statement we stated our intention not to make regulations at this stage about the procedure for making a scheme, which still holds.
The rationale for not regulating is on the basis that local authorities already routinely consult on a range of issues, and additional prescription should not be required. In other words, they ought to know when they should need to consult.
I am pleased to note that at least 305 councils—or 94% of them—have already commenced their consultations on the schemes, during which vulnerable people will continue to receive protection. However, as with all aspects of policy, we will keep this under review. As the need to consult on schemes for local council tax support is a new requirement, it may become apparent that it is desirable to prescribe certain elements of the process in future years. Retaining this power ensures that, if necessary, we are able to take steps for future years to ensure that the consultation process is fair for the taxpayer.
The effect of Amendment 106 would be to remove the deadline of 31 January for making and revising schemes, and to remove the Secretary of State’s power to change that deadline by order. It is important to maintain the 31 January deadline to ensure that local schemes can be in place in time for April 2013 and that people continue to receive protection from the scheme. Allowing changes after this date would create uncertainty for the people who are benefiting from the scheme as they would face having their awards changed part way through the year. It would also create uncertainty for taxpayers generally, as reductions are reflected in the tax base on which council tax is levied; I do not think that this would be helpful.
When we discussed this amendment in Committee, my noble friend Lord Jenkin asked about the relationship between the setting of the scheme and council tax referendums. Indeed, this point has just been made again tonight. If I may, I will briefly repeat what I said in Committee:
“Local authorities will need to take account of the potential impact on council tax when designing their schemes. They will already know their provisional funding allocations, and the Government expect to have published the proposed referendum principles at the same time as the provisional local government finance settlement”,
and that information will be available. I confirm that any referendum that took place would have to take place in May, after the setting of the council tax should have taken place. In Committee, I went on to say:
“The need to consider the affordability of the proposed scheme and its impact on council tax is no different to taking decisions about the level of funding for other services and their potential impacts on council tax”.—[Official Report, 19/7/12; col. GC 171.]
Any authority that considers that it might breach the referendum principles must prepare a shadow budget setting out how it would carry on its services under a lower rate of council tax.
It is correct to say that it will not be possible for local authorities to go back and change their scheme if a referendum is triggered and a council tax increase vetoed, but it is absolutely right that we do not create unnecessary uncertainty for people in financial need about the amounts of support that they can claim. I hope that with that explanation the noble Lord might be willing to withdraw his amendment.
Lord Jenkin of Roding
On Amendment 106, I am very grateful for the support of the noble Lord, Lord McKenzie of Luton. He is quite right to say that the referendum has to happen in May—on the first Thursday in May in the financial year to which the increase relates. However, if the referendum succeeds in overturning the original rate of council tax that was to be levied and the local authority has to hold another one, it would have had to make any changes to the council tax relief scheme by the previous January, which means that it will not be able to make any adjustment to reflect the lower rate that it is now going to have to levy.
If it is the Government’s intention that if there is a referendum local authorities cannot change the council tax relief scheme after the result is known, that ought to be made clear. I do not think that it has been clear hitherto. Is my noble friend prepared to add a few words to what she has said? If she is saying that local authorities cannot change the scheme after a referendum, everybody will know where they stand. However, if they are to be allowed to change the scheme, the date of 31 January has to be moved. There has to be an option to choose something else. Will my noble friend go a little further and clarify that that is what the Government intend?
Baroness Hanham
My Lords, I can clarify the position and confirm it. It will not be possible for a local authority to change its scheme if a referendum is triggered; in other words, it would have to carry on with the scheme which it had put together and sort out the funding subsequently.
Lord Jenkin of Roding
My Lords, in the circumstances, obviously it would be sensible for me to withdraw the amendment but we may seek to clarify the position further. I want to read very carefully what my noble friend has said to clarify the position. I may bring forward an amendment at Third Reading to renew this discussion. In the mean time, I beg leave to withdraw the amendment.
Baroness Hanham
“( ) sections 32 to 34 of the Welfare Reform Act 2007 (benefit for persons taking up employment) so far as applying in relation to council tax benefit.”
Baroness Hanham
Lord Smith of Leigh
“(4) Both billing and precepting authorities shall be entitled to hold such balances to deal with the shortfalls in council tax receipts as agreed by their auditors.”
Lord Smith of Leigh
My Lords, in moving this amendment I recognise the contributions that have been made around the House today saying that the new council tax support scheme poses a much higher degree of risk to local authorities. There is great uncertainty about the collection rates under the new scheme and how we will be able to get money from people who currently are not paying. That is not in contention.
Those of us who have been involved in local government finance for a number of years recognise that local authority treasurers and finance officers are by nature a conservative bunch in the non-political sense of that word; in other words, they take a gloomy view of life and they want to make sure that they cover all the bases. We welcome their advice although we do not always necessarily take it. Therefore, I am not asking in this amendment that authorities should take the advice of their own treasurers or finance officers. However, auditors may take a more objective view on the balances that an authority needs to hold. Anyone who takes a prudential view of a local authority believes that it is necessary to increase balances, whether a billing authority or a precepting authority is involved. In the past certain announcements or indications have emanated from the Department for Communities and Local Government which seemed to indicate that local authorities which maintained high balances were storing up money, and consequently they might be hammered in the future. I hope that the Minister can assure us that that is not the case and that the Government will support the concept of prudential balances.
As regards Amendment 107C, this matter was raised in Grand Committee in a slightly different format. I seek clarity on whether or not the Government will impose a freeze on council tax support from now on. If that is the case, that is not fair because all local authorities will see a change in the number of claimants. This will in part reflect the state of the economy and the number of pensioners in an area. At my age I was pleased to see that in the Greater Manchester area Wigan has the highest increase in the number of pensioners. That is good news for people like me but it is not good news if you are running a council tax support scheme because the more pensioners you have to deal with the greater the inflexibility of the scheme for everyone else, which tends to increase the burdens falling on them. In the spirit of recognising new burdens, a local authority cannot be expected simply to absorb such changes given the general problems affecting local government finance.
What we are trying to do is make sure that payment for support to each local authority reflects the actual need for council tax benefit, and is based on some historic situation, similar to the point made by the noble Earl, Lord Lytton, about council tax never being updated and still calculated on 1991 figures. We do not want to get into that situation and make this an equally problematic area. I hope that the Minister will think about that. I beg to move.
Baroness Lister of Burtersett
My Lords, I shall speak to Amendment 108. Its purpose is twofold—first, to ensure that a local authority has a duty to do what it can to ensure that local residents claim the council tax discount to which they are entitled and, secondly, to ensure that any consequent increase in expenditure, which exceeds 10% of its 2012 grant, is reimbursed.
In making the case, I can do no better than quote two noble Lords from the Liberal Democrat Benches who expressed concerns in Grand Committee about the potential conflict of interest that local authorities now face as a consequence of the cash limit imposed on the council tax discount settlement, so that the authority will now have to find the money to fund any increase in take-up rather than have it reimbursed by central government.
The noble Lord, Lord Greaves, who is not in his place, warned that,
“Under the new system, there would be a real incentive for local authorities to discourage people from claiming”.—[Official Report, 10/7/12; col. GC552.]
The noble Lord, Lord Shipley, kindly spoke in support of a similar amendment that I moved. He described it as,
“a serious and important issue. That must be addressed. It may be in the financial interest of a local council not to promote or advertise the council tax support scheme. That cannot be right”.—[Official Report, 19/7/12; col. GC147.]
It is not right. It is unethical to build into the template of a statutory income-maintenance scheme an incentive to depress take-up.
Noble Lords will be aware that take-up of means-tested benefits is a perennial problem, and take-up of council tax benefit is among the lowest. The latest government estimates indicate that as many as nearly two-fifths of those eligible might not be claiming their entitlement. Take-up is particularly low among pensioners and among couples with children, of whom between two-fifths and nearly half are not claiming. Overall, the trend in take-up of council tax benefit has been downward. Since 1993-94, take-up has fallen by at least six percentage points for pensioners, by around seven percentage points for non-pensioners, and by a massive 15 percentage points for couples with children, although these figures are approximate.
Take-up matters. The Child Poverty Unit has identified it as a crucial element in the child poverty agenda, suggesting that as many as 400,000 children were living in income poverty in 2009 because their families were not receiving the benefits or tax credits to which they were entitled. The unit also pointed to the benefits for the local economy, as the money is likely to be spent in local communities, and to the importance of increasing awareness of the financial support available to those entering employment.
Given the importance of take-up, in particular to the child poverty agenda, it is extraordinary that the Government now want to cease publication of the official estimates of take-up. If there are no official estimates, we will lose one important indicator of the effectiveness of benefits and of the Government’s own universal credit reforms, one objective of which is supposedly to improve take-up. I asked the Minister if she would make the noble Lord, Lord Freud, aware of the Grand Committee’s concerns on this issue. I should be grateful if she could tell your Lordships’ House whether she has been able to do that.
In Committee, when I moved a similar amendment, the Minister responded that the Bill already,
“seems to cover more or less what the amendment is about”.—[Official Report, 19/7/12; col. 152.]
I am afraid that it does not. There is nothing in the Bill that places a clear duty on local authorities to maximise take-up of the discount. This is in fact a step backwards from the current situation with regard to council tax benefit. Under the Social Security Contributions and Benefits Act 1992, local authorities have a statutory responsibility for council tax benefit take-up. Each billing and levying authority,
“shall take such steps as appear to it appropriate for the purpose of ensuring that any person who may be entitled to council tax benefit in respect of council tax payable to the authority becomes aware that he may be entitled to it”.
Amendment 108 is in the spirit of this obligation and would write a similar, although differently worded, responsibility into this legislation.
Lord Shipley
My Lords, I should like to speak to Amendments 107C and 108. The noble Lord and the noble Baroness in whose names those amendments stand will be reassured to know that I support their comments. There are several issues of principle which I hope the Minister will take on board in her response.
There has been a lot of discussion about demand: what the demand is and what it could be. The figure of 60% has been mentioned for current take-up. If that is true, it implies that 40% of those who might take up the entitlement are not doing so. However, the facts on growth and demand can be understood only if there is a clear means of collecting data to a common format. Given that council tax support is being localised, it would need to be to a common format because different councils may do things slightly differently. Therefore, there has to be a means for knowing what actually happens. I think that guidance needs to be given on what that common format should be.
The second point of Amendment 107C, tabled by the noble Lord, Lord Smith, about altering,
“the funding for council tax support to reflect the changes to entitlement”,
is extremely important. It is unclear what the impact of the £100 million transitional funding will lead to because, of course, that money has not yet been allocated. Therefore, in my view it should in theory be allocated to meet need and demand. Depending on how and when that money is allocated and whether it has met the problem identified in earlier debates, an 8.5% cap could be difficult for some councils to deliver without dipping into their own resources. We have to have an information base that is commonly reported and commonly understood.
I agree entirely with the noble Baroness, Lady Lister, about conflict of interest. I did say that it is not even a potential conflict of interest, in one sense because it is just a conflict of interest. If a council advertises council tax support systems very widely it will end up paying out more money. I am absolutely sure that all of them would want to do that but it could mean some difficult choices for those councils. Therefore, there has to be clear guidance on what constitutes publicity that is reasonable. What do the Government expect? It is not about regulating but guiding. What do the Government expect councils will do to ensure that information gets out to those who might wish to apply?
My noble friend Lord Greaves said in Grand Committee that there is an issue about reimbursement. The amendment now calls for a sum in excess of 10% to be reimbursed. Of course, there is now an extra £100 million transitional grant as well. We have to understand it a little better. I think that it means that a cut of 12.5% as opposed to 10% is what will actually happen, based on 2013-14 take-up levels. That £100 million may go some way to meeting that problem of the cut being higher than we had anticipated. How that works through in terms of transitional relief distribution, to which authorities, how much and exactly for what purpose will need to be carefully understood. Those are very important issues of principle and I hope to hear from the Minister how the Government will help us to address those problems.
Baroness Hollis of Heigham
I support the amendments, particularly the one spoken to so ably and powerfully by my noble friend Lady Lister which overlapped with the amendment moved by my noble friend Lord Smith, speaking from his Wigan experience.
The Minister spoke earlier in the day about the need to get council tax benefit under control because of its doubling and so on over the past decade, 12 or 14 years. My noble friend, so to speak, revised his statistics by insisting that this was the result primarily of the increase in council tax. Let us do a counterfactual and assume that this system had been in place in 1997. The result is that all of that increase in council tax benefit generated perfectly properly by the increase in council tax would be expected to be carried by the local authority. A grant that starts at 90% would the following year be 75%, the year after that perhaps 50%, and so on. As council tax rose and as claims rose, and as the grant remained capped, the local authority would have to pick up more and more of these moneys. I do not see how it can reasonably be expected to do so. It is not just a question of take-up; where local authorities may differ is in the degree to which they may depend on a single industry. Norwich, for example, is very dependent on financial services, and in particular on the former Norwich Union, now Aviva. If that company was to make a major decision and relocate, for example, to Sheffield, which is a second source of Aviva jobs, it would have a dire effect on the Norwich economy, and on the demand for benefits, including council tax benefit. The local authority would have no obvious resources with which to respond to what my noble friend Lady Lister called an economic shock.
For a number of reasons, there will be an ethical dilemma. First, it is not in the council’s interest to promote people’s entitlement to benefits they should have—and we know that pensioners underclaim. Secondly, the council can be very vulnerable to significant economic shocks such as the closure of a factory or even, with the NHS consultation coming through, of a local hospital, where we could very well see 1,500 jobs go very quickly. Many holders of those jobs will be poorly paid women who will come into the council tax benefit claims system. They will be trying to get money from a limited pot, and the resources available to others will diminish. The third problem is that there will continue to be modest future council tax rises, and unless the money keeps pace with that increase, taking into account inflation and everything else, we will find that people who receive aid with their council tax benefit will get a smaller and smaller share of the moneys that they should get.
This means that we will be asking local authorities each and every year to revise their scheme not so much because of local needs but because the amount of bidding for it has outpaced the resources available. I fear that if the Minister does not take this issue very seriously, she will embed instability into the future projections of local authorities’ need to fund their council tax benefit system, so they will continue each and every year to have to revise their scheme to take account of the new needs and take-up, and of the increase in council tax. Unless we have some back-up mechanism to enable local authorities to fund this, we will have major problems down the road that—bluntly—could make some poll tax issues look quite small by comparison.
Lord Beecham
My Lords, the localisation of council tax, coupled with the localisation of the social fund, will give local authorities the unenviable task of dispensing a capped budget on two important areas of welfare benefits. Hitherto, the responsibility for funding both schemes has come from central government. Now local authorities will have to administer the scheme, and presumably also deal with the local consequences in the form of pressures on their budgets and the difficulties that will be occasioned to many of their residents. It is another case of the Government passing the buck to local government, but not providing the resources for local government to deal with it.
The noble Lord, Lord Shipley, and I were both at one time leaders of a council that has done a great deal to promote the take-up of benefits—not only council tax benefits but other benefits as well. The welfare rights department and other agencies of the authority, in collaboration with the voluntary sector, succeeded to a significant extent in promoting claims. Over the past few years in particular, several million pounds were won for potential claimants, who had their rights enshrined in practice as well as in theory. This is fairly typical of local government across the piece. Nevertheless, something like £1.8 billion in council tax benefit remains unclaimed. Much of that is thought to be money that would have gone to owner-occupying old-age pensioners.
I congratulate the Government on one thing; I repeat the congratulations I uttered in Grand Committee. The change of style from a benefit to support—it was called a rebate in earlier days—may well encourage people, particularly perhaps elderly people, to claim. This is something that does not seem to have been taken into account in relation to the total amount of funding that will be provided. However, that is the only thing that one can congratulate the Government on because when I tabled a Written Parliamentary Question last year asking what steps the Government would be taking to increase the take-up of the benefit as it then was—and, for the moment, still is— the Answer was “nothing”. So even at that time the Government were not keen apparently to promote the take-up of these benefits.
Baroness Hanham
My Lords, I shall start by answering the noble Lord, Lord Smith of Leigh, with regard to reserves. We have discussed this issue before and we have all accepted that local authorities need to have, and must have, reserves. The amendment is almost exactly the same as the one the noble Lord laid on a previous occasion and would make it explicit that local authorities are entitled to hold reserves to deal with any shortfalls.
I entirely agree that it is sensible for local authorities to consider what reserves they are going to budget for. We acknowledge that reserves can help local authorities to respond to unexpected and exceptional circumstances. Local authorities can build-up reserves for particular aspects and they can act as a support for budgets. However, individual authorities are already free to determine the level and use of reserves as part of their own overall financial risk management. It is a matter for individual authorities to consider taking into account their local priorities. There is no prescriptive national guidance on the minimum or maximum level of reserves either as an absolute amount or as a percentage of the budget. For that reason, I do not think that the amendment is necessary.
With regard to Amendment 106A, that would require the auditor to agree the level of reserves. As I explained when the previous amendment was tabled in Committee, that would not be appropriate because the auditor is meant to be independent and therefore should not give advice on reserves, although he can comment if he thinks they are not appropriate. Sometimes auditors ask what is going to be done with the reserves, but they do not direct how much should be held in order to help cover expenditure. I hope it is clear that there is nothing against reserves. From time to time it might be suggested that if they were too large, they could be used for something the local authority had not thought of, but that is good financial management anyway. I hope that the noble Lord will be able to accept that as the final answer. I have said the same thing twice, and I hope that it is sufficient.
Amendments 107C and 108 would both require the Government to provide additional funding in certain circumstances to support local authorities to deliver council tax reductions, and indeed the noble Baroness, Lady Hollis, drew attention to the situation where there might be a big change in circumstances as regards the amount of money being held by a local authority. Central government are not going to leap in and help out in those situations. The funding for council tax support is going to be formed as part of the baseline funding under the new local government finance systems, and as noble Lords know, that will not be changed until the reset. However, we recognise that there will be fluctuations in the demand for council tax support, and primarily we will be looking to billing authorities to work with their major precepting authorities to agree an approach to such management risks.
As noble Lords will be aware, mechanisms are in place to share the effects of a reduction in council tax collection rates between billing and major precepting authorities, and that will be the same for financial pressures that result from increases in demand for support so that it can be shared. We are also making provision in the Bill to enable billing authorities to arrange with major precepting authorities to vary the amount of precept to be paid in-year to reflect any shortfall in council tax receipts. It will be a partnership between the billing authorities and local authorities if the sort of pressure that is anticipated—it will not happen everywhere—comes to pass.
The noble Lord, Lord Shipley, asked about the data that have to be collected. Our expectation is that data requirements on local authorities will be very small and significantly less than those in relation to council tax benefit, which is the one where council tax support is coming from. We are working with local authorities to establish what data on the value of reductions offered under the scheme will be collected for both pensioner and working-age people, and we also want to make use of the information collected in the Family Resources Survey to support future policy evaluation. We do not expect too much data to be required.
In relation to the publication of statistics, the Department for Work and Pensions has conducted a consultation on proposals to cease publication of the annual Income Related Benefits: Estimates of Take-up. The consultation closed on 4 October, and a response will be published in due course. No doubt the noble Baroness knows about it. If she does not, she should ask me and I will make sure that she gets to see it. There were a number of options in the consultation paper. The DWP is not going to cease any data collection, just the calculation of estimated take-up rates—which was the point made by the noble Lord, Lord Beecham—and the data source is and will continue to be available, so it will be possible to do the calculations later.
Noble Lords asked about pressures on budgets. I hope that I have answered that. On the question of promotion, it will be up to local councils to make sure that they get people coming for council tax support. The noble Lord, Lord Beecham, is correct that one of the things we understood to be holding people back from applying for benefits was the name, so “council tax support” will we hope make them more interested in doing it. Once again, local authorities will have to manage their budgets in order to deal with that.
I hope that with those explanations, the noble Lord will be willing to withdraw his amendment.
Lord Smith of Leigh
My Lords, I thank the Minister for her response. I am not sure that I take it as an assurance that she recognises that we need to hold more balances now as a result of the Bill that we are currently enacting. She might not carve her name in history like her predecessor Lord Bellwin, but until we get the “Hanham reserves” to support this, I will accept what she has said.
I thank the noble Lords who supported me on Amendment 107B: the noble Lord, Lord Shipley, and my noble friend Lady Hollis, who raised the issue of the economic shock and the impact that could have on council tax benefit. I remind noble Lords that that will have an impact the other way as well because it will probably affect the business rate collection, so local authorities will be squeezed in both having to pay out more council tax benefit and receiving less business support.
I sincerely regret that the Government have now confirmed that the real value of any contribution they make to the council tax support scheme is going to fall significantly over time. None of us really understands what that will be, it depends on the changes that happen over a period of time, but we need to say before we start that it will bring instability into the system. I regret that, but I beg leave to withdraw Amendment 106A.
Baroness Hanham
“( ) sections 32 to 34 of the Welfare Reform Act 2007 (benefit for persons taking up employment) so far as applying in relation to council tax benefit.”
Lord Beecham
“Arrangements for future council tax benefit schemes
The provisions of section 9 shall cease to have effect after 31 March 2016 and the Secretary of State shall make arrangements for the reintroduction of a national council tax benefit scheme consistent with universal credit.”
Lord Beecham
My Lords, this is an amendment of last resort, designed to ensure that the deeply flawed and ideologically driven provisions in relation to council tax benefit in this Bill, if enacted, will lapse three years hence, to be replaced by a national scheme compatible with universal credit—assuming, of course, that the latter is operational and effective at that time.
It is based upon a philosophical objection to the faux localism implicit in more than 300 different schemes in which councils will be expected to determine, in the manner of Poor Law guardians, what levels of council tax support will be afforded to individuals and families in a wide range of circumstances. We reject this abandonment of a national minimum entitlement to this and other benefits, as we reject proposals for differential regional pay structures.
The provision of a basic standard of living, whether by means of direct financial assistance through the welfare system and/or relief from charges for such imposts as council tax, is and ought to be the responsibility of national government. As envisaged in Amendment 108 in the name of my noble friend Lady Lister, which we have just debated, local authorities should have a duty to promote take-up and a discretion to enhance support, although not to limit or curtail it. To adopt a phrase now resonating in political debate, in terms of welfare, we are—and if we are not we ought to be—one nation.
We cannot ignore the context in which these changes are proposed, any more than we can ignore the implications for millions of people. The Government assume a fall in demand but, as we have heard several times today, the opposite seems more likely, even if the Government adhere to their policy of not promoting take-up. As we have already heard, the likelihood is that some pensioners at least will take advantage of the welcome change in the nature of the benefit, but, still, a large amount goes unclaimed. The stuttering economy is unlikely to afford many opportunities for full-time work to present working-age claimants while others, not least in the public sector, are likely to lose their jobs. In addition, changes to housing benefit will hit many households hard, whether the infamous bedroom tax or other pending reductions. In debates yesterday in this House and today in the House of Commons on the Housing Benefit (Amendment) Regulations, it appeared that some £1 billion in housing benefit would be lost, a considerable proportion of that to families or households with a disabled person living in them.
Baroness Hanham
My Lords, I thank the noble Lord for all the information he provided. I turn again to the position that local authorities will make up their own schemes, work out their budgets and decide within the mechanism of what they have got what they need to do. We have already said that they have the flexibility within those budgets to decide what they do to make the council tax support work. Considering putting this back for three years would not give any stability at all to this whole process.
Baroness Hanham
I am sorry; that is quite right. I hope and expect that, by that stage, things will be well settled down and we will have moved on substantially so that that is not necessary. The Government will resist the amendment.
Lord Beecham
My Lords, in the absence of any indication of positive support from the Government or anywhere else in the House, and given the lateness of the hour and the relatively small number of Members, however talented, that we have around us, I feel obliged—very reluctantly—to withdraw the amendment.
Baroness Hanham
“(9) In determining whether a dwelling is a long-term empty dwelling, no account is to be taken of any one or more periods of not more than 6 weeks during which either of the conditions in subsection (8)(a) and (b) is not met (or neither of them is met).
(10) The Secretary of State may by regulations substitute a different period (of not less than 6 weeks) for the period which is for the time being specified in subsection (9).””
Baroness Hanham
My Lords, I have written to the noble Lord, Lord Beecham, who raised the question of when an empty home was an empty home, and whether it was based on whether it had furniture in it. The situation is that the six weeks will matter regardless of whether it has furniture in it. It will end up in the same situation and local authorities can make their decisions on the basis that the home is empty.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Baroness for sending us a letter on this in advance of our discussions today. We are happy with the proposition included in the amendment. I think that we had an amendment in Committee that may have prompted the thought but, on reflection, perhaps it was not precisely on point. This amendment is precisely on point and intended to stop-up a loophole. We support it.
Lord Smith of Leigh
“Equalisation of additional council tax income
As part of the local government finance report the Secretary of State shall—(a) report on the capacity of each billing authority to raise revenue under sections 10, 11 and 12, and(b) alter the distribution of revenue support grant to equalise resources.”
Lord Smith of Leigh
My Lords, my view of the political process these days is somewhat prejudiced because I watch “The Thick of It”. I can understand the meeting taking place in the Department for Communities and Local Government with government advisers and civil servants when the idea was mooted for changing the council tax benefit, saving £500 million as a contribution towards deficit reduction but at the same time raising money through changes to the council tax scheme by technical adjustments which would actually fund it. In previous times, that might have been called a stealth tax, but we do not use those words any more.
That might seem superficially attractive, but the major flaw, as my noble friend Lord McKenzie of Luton said earlier, is a misunderstanding of geography. It works very differently in different parts of the country. As we said earlier, the capacity of local authorities to raise money through technical changes depends on a number of factors, including the number of second homes. I made the point that Wigan is not seen as a place in which people live in second homes, and we understand that we might raise £20,000 from that source. I suspect that in the London Borough of Kensington and Chelsea, which the noble Baroness used to run, a single house might raise that. So we are limited in the amount that we can afford.
Secondly, there is a mismatch with the need for council tax benefit support. Those authorities with the least capacity to raise it probably have the greatest liability to pay out council tax support. In Wigan, 25% of our households are on some form of council tax support at the moment, and 65% of those are on full benefits. That is because we have a large number of people on low incomes as well as a large number of pensioners.
The Institute for Fiscal Studies, in its report on the cuts which my noble friend Lord Beecham mentioned, showed that the geographic distribution is not fair. Places such as Wigan, Newcastle and many others have the triple effect of having difficulty raising funding through the council tax adjustment, the need for expenditure on council tax support and the biggest level of cuts to implement.
Last week, when we were debating business rates, I noted with interest that the noble Baroness stressed the importance of equalisation to provide fairness in the distribution of business rates. The amendment is there to say: if it is right to do it for business rates, to ensure that there is a fair playing field for local authorities, we should do it also for the amount of money that can be raised through council tax administrative changes. Then we would have a level playing field and would not need to fritter away £100 million in a strange manner; it could simply be applied and the system would be fair. I beg to move.
Lord McKenzie of Luton
My Lords, my noble friend Lord Smith raises an interesting point in his amendment. There are two bits to it. One is the extent to which local authorities have the capacity to raise revenue under the new freedoms that they get under the Bill; and the second is how that should be dealt with under the revenue support grant as an equalisation process. One difficulty with this in the longer term is that, as I understand it, we do not know whether we will have revenue support grant on an ongoing basis. That is tied up with the issue of the central share, how it is to be used and what redistributive mechanism there will be. Obviously, the greater the local share, the smaller the central share. The more that the central share is used in Section 31-type grants or their equivalent, the less capacity there is in the system to equalise—to do what my noble friend rightly says should be done.
I am not sure what the resources component of the current revenue support grant in the three-part calculation is, or the extent to which that would pick up those issues. It certainly should if it does not. This is an imaginative and appropriate amendment and I look forward to hearing the Minister’s response.
Baroness Hanham
My Lords, perhaps I might address the two strands of this amendment. First, the level of discounts and the empty homes premium will be a matter for local authorities to determine annually. I do not think it is the role of the Secretary of State to pre-empt the decisions of a local authority, and the high volume of changes among individual council tax payers throughout the year, by speculating on the amount of income that they could raise through their discounts and any premium.
Turning to the second strand, I am unclear whether this was the noble Lord’s intention but my officials advise that the drafting of the amendment could force a general redistribution of resources against unspecified criteria, rather than a more specific redistribution of resources raised by the various discounts and premiums. This picks up on the point that the noble Lord, Lord McKenzie, was making. The Government have been consistently clear that they wish local authorities to have discretion over the level of, and keep the receipts from, the empty homes premium. They will not want to intervene actively to redistribute revenue support grant in any way that would run counter to the direction of the new government policy on business rates retention, which seeks to end the begging-bowl approach to local government finance. The business rates retention scheme, which effectively works in with this, will be created by this Bill and will create a direct link between the business rates collected and local authority income. It also gives the local authority the ability to help people into employment and with the council tax support scheme. However, the sort of equalisation that the noble Lord is looking for will not be available in the way that he seeks.
Lord Smith of Leigh
My Lords, I thank the Minister for her response. I suppose that I am not surprised by what she said but I am obviously still somewhat disappointed because she focused on the detail of the amendment and not the principle behind it. The principle was that in the system being set up we have created an unfair opportunity for some authorities to raise revenue to pay for any change to the council tax support system. As we heard earlier, many authorities will not need to implement any change whatever while other authorities, which do not have that capacity but have a greater need for council tax benefit support, will be making very difficult decisions and reducing the support that they give to many deserving people on low pay who currently benefit from that scheme.
I take the point that it may not technically be a correct amendment in the way that I wanted it to be but my “distribution” was simply intended to move it back. If the Government were to assume that we would all implement the system to the full extent, whether we do or not, that would be one basis for doing it. What we are seeing now is that the Government are accepting that this Bill will create two nations: the nation of those who can afford to pay for the scheme that is being introduced and the nation of those who cannot. I wonder what the impact of that will be in the long term. I beg leave to withdraw.
Lord Ahmad of Wimbledon
“(3A) Where—
(a) regulations under this section specify a sum as a penalty (or a minimum or maximum penalty), and(b) it appears to the Treasury that there has been a change in the value of money since those regulations were made or (as the case may be) the last occasion when an order under this subsection was made,the Treasury may by order substitute for that sum such other sum as appears to them to be justified by the change.(3B) An order under subsection (3A) does not apply in relation to any act done or omission which began before the date on which the order comes into force.”
Lord Ahmad of Wimbledon
My Lords, this series of amendments is necessary to provide a route of appeal to a valuation tribunal in England or Wales against any penalties that may be created in regulations under the powers provided in this Bill. Moreover, it gives Her Majesty’s Treasury the power to increase the level of any such penalties in line with inflation. Minor amendments are also being made to enable provision to be made for new penalties to be collected and enforced in the same way as existing penalties under the council tax system. These amendments make no assumptions about the penalties themselves or the offences that may be imposed as an alternative to prosecution, as these have yet to be determined. These amendments seek to ensure that, when such penalties are created in regulations, be it by Welsh Ministers or by the Secretary of State, with Parliament’s approval through the affirmative procedure, there is an available route of appeal.
The amendments also ensure that where there is a change in the value of money, the amount of any penalties may be varied by order made by the Treasury, subject to the negative resolution procedure, without requiring the affirmative procedure to make the necessary regulations. This is consistent with the procedure for increasing the existing penalties that authorities may impose in relation to council tax under Schedule 3 to the Local Government Finance Act 1992. This ensures that where a decision is taken to increase these penalties in line with inflation, any new penalties may be increased by the same order.
Amendment 107E provides that the creation of any new penalties would not impact on the well established system of penalties within the council tax system.
Amendment 107F amends existing powers to make regulations to deal with a situation where a person dies and was liable to pay a penalty, so that provision may also be made in relation to any new penalties created in regulations under new Section 14C.
Amendment 107G provides a clear route of appeal against the new civil penalties that may be imposed by local authorities under regulations made under new Section 14C. Where regulations allow for the imposition of a penalty as an alternative to prosecution, the amendment enables a person to appeal the amount of that penalty. This would be to the Valuation Tribunal for England for penalties affecting English authorities, while such penalties as the Welsh Ministers may decide to create would have a route of appeal to the Valuation Tribunal for Wales.
These amendments seek to make technical changes to ensure that any penalty regime that may accompany these schemes works alongside and mirrors the existing council tax penalty regime. I must admit that this exhausting list of penalties conjures up pictures of football. However, I shall not talk about this at such a late hour. With all the penalty explanations that I have given, I ask noble Lords to support Amendments 107D to 107G.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of these amendments, with which I do not believe we have a problem. I was slightly intrigued by references to the Treasury being able to act where there has been a change in the value of money. Amendment 107D states that,
“the Treasury may by order substitute for that sum such other sum as appears to them to be justified by the change”.
I had a joke about the value of the pound in your pocket, but I think the Minister is too young for that.
From what the Minister said, this simply replicates existing arrangements that are in the system somewhere. The thought of the Treasury being able to roam at will and take a view on changes in the value of money, and therefore being able to bring forward changes to the level of penalties by order, was a bit of a concern. The amendment does not say anything about the regularity with which that can be done. On the basis of the wording, it seems that it can be done at any time; it is not once a year or uprated by other issues. Indeed, when it comes to changes that appear justified to the Treasury, we all know that what the Treasury thinks is justified is not necessarily anything that we will be comfortable with. However, I will not press this matter. If the Minister says that this simply replicates existing arrangements, I am happy with that—or not unhappy.
Lord Ahmad of Wimbledon
I confirm that it is in line with council tax. I am sure that Her Majesty’s Treasury has enough to do without sending people roaming around the country.
Lord Ahmad of Wimbledon
“( ) In section 18(1)(c) (death of person liable for penalty), after “him” insert “under regulations under section 14C or”.”
“( ) Schedule 3 (penalties) is amended as follows.
( ) After paragraph 3(1) (appeals) insert—
“(1A) A person (“P”) may appeal to a valuation tribunal if aggrieved by the imposition on P of a penalty under regulations under section 14C, unless P agreed to the imposition of the penalty as an alternative to criminal proceedings being taken against P in respect of the act or omission to which the penalty relates.”
( ) After paragraph 3(3) insert—
“(4) Where a penalty is imposed on a person (“P”) under regulations under section 14C, and P alleges that there is no power in the case concerned to impose a penalty of the amount imposed, P may appeal to a valuation tribunal under this sub-paragraph against the imposition.”
( ) In paragraph 6(1) and (5) (regulations about collection) after “paragraph 1 or 2 above” insert “or under regulations under section 14C”.
( ) In Schedule 11 to the LGFA 1988 (tribunals), in paragraph 10A(1)(d) (orders), after “under” insert “regulations under section 14C of or”.”
Lord Ahmad of Wimbledon
“Calculation of billing authority’s council tax base
(1) In section 34 of the LGFA 1992 (calculations to be made in setting council tax: additional calculations where special item relates to part only of billing authority’s area), after subsection (4) insert—
“(5) Regulations under subsection (4) that apply to billing authorities in England may contain different rules for the purposes of calculating item TP in relation to different kinds of special item.”
(2) In section 45 of the LGFA 1992 (calculations to be made in setting council tax: additional calculations where special item relates to part only of major precepting authority’s area), after subsection (5) insert—
“(5A) Regulations under subsection (4) that apply to authorities in England may contain different rules for the purposes of calculating item TP in relation to different kinds of special item.
(5B) Regulations under subsection (4) that make provision by virtue of subsection (5A) may make consequential amendments to this Act.””
Lord Ahmad of Wimbledon
This amendment is necessary as part of the Government’s policy for providing funding certainty for parish and town councils. As noble Lords will be aware, the funding arrangements consultation was published in May. It set out the Government’s policy that billing authorities and town and parish councils should work together to manage the impact of localising council tax on town and parish budgets and the levels of band D council tax for parish residents.
Noble Lords will be aware that in response to that consultation some concerns have been raised by town and parish councils that the approach set out in the consultation would not provide enough certainty over funding. We have listened to those concerns, which is why in August we published a further consultation setting out proposals for providing that level of certainty. In short, we are proposing amending secondary legislation to allow the calculation of the tax base for town and parish areas to be calculated excluding council tax support reductions. The effect will be to maintain the status quo for town and parish councils and their residents.
The amendment to the Bill is a technical amendment to ensure that the proposals for town and parish council areas in respect of parish precepts do not need to be applied to all other special items for part of a billing authority or major precepting authority area. Noble Lords will also be aware that the Government have recently consulted on the proposals for providing certainty for town and parish councils, and part of that consultation is to seek views on how other special items, such as waste and transport levies, should be treated.
This amendment will enable the council tax base to be calculated differently, depending on which special item is being considered. For example, if there is good reason why the council tax base for all other special items should be calculated with council tax support reductions included, the current legislation would not allow us to deliver that without also applying the same rules to the calculation of the council tax base for parish precepts. We may therefore be unable to provide the certainty town and parish councils so desire.
I recommend this amendment as it is a sensible way of ensuring that we can provide certainty for town and parish councils without automatically forcing the same rules to apply to the calculation of the tax base for other special items. With this explanation, I trust that noble Lords will support this amendment
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for his explanation of this amendment. I would like to read the record and ponder a bit, but I accept what he says. This is not an issue of contention for us. Perhaps he will recap. I believe he said there was an updated consultation in August with town and parish councils about working together with billing authorities. He will correct me if I am wrong. If that is right, will he say when the Government’s response—if that is not the Government’s response—is likely to be ready?
Lord Ahmad of Wimbledon
The response is being prepared and will be ready in November.
“Consultation on new bands of council tax
The Secretary of State shall consult with local government on the introduction of a new higher (I) band, or bands, of council tax.”
Baroness Hollis of Heigham
Given the lateness of the hour, I shall not move this amendment.
Amendment 109 not moved.
Amendment 109ZA
Baroness Meacher
“Enforcement of council tax defaulters’ income and expenditure
(1) Councils shall take reasonable steps to obtain from all council tax defaulters a statement showing income, expenditure and debts before—
(a) applying to the magistrates court for a liability order;(b) issuing a distress warrant to the bailiffs;(c) deducting sums of arrears from jobseekers allowance or income support, universal credit or other means tested benefits;(d) commencing bankruptcy proceedings;(e) applying for a charging order;(f) commencing committal proceedings.(2) Regulations will govern the procedures to be followed by local authorities when undertaking a means enquiry and obtaining the information required in subsection (1).”
Baroness Meacher
I shall speak also to Amendment 109ZB. I shall be very brief. Amendment 109ZA would require councils to take reasonable steps to obtain from all council tax defaulters a statement showing income, expenditure and debts before taking action to recoup the council tax debt. Amendment 109ZB would provide for local authorities to have in their contracts with bailiff companies dealing with the enforcement of council tax a provision for the bailiff company to return the liability order or warrant in specified circumstances. These circumstances are glaringly obvious examples of when such a return should be made. Where there is an error in the decision to issue the liability order or warrant in the first place, surely the warrant should be returned. If the liability order or warrant was imposed before the relevant facts of the case were known, how could such a thing happen and how could it be left like that? The circumstances also include other cases where absolutely obviously it would be unjust or pointless to go ahead with processing the liability order.
Lord Tope
My Lords, I support the thrust of these amendments. I do not imagine that the noble Baroness intends to put it to the vote at this hour. I am not entirely certain that it is appropriate for it to be in the Bill anyway but she certainly raises extremely important issues, which I am quite sure, in a few moments, the Minister will agree with. I would like to endorse that and see how we can take this forward—probably in discussion with the Local Government Association and certainly through issuing good practice. It does not necessarily have to be the Government who do that. The Local Government Association could do that. But these are important issues which need to be addressed.
Lord Beecham
I certainly endorse what the noble Lord, Lord Tope, said and support the thrust of the noble Baroness’s amendments. The first is a matter essentially for the local authorities. The second impinges on the role of bailiffs. We had a discussion in the Committee stage of the Crime and Courts Bill when I moved an amendment urging the Government to produce a regulatory system for bailiffs, about which there had been a great deal of controversy. The previous Government had passed the Tribunals, Courts and Enforcement Act 2007 which envisaged a code of practice dealing with a whole range of issues, some of which were touched on in the noble Baroness’s Amendment 109ZB.
We were informed in the Committee stage of the Crime and Courts Bill that the consultation period that the Government had initiated about that whole area was ending on 14 May and that conclusions would be reached in the autumn. Well, we are in the autumn—we avoided having a summer in the mean time—and it would be interesting to know how things are going in that respect, although I do not expect the noble Baroness the Minister to know offhand. It seems to me, and it might seem to the noble Baroness, Lady Meacher, that it would be sensible to draw the two discussions together, because certainly as far as the role of bailiffs is concerned, clearly critical to Amendment 109ZB, there are also wider implications. I believe that the noble Baroness, Lady Northover, was dealing with this matter, but I think that she may have moved on and it is probably the noble Lord, Lord Taylor, who now has the remit for this. It would be helpful if the Minister could consult with whoever is now dealing with this matter to see what is happening on that front so that we can have a clear indication of the Government’s thinking—I hope before Third Reading, which does not leave a lot of time—so that the noble Baroness might have an opportunity, if necessary, to press something on that occasion. Therefore it would be helpful if the Minister would indicate that she would be prepared to take this issue back, looking at it with the other department and letting noble Lords know how the land lies in respect of bailiffs and enforcement measures generally, but in particular in relation to council tax.
Baroness Hanham
My Lords, I thank the noble Baroness for moving this amendment. Again, we had some discussion about it in Committee. I have some sympathy about the way in which these enforcements are carried out and the fact that, as the noble Baroness said, sometimes they may simply not be known about.
Again, this is a matter for local authorities. They have to recognise that they have to treat this issue sympathetically, pragmatically and sensibly. I know that it is felt that they do not always do that. I do not think that it is a government direction to do that but—I notice the expression on the noble Baroness’s face—I do think that we can do something in terms of guidance on how they go about this. I will combine, if I may, the two points about guidance because the noble Lord, Lord Beecham, raised the question of the MoJ consultations. We know that those have been concluded, and we also know that there has not yet been a result from them because we have been pressing to see whether we could get anything for today. The MoJ is looking at the question of bailiffs very widely, and we need to look at it from the point of view of enforcement of council tax issues.
I would like to suggest to the noble Baroness that we issue guidance from the DCLG, and that she and her advisers have an opportunity to talk to us about how that guidance should be set up and what should be included. I do not guarantee that we will take it all on board but I think that there is much experience around there that would be helpful. Once the MoJ comes to a conclusion and gets its guidance sorted out, we can pull these together so that there is a comprehensive document. Given that I understand the noble Baroness’s concerns and that we will respond in this way, I hope that she will be willing to withdraw her amendment.
Baroness Meacher
I thank the Minister very much for that understanding and good response. I very much welcome the fact that the consultation on the regulation of bailiffs has been concluded. I was arguing for that 20 years ago. People always say that it takes 10 years—or is it 20 years?—for a good idea to come to fruition. I am pleased that the department will issue guidance and would welcome the opportunity to talk about it. With those assurances, I am happy to withdraw the amendment.
Lord Ahmad of Wimbledon
Lord Ahmad of Wimbledon
My Lords, in moving Amendment 109A, I will speak also to Amendment 109B. Both are minor amendments. They would remove the requirement for two months to elapse between Royal Assent being given to the Bill and the date on which provisions allowing for HMRC information to be supplied to local authorities in England, Scotland and Wales for purposes relating to council tax, and to the relevant Northern Ireland departments for purposes relating to rates, come into force.
As noble Lords will I am sure be aware, local authorities in England will have the freedom to design their own schemes for working-age people. It is very likely that most, probably all, local authorities will choose to take into account income and tax credit information, information which originates with Her Majesty’s Revenue and Customs, as well as information pertaining to entitlement to benefits, in determining the level of support they wish to provide to applicants under their schemes.
As currently drafted, the provisions in the Bill containing the power for HMRC to share information with local authorities will come into force only two months after Royal Assent is given. These amendments are a sensible measure to take, allowing for information sharing to begin two months earlier than currently provided for, which will give greater certainty to local authorities as they design and implement their schemes regarding the information they will have and the purposes for which they may use it. I trust that with this brief explanation your Lordships’ House will support these amendments.
Lord Ahmad of Wimbledon