House of Commons

Monday 29th October 2012 Commons Chamber

Monday 29 October 2012

The House met at half-past Two o’clock

Prayers

Monday 29th October 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 29th October 2012 Commons Chamber

The Secretary of State was asked—

[Mr Stephen Hepburn (Jarrow) (Lab)]

1. What steps he is taking to increase the quality and availability of apprenticeships for 16 to 18 year-olds.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

There is growing consensus that, alongside the overall increase in apprenticeships under this Government, we must enhance their quality and make them more employer-focused. I pay tribute to my predecessor, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), who ensured that an apprenticeship normally lasts longer than a year, and is a real job. To enhance availability, we are simplifying apprenticeships, and the National Apprenticeship Service will in future focus more of its resources on engaging with employers.

[Mr Hepburn]

Is it not a fact that a lot of those apprenticeships are nothing but a scam? They allow employers to change the name on a job, call them apprenticeships and dodge paying the minimum wage. What is the value of an apprenticeship making sandwiches or packing shelves in a card shop?

[Matthew Hancock]

I am a great supporter of apprenticeships across the economy. As the economy has changed over the past few decades, apprenticeships are in the service sector and insurance as well as in engineering and high-value areas. I am sure the hon. Gentleman, like me, is looking forward to the review by Doug Richard into the future of apprenticeships, because we must ensure that quality is at the heart of the apprenticeship offer.

[Robert Halfon (Harlow) (Con)]

Is my hon. Friend aware that the number of apprenticeships has gone up by 76% in the past year in Harlow? Far from making sandwiches, many of the apprentices have gone on to full-time jobs.

[Matthew Hancock]

I am in favour of sandwiches and in favour of people who learn skills in apprenticeships in all sorts of different sectors. I pay tribute to my hon. Friend, who held a jobs fair last week. I will be copying what he did in my constituency. I hope he, like me, will go to the meeting on Wednesday to discuss what Members on both sides of the House can do to promote apprenticeships in their area.

[Ms Karen Buck (Westminster North) (Lab)]

I welcome the Minister to his post. He has large shoes to fill because his predecessor was a passionate advocate for the brief, but I am sure he will do splendidly. Unfortunately, however, recent figures show a 2% drop in the number of apprenticeships for 16 to 18-year-olds for 2011-12. Given the concerns that we share about long-term youth unemployment and the number of young people not in employment, education or training, does that figure show that the Government are failing in their own terms?

[Matthew Hancock]

On the contrary, not only is youth unemployment on the latest figures falling—thankfully—but in the last year, we have moved to make apprenticeships higher quality. For instance, 11,000 apprenticeships had no job attached. Is it not far better to have high-quality apprenticeships and sell them to employers to ensure that as many as possible engage, so that we can get the numbers and the quality going up at the same time?

[Dan Rogerson (North Cornwall) (LD)]

I, too, welcome the Minister to his position and wish him well in taking over the work his predecessor carried out so admirably. In tightening up the rules on quality, the Government have borne down on some questionable practices. However, they have also tightened up on sub-contracting and sub-sub-contracting to providers. In some areas, particularly rural and peripheral ones, some of those providers are the only providers of such courses. Will he ensure that, where that quality can be guaranteed, those arrangements can continue?

[Matthew Hancock]

Yes.

[Laura Sandys (South Thanet) (Con)]

2. What assessment he has made of the effects of the pupil premium on pupils from disadvantaged backgrounds.

[The Minister for Schools (Mr David Laws)]

The pupil premium represents a significant investment of £1.875 billion since its introduction in April 2011. We are keen to ensure that schools’ use of the premium leads to real improvements for disadvantaged pupils. We have two evaluations under way—a study we have commissioned from Ofsted and our own external evaluation of the premium’s first year. The findings of both reviews will be available next spring, and will further support our drive to promote best practice.

[Laura Sandys]

I welcome the Minister to his position and thank him for his answer. Fifty-six per cent. of the children at Newington primary school are on free school meals. In the headmaster’s view, the pupil premium has doubled key stage 2 attainment and improved maths and English scores by 41%. Will the Minister give a commitment that the money will be in the hands of the head teacher and not ring-fenced in future?

[Mr Laws]

I am grateful to the hon. Lady for her kind words and am delighted to hear of the success of the pupil premium in her local school. I can confirm that we are not going back to the days under the previous Government, who sought to micro-manage each piece of education expenditure.

[Mr Frank Field (Birkenhead) (Lab)]

Given that the skills that young people have before they go to school will determine how effective they are at school, might the Minister consider extending the pupil premium to cover from birth to five?

[Mr Laws]

The right hon. Gentleman has a long tradition of passion for and commitment to the early years in education. We are constantly keeping schools and early years funding under review, and of course we will do what we can over time to ensure that youngsters, at whatever stage of their education, have an opportunity to fulfil their maximum potential.

[Richard Fuller (Bedford) (Con)]

The pupil premium is an excellent coalition policy to assist children from disadvantaged backgrounds, as is the free school policy. Can the Minister advise us on what efforts he will make to push forward with the free school policy to target areas with a high proportion of students on the pupil premium?

[Mr Laws]

My hon. Friend makes a very good point. It is right that free schools are being concentrated in many parts of the country where there is disadvantage and where traditionally the performance of the school system has been weak. That will ensure that many disadvantaged youngsters can attend schools producing an outstanding or at least good performance.

[Ann Coffey (Stockport) (Lab)]

The SK5 8 postcode in my constituency is the 162nd most deprived neighbourhood out of almost 32,500 in the UK. Children attend three different secondary schools where they significantly under-achieve, and not all are entitled to the pupil premium. The Brinnington educational achievement partnership set up in 2009 has helped to increase the number of children attaining GCSE A* to C from 33% to 75%—quite an achievement. Funding has now ended, but would the Minister look favourably on its bid to the education endowment fund?

[Mr Laws]

I am delighted to hear about the progress in the hon. Lady’s constituency, and she has ingeniously managed to keep her question in order. If she would care to write to me on that subject, I will certainly look at the issue further. In the light of what she has said about disadvantage in her constituency, I hope that she will welcome the pupil premium, which must be helping schools enormously in her area.

[Mark Pawsey (Rugby) (Con)]

3. How many 16 to 18 year-olds started an apprenticeship in the last year for which figures are available.

[Sir Tony Baldry (Banbury) (Con)]

4. How many 16 to 18 year-olds started an apprenticeship in the last year for which figures are available.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

Early provisional data show that 126,000 apprenticeships were started by those under the age of 19 in the last academic year.

[Mark Pawsey]

Eight hundred and seventy people took up an apprenticeship in Rugby last year, which is an increase of more than 50% since the general election. These are young people who are starting on a process that is vital to them and to the country. Does the Minister agree that, in the same way as for those completing a degree, graduation-style ceremonies should be encouraged as an important way of recognising their achievements?

[Matthew Hancock]

I agree very strongly with my hon. Friend. The first graduation ceremony was held at Buckingham palace a fortnight ago, and the next will be at York minster on 12 November. I hope that around the country we will have ceremonies of graduation from apprenticeships to show the value that has been added to young people’s lives by this fantastic programme.

[Sir Tony Baldry]

It is fantastic that there are so many apprenticeships available, but we are not going to get youth unemployment down if youngsters do not avail themselves of the apprenticeships that are available. Does my hon. Friend find it disturbing—indeed, disquieting —that Barchester Healthcare, which is probably one of the best health care providers, has not been able to fill 500 of the 600 apprenticeships that it has offered? Indeed, it took six months to fill one single paid administrative apprenticeship in its Chelsea office.

[Matthew Hancock]

The average value of an apprenticeship to the apprentice over their lifetime is more than £100,000, and is often more than a university degree. There has been a sharp rise in apprenticeships in health and social care, but I would be happy to meet my hon. Friend to discuss the specifics of the case that he raises.

[Mr David Crausby (Bolton North East) (Lab)]

I started an apprenticeship in a factory, along with 50 others, in the days when it took six or seven years to complete—an experience that the Minister could not possibly be expected to understand. Over the years, the decline in genuine apprenticeships has been catastrophic to Britain’s ability to produce for itself, so what will he do to rebuild the real, quality skills that used to be—not any more—the envy of the world?

[Matthew Hancock]

I would have thought that as a former apprentice the hon. Gentleman would welcome the 500,000 apprenticeship starts over the last year. I entirely agree, however, that we must do more to support quality in apprenticeships, for instance by ensuring that they last for a minimum of one year, and I hope that he will work with me to deliver that.

[Kate Green (Stretford and Urmston) (Lab)]

The Minister will be aware that the recent national apprenticeship scheme pilots achieved a small increase in the take-up of apprenticeships by black and ethnic minority young people, but those pilots have now come to an end. Will he consider using the employer apprenticeship grant to continue to promote diversity and further increase participation by BME young people?

Matthew Hancock: Apprenticeships are a route for all. I welcome the idea of a bid into the second round of the employer ownership pilot from the sorts of groups the hon. Lady talks about. I look forward to such a bid and will consider it along with all the others.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

5. What steps he is taking to ensure sufficient funding for early intervention for children aged five or under.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

7. What plans he has for early intervention spending; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

We are increasing the overall funding for early intervention from £2.2 billion in 2011-12 to £2.5 billion in 2014-15. This funding should enable local authorities to support early intervention for children under five, including through the new entitlement to early education for two-year-olds.

[Annette Brooke]

What particular action will the Department take to ensure that Sure Start children’s centres retain early intervention support for families, as well as providing targeted services?

[Michael Gove]

Local authorities are under an obligation to ensure a sufficient supply of Sure Start children’s centres. The overwhelming majority of local authorities, including Liberal Democrat-led ones, have done just that. It is important to recognise that children’s centres work best when they offer a variety of services, from stay and play to some of the targeted early intervention programmes that have done so much to help those children most in need.

[Seema Malhotra]

The Royal College of Speech and Language Therapists estimates that at just age four there is a 30 million word gap between a child from a deprived household and one from an affluent household. This is the number of words that a child will hear in different environments. Will not language and child development now suffer from the scrapping of the ring-fenced early intervention grant and result in more children starting school at four on an unequal playing field?

[Michael Gove]

I have a lot of sympathy with the hon. Lady’s case. The gap in attainment between disadvantaged children and children from more fortunate circumstances only grows over time and is often a consequence of growing up in households where they are not read to and where they do not have a rich literary heritage on which to draw. However, she is mistaken in thinking that the early intervention grant was ring-fenced. It was not; it was money that was available to local authorities to spend as they saw fit in order to help those whom they considered, on a local basis, to be most deserving.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Will the Secretary of State tell the House whether the Government intend to abolish the early intervention grant, and what steps they are taking to ensure the quality of provision provided in the early years? It is not simply about providing services but about ensuring that they are of the necessary quality to make a difference, so that disadvantaged children arrive ready for school.

[Michael Gove]

That is a typically good point from the Chairman of the Education Select Committee. The early intervention grant money has never been ring-fenced and will remain available to local authorities, which have statutory obligations to provide not just children’s centres but particular services, and we will be announcing more steps in due course to ensure that money is spent even more effectively in the future.

[Mr Graham Allen (Nottingham North) (Lab)]

17. I declare my interest in the Register of Members’ Financial Interests, Mr Speaker. The early intervention grant has been, and will be, reduced and will be put into the rate support grant. Without a doubt, one thing that is happening is that £150 million is being taken from the localities to the centre. What does the Secretary of State intend to do with that money on early intervention, and will he please meet me, in the not-too-distant future, to discuss that and other early intervention grant matters?

[Michael Gove]

Meetings with the hon. Gentleman are always a pleasure—I find myself better informed after every single one. On this occasion, however, I fear that, in the same way as even Homer nods, even the hon. Gentleman errs. The early intervention grant money will increase over the lifetime of this Parliament. The £150 million to which he refers is money that will go to local authorities in order to support the sorts of evidence-based interventions I know he has done so much to champion.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

Even a Conservative councillor described the Government’s approach on this as “typical smoke and mirrors”, and we have heard typical smoke and mirrors again from the Secretary of State today. If we compare like with like—not the money for two-year-olds, which the Government have claimed is new money—what are the figures this year and next year?

[Michael Gove]

The figure for this year, 2011-12, is £2,222,555,697, which then goes up to £2,365,200,000, so that is an increase from 2011-12 to 2012-13.

[Stephen Twigg]

A significant part of that extra money is actually the money for two-year-olds which the Government said was additional money. The figures in the Government’s own consultation showed that the cut would be from the £2.3 billion figure, which the Secretary of State has just given us, to £1.72 billion next year, which is a cut of 27%. Should not the Secretary of State be honest and listen to Merrick Cockell, the leader of Conservative local government, who made a clear point last week:

“this move…will force local authorities to cut early intervention services even further”?

Is that not what is really going on?

[Mr Speaker]

Order. Just before the Secretary of State responds, I am sure that the shadow Secretary of State would accept that the Secretary of State would always be honest with the House. There is no need to ask for a commitment to honesty; that is implicit.

[Michael Gove]

Thank you very much, Mr Speaker.

[Mr Speaker]

The Secretary of State need not sound so surprised.

[Michael Gove]

I am never surprised when I hear a kind word from the Chair. It is no more than I have come to expect.

Implicit in the hon. Gentleman’s question was the idea that we should reduce funding to extend early education to two-year-olds. I do not believe that is right. I believe it is right that we increase the amount we spend on early intervention from £2.2 billion to £2.3 billion, to £2.4 billion and then to £2.5 billion. That is an increase in anyone’s money.

[Nigel Mills (Amber Valley) (Con)]

6. How many places he expects to be available in studio schools by 2015.

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

There are currently 16 studio schools open. By September 2013, we expect there will be 30 studio schools open, representing nearly 10,000 new school places. More studio schools will be announced following the current application round, providing an employer-backed academic and vocational offer for 14 to 19-year-olds of all abilities.

[Nigel Mills]

I thank my hon. Friend for that answer and welcome him to his position. Does he agree that studio schools offer young people not only a great academic education, but real-world life experience, and will he therefore join me in welcoming Derby college’s bid to open a school in Heanor?

[Mr Timpson]

I completely agree with my hon. Friend about the importance of what studio schools bring to the offer for young people. I understand that this is the first time that Derby college has applied to open a new studio school. We are very much looking forward to receiving its proposal, which will no doubt be supported vigorously by my hon. Friend. Each application will be considered on its own merits and in comparison with others submitted.

[Mr Andy Slaughter (Hammersmith) (Lab)]

9. What steps he is taking to raise the status and quality of vocational education.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

As Minister for Skills, it is my mission to raise the status and quality of vocational education. Following the Wolf review, we have reformed school performance tables to encourage the take-up of high-value vocational qualifications before the age of 16. From this September, all those in apprenticeships were required to study English and maths, but there is more to do.

[Mr Slaughter]

That is utter waffle. Is not the truth that the Secretary of State has downgraded the engineering diploma, excluded practical subjects from the English baccalaureate and has no plans to follow my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) in offering a technical baccalaureate? What do the Government have against vocational education? Is it spreading the privilege a little bit too far?

[Matthew Hancock]

I do not think that requiring all those in apprenticeships to study English and maths if they do not have level 2 is “waffle”; I think it is extremely important for improving the rigour and quality of vocational education. Vocational education is vital to this country’s future, and that is why I will put all my effort into championing it.

[Margot James (Stourbridge) (Con)]

Although more girls start apprenticeships than boys, they are very under-represented in some areas. Only 5% of engineering apprenticeships and 13% of IT apprenticeships were taken up by girls. Will my hon. Friend take action to encourage more girls to consider apprenticeships in IT and engineering?

[Matthew Hancock]

Yes. I am delighted to say that I have already taken some action, but there is more to do. The first round of the employer ownership pilots included funding for a bid by engineering companies across the country specifically to support engineering apprenticeships and engineering training. I entirely accept the size of the challenge in engineering and ICT. If we say that engineering is not for half of our population, we are never going to have enough high-quality engineers. [Interruption.]

[Mr Speaker]

The hon. Member for Huddersfield (Mr Sheerman) has been chuntering from a sedentary position, to no obvious benefit or purpose—[Interruption.] Order. He was making his point sitting down. Would he like to make it standing up?

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

20. Indeed. Would the Minister accept that the withdrawal of funding for the Women into Science and Engineering campaign is not a good idea if we are to be serious about getting more women into engineering and science?

[Matthew Hancock]

No, I do not recognise that point at all. The employer ownership pilots are doing precisely the opposite in the first round. We are looking for more innovative, thoughtful and new ways of ensuring that funding gets to the right places, including to women, where their representation in a particular sector is low.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

A number of organisations have expressed concern that the increased focus on the EBacc will lead to fewer students studying the practical or vocational subjects that are so important for encouraging the next generation of engineers. What can my hon. Friend say to those organisations to allay their fears?

[Matthew Hancock]

In the first instance, ensuring that high quality science is taught before the age of 16 is vital to the future of engineering at a later age. More importantly, ensuring that English and maths are there is crucial for vocational and occupational skills for everybody. There is much more to do in that area, but the EBacc is a step forward. It is part of the future provision right across the academic and vocational areas.

[Derek Twigg (Halton) (Lab)]

10. What steps he is taking to raise levels of attainment in literacy and numeracy for children from deprived backgrounds; and if he will make a statement.

[The Minister for Schools (Mr David Laws)]

The pupil premium provides additional funding—rising to £900 per pupil next year—that helps schools to raise the attainment of disadvantaged children, including in literacy and numeracy. Ofsted will have an increased focus on the performance of pupils who attract the premium. We are also putting in place a new catch-up premium of £500 per eligible child for every year 7 pupil who has not achieved basic literacy and numeracy standards on leaving primary school.

[Derek Twigg]

Halton has seen significant improvements recently in the attainment of those pupils receiving school meals, compared with those who do not. We have also seen a doubling of the number of students getting five or more A to C grades at GCSE over the past 10 years. Resources are of course crucial to all that. The Minister has just mentioned the pupil premium. Can he guarantee that, over the remainder of this Parliament, there will be no cuts in resources going into education in Halton?

[Mr Laws]

What I can guarantee is that the pupil premium will go on rising every year in this Parliament. The hon. Gentleman might like to know that, in this current year, more than £2 million of pupil premium funding is going into his constituency, and he will be delighted to know that that will rise to more than £3.3 million in the year to come.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

A car travels, on average, 41.8 miles per gallon. How many miles will it travel on 8.37 gallons? The answer, of course, is 349.866 miles. The problem is that, while 54% of 14-year-olds answered that question correctly in 1976, only 33% did so in 2009, according to a study carried out by King’s College, London. Does my right hon. Friend agree that the new draft maths primary curriculum and the new teacher training courses for specialist maths teachers in primary schools will have a significant effect on ensuring that children grasp and understand the fundamentals of maths and arithmetic by the time they leave primary school?

[Mr Laws]

For a moment, I thought that my predecessor as Schools Minister was going to skewer me at the Dispatch Box, and I began to freeze over. However, I am most grateful to him for his question—and for providing the answer—and for highlighting the important work that the Government are doing to restore the credibility and seriousness of these subjects. I pay tribute to him for the superb work that he has done in these areas over the past two years.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

May I also welcome the Minister back to the Front Bench? I know that he is passionate about this subject, and I look forward to working with him for the benefit of the House and of the country. Last month’s reading recovery annual report confirmed that 9,000 fewer children received reading recovery intervention last year. That means that 9,000 struggling children, many of whom are from disadvantaged backgrounds, are not getting the intensive support that they need to support their literacy levels. The Department’s own evaluation shows that reading recovery achieves real results for children, and that it could achieve long-term financial benefits for the Government. Does the Minister agree with that evaluation? If not, why is he happy to sit back while children fall behind?

[Mr Laws]

I am grateful to the hon. Lady for her kind comments, and I am keen to work across the House where we can on some of the issues to which the previous Labour Government showed considerable commitment. This Government, however, are trying to put in place a simpler funding system, not only for the baseline funding, but by giving schools through the pupil premium a large amount of additional finance— £2.5 billion by the end of this Parliament—so that schools can prioritise in each setting the mechanism and the intervention that best serves their pupils. Schools will, through the pupil premium, have the moneys for precisely the types of reading recovery that the hon. Lady mentioned.

[Andrew Bridgen (North West Leicestershire) (Con)]

My constituency is not getting the full benefit of the pupil premium because many parents are far too proud to access free school meals for their children on account of the stigma attached. What can my right. hon. Friend do to address this problem?

[Mr Laws]

That is an important point. Research from the Department will be published shortly, which will highlight the massive differences in the take-up of free school meals right across England. In some parts of England there is essentially 100% take-up, while in other parts almost a third of pupils do not take up free school meals. The Government will look at this and work with local authorities and schools to get those figures up.

[Henry Smith (Crawley) (Con)]

11. What assessment he has made of the effectiveness of university technical colleges in delivering high-quality technical education.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

It is early days, but 98% of pupils at the JCB academy, which was our first university technical college, got an A* to C in engineering in their first exams this summer. [Interruption.] I am sure that Labour Members will be delighted by this great success. Many of the sixth formers have gone on to university and higher level apprenticeships. Five UTCs are open, and we are committed to having at least 24 across the country by 2015.

[Henry Smith]

I thank my hon. Friend for that answer. In the last year of the Labour Government, only 17% of young people in my constituency went on to higher education. This December, I am pleased to be officially opening a new university presence in Crawley, which links local employers with local young people through technical education. Will the Minister join me in congratulating Central Sussex college on setting that up?

[Matthew Hancock]

I certainly join my hon. Friend in warmly welcoming what has happened at Central Sussex further education college, which is now offering higher education. It is crucial to have more engagement between our employers, our colleges and our young learners in order to ensure that when people leave college, they are ready for work, can participate in the work force and make sure that Britain has the prosperity it needs in the years ahead.

[Bill Esterson (Sefton Central) (Lab)]

The EBacc means students are less likely to study technical subjects purely on the basis that schools are less likely to provide them because they will be measured on the narrow academic approach of this new qualification. Surely the way forward should be for all schools to offer vocational qualifications, knowing full well that people do better in their academic subjects when they do vocational routes, which should not be provided only in specialised technical colleges.

[Matthew Hancock]

If the hon. Gentleman has any evidence to back up his assertion, I will happily look at it, but having a core of English, maths and the sciences within the EBacc before pupils reach 16 is vital to ensuring that people can go on to a vocational or an academic pathway in the future. It is absolutely central to this Government’s future vision of where our prosperity comes from that our occupational and vocational skills are at the heart of it.

[Mel Stride (Central Devon) (Con)]

13. What recent progress he has made on ensuring young people leave school or college with a good understanding of English and mathematics.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

We are developing a new rigorous English and maths curriculum, which will help young people become fluent in the basics. The new phonics test will identify pupils in year 1 who need extra help, and the new year 6 grammar, spelling and punctuation test will ensure the basics are secure.

[Mel Stride]

My hon. Friend will know that the recent CBI survey showed that 42% of employers were having to provide remedial training in numeracy and literacy to college and school leavers. Will my hon. Friend set out the steps the Government are taking to make sure that these colossal costs to businesses are reduced?

[Elizabeth Truss]

My hon. Friend has made a good point. The Secretary of State has already said that his ambition is for virtually all students to study maths until the age of 18, and we will introduce a funding condition for students who have not achieved a GCSE in maths so that they can reach that level of aptitude. We will also look at mid-level qualifications for students who have maths GCSEs but do not want to take a full A-level in maths, so that there is an alternative path for them to take.

[Kelvin Hopkins (Luton North) (Lab)]

14. What assessment he has made of the 2012 GCSE English results; and if he will make a statement.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

16. What assessment he has made of the 2012 GCSE English results; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

On 18 October, provisional national and local authority level GCSE results for 2012 were published. The percentage of pupils achieving grades A* to C in English had fallen by three percentage points to 66.2%. The independent regulator, Ofqual, continues its investigation into the awarding of English GCSEs this year, and is now looking into why some schools achieved the results that they had expected while others did not. The final report will be published shortly.

[Kelvin Hopkins]

My hon. Friend the Member for Luton South (Gavin Shuker) and I recently met teachers and head teachers in Luton to discuss the problems involved in the GCSE results. It is clear that some pupils were not permitted to take the sixth-form courses that they had chosen, as a consequence of their results, and that some schools that made strenuous efforts to improve their English results have actually been knocked back. Is that not a disgrace, and should not apologies be made?

[Michael Gove]

I share the concern felt by the hon. Gentlemen. We must wait to see the Ofqual report before we can be more certain about what went wrong this year, but it is clear that there were a variety of factors consequent on the design of the examination, and that we need to take steps to remedy them.

[Meg Hillier]

In Hackney, 103 pupils received D grades in English in June. In some cases, classmates at the same schools achieved lower scores in January, and received C grades. In each of the five schools affected in Hackney, at least 85% of ethnic minority pupils received Ds rather than Cs. The Secretary of State talked about looking into why some schools had achieved less than others. Will he look into this very serious matter as well?

[Michael Gove]

I certainly shall. Hackney has an exemplary record of educational improvement, and when there are inconsistencies such as this, we must look at the evidence to work out what has happened.

[Andrew Percy (Brigg and Goole) (Con)]

Along with my hon. Friend the Member for Cleethorpes (Martin Vickers), I recently met head teachers from North Lincolnshire. Despite an improvement in results in the area this year, they were still concerned about this year’s marking, particularly in the case of pupils who would have found it easier to get an A in January than they did in the summer examinations. Will my right hon. Friend consider the concerns about the situation that will be expressed in a letter from my hon. Friend and me?

[Michael Gove]

I certainly shall. As we all know, the hon. Gentleman is a teacher with extensive experience of working in some of the toughest schools. I am glad that there has been an improvement in academic results in North Lincolnshire, but yes, there are continuing question marks over the quality of marking at GCSE.

[Alun Cairns (Vale of Glamorgan) (Con)]

Questions raised about GCSEs earlier this year place even greater emphasis on the need for rigour in the exam system. Will my right hon. Friend encourage other parts of the United Kingdom to follow suit, and does he agree that clarity is needed for pupils and students, universities and employers, so that they compare equally?

[Michael Gove]

My hon. Friend has made a very good point, and I look forward to working with the Welsh Assembly to ensure that standards there can be raised to the level enjoyed by students in England.

[Paul Blomfield (Sheffield Central) (Lab)]

18. If the legal action against Ofqual is successful, and it is decided that pupils were treated unfairly—which the Secretary of State himself believes, although he refuses to do anything about it—what action will the right hon. Gentleman take?

[Michael Gove]

I would not wish to pre-empt any judgment in the courts.

[Kevin Brennan (Cardiff West) (Lab)]

We know that the Secretary of State is in a good mood, because yesterday was his favourite day of the year, when he gets an opportunity to turn the clock back without anyone being able to complain. Why does his new Schools Minister have no responsibility whatsoever for GCSE English, or even for the curriculum? Is he too ashamed to defend the Government’s position on the GCSE English scandal, is he too busy at the Cabinet Office polishing the Deputy Prime Minister’s shoes, or does the Secretary of State not trust him?

[Michael Gove]

That was a three-part question, and I shall use both sides of the paper. Yesterday was, in fact, a sad day for me: I was in mourning because, sadly, Queens Park Rangers lost to Arsenal, who, with 10 minutes to go, scored a goal that I can only conclude was offside. It was a day of mourning for the Gove household. The Schools Minister, however, is fully involved in all discussions in the Department for Education in every policy area. The two of us are singing from the same hymn sheet, which is, of course, what we should be doing every Sunday, whether or not the clocks go back.

[Mr Speaker]

The Arsenal result was extremely satisfactory and I was there to observe it.

[Justin Tomlinson (North Swindon) (Con)]

15. What steps he is taking to improve the quality of mathematics teaching in schools.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

I agree that mathematics teaching is a major issue. It is the subject with the highest teacher shortage, and we know that maths skills are vital for students. We are working to attract top graduates, with bursaries of up to £20,000. By increasing maths take-up between the ages of 16 to 18 we will increase the pipeline of people going into the maths teaching profession.

[Justin Tomlinson]

Does the Minister agree that teaching factual financial education, such as calculating APRs and tariffs, should be an integral part of the maths curriculum, and will she meet me to discuss the work of the all-party group on financial education for young people?

[Elizabeth Truss]

I completely agree that it is very important for students to be financially literate. In order to be financially literate they need to be mathematically fluent. That is why we are going to have higher expectations in topics such as using and understanding money, working with percentages, and positive and negative numbers. We are also looking at limiting the use of calculators in the early years of primary school so that students achieve proper fluency in calculations. I believe I am due to meet my hon. Friend in only a couple of minutes’ time, but I am happy to have a further meeting with him on this issue.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Great maths teaching was instrumental in enabling me to go on to a career in STEM, and it is absolutely critical in helping us to rebalance our economy. The Secretary of State is turning our locally accountable schools into academies, so can the Minister tell me what minimum qualifications or standards she will put in place for maths teaching in academies?

[Elizabeth Truss]

What is important in academies—and, indeed, in all schools—is that we give the head teachers the maximum autonomy and flexibility to recruit the best possible people. As the hon. Lady knows, the issue we face is that although maths is the highest earning subject at degree level and A-level, it is very hard to recruit teachers. We are looking at every possible avenue to increase the level of people coming into studying and teaching maths. That will increase the pipeline, which in turn will make sure academy head teachers have the best possible pool of teachers to draw on.

[Guy Opperman (Hexham) (Con)]

19. If he will take steps to prohibit local authorities from preventing schools from converting to academy status by requiring a 20% pensions fund surcharge for non-teaching staff.

[The Minister for Schools (Mr David Laws)]

Pension contribution rates for non-teaching staff are determined by local administering authority fund managers. In a joint letter in December 2011 my right hon. Friends the Secretaries of State for Education and for Communities and Local Government made it clear that no academy should pay unjustifiably higher employer pension contributions than maintained schools in their area. The letter also made it clear that other options would be considered if high rates persisted.

[Guy Opperman]

Northumberland county council is blocking schools that wish to go to academy status. Will the Minister review the December 2011 evaluation of this problem and then meet with me and interested representatives from my constituency who wish to turn to academy status or are considering doing so?

[Mr Laws]

I am concerned by what my hon. Friend says about his local authority blocking those schools that wish to go to academy status, and I can tell him that Department for Education officials are continuing to work on this issue with Department for Communities and Local Government officials. I would be delighted to meet him and others to discuss this matter. It would not be acceptable for local authorities to use this move to impede schools that wish to go to academy status.

[Karen Lumley (Redditch) (Con)]

21. If he will make it his policy to reform the funding formula for schools in Worcestershire.

[The Minister for Schools (Mr David Laws)]

In March the Secretary of State announced our intention to introduce a national funding formula during the next spending review period. In the meantime, we are simplifying the local funding system, and I hope I was able to reassure my hon. Friend during a Westminster Hall debate last week that we are committed to introducing a national funding formula and to doing so at a pace which is manageable for all schools.

[Karen Lumley]

I thank the Minister for that answer. I just want some reassurances, on behalf of the parents and young people of Redditch, that finally, after 13 years of Labour failing to deal with the issue, we are going to address the national funding formula. I also wish to invite him to come to Redditch to see some of our fantastic schools, which do a very good job in difficult circumstances.

[Mr Laws]

I would be delighted to visit the hon. Lady’s constituency, and I can guarantee her that, after many years of the previous Government failing to address this very unfair national funding formula, this Government will, in the next spending review period, ensure that there is a fair formula for the whole country.

[Mr Robin Walker (Worcester) (Con)]

I am grateful for those assurances from the Minister, and I welcome him to his place. He mentioned the next spending review period. Does the welcome extension of the minimum funding guarantee not give the Government the opportunity to move even faster and to take steps towards a fairer funding formula now?

[Mr Laws]

My hon. Friend is right to say that we already need to take those first steps towards a more rational and fairer formula. We are doing exactly that by reducing the huge number of existing variables in the formulae across the country to a much smaller number. That is the first step in moving to a fairer formula for the whole country.

[Chris Williamson (Derby North) (Lab)]

22. What steps he is taking to raise levels of attainment in literacy and numeracy for children from deprived backgrounds; and if he will make a statement.

[The Minister for Schools (Mr David Laws)]

I refer the hon. Gentleman to the answer I gave a few moments ago to the hon. Member for Halton (Derek Twigg).

[Chris Williamson]

I am just a simple bricklayer, so can the Minister explain to me why he thinks unqualified teachers in free schools and academies will raise standards, but at the same time he feels it necessary to impose tougher tests on teachers in other state schools in order to achieve the same thing?

[Mr Laws]

We announced last week measures to raise the quality of teachers across the board, and I think those received a warm welcome across the country. In the past, the standards for going into teaching have been too low. It is sensible to raise those in all schools across the country.

[Chris Skidmore (Kingswood) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Education (Michael Gove)]

Last week, I had the opportunity to write to hon. Members from Leicester and Derby inviting them to join me in raising standards in those cities, specifically by making sure that underperforming primary schools can be converted into academies. I look forward to working with those Members in the coming weeks.

[Chris Skidmore]

This year, only 11 out of the 2,000 pupils who took A-levels in Knowsley took A-level physics, which compares with 971 who did so in Hampshire. Even when the population size is taken into account, I simply do not believe that pupils in Hampshire are 22 times more scientifically gifted than those in Knowsley. Will the Education Secretary commit to a one nation policy in which every pupil, regardless of their background, will be encouraged to study rigorous qualifications, as opposed to the previous Government’s two nation policy, which exposed this educational divide?

[Michael Gove]

May I congratulate my hon. Friend on his election to the Education Committee? He is a distinguished historian and a long-time campaigner for improved access to rigorous academic subjects for all students. He is absolutely right to say that we inherited a frankly inequitable situation, and I hope that we can work across the House to resolve it.

[Lisa Nandy (Wigan) (Lab)]

The whole nation has been shocked by the allegations of child abuse surrounding Jimmy Savile, but Labour Members are also deeply concerned by the similarities with recent cases such as the one in Rochdale, where power relationships were exploited and cries for help were ignored. It has become clear that the BBC is just one of many organisations with questions to answer, so will the Secretary of State back our calls for a public inquiry, in order to gain justice for the victims and to ensure that in future young people are both empowered to speak out and listened to when they do so?

[Michael Gove]

I do not think that any of us should seek, for any moment and in any way, to relativise the seriousness of the charges that the hon. Lady raises. The BBC certainly has some issues to investigate, and two inquiries are being undertaken there. Separately, the Deputy Children’s Commissioner has been conducting her own inquiry into the exploitation of young people by groups and gangs. I want to make sure that we can consider each of those reports, but I rule nothing out.

[Simon Kirby (Brighton, Kemptown) (Con)]

T2. Does my right hon. Friend agree that parental engagement in children’s education is vital in raising standards? Will he continue to develop the close ties that exist between schools, parents and pupils?

[Michael Gove]

My hon. Friend is absolutely right. Ensuring parental involvement in children’s education is critical, and one way that that can be improved is through regular reporting of pupils’ progress. That is why I deprecate the action that has been taken by the National Union of Teachers and the National Association of Schoolmasters Union of Women Teachers, which works against parental involvement by inflicting a work to rule on members.

[Kerry McCarthy (Bristol East) (Lab)]

T3. This summer, 97% of students at Bristol Metropolitan academy achieved five good GCSEs, which is a phenomenal improvement over the past few years. Sadly, only 37% achieved five good GCSEs in English and maths, but 46% would have done so if they had sat the exams in January. That means that the school is now below the floor standard, whereas it would have been above it. Is that not grossly unfair, particularly for those pupils who worked so hard to try to get that grade C?

[Michael Gove]

I am grateful to the hon. Lady for her question and delighted that pupils in that academy are improving their education. As I have said before, the structure of the GCSE examination that those students sat, which was designed before this Government came to power, was unfair.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

T5. I think I detect a bid for the regrading of football scores from the Secretary of State. Will Ministers confirm that the Government will do everything they can to ensure that the Southwark and Lewisham college campus site in Bermondsey gets not only a continuing further education college but a university technical college and, if space permits, a secondary school, too?

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

Yes, I can. I know that my right hon. Friend has met colleagues in the other place, and my colleagues in this place and I are happy to meet him too to ensure that we can sort this problem out.

[Richard Burden (Birmingham, Northfield) (Lab)]

T4. Does the Secretary of State share my concern at a recent Ofsted report that showed serious and ongoing issues in Birmingham social services? There is good news, however, in that under new leadership Birmingham is now showing greater vigour and strategy in addressing those issues. How can Birmingham be assured that it will have the resources it needs to address those issues, particularly given the doubt over matters such as the early intervention grant, which was discussed earlier?

[Michael Gove]

First, let me reassure the hon. Gentleman that, because the early intervention grant is rising, the money will be there to ensure that safeguarding responsibilities can be discharged. Birmingham local authority has, under different political colours, had problems in both school improvement and child protection. I want to work constructively with local councillors and local MPs to ensure that we can make some improvements. Investment is required, but so is a far more rigorous attitude towards dealing with the circumstances in which many children at risk of abuse or neglect find themselves.

[John Glen (Salisbury) (Con)]

T9. A number of schools in my constituency struggle to get some of their pupils to grade C standard at GCSE, and some of the head teachers to whom I have spoken are concerned that the rigorous standards of the English baccalaureate certificate will prove unattainable for some of those pupils and might be discouraging, particularly for those who at age 11 are five years behind on reading? Will he assure teachers in my constituency that he is committed to raising standards for all, that those pupils should not be discouraged and that the EBacc is not out of reach?

[Michael Gove]

My hon. Friend makes a fair point, and that is why we are introducing additional support for all children who are behind their expected level of achievement at the age of 11. That additional support will go to those secondary schools that need it. I must be honest, however, and if there are primary schools in Wiltshire in which children are five years behind their expected reading age, that is just not good enough. The responsibility rests with the head teachers of those underperforming primary schools. If secondary teachers are saying that they cannot transform those children’s education in some of the wealthiest parts of Wiltshire, he should have a word with those head teachers, because as far as I am concerned they are falling down on the job.

[Mr Jim Cunningham (Coventry South) (Lab)]

T6. May I go back to the Minister’s answer to the question from my hon. Friend the Member for Derby North (Chris Williamson) about tough new tests for new teachers? Will he clarify whether that will apply outside the state system—for example, to free schools? Will he answer that question directly?

[Michael Gove]

Those schools that are already outside the state system—independent schools—have the opportunity to hire people who do not have qualified teacher status. That has led to Brighton college, for example, hiring a nuclear physicist. I am sure that the students in Brighton college and the parents who pay for that education are only too appreciative of it, and if we can have the same degree of spirit, invention and flexibility in the state sector, great.

[Mr Robert Buckland (South Swindon) (Con)]

I welcome the provisions on special educational needs in the draft Children and Families Bill, but will my hon. Friend carefully consider the case for a national framework within which those commissioning the new local offers can operate, similar to NICE guidelines in the field of health, for example?

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

I know my hon. Friend is a deeply committed and understanding champion of children with special educational needs and disabilities. He will therefore be aware that we have 20 pathfinders across 31 local authorities that are testing the formulisation and delivery of the local offer. We will examine their findings carefully to help sharpen up the development of the local offer as we go forward.

[Nic Dakin (Scunthorpe) (Lab)]

T7. Considering the need to preserve our Olympic legacy, what does the Secretary of State have to say to those 150,000 people who signed a petition against his plans which will come into force this Wednesday to scrap minimum size regulations for school playing fields?

[Michael Gove]

I admire their passion, but they are wrong.

[Stephen Gilbert (St Austell and Newquay) (LD)]

Many children from my constituency with severe learning difficulties attend Doubletrees school in St Blazey. It has been reported to me that the move from EMA to bursaries for 16 to 19-year-olds represent a fall in funding for that school. Will he meet me to discuss their concerns?

[Michael Gove]

I would be delighted to meet the hon. Gentleman.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

T8. Bearing in mind that the Secretary of State has already said that the results of the GCSE fiasco this year were unfair, who would he advise the 137 pupils in my city who have had manifest injustice done to them as a result of the marking fiasco to put their faith in—him, to put the matter right, or the legal action against Ofqual?

[Michael Gove]

It is anyone’s right to pursue action through the courts if they believe that is the only way to secure a remedy, but the point that I would make, and have consistently made, and a point which was reinforced by the Chairman of the Select Committee, is that the design of those qualifications was flawed from the start, and it was not this Government who designed them.

[Sir Bob Russell (Colchester) (LD)]

I am sure that forward thinking and value for money are part of the Department for Education’s thinking. With that in mind, does the Secretary of State agree that it would be silly to remove permanently surplus places in secondary education, when it is known, as is set out in question 24, that youngsters coming through the system will need those places in three or four years’ time?

[The Minister for Schools (Mr David Laws)]

I think my hon. Friend has specific concerns about issues in his constituency in relation to some of the smaller secondary schools. I would be happy to meet him to discuss whether there is some way that we can support his understandable desire to make sure that there is capacity for future children in those schools.

[Liz Kendall (Leicester West) (Lab)]

The Government’s decision to transfer funding for two-year-olds’ nursery education to the dedicated schools grant will mean an additional cut of 27% for the early intervention grant. Leicester will lose £4 million in 2013. It will have no option but to reduce support for children’s services and the troubled families programme. Can the Minister explain how this will get kids ready for school, promote social mobility or save taxpayers’ money in the long run?

[Michael Gove]

I should have thought that the hon. Lady would welcome the additional investment in making sure that the very poorest two-year-olds receive 15 hours of free pre-school education—something that was never achieved under the previous Government. [Interruption.] I notice all sorts of sedentary chuntering from the Opposition Benches but there is a direct challenge to the hon. Lady and to the shadow Secretary of State. Last week I asked whether they would work with me in order to convert underperforming primary schools in her constituency into academies. She has said nothing yet. People are waiting. Is she on the side of reform or of a failing status quo?

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I welcome proposals to continue the teaching of maths to age 18, both for those who get a grade C GCSE and for those who do not. Are any practical changes required in the timetable of those who go into employment at the age of 16 if they are to be able to continue to do maths and possibly literacy up to the age of 18?

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

The Government have already committed to a funding condition for students who do not achieve a C at GCSE to continue to study maths until 18 either in or not in employment. I am also concerned about the cohort who achieve a GCSE grade C in maths but who do not want to go on and study A level. We need to make it clear that there are qualifications for them, too.

[Toby Perkins (Chesterfield) (Lab)]

I am interested in the logic of the Secretary of State’s position. If he believes it is right that academies and free schools should be able to take on whoever they like on the strength of the opinion of the head teacher, why is that not right for local authority schools? And if he believes it is right that we make the teachers’ training qualification more difficult, why is it right that academies can opt out of that?

[Mr Speaker]

Order. The hon. Gentleman is supposed to be an egalitarian. One question will do—an equal distribution of the available fruits.

[Michael Gove]

I, too, am an egalitarian, which is why I believe that academy status should be extended to every school that believes in improving outcomes for its children.

[Duncan Hames (Chippenham) (LD)]

As Wiltshire’s education settlement has historically been underfunded, we look forward to the new school funding formula, but Wiltshire council is concerned that it might have unintended consequences, especially in relation to support for small schools, so will the Minister please meet me to explore any scope for discretion in how the council can go about making those changes?

[Mr Laws]

I would be delighted to meet my hon. Friend to discuss these matters. He will know that in the past couple of weeks the Government have made two announcements to try to ease concerns in this area: first, we have committed to reviewing the funding formula for 2014-15; and secondly, we have promised to continue the minimum funding guarantee beyond 2015.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The special educational needs proposals currently under pre-legislative scrutiny will water down the scope of the SEN tribunal, weakening the rights of parents to get the help they need. Will the Minister give a commitment today to ensuring that parents of children with SEN do not lose out?

[Mr Timpson]

The hon. Gentleman should look carefully at the draft clauses and the subsequent regulations and code of practice that will follow, because it will be clear from all that that the tribunal processes will be strengthened, particularly for those over 16, who currently have little course for redress.

[Rehman Chishti (Gillingham and Rainham) (Con)]

In the 2012 GCSE results more students in Medway achieved five or more A to C grades. Will the Minister join me in congratulating the parents, students and staff on that achievement?

[Michael Gove]

I absolutely will. It proves that, even in tough circumstances, with strong leadership children can do better.

[Lilian Greenwood (Nottingham South) (Lab)]

What evidence informed the Secretary of State’s decision to propose the removal of coursework and controlled assessments from the examination system?

[Michael Gove]

A huge weight of evidence showing that the very best schools recognise that the most effective way of ensuring that children can be motivated is by having linear qualifications.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I, like many others in South Essex, believe that one way to improve educational outcomes in Basildon would be through the provision of a UTC specialising in both engineering and logistics. Will my hon. Friend confirm that he would welcome and support an application for such a college in Basildon?

[Matthew Hancock]

Yes, I absolutely will. There is a commitment to have 24 UTCs by the end of this Parliament. The deadline for applications is next month and we hope to be able to announce which UTCs will go ahead by Easter.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

I am sure that the Secretary of State agrees that children learn properly when they eat properly, so does he share my concern that already more than 1 million children who live in poverty are not eligible to claim free school meals—a figure that is likely to increase next year with the introduction of universal credit? Has he made it clear to the Secretary of State for Work and Pensions that he should be seeking to extend eligibility rather than restricting it?

[Michael Gove]

I have enormous respect for the right hon. Gentleman. We are working across Government to ensure that as many children as possible who are eligible for free school meals receive that very important benefit and that it continues to go to those who deserve it.

[Jenny Chapman (Darlington) (Lab)]

Does the Secretary of State accept that the effects of the GCSE fiasco are now being felt by students not directly involved, because schools in my constituency are having to fund a legal action against Ofqual, because the Government, unlike the Welsh Government, have failed to act?

[Michael Gove]

I have already made clear to the House my view of the mistakes the Welsh Education Minister has made. All I will say once again is that the flaw in the qualification was in its design, and it was not this Government who designed it.

Ash Dieback Disease

Monday 29th October 2012 Commons Chamber

14:30

[Mary Creagh (Wakefield) (Lab)]

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if he will make a statement on the Government’s policy on tackling ash dieback disease.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

My right hon. Friend the Secretary of State is today in Cannock Chase visiting woodland, so I will reply in his stead. We are taking the threat posed by Chalara fraxinea—ash dieback disease—extremely seriously. We have today imposed a temporary ban on imports of ash and restrictions on its movement, supported by the results of a shortened consultation with industry on our pests risk assessment. The ban will therefore be effective well before the start of the main UK planting season. Before the ban, the Horticultural Trades Association urged its members to follow a voluntary moratorium on imports throughout the period, which is being well observed.

On discovering Chalara in the UK, plant health authorities took immediate action rapidly to assess ash trees for signs of infection at more than 1,000 sites where ash plants from Europe had been grown or planted in the past five years, and this has resulted in the destruction of 100,000 trees.

[Mary Creagh]

I thank the Minister for his reply.

Over the weekend, the risk facing the UK from ash dieback disease has become apparent. Experts fear that it is the biggest threat to British trees since 25 million trees were killed by Dutch elm disease 30 years ago. It is disappointing that the Secretary of State chose to announce the ban in Staffordshire instead of in person to this House.

We welcome the ban, but the question on everyone’s lips is, “Why did it take so long?” Ash dieback was found last February in a Buckinghamshire nursery. Why did Ministers sit back, cross their fingers and wait until the disease was found in the wild in June? Why did the Horticultural Trades Association act before the Government? Why did the Government’s consultation on an import ban on ash start only on 31 August? Can the Minister give a cast-iron guarantee that no infected trees were planted in the spring, especially after the severe winter? Can he guarantee that no infected trees were imported into the UK over the summer while Ministers dithered? How does he know that people did not import saplings into the country in the boot of their car? Why were landowners and local authorities told of the disease just three weeks ago?

How will the ban be implemented and policed, and how much will it cost? On Saturday, the Secretary of State told the “Today” programme that 58,000 trees had been burned since the disease was identified. The Minister said that within that short 48-hour period the number had been revised up to 100,000. Can he tell us what the number will be by the end of the week? Is it possible to treat and store felled wood so that it can be used productively in future? What assessment has he received of the impact of the disease on jobs in the wood services industry?

In autumn 2011, the Forestry Commission’s pathology bulletin carried the headline “One to watch for—Chalara fraxinea”, and stated that it was

“not yet present in Britain”.

On what date was Chalara fraxinea identified as the pathogen that causes ash dieback and when were Ministers informed? They cannot say that they were not warned as an internal Forestry Commission document warned that cuts meant that there would be

“no capacity to deal with the costs of disease or other calamity.”

The Forestry Commission trade unions’ evidence to the Science and Technology Committee stated:

“Forest research in Great Britain is already funded at a minimal level, and will be drastically under-funded as the cuts proceed.”

This Government cut the Forestry Commission’s cash by 25%, closed seven regional offices, and cut 250 staff. They have cut funding for forest research from £12 million a year to £7 million a year. The Forestry Commission’s website details the difficulty that scientists had in identifying the deadly form of the fungal infection, and those cuts reduced the commission’s ability to identify and tackle tree disease.

We welcome the creation of a tree disease taskforce under Professor Ian Boyd to deal with this crisis. We also welcome the app that is being launched to crowd-source the disease—I am surprised that the Minister did not mention it—although with leaf fall already under way this is, again, too little too late. After the forest sell-off fiasco, this incompetent Government have been asleep on the job with ash dieback. Like Nero, Ministers fiddled, and now it is our forests that will burn.

[Mr Heath]

It is sadly predictable that when we have a serious condition that could have enormous consequences with which we are trying to deal as a country, the first thing the hon. Lady thinks is, “How can we blame the Government rather than deal with the disease?” She asked why the Secretary of State was not here today. It is because he is talking to people who are dealing with the disease; he is talking to foresters and making sure that we are taking all necessary precautions.

The hon. Lady asked why nothing was done in February. Of course something was done in February—we acted straight away under the previous Secretary of State. Once the first United Kingdom finding of Chalara was confirmed in March, plant health authorities prepared a pest risk analysis. No previous national or international pest risk analysis existed, partly because until 2010—[Interruption.] The hon. Lady would do well to listen to the background to this. Until 2010, there was widespread scientific uncertainty over the identity of the causal organism. That is actually an international issue, rather than an issue in this country.

Since the disease was intercepted, plant health authorities have been carrying out intensive surveillance and monitoring, chasing forward movements of ash plants from infected nurseries and inspecting trees in the vicinities of infected sites to ascertain where the disease may be present in the wider environment. That enormous ongoing task involves well over 1,000 sites, and it is as a consequence of that that the 100,000 trees have been destroyed.

The hon. Lady asked for a guarantee that no infected material came in during the voluntary moratorium, but of course I cannot guarantee that. I can say that no commercial imports took place, because of the action that we took, but I cannot guarantee that no one brought back a little ash sapling in the boot of their car. I hope that they did not, but I cannot guarantee it.

The hon. Lady may not understand that this is an airborne disease and that the incidence of the disease in mature trees in East Anglia had not previously been suspected—it is likely to have been carried on the wind over the channel. Now that we have discovered it, we have immediately taken the action required.

Finally, the hon. Lady was quite wrong about resources, because there has been no reduction in those for plant health and tree health in this country, as she would ascertain were she to speak to the Forestry Commission.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Many Members are seeking to catch my eye and I am keen to accommodate them, but to do so will require brevity from those on Back and Front Benches alike. I am sure that we will be led in this process by the Chair of the Select Committee.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I welcome these proceedings and congratulate my hon. Friend the Minister. Will he pass on our thanks to the Food and Environment Research Agency in my constituency for its work and to the Forestry Commission? Will he explain to the House that this disease was already treated as a quarantine pest under national emergency measures? That would help to show that it was already high on the political agenda. Will he ensure that resources are put into urgently investigating the age profile of the disease? Saplings are deemed more likely to die from the disease, but are mature trees equally at risk? Will he also assure the House that none of the other plants that are being inspected by FERA and the Forestry Commission are causing the same concern?

[Mr Heath]

I can certainly confirm that we are taking all measures possible to deploy colleagues in the Forestry Commission, those working in forest services and people from FERA to identify the incidence of disease wherever it can be found. We will look closely at a suspected further case in a mature tree. It is important to realise that there is a national forest inventory through which symptoms of disease are looked at across the board all the time. There were 8,000 inspections of ash trees under the inventory last year and it was found that the trees were, in fact, in very good health. Only 61 cases of any signs of ill health in ash trees were discovered, and none of them was due to Chalara.

[Joan Walley (Stoke-on-Trent North) (Lab)]

There is concern because while it is now late autumn, this was discovered much earlier in the year. Leaving aside that delay, will the Minister give the House an assurance that he will work with the Woodland Trust, which has great expertise in this issue and has a series of asks for the Government?

[Mr Heath]

It is important that we work with everybody; this is not something that we can leave entirely to the scientists and the experts. Anyone who spots an incidence of disease in trees would do well to advise the authorities. We can then use the great body of voluntary organisations that are interested in the health of our forests to do all we can to deal with the disease as quickly as possible. I repeat that there was not a delay over the summer. Planting does not take place during the summer period and, as far as we are aware, the voluntary moratorium has worked very well.

[Dan Rogerson (North Cornwall) (LD)]

Given the importance of a joined-up approach to tackling the threat to trees and plants, will my hon. Friend tell us the likely make-up and remit of the expert taskforce?

[Mr Heath]

We are keen to bring together experts in plant disease, industry experts and wider forest interests so that we can see what more, if anything, can be done to deal with what could be a disastrous outbreak of the disease. We also need to look at how we will deal most effectively with plant and tree health in future. The Secretary of State and I have discussed that, because we feel that for many years this country has not been as well equipped to deal with plant health as it has with animal health. I would like us to be prepared for all eventualities at all times.

[Caroline Lucas (Brighton, Pavilion) (Green)]

This episode is a terrible indictment of the Government, and also the Opposition, because the Horticultural Trades Association first warned about the disease back in 2009—[Interruption.] Neither of your houses has worked hard or fast enough on this. Will the Minister reverse the 25% cuts that he is making to the Forestry Commission so that it has the resources to tackle this episode urgently and properly?

[Mr Heath]

I am afraid that the hon. Lady simply is not correct. I have explained the sequence of events and the fact that we have in no way reduced the resources available for plant and tree health.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Pound farm in Suffolk is a mile from my constituency boundary, in the constituency of my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter). Will the Minister update the House on what proactive policies are being put in place for local home owners and residents? Will there be a proactive felling and burning policy, and how will it be communicated?

[Mr Heath]

We certainly need to communicate with local people who have forestry interests and trees on their property about what they should be looking for. I will not pre-empt the discussions with the experts on the ground about precisely what is the right action to take, but I assure my hon. Friend that we will apply all available resources to the problem, because we do not want it to spread further if we can possibly avoid it.

[Dame Joan Ruddock (Lewisham, Deptford) (Lab)]

The Minister said that he had difficulty identifying the pathogen, but did he or his officials contact Danish scientists who have a decade of experience in the field? Will he publish the scientific research indicating that airborne spores could reach this country from continental Europe?

[Mr Heath]

It was not I who had a problem identifying the pathogen; it was the international authorities, including the Danish authorities that the right hon. Lady mentions, who had reason to suspect that the pathogen was not the one that was initially identified, and that it was less virulent. That was why Europe and the world, frankly, took their eye off the ball to a certain extent and did not recognise the threat that Chalara represented to the Danish forests, for instance. Of course we work closely with our colleagues in other European countries and learn from their information, but I am afraid we cannot second-guess the international consensus.

[Mr Edward Leigh (Gainsborough) (Con)]

The ash tree is known as the Lincolnshire tree. Indeed, my home in Lincolnshire is surrounded by them, and if only a couple fell over, my home would be completely demolished. We therefore take the problem very seriously in Lincolnshire. Will the Minister accept that there have been reports of nursery imports carrying the disease coming into Lincolnshire, and that the reason why such diseases have taken off in the past is that Governments have not had sufficient grip and have not been severe—ruthless even—by stopping them at their inception?

[Mr Heath]

As I have indicated, we need to take tree and plant diseases very seriously. There is of course evidence that saplings have brought the disease into the country, which was precisely why we applied the voluntary moratorium and have now moved to a ban, which comes into effect today. That means that no trees have been imported on a commercial basis since early spring.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

May I declare an interest as the proud owner of a number of ash trees that I planted 10 years ago?

Will the Minister explain what budget Professor Boyd and his team are working to and where that fits in the cuts that were identified in evidence to the Science and Technology Committee last June?

[Mr Heath]

The team that Professor Boyd has brought together will have all the resources it needs. I do not have a figure to give the hon. Gentleman because that will depend on where the team’s discussions take it but, if he wishes, we will provide his Committee with the information in due course.

[Guy Opperman (Hexham) (Con)]

I have six forests in my constituency, and I pay tribute to the work of the Forestry Commission thus far. Will the Minister outline what ongoing funding the Government have allocated for research into tree health?

[Mr Heath]

Research into tree health—other than that which takes place within the university sector and independently of the Government—is carried out through the Forestry Commission and Forest Services. The actual amount will be available in the Forestry Commission’s budget, and I will send the hon. Gentleman an accurate figure if he wishes.

[Mrs Mary Glindon (North Tyneside) (Lab)]

What advice would the Minister give to people who might have trees with the disease in their garden? How will he encourage them to come forward if they are concerned that they might be blamed for bringing the disease into the country?

[Mr Heath]

Let me be clear: we are not going to blame anyone for bringing in a tree. The only person engaged in a blame game is sitting on the Opposition Front Bench; the rest of us are trying to find practical solutions. I have no intention of scapegoating somebody who has innocently brought a diseased tree into the country. We will ensure that advice is available through the Forestry Commission, and use every resource, including the press, so that people know the signs they should be looking for in mature ash trees. Meanwhile, it will be for experts to identify the existence of the pathogen in ash trees and to take appropriate steps. Nobody should feel worried that because they have planted an ash sapling, they will be held personally responsible for the outbreak of Chalara.

[Michael Ellis (Northampton North) (Con)]

While the Labour party has been making cheap political points, a consultation has been in progress. What can the Minister tell the House about how effectively that consultation supported a prohibition?

[Mr Heath]

The consultation was about a statutory ban and the responses we received were overwhelmingly supportive of that. In fact, they also provided some further helpful advice about the implementation of the ban, which enabled us to achieve that at the very first opportunity.

[John McDonnell (Hayes and Harlington) (Lab)]

I do not doubt the Minister’s commitment to tackling this issue, but when the Public and Commercial Services union made representations to the Government, it stated that cuts in the Forestry Commission would have such consequences. Even if the Minister does not accept that point, we will need additional resources. Will he undertake a swift, independent review of the need for those resources? I assure him that if he requires support in getting those additional resources and lobbying the Treasury, the Labour party will assist him.

[Mr Heath]

May I make it absolutely clear that we will not fail in our fight against this disease through lack of resources? We will make available from the Department those resources that are identified as necessary by the scientific team and taskforce that we have brought together to consider what should be done next.

[Mr William Cash (Stone) (Con)]

Has my hon. Friend experienced any resistance from the European Commission or the European Union regarding the import ban, as was suggested on the “Today” programme a couple of days ago? If so, will he make certain that under no circumstances we will allow the EU to stand in the way of the plans that he has announced?

[Mr Heath]

In this instance I can put my hon. Friend’s fears to rest because the EU has not impeded what we have sought to do in any way. Indeed, we have been working extremely closely with colleagues in other countries who, to date, have faced a much larger incidence of this disease than we have. We have been able to learn from their experiences and put those lessons into action in this country.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The Minister will understand that the felling of a large amount of timber may have an effect on the wood services industry and the price of timber. Will he issue advice—perhaps he has advice now—on the safe storage, curing and drying out of wood that has been felled, to ensure that the pathogen does not persist?

[Mr Heath]

We will certainly issue such guidance. The ban also deals with the movement of timber and timber waste products in this country. There is no evidence that the pathogen persists in felled trees and wood products but, nevertheless, we believe that an appropriately precautionary response would be to restrict movements in this country, and that is what we have done.

[Zac Goldsmith (Richmond Park) (Con)]

Ash is not the only tree in this country that is under assault from invasive species. In parts of Richmond park, up to 50% of our great oaks show signs of acute oak decline, and about 70% of horse chestnuts in the country show signs of bleeding canker. Surely we can make better use of our island status and apply stronger and better controls at points of entry.

[Mr Heath]

We can do a number of things. Obviously, we cannot prevent the spread of wind-borne disease, but we can look carefully at where import controls are required. We have instructed the agricultural attachés network in our embassies to monitor local intelligence, so that when there are outbreaks of tree disease, we can deal with them in a timely and effective way. The hon. Gentleman is absolutely right that ash dieback is not the only disease to consider, because we also have phytophthora, Asian longhorn beetle and sweet chestnut blight. We are having to cope with a number of serious tree diseases, and we are applying the necessary resources to do so.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I understand that an incidence of the disease has already been identified in Scotland. Will the Minister therefore tell the House the date on which the devolved Administrations were first notified?

[Mr Heath]

We have worked very closely with colleagues in the devolved Administrations to ensure that they are aware of what we are doing and that they can take appropriate decisions on what ought to be done. The Forestry Commission works across the border with its counterparts in Scotland to ensure that all scientific information is shared. I am absolutely clear that they will have all the knowledge we have in dealing with this case. I do not think there is any shortage of information.

[Mrs Eleanor Laing (Epping Forest) (Con)]

The House has heard what the Minister said about his Government not second-guessing the international consensus and not being impeded by the EU, but does he not understand the annoyance of my constituents, who care about our precious, ancient Epping forest, at the EU’s lack of action on biocontrol? While EU officials are wasting their time and our money trying to interfere with the work of UK hairdressers, who do not need protection, they are doing nothing for our ancient forests, which need protection from airborne diseases and diseases imported from Europe. Why has the EU not taken action, and will he do all he can to ensure that it does so?

[Mr Heath]

We have brought together scientific experts from all over Europe to deal with this problem. I am not sure that the people dealing with hairdresser regulation are best deployed dealing with tree health. We need to use all available methods to restrict the spread of tree diseases, because there is a very high incidence of several of them, particularly in northern Europe. We should do everything we can do to avoid their coming into this country.

[Mr David Anderson (Blaydon) (Lab)]

In evidence to the independent panel on forestry, the Friends of Chopwell Wood, which is based in my constituency, said:

“There is a concern that having ‘saved’ our wood from sell-off we may lose it by neglect and disease”

and that that would be caused by “insufficient staff and funding”. Will the Minister give an assurance that that will not happen?

[Mr Heath]

As the hon. Gentleman knows, the Government have not yet formally responded to the independent panel on forestry, but we have indicated that we accept the thrust of its recommendations. I look forward to giving a full response early in the new year on that subject. The future for forestry is very bright, despite setbacks of the sort that I have described today. I repeat that we have not cut back on the allocation of resources. I hope we will be able to mobilise not just scientists, foresters and the voluntary groups for which he has spoken up, but everybody who has an interest in trees in this country, to ensure we have a thriving forest—not only today, but in future.

[Andrew George (St Ives) (LD)]

Given that there will be a desire for public vigilance, what will the Government do to ensure that public concern and support for taking action on this issue are properly and effectively harnessed?

[Mr Heath]

I am keen that all of us with an interest in tree health take responsibility for this. We cannot all be experts on fungal diseases of the ash—I do not expect that—but people should report clear symptoms of ill health in trees to the authorities. The Government play their part by ensuring that research programmes into aspects of tree health are augmented, and we will thus ensure that we have healthy forests in the future.

[George Freeman (Mid Norfolk) (Con)]

As a representative of one of the areas affected by the disease, may I—in contrast to the hon. Member for Wakefield (Mary Creagh), whose principal preoccupation seemed to be to play the blame game—thank the Department and its officials for their rapid action to get on top of this potentially devastating disease, particularly by inspecting more than 1,000 sites over the summer, destroying more than 100,000 trees and introducing an immediate ban? Given that the science of the disease is little understood, will he reassure the House by updating us on what steps are being taken to work with the forestry industry and researchers to understand its epidemiology?

[Mr Heath]

That is absolutely right. We have actually allocated £8 million from existing resources for new research into tree health over the next four years, which I hope will go some way to supplementing what is already in place. There are question marks in the international scientific community over such things as the pathology of the organism and its means of transmission, which we need to explore more fully. The fact that those countries with a high level of infestation—Denmark, Germany, Poland and others in northern Europe—still do not have the answers to some of those questions indicates the complexity of the issue. It is not the case that Britain has not been playing its part; scientific research sometimes takes time.

[Mr Mark Spencer (Sherwood) (Con)]

Will the Minister assure the House that his officials are working with importers and nurseries to ensure that no affected stock remains that may be planted in the future, so that forests such as Sherwood stay not only clean and green, but great places to visit?

[Mr Heath]

We will continue the programme of inspection that has identified those saplings that may be a risk and destroyed them. The ban has been in place on a voluntary basis—it is now on a statutory basis—to ensure that nothing came into the country over this summer and therefore was not available for the next planting season. We can be reasonably assured that infected trees will not be planted this winter—at least those from commercial sources—but we need to maintain vigilance, which we certainly will do. We will also work closely with the industry, which understands how dangerous the disease is and wants to co-operate. I am grateful for the help it has given to the Department in identifying and dealing with the threat at an early stage.

[Dr Sarah Wollaston (Totnes) (Con)]

We have already seen one dangerous tree disease spreading into other species—phytophthora. Is there any evidence of Chalara spreading into other species, either on the continent or here?

[Mr Heath]

I do not believe that there is evidence of Chalara crossing species at the moment, but I will check that and give the hon. Lady an accurate response. She is right about phytophthora, which is well evidenced. In the case of Chalara fraxinea, we are dealing with a specific issue for the ash tree but, as she will be aware, fungal diseases are sometimes more easily spread between species than some other pathogens. I will examine all the evidence and write to her if there is any suggestion of cross-species spread.

Mental Health Act 1983

Monday 29th October 2012 Commons Chamber

16:05

[The Secretary of State for Health (Mr Jeremy Hunt)]

With permission, Mr Speaker, I wish to make a statement about an issue relating to the Mental Health Act 1983.

It has become apparent that there are some irregularities around the way in which doctors have been approved for the purpose of assessing patients for detention under the Act. For assessments and decisions under certain sections of the Act, including detention decisions under sections 2 and 3, three professionals are required to be involved—two doctors and an approved mental health professional. The latter will usually be a social worker.

In 2002, when strategic health authorities came into being, the then Secretary of State properly and lawfully delegated his function of approving doctors under the Act to them. However, it came to light last week that in four of the 10 SHAs—North East, Yorkshire and Humber, West Midlands and East Midlands—between 2002 and the present day the authorisation of doctors’ approval appears to have been further delegated to NHS mental health trusts.

I was made aware of the issue and kept up to date with the actions being taken last week. Our latest best estimate is that approximately 2,000 doctors were not properly approved, and that they have participated in the detention of between 4,000 and 5,000 current patients within institutions in both the NHS and independent sectors. Rampton high-secure hospital is in one of the affected areas, and some patients at Ashworth high-secure hospital are also included.

There is no suggestion that the hospitalisation or detention of any patient has been clinically inappropriate; that the doctors so approved are anything other than properly qualified to make such recommendations; or that these doctors might have made incorrect diagnoses or decisions about the treatment that patients needed. All the proper clinical processes were gone through when these patients were detained. We believe that no one is in hospital who should not be and that no patients have suffered because of this. The doctors would have had no reason to think that they had not been properly approved. They acted in good faith and in the interest of their patients throughout this period.

In the light of our legal advice, we do not believe that any decisions made about patients’ care and detention require review because of this irregularity. Doctors should continue treating patients currently detained under the MHA in the usual way. We have received advice from the First Treasury Counsel that there are good arguments that the detentions involving these particular approval processes were and are lawful, but the counsel also argues the need for absolute legal clarity. The legal advice is that this should be resolved through emergency retrospective legislation.

As soon as the irregularity was identified, my Department worked swiftly to identify the best course of action and to put the necessary preparatory work in place. It first became aware of the problem last week. Officials immediately sought initial legal and clinical advice. We then swiftly analysed possible options, including the option of reassessing all potentially affected patients, working with the health leads in the regions affected and clinical experts from the Royal College of Psychiatrists.

When I was briefed on the situation, I asked for detailed information on the time it would take and the clinical risks involved in reassessing all potentially affected patients. On Friday, I asked for an emergency Bill to be drafted over the weekend, as a matter of contingency. I also briefed the Prime Minister personally the next day. Following further discussions and analysis over the weekend, the decision to introduce emergency legislation was taken yesterday, and we have since worked to prepare the necessary materials.

At all times, my priority has been to resolve the situation in a way that follows clinical advice about the most sensitive way to deal with a highly vulnerable group of individuals. We have also worked to remedy the problem as it relates to current and future detentions. As of today, all the doctors involved have been properly approved. The accountable officers for the four SHAs in question have written to Sir David Nicholson, chief executive of the NHS, to confirm they have made the necessary changes to their governance arrangements. Furthermore, the accountable officers in the remaining six SHAs have written to Sir David to confirm that they have, in the light of this issue, reviewed their own arrangements and that they are in full compliance with the Act.

Although we believe there are good arguments that past detentions under the Mental Health Act were and are lawful, it is important that doctors, other mental health professionals and, most importantly, patients and their families have absolute confidence in the decisions made. That is why, in relation to past detentions, we have decided that the irregularity should be corrected by retrospective legislation. Although we are aware of the problem in only the four areas going back to 2002, the proposed legislation will apply in principle to the approval of all doctors under the Mental Health Act since its introduction in 1983. The proposed legislation will retrospectively validate the approval of clinicians by those organisations to which responsibility was delegated, up to the point when all the relevant doctors were fully re-approved and their status put beyond doubt. The legislation will not deprive people of their normal rights to seek redress if they have been detained for any reason other than the narrow issue of the delegation of authority by the strategic health authorities, nor will it affect any future detentions or legitimise any similar failures in future. We are proposing to introduce the draft legislation to this House and, through best endeavours, looking for it to complete its passage through all the appropriate stages in this House and the other place as soon as is practicable.

While addressing the technical issue, it is also important that we get to the bottom of how this happened and that we learn any lessons to help inform the operation of the new system architecture from April 2013. As such, I have asked Dr Geoffrey Harris, chair of NHS South and former chair of Buckinghamshire mental health trust, to undertake an independent review to look at how the responsibility was delegated by the four SHAs and, more broadly, the governance and assurance processes that all SHAs use for delegating any responsibilities. I will also ask him to look at this issue in the context of the new NHS structures that come into force from next April and to see whether any lessons need to be learned. It is imperative that the review is swift, and I have asked Dr Harris to report to me by the end of the year with recommendations to ensure that every part of the system employs the highest standards of assurance and oversight in the delegation of any functions.

I stress to the House that I have reviewed with lawyers, clinicians and NHS managers possible alternatives to introducing this retrospective legislation. I have been advised that all alternatives would be highly disruptive to many of the most vulnerable patients and would deprive many other patients of the care they need while any action is undertaken. However, all the advice I have received has been unequivocal in stressing the need for absolute clarity of the legal status of any hospitalisation or detention of patients, in the interests of those patients, their families, those caring for them and the wider public. That is why, in such exceptional circumstances, this retrospective legislation is being proposed. Both a Bill and the accompanying explanatory notes will be published this afternoon. I commend this statement to the House.

16:12

[Andy Burnham (Leigh) (Lab)]

I thank the Secretary of State for his statement and for notice of it. Detaining people under the Mental Health Act raises the most serious issues of fundamental rights and of patient and public safety. Any reported failure will therefore always be a matter of the highest concern. I know this House will want to get to the bottom of the unacceptable breaches of procedure that we have just heard about. However, I am sure I speak for both sides in saying that the House will have been reassured by the Secretary of State today on three crucial points: first, that no patient has been wrongly detained, received care that was not clinically appropriate or will see their legal rights restricted by the legislation; secondly, that no doctor was unqualified to make decisions; and, thirdly, that urgent action is being taken to correct the situation and bring the clarity that is so essential.

Let me now turn to the serious questions that need to be answered. Will the Secretary of State say more about the events that brought this issue to light last week? Was it discovered in one SHA first, and by what process did the Department establish that it extended to three more? When exactly was the Department made aware, when was the Secretary of State informed and what action has been taken to establish the full extent of the problem? Have extensive checks been undertaken in all 10 SHA areas, and is he absolutely confident that no more patients and families are affected than the 4,000 to 5,000 he has mentioned?

I want to press the Secretary of State for more information on the people affected. Will he say whether he has any plans for direct communication with the patients and families affected? Are the patients living not only in the four regions mentioned but in all parts of the country? How many are in high-secure hospitals, and how many could pose a risk to the public?

We understand and support the Secretary of State’s wish to remove any doubt about the legal status of the patients concerned, but that must be set against the undesirability of asking the House to legislate tomorrow on an issue that it has found out about only today. Over the next 24 hours, will he ensure that Members have access to the fullest possible information, including a summary of the legal advice he has received?

There will be concerns about precedent. This is the first time that the House has been presented with emergency legislation in this area that will affect people’s rights. The public will want to know that it is being used in exceptional circumstances as a last resort, and not as a convenient means of correcting administrative failures. Will the Secretary of State therefore explain precisely what alternatives to legislation were considered, and why it was decided that they were not acceptable in these circumstances?

Let me turn to the investigation. We support the review under Dr Harris that will try to get to the facts and ensure that lessons are properly learned. We do not want to prejudge it, but is the Secretary of State in a position to confirm today whether the review is already proceeding on the basis that this is a failure of policy implementation rather than a defect in the original legislation? That is important, as practitioners working in this field will not want any unnecessary question marks hanging over the Mental Health Act 1983.

We also need clarity about the future. This area is currently the responsibility of SHAs, which are due to be abolished next April. So, as well as establishing the historical facts, will the Secretary of State ask his review to consider whether the new arrangements for sections, following the Government’s reorganisation of the NHS, are sufficiently well understood? Will he also ask the review to advise on how any danger of further confusion arising from the process of transition can be prevented?

I commend the Secretary of State for the pragmatic approach he is taking to this difficult issue. His request of the House is exceptional, but failure to act could cause unnecessary distress and uncertainty to many thousands of vulnerable patients and their families, and present risks to public safety. We will press him for answers in the areas that I have outlined, but we believe that his action is justified. He will have our support in removing any uncertainty.

[Mr Hunt]

First, I thank the right hon. Gentleman for the co-operation that he has shown to me and my Department over the weekend. There are occasionally moments when issues of public safety and patient well-being transcend the normal political divides, and I greatly appreciate his co-operation on this matter.

Let me deal with the important questions that the right hon. Gentleman has asked. The issue arose when a challenge was made to the authorisation of one doctor in Yorkshire and Humberside and, in dealing with that challenge, the irregularity in the way in which all authorisations had happened became apparent. Following further investigation, we discovered that this had happened in four other SHAs. We found out about this early last week, and I was informed towards the end of last week. Immediate action was taken to ensure proper validation last week of all the doctors who are currently taking section 12 decisions under the Mental Health Act, and that was completed as of today.

We have done exhaustive checks on the other SHAs, which is part of the reason why we asked all the SHA bosses to write to Sir David Nicholson—which they have all done today—to confirm that their processes in this area are in order. We do not believe that this issue affects any patients other than the ones we have talked about, to date. However, because people move and are moved to different hospitals and places of detention, it might be happening in other parts of the country beyond the four SHAs in which the irregularities in authorisation happened.

The right hon. Gentleman will understand that it is not the practice for Governments to publish legal advice because we want to continue to be able to receive frank legal advice in the future. However, I am happy to answer any questions about the legal advice and, as he knows, I am happy for him to talk to my Department’s legal advisers to satisfy himself on the precise legal situation.

Let me move on to the really important point about the alternatives that we considered, as it is highly exceptional to bring in emergency legislation. The right hon. Gentleman will know that authorities are allowed to detain someone under the Mental Health Act for 72 hours while the correct processes are followed to section them. Although, as I mentioned, we believe we have good arguments to show why these detentions were lawful, we did not know what a court might have decided if the detentions were challenged. We could have faced literally having to redo the entire process for 4,000 to 5,000 patients within 72 hours. Given the high level of vulnerability of many of them, we could not find a means of doing that in an orderly way that protected their well-being. I received clear medical advice from the NHS medical director, Professor Sir Bruce Keogh that that would not be an appropriate course of action. We looked at the position carefully and because we were trying to explore other alternatives we did not come to the decision to introduce emergency legislation until this weekend.

I can confirm that we do not believe that this has highlighted a defect in the legislation. We are not seeking in the emergency draft Bill to change the Mental Health Act. This is purely retrospective legislation dealing with some specific procedures under that Act; it will have no impact as this goes forward.

The right hon. Gentleman is absolutely right that we must be sure to minimise the confusion as we move towards the new structures. Under them, the problem would have been resolved, with the power reverting from strategic health authorities to the Department of Health. I do not want to be complacent: if this problem happened in one area, we want to be sure that it cannot happen in others.

[Mr Stephen Dorrell (Charnwood) (Con)]

I welcome the prompt action taken by my right hon. Friend and the support he has secured from Opposition Front Benchers for putting this sensitive matter on a secure legal footing. Is not the key point the fact that no patient has been sectioned and no doctor has been authorised who would not have been sectioned or authorised under the legislation? Is not the purpose of the emergency Bill, as always with retrospective legislation, simply to put the position as Parliament intended it to be in the first place?

[Mr Hunt]

My understanding is exactly the same as that of my right hon. Friend. The key point is that this was a technical irregularity, but we do not believe that any patient has been sectioned, detained or hospitalised who would not have been if the correct procedures had not been followed. It is none the less very serious that this technical breach happened; that is why, as well as correcting the technical breach and providing absolute clarity, we are conducting this review to make sure that we do everything we can to avoid anything similar happening again—even under completely different structures than the SHAs.

[Derek Twigg (Halton) (Lab)]

I do not necessarily disagree with anything the Secretary of State said, but I noted that he used the term “we believe”, which means that it is not simply factual at this point that no one has been detained who should not have been. It would be worth the Secretary of State addressing the reverse position: does he believe that no one who should have been detained has been released and then gone on to commit a serious offence?

[Mr Hunt]

As a result of the technical irregularities that we have identified and put right, I do not believe that what the hon. Gentleman describes has happened. Let me explain that when I say “we believe”, it reflects the advice we have had that there are good arguments on why the detentions were and are lawful, but that is not to say that those arguments cannot be challenged or that a court would necessarily agree with us. That is why it is necessary to take this unusual step of introducing emergency legislation.

[Mr Charles Walker (Broxbourne) (Con)]

Removing the liberty of ill people is serious business, and deserves to be taken seriously. That has not been the case for the past decade, or perhaps even longer. I hope that, as we go forward, we can ensure that people who are ill get the representation and advocacy they deserve and that they—and, most importantly, their rights—are taken seriously.

[Mr Hunt]

My hon. Friend is absolutely right. As a result of the new structures in the NHS, responsibility for ensuring that all patients who are threatened with detention receive the advocacy to which they are entitled under the Mental Health Act will be transferred from primary care trusts to local authorities. We will use this opportunity to review the arrangements, talk to local authorities, and do all that we can to ensure that those functions are discharged in the way my hon. Friend seeks.

[Andrew Percy (Brigg and Goole) (Con)]

Two mental health trusts that do a fantastic job in my constituency, Humber NHS Foundation Trust and Rotherham, Doncaster and South Humber NHS Foundation Trust, have been involved in this. Can the Secretary of State tell us how many patients have been affected by what has happened in trusts, so that if families approach us we can offer them the information that they require?

[Mr Hunt]

I shall try to give my hon. Friend that information later.

[John Howell (Henley) (Con)]

Does the Secretary of State agree that speed is of the essence in the provision of clarity, and will he accept our congratulations on having moved with such commendable speed?

[Mr Hunt]

I am grateful to my hon. Friend for saying that, but I think that we should extend our gratitude to the Opposition on this occasion. It is possible to move with speed only when there is cross-party co-operation, and I think that everyone has recognised the seriousness of the situation.

[John Pugh (Southport) (LD)]

Given the huge, overwhelming concentration on the subject of detention during the passage of the National Health Service Act 2006, which revised the Mental Health Act 1983, why was this departure from the law not brought to Members’ attention, or, indeed, to light? Someone in the Department of Health must be answerable, surely.

[Mr Hunt]

The truth is that no one in the Department of Health knew that this irregularity was happening. I do not think that anyone in the system knew that it was happening, until the issue arose in Yorkshire and Humberside when a particular decision was challenged. However, the hon. Gentleman is right: there is an important question mark over why it was possible for the irregularity to continue for so long without being noticed. I think that we need to listen to what Dr Harris says about why he believes that it was possible for it to continue for so long, and to act on his advice.

[Guy Opperman (Hexham) (Con)]

I declare an interest, as someone who represented a number of individuals under section 12 of the Mental Health Act—and also as someone who is owed money by the state for the work that he did on behalf of such individuals three and a half years ago, but I leave that to one side.

I welcome the drafting of retrospective legislation to resolve this problem, but has advice been obtained on whether the section 12 patients will retain any right to challenge their original detention procedures by way of judicial review?

[Mr Hunt]

My hon. Friend makes a very important point. All the patients’ rights to challenge their detention are preserved, with the exception of their rights relating to the technical irregularity over the authorisation of doctors under section 12. If they are challenging any other clinical or legal due-process decision, they are free to continue to do so: that will be completely unaffected by the retrospective legislation.

[Iain Stewart (Milton Keynes South) (Con)]

Can my right hon. Friend explain the position of trusts such as Milton Keynes PCT, which was part of South Central strategic health authority but is now part of East Midlands SHA? I understand that that is one of the SHAs that were affected. Will my right hon. Friend look into whether any issues have arisen from that transfer?

[Mr Hunt]

I can reassure my hon. Friend that if any issues have arisen from the technical irregularity involving the authorisation of doctors under section 12, they will be dealt by the retrospective legislation.

[Mr Robert Buckland (South Swindon) (Con)]

I welcome my right hon. Friend’s approach, which is responsible and right. May I urge him to ensure that the review being undertaken by Dr Harris will include the effect of the changes in NHS structures on all relevant provisions of the Mental Health Act—for example, the provision of information about bed availability to courts under section 39?

[Mr Hunt]

I shall certainly pass my hon. Friend’s question on to Dr Harris. It is not clear that the irregularity is a result of reorganisations, but I want to give Dr Harris a completely free hand. We shall then listen to what he says very carefully.

[Rehman Chishti (Gillingham and Rainham) (Con)]

rose—

[Mr Speaker]

Ah! A late arrival at the station.

[Rehman Chishti]

I am so sorry, Mr. Speaker.

I am very grateful to the Secretary of State for his statement. Despite the irregularity, sections 2 and 3 of the Mental Health Act give patients an automatic right to a tribunal hearing, and the tribunal will have been able to consider their applications for release.

[Mr Hunt]

That is correct. Nothing in the legislation will affect any rights that patients have, except with respect to the technical irregularity involving the authorisation of doctors under section 12.

West Coast Main Line

Monday 29th October 2012 Commons Chamber

16:30

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

With permission, Mr Speaker, I would like to make a statement on the progress we are making to put right arrangements for the west coast main line and rail franchising. First, I will update the House on the Laidlaw inquiry. Secondly, I will explain how we will ensure not only continuity of service on the west coast line after 9 December, but an enhanced service.

On 3 October I announced the cancellation of the competition to run the inter-city west coast franchise because of the discovery of unacceptable flaws in the procurement process run by the Department for Transport. I made it clear at the time, and do so again today, that this was a very regrettable decision prompted by mistakes that should never have happened. I also launched two independent inquiries, one of which has reported its interim findings to me, and which I am today delivering to the House.

I asked the first inquiry, led by Centrica chief executive Sam Laidlaw, to look into what happened and why, with the aim of establishing the lessons to be learned. I also asked the second review, led by Eurostar chairman Richard Brown, to focus on any lessons to be learned for the future rail franchising programme. I promised that both would conduct their investigations thoroughly, independently and urgently.

Given the public interest in this matter, the Laidlaw inquiry was asked to deliver an interim report to me by 26 October and a final report by the end of November. I am grateful to the inquiry for meeting the first deadline and for working tirelessly to meet the second. I stress that today’s findings are precisely that: an interim report. There is more work to do. These findings are clearly a first stage. As Mr Laidlaw explains, they set out what went wrong, and from that basis he will now carry out further investigations into why this happened.

From the start, my aim in dealing with this situation has been to be open and to come forward with information for the House at the earliest opportunity. It is in that spirit that I make this statement today. In the interests of complete transparency, I am publishing this interim report with its provisional findings, and placing copies of it in the Libraries of both Houses.

To be blunt, these initial findings make uncomfortable reading, but they provide a necessary and welcome further step in sorting this situation out. The Government will need to see the full and finished report before we can comment in detail on any conclusions. That is crucial because of the independent nature of the Laidlaw inquiry and the need for the Government not to prejudge its eventual findings, but it is clear that the inquiry has identified a number of issues that confirm that my decision to cancel the franchise competition was necessary. These include a lack of transparency in the bidding process, the fact that published guidance was not complied with when bids were being processed, inconsistencies in the treatment of bidders, and confirmation of technical flaws in the model used to calculate the amount of risk capital bidders were asked to provide to guard against the risk of default. The Laidlaw inquiry also mentions factors that

“appear to have caused or contributed to the issues raised”.

We will look at them with interest and care, although, once again, we will need to see the final report before we can comment further.

Secondly, I would like to update the House on the progress we are making to ensure continuity of service on the west coast main line once the current franchise expires on 9 December. As I have said previously, we will ensure that passengers continue to be served by the same trains with the same front-line staff, the same services and using the same tickets, and, I am pleased to say, with enhanced future timetables.

The Department is making good progress in its discussions with Virgin on how it will operate the line for a short period of up to 14 months while a competition is run for an interim agreement. We are discussing its proposals for improved services over this period and an enhanced compensation scheme for delayed passengers.

In dealing with this matter, my Department has been frank and open about its mistakes and is absolutely determined to find out exactly what happened. In the meantime, we will keep delivering for passengers, and continue with the unprecedented levels of investment in trains, stations and railway lines.

Combined with our decision to limit train fare rises to an average of inflation plus 1%, instead of RPI plus 3%, for the next three years, this demonstrates this Government’s total commitment to Britain’s railways. I commend the statement to the House.

16:34

[Maria Eagle (Garston and Halewood) (Lab)]

I thank the right hon. Gentleman for early sight of his statement—it was a good job I had my mobile phone with me so that I could read it. I welcome his willingness to come to the House and his stated intention to be transparent, which I hope will translate into actual transparency.

However the Secretary of State spins it, the truth is that this is a franchise fiasco with not one but four Cabinet Ministers’ fingerprints all over it. Who designed the new franchising policy, building significantly greater risk into the process? It was the Secretary of State for Northern Ireland. Who reduced the Department’s capability to manage major contracts by cutting a third of the staff, including the directors of procurement, rail strategy and rail contracts? It was the Secretary of State for Defence. Who decided not to bother with an external audit, turning a saving of thousands into a cost of tens of millions, then delegated the entire process to her junior Minister and then failed to act on warning after warning about flaws in the process? It was the Secretary of State for International Development. And who declared himself satisfied with the whole process before the Transport Committee, despite the growing evidence that something had gone badly wrong, and then added to the chaos in the franchising system by replacing the costs of one competition with the costs of three? It was the current Secretary of State. This is a shambles involving not one but four members of the Prime Minister’s Cabinet, and it is about time they took responsibility for it instead of blaming officials.

After his last statement to the House, the Secretary of State failed to answer a single question I put to him, so perhaps today, in the interests of transparency, he can manage to give answers to five questions. The first relates to what Ministers knew and when. We know that his Department received a detailed report by Europa Partners five days before awarding the contract. Its author has said that a proper risk analysis was not at the centre of the appraisal. Can the Secretary of State now confirm that at least one bidder warned the Department of errors as far back as May 2011, with one executive telling the Financial Times:

“The spreadsheet contained certain assumptions that looked odd to our economic modellers, so we went back to the department and pointed it out”?

Again, why did Ministers not act on that warning? Can the Secretary of State tell the House who the senior responsible owner for this project was in his Department?

Secondly, on the cost to taxpayers, the Secretary of State doggedly sticks to his figure of £40 million, yet we know that that is just the cost of compensating the four west coast bidders. It does not include the cost of re-running the competition twice, of compensating bidders for the other stalled franchises or of preparing Directly Operated Railways to step in. So what assessment has he been given of the final cost of this Cabinet ministerial failure? How accurate are reports of a final figure of well over £100 million?

Thirdly, on his Department’s external advice, the Secretary of State has admitted in parliamentary answers that his Department paid £491,000 to Eversheds and £439,000 to WS Atkins for advice during the west coast tender process. Can he confirm whether those are the total amounts paid? What steps is he taking to secure a refund for taxpayers for any mistakes that may have contributed to this fiasco?

Fourthly, on the legal advice that the Secretary of State has received, what is his Department’s liability if the participants in any of these cancelled or stalled franchises take action against the Government? What advice did he receive on procurement and EU competition law before deciding to extend Virgin’s contract? What will be the cost of Virgin’s interim operation of the west coast main line until he can get to the first of the next two competitions?

Finally, on the review itself, does the Secretary of State not think it is extraordinary for his Minister of State to insist, in a parliamentary answer, that the Department for Transport board has no responsibility for this fiasco because it was delegated to one of its sub-committees? Surely the board is responsible for its own sub-committee. It is precisely this wriggling that makes people suspicious about the nature of this review. Will the Secretary of State, even at this late stage, think again and allow a genuinely independent review that can look at the role of the Department for Transport board and of Ministers?

The Secretary of State’s attempt to bury his franchise policy at midnight failed to cover up this nightmare on Marsham street that has rapidly become a nightmare for Downing street. Does the Secretary of State agree that

“Ministers must take responsibility for serious or systematic performance failures...flawed policy and poor design...Ministers must not be allowed to shuffle off responsibility”?

Those are not my words, but those of the Prime Minister. This is not just a faulty process; it is a faulty Government. It is time that the Prime Minister listened to his own words, followed his own advice and insisted on his Cabinet finally taking some responsibility for this franchise fiasco.

[Mr McLoughlin]

For the hon. Lady’s information, the Department is based in Horseferry road, not Marsham street.

Let me draw the hon. Lady’s attention to the final line of Mr Laidlaw’s letter to me today, which states:

“Firm judgments should not be made based upon what are provisional findings or wider conclusions drawn at this stage.”

I have been very open with the House about the problems we have encountered. She accuses the Government of wasting money, but she should perhaps look back at the previous Government’s record, particularly the decision by the then Deputy Prime Minister that wasted some £469 million on the flawed procurement of regional fire stations. I see that the shadow Minister, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), is rather amused by that, because he was directly involved.

I have come to the House and I have been open with the House. As far as the money is concerned, I talked about the £40 million that related to the bidding process and there will be some other costs. When I have those costs, I will inform the House. I will not judge them or estimate them; I will give the House the information when I have it.

The last time I gave a statement, the hon. Lady attacked us for not getting external advice. As the answers given by my right hon. Friend the Minister of State show, we did get external financial advice where necessary. Yes, some changes were made to the Department but they were well under way and being planned for before May 2010.

On the question of Virgin’s position, I made it perfectly clear the last time I made a statement that I intend to enter into an interim contract with Virgin until we can do a longer franchise. That first franchise will last up to 13 months. I did check it out, and have obviously had discussions with, the commission.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

May I congratulate my right hon. Friend on coming to the House and being so transparent and open about what is obviously a very painful part of the Department’s dealings? Will he now translate that openness and transparency across all the modelling that is being used either by the Department for Transport or its subsidiary, HS2 Ltd, for HS2? Will he now put his words into action and publish the Major Projects Authority’s report on HS2, showing that he really is a transparent Secretary of State?

[Mr McLoughlin]

As I think I said to my right hon. Friend the last time we discussed this matter, a lot of work is being done on the planning of HS2 and there will be a number of opportunities for wide-ranging debates when we discuss that Bill, but today I am dealing with the west coast main line and franchising.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

Will the Secretary of State tell us whether Mr Laidlaw considered the implications of the decision to make this a 15-year franchise? He will know that when I had his job I reduced the franchises to seven years, because after that time trying to speculate on the state of the economy, and therefore on what fair revenue is, becomes increasingly difficult, if not impossible. The problem is that the further out we go, the greater the probability is that the risk will fall back on the Government. Does not that policy decision, taken, I think, by some of his predecessors, need to be reconsidered if we are not to repeat some of the procedural problems that he has outlined today?

[Mr McLoughlin]

I am grateful to the right hon. Gentleman for that question. He has a distinguished record of being one of the longest-serving Secretaries of State for Transport, so I listen to him with the care and attention he rightly deserves. He raises a couple of points. He might not be aware that at the tail end of the previous Government they also talked about extending the franchises up to 20 years, which was seen to be a way of getting a better return overall for the huge investment from the taxpayer that goes into the railways. He makes an interesting point. As I said in my initial statement, I have asked for two reviews and I think that that is something that Richard Brown, the chairman of Eurostar, will be considering in his report, which I expect to see before the end of the year.

[Mr John Redwood (Wokingham) (Con)]

In the appraisals of the new competition being held for the west coast franchise, what will the role of Ministers be in setting the terms of the competition, supervising the arithmetic and making sure that a fair assessment is made?

[Mr McLoughlin]

I hope Ministers set out the policy. I am not sure that we are there to check every line of every spreadsheet. That is something that we should rightly expect officials to do for us at the request of Ministers, to ensure that we get the best value for the taxpayer out of what has been a huge amount of investment on this railway line, which has been made on behalf of the British public. It is one of the most important lines that serves the United Kingdom so I will certainly bear in mind what my right hon. Friend says, but part of the point of going for longer franchises was to try to deliver better services to the passenger.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The Secretary of State will be aware that the Transport Committee may have a few questions to ask him on Wednesday. Perhaps he could tell the House today why, if it is important that the outcome of the review should not be prejudged, he suspended three civil servants.

[Mr McLoughlin]

I am sure the Transport Committee will have a number of questions for me on Wednesday. I think I am looking forward to coming. The decision on suspensions of staff is not made by a Secretary of State; it is made by the permanent secretary. I have had no involvement with that process and it would not be right for me to do so.

[Mr John Leech (Manchester, Withington) (LD)]

Does the Secretary of State agree that one of the lessons that should be learned in relation to future franchising is the need to ensure that good performance as well as poor performance by an operator can be taken into consideration as part of the franchising process, notwithstanding the need for fair competition?

[Mr McLoughlin]

I entirely agree. That should certainly be taken into account, but so should the return to the taxpayer. The taxpayer has invested a huge amount of money in the line, which must be borne in mind as well.

[Mr Jack Straw (Blackburn) (Lab)]

Successive reports this year from the Transport Committee and a National Audit Office report last week have indicated that the Department is running a huge underspend on its capital programme. The NAO report last week talks about addressing

“£1.7 billion unexpected funds for infrastructure”.

I realise that the Secretary of State has been in office for only a few weeks, but can he say to what extent the slimming down of the Department and its preoccupation with the issue of rail franchising has meant that it lacked the capacity to ensure that funds properly allocated to it—for example, for road repairs and desperately needed regional rail infrastructure improvements—are spent, and what he is doing to address that?

[Mr McLoughlin]

The right hon. Gentleman’s question goes slightly wider than my statement this afternoon, but I point out that I made an announcement just a few weeks ago about a pinch-point plan to relieve certain areas of road congestion, which will cost £170 million. Wherever money is spent, I am determined to ensure that good value is obtained and that we do not waste public money. That is more important to a Minister than making sure he spends the money, come what may.

[John Stevenson (Carlisle) (Con)]

I congratulate the Secretary of State on the speed of the work that he is doing and his approach to this very difficult issue. My concern, however, is the potential loss of investment and innovation in the rail service in the short term. Will the Secretary of State assure me that everything will be done by his Department to ensure that no investment opportunity is lost and that any improvement to the service will go ahead if at all possible?

[Mr McLoughlin]

My hon. Friend make a good point, because the line is very important for his constituency. I know that he has already had a meeting with my right hon. Friend the Minister of State about rail investment in his constituency. I am keen to make sure that the benefits that people will get from the franchise are realised as soon as possible. There has been a necessary delay and I very much regret that.

[Mr George Howarth (Knowsley) (Lab)]

In his statement the Secretary of State referred to discussions that he is holding with Virgin about extending its involvement for a short period of 14 months. Can he give some reassurance to travellers and also to the staff who work on the west coast main line that if it becomes necessary to extend that 14-month period, there is no in-principle reason why that should not happen?

[Mr McLoughlin]

Over the next eight months, which we are talking about as the extension to the franchise, and the following five-month changeover period, if that is necessary, we will obviously be talking with Virgin and other companies interested in running the interim two-year contract, but I think that the jobs of the people who operate the trains will remain the same under any operator.

[Christopher Pincher (Tamworth) (Con)]

Commuters in Tamworth will be relieved to hear that at least my right hon. Friend knows where his Department is. Will he make clear the steps he can take to ensure that the next round of franchises are not unduly delayed? In particular, can original requests for proposals made by bidders who choose to tender again be requested again so that that the review process is expedited?

[Mr McLoughlin]

I can assure my hon. Friend that I am very keen to get on with franchising, but he would expect me to wait for the recommendations of the Brown report and the Government to respond to it in a measured and appropriate way. I can give him the assurance he seeks: I am very keen to get on with franchising.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

I join those Members who have complimented the right hon. Gentleman on his openness in coming to the House and his readiness to come here frequently. Is he aware that, as is shown in the book “How to be a Minister”, the incompetence, errors and blunders he listed in his statement should end up in the lap of his predecessor and that the Government should admit that? Will he also accept that those of us who travel twice a week on the west coast main line have seen the cloud that has hung over the train crews during this period lifted? It is up to him to ensure that the cloud does not return.

[Mr McLoughlin]

I am not sure who wrote “How to be a Minister”, but the right hon. Gentleman might like to inform me privately afterwards. I refer him to Sam Laidlaw’s letter, which I mentioned earlier. The fact is that this is an interim report and nowhere does it criticise Ministers.

[Mr Brian Binley (Northampton South) (Con)]

I welcome the Secretary of State’s willingness to update us on the continuity of service on the west coast main line once the current franchise expires on 9 December. Has he noted recent reports suggesting that capacity could be reached well before 2026, undermining continuity of service? Consequently, will he bring forward plans for HS2, even though he said he would not talk about them today?

[Mr McLoughlin]

I am interested in the representation my hon. Friend has made, but perhaps we could leave it at that.

[Mr Frank Field (Birkenhead) (Lab)]

Why does the Secretary of State think that he will ever be best placed to decide competition between these companies? Does he not realise that we, the consumers and travellers, would like to decide competition between the companies ourselves? When will he realise that we are in a better position to decide which trains we would like to travel on, that those who are bidding for the contracts have huge skills in fixing them and that no amount of skill from the Secretary of State can overcome them fixing the market in the way they have succeeded in doing up to now?

[Mr McLoughlin]

I am not sure that I completely agree with the right hon. Gentleman, but I might want to reflect a little on what his question is in the longer term. The Government, on behalf of the taxpayer, have invested a huge amount of money in the west coast main line—some £9 billion—so it is right that the people who are served by the line get a good service, and we are trying to find how best to achieve that.

[Mr Marcus Jones (Nuneaton) (Con)]

Over the past eight years, passenger numbers from Nuneaton station have increased by 77% to just under 1 million. On the basis of that growth and the huge growth in railway usage that we have seen across the country, does my right hon. Friend agree that it would be complete folly at this stage to revert to a nationalised railway, as has been alluded to by some Labour Members over the past week? May I also appeal to him to consider better off-peak fast services to Nuneaton station when he deals with the re-timetabling?

[Mr McLoughlin]

I am grateful to my hon. Friend. Requests for improved services often come my way whenever I appear at the Dispatch Box. That shows, to a degree, the importance of the rail industry to all our constituents and the demand that exists whereby people will use a service if it is available, so I take his representations very seriously. As for nationalisation, the railways could have been nationalised by the previous Government—they were in power for 13 years—and they decided not to do so, for very good reason.

[Ann Coffey (Stockport) (Lab)]

I know that the Secretary of State is aware of the urgent need for improvements to Stockport station, so will he tell me whether capital projects are to be included in the interim agreement?

[Mr McLoughlin]

I cannot yet go into the full details of what will be in the interim two-year agreement. However, the hon. Lady has made the case for Stockport station not just today but on other occasions, and, knowing her, I have the feeling that she will continue to do so every time I appear at the Dispatch Box.

[Jeremy Lefroy (Stafford) (Con)]

Stafford station is to receive a welcome £3 million upgrade, and my constituents are looking forward to several other improvements in fares and services, particularly—here is another bid for my right hon. Friend—later departures from London and Liverpool in the evening. Can he confirm whether these improvements will be possible under the two shorter franchises?

[Mr McLoughlin]

I am very pleased to hear that my hon. Friend’s station is being improved. I should like to point out that Derby station is being improved as well, but that was agreed some time before I arrived at the Department. On his request for further services to Stafford station, which I know well, I will certainly try to ensure that when the enhanced services are negotiated, Stafford also gets the benefit.

[Richard Burden (Birmingham, Northfield) (Lab)]

The Secretary of State mentioned the Brown review on more generalised lessons for franchising. Is he aware that some urgent lessons need to be learned and acted on straight away, particularly regarding routes to and from the west coast main line? I refer, of course, to the literally hundreds of train services that have been delayed or subject to cancellation by London Midland. The Secretary of State says that his officials are in daily contact on this. What are they doing? Will the problem be resolved? How did we get to the situation whereby London Midland appears not to have forward planned its driver requirements? What penalties are available to him and his Department?

[Mr McLoughlin]

I congratulate the hon. Gentleman; I think there were about six questions there. However, I will give him only one answer, which is that the Under-Secretary, my hon. Friend the Member for Lewes (Norman Baker), spoke directly to the managing director of that rail line. We are concerned about the deterioration of services, and I hope that measures will be put in place quickly to put them back to an acceptable level.

[Andrew George (St Ives) (LD)]

Notwithstanding my right hon. Friend’s reply to the hon. Member for Tamworth (Christopher Pincher) about the Brown inquiry, is he prepared to go a little further in outlining the consequences for other franchises and their timetabling, particularly the First Great Western franchise, which many hon. Members are very concerned about?

[Mr McLoughlin]

Yes; the hon. Gentleman’s points are well taken. However, I do not want to prejudge the Brown inquiry, nor the final Laidlaw inquiry. It is better that I wait for those reports to see whether they have any read-across. I assure him that, as I have said throughout the statement, we are very keen to see good, reliable railway services across the country.

[Iain Stewart (Milton Keynes South) (Con)]

I thank my right hon. Friend for his comments about the continuity of services on 9 December. He also said that he is in discussion with Virgin about enhancing services in December and an improved timetable. Can he give any more details about those discussions?

[Mr McLoughlin]

I am afraid that I cannot give those details at the moment, because we are in negotiations. I know that my hon. Friend wants a better service for Milton Keynes, because every time he talks to me he talks about exactly that. As a member of the Transport Committee, he is one of those people who keep an incredibly close eye on this issue and he will no doubt pursue me at every opportunity.

[Guy Opperman (Hexham) (Con)]

I welcome the speed and transparency of the interim Laidlaw report and endorse the calls of other hon. Members for lengthier franchises. Today the all-party group on rail in the north looks forward to meeting the Minister of State.

[The Minister of State, Department for Transport (Mr Simon Burns)]

I have already been there.

[Guy Opperman]

Yes, and I am sure that my right hon. Friend will be coming back.

Will the Secretary of State confirm that this Government’s increased investment in things such as the northern hub and the expanded service for the north will continue in the long term?

[Mr McLoughlin]

I am grateful to my hon. Friend for his question. My right hon. Friend the Minister has just told me that he looks forward to going back to the all-party group. My hon. Friend makes a very important point. Just before the summer recess we announced our plans for the railways from 2014 to 2019, which ought to have some very beneficial effects for all constituents. They include the largest electrification ever seen in this country—we are planning to electrify some 850 miles, which is a lot more than the previous Government achieved in 13 years.

Business of the House

Monday 29th October 2012 Commons Chamber

17:01

[The Leader of the House of Commons (Mr Andrew Lansley)]

With permission, Mr Speaker, and in the light of the statement earlier this afternoon by my right hon. Friend the Secretary of State for Health, I should like to make a short business statement. The business for tomorrow will now be:

Tuesday 30 October—Proceedings on a business of the House motion, followed by all stages of the Mental Health (Approval Functions) Bill.

The business for the rest of this week will be substantially unchanged.

Wednesday 31 October—Consideration of Lords amendments to the Local Government Finance Bill, followed by a motion to approve European documents relating to the multi-annual financial framework. The House may also be asked to consider any Lords amendments that may be received, and the Speaker shall not adjourn the House until he has reported the Royal Assent to any Act agreed on by both Houses.

Thursday 1 November—A debate on a motion relating to beer duty escalator, followed by a debate on a motion relating to air passenger duty. The subjects for these debates have been nominated by the Backbench Business Committee.

Friday 2 November—Private Members’ Bills.

I will announce, as usual, further business during the business statement on Thursday.

[Several hon. Members]

rose—

[Mr Speaker]

Order. The Leader of the House emphasised that it was a short business statement and I emphasise for the benefit of hon. and right hon. Members that it is also a narrow business statement. The normal opportunity for exchanges will occur on Thursday at business questions, but I know that hon. and right hon. Members will wish narrowly to focus their questions on the specific change to business to tomorrow, which the right hon. Gentleman has announced.

[Ms Angela Eagle (Wallasey) (Lab)]

I thank the Leader of the House for his business statement, which was inevitable following the earlier statement by the Secretary of State for Health. Will the Leader of the House do something to reassure us about the practicalities of a sudden switch to consider all stages of a Bill that has just this minute been published? In the words of my right hon. Friend the Member for Leigh (Andy Burnham), the shadow Secretary of State, we will be legislating tomorrow on something that the Government, or certainly we in this Parliament, have only found out about today.

Will the Leader of the House explain why there is such a rush and why all the Bill’s stages have to be taken tomorrow? Will he reassure hon. Members, who would usually be given adequate time to ask parliamentary questions and to discuss or even hold hearings on aspects of the Bill? Is there anything he can do as Leader of the House to ensure that adequate help is given to those who wish to consider the Bill, which has only just been published, at such short notice? Are there any extra things that the Department of Health could do to reassure hon. Members about the reasons for this? Perhaps it could be more open than would usually be the case, given that all stages of the Bill are now due to be taken tomorrow. I would appreciate it if he could go into a little detail for those who are interested in taking part in the debates, and if he could reassure the House and those outside that the matter has been adequately examined.

I particularly wish for some reassurance about stakeholders. The explanatory memorandum to the Bill mentions stakeholder involvement, but only medical involvement, not user involvement.

[Mr Lansley]

I am grateful to the shadow Leader of the House for her response, and to the shadow Secretary of State for Health for how the Opposition responded to my right hon. Friend’s statement.

On the practicalities of the matter, hon. Members will of course be concerned to know that tomorrow’s business of the House motion, which I will table later, ensures that they can raise issues by tabling amendments, including before Second Reading. I hope that the motion will permit that to take place, to allow the full debate that Members will wish to have in Committee.

My colleagues, including the Secretary of State for Health, and I of course looked carefully at the requirement for the proceedings on the Bill to be conducted on such a time scale. As the hon. Lady will recall from my right hon. Friend’s responses to questions following his statement, a 72-hour period is allowed to put in place the assessment necessary to make a section under the Mental Health Acts. By extension, once it is clear that there is any procedural irregularity, there is a risk of legal proceedings being raised by the patients concerned. The legal advice makes it clear that it is desirable to achieve clarity as quickly as possible, otherwise there is a risk of large numbers of assessments having to be entered into. I know that our collective judgment will have been explained to the shadow Secretary of State.

I hope that along with the Department of Health, we will be able to take every step that we can. The Department has published the Bill and explanatory notes, which the hon. Lady will have seen. She will know that the Bill contains one substantive clause plus those on commencement, extent and short title, and I hope that today’s statement and the explanatory notes make it clear that it is focused specifically on the point in question.

As far as stakeholders are concerned, the issue that has arisen is about the approval of medical professionals. We were therefore particularly focused on the Royal College of Psychiatrists. As my right hon. Friend the Secretary of State made clear, patients’ rights and interests have not been prejudiced, and I hope that they will take reassurance from that. I have no doubt that immediately following his informing the House of the situation, my colleagues at the Department of Health will have ensured that all those in a position to represent patients’ interests have been given the necessary details and that they will have the opportunity to contact the Department and Members over the next 24 hours.

[Grahame M. Morris (Easington) (Lab)]

Can the Leader of the House clarify what will happen to the Second Reading of the Growth and Infrastructure Bill, which was planned for tomorrow? Have I misunderstood, or will it be rescheduled?

[Mr Lansley]

No, the hon. Gentleman has not misunderstood. As I said, I will announce further business for next week and provisional business for the week after in the business statement on Thursday.

[Mr Speaker]

I am grateful to the Leader of the House, the shadow Leader of the House and the hon. Member for Easington (Grahame M. Morris).

Ford Assembly Plant (Swaythling)

Monday 29th October 2012 Commons Chamber

Application for emergency debate (Standing Order No. 24)

17:09

[Caroline Nokes (Romsey and Southampton North) (Con)]

I seek leave to call for a debate on a specific and important matter that I believe should receive urgent consideration—namely the planned closure of the Ford assembly plant based in Swaythling in the Southampton part of my constituency.

Ford is the biggest single employer in my constituency. It currently employs approximately 500 people on site, and is home to the iconic Transit van. Ford began production in my constituency in 1953, and commenced building the Transit in 1972—40 years ago. The decision to close the plant will affect not only the 500 employees on site, but the significant supply chain attached to the business, which is equally at risk. Current estimates indicate that approximately 1,500 jobs are reliant on the Ford supply chain.

I call for a debate in the House because the closure affects not only my constituents but those of neighbouring right hon. and hon. colleagues. It is very much a cross-party matter, and the House will understand its importance. I am extremely concerned about the effect the plant’s closure will have on an area of my constituency that has higher unemployment statistics than other parts of Romsey and Southampton North, and I wish to seek assurances that the Government will do all they can to support those hard-working individuals.

I wish to emphasise the importance of Southampton’s inclusion in the next wave of city deal funding, and highlight the need for an enterprise zone to be created in the area. An enterprise zone in or around Southampton will undoubtedly create an environment in which businesses can grow, leading to a stronger local economy. I also strongly encourage BIS local, the city council and other neighbouring local authorities to join forces so that those being made redundant are given the most comprehensive help possible to find alternative opportunities.

It is imperative for this House to know whether there was anything the Government could have done to prevent the decision to close the plant. There are also questions over whether Ford has reneged on earlier promises to keep the factory open in exchange for previous Government funding, and what, if anything, the Government knew about the decision. Those issues should rightfully be debated on the Floor of the House, and not in the media.

[Mr Speaker]

The hon. Lady asks leave to propose a debate on a specific and important matter that should have urgent consideration, namely the closure of the Ford assembly plant in Swaythling. I have listened carefully to her application, and it is an important matter for her constituents and others who depend upon that plant. I must tell the hon. Lady, however, that I have concluded that the matter does not meet the stringent criteria for an urgent debate under Standing Order No. 24, and for that reason I do not propose to put the application to the House. I hope that the hon. Lady will succeed in finding other ways to debate this important issue soon. I hope that is of some assistance.

Public Service Pensions Bill

Monday 29th October 2012 Commons Chamber

Second Reading

17:12

[The Chief Secretary to the Treasury (Danny Alexander)]

I beg to move, That the Bill be now read a Second time.

The Public Service Pensions Bill represents the final building block of the Government’s commitment to reforming public service pensions. It is an important measure that will affect the pensions of millions of public service workers for decades to come. It is the culmination of a process that started more than two years ago when the coalition Government invited the former Labour Secretary of State for Work and Pensions, Lord Hutton of Furness, to undertake a fundamental review of public service pensions. Lord Hutton’s independent public service pensions commission undertook its responsibilities with thoroughness. It consulted and met a wide range of interests and considered a wealth of expertise and viewpoints, and more than 3,000 pages of evidence were submitted in response to it by more than 250 bodies.

[Mr Jim Cunningham (Coventry South) (Lab)]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will give way, although it is rather early in my speech. Perhaps the hon. Gentleman wants to make an urgent point about Lord Hutton.

[Mr Cunningham]

I appreciate that the Government commissioned the Hutton report, but surely that report would not have been needed had they honoured the previous Government’s commitment to civil servants and public service workers.

[Danny Alexander]

I shall deal with the good reasons why further reform is needed later in my speech.

Lord Hutton’s conclusions of March 2011 set out a clear and compelling case for further reform. He found that the status quo was not tenable, that there had been an unfair sharing of costs between the employer, the employee and the taxpayer, and that previous reforms had not fully addressed the underlying issues of sustainability and fairness. His recommendations were equally compelling, and those for the future design of schemes fall into three broad categories, the first of which is safeguards to ensure that the long-term costs of pensions are sustainable. That is achieved through a link between the state pension age and normal pension ages in the majority of schemes, and a cost-cap mechanism to protect the taxpayer in the event of other unforeseen costs.

[Mr David Anderson (Blaydon) (Lab)]

rose—

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

rose—

[John Healey (Wentworth and Dearne) (Lab)]

rose—

[Danny Alexander]

I give way to the former Secretary of State.

[John Healey]

The Chief Secretary lays great stress on the Hutton report, so why did not the Chancellor wait until Hutton reported before hitting public service workers with a 3% surcharge on their pension payments?

[Danny Alexander]

I did not mention Lord Hutton’s interim report, but I am happy to do so now for the benefit of the House. The right hon. Gentleman will know that Lord Hutton produced an interim report in October 2010 that said that there was a case for rebalancing member contributions. We followed that advice and came forward with our proposals as part of the general programme to repair the public finances and clear up the mess that the Labour party left.

[Mr Donohoe]

The Chief Secretary is a Scottish Member, so I presume that he is aware of negotiations north of the border. If the Scottish Executive make different decisions, how will they fund them? Will the Treasury fund them?

[Danny Alexander]

The hon. Gentleman makes a good point. I will deal with this subject in detail later in my speech, but I shall turn to it briefly. In respect of the pension schemes that are devolved to the Scottish Government, the Northern Ireland Government—their Finance Minister, the hon. Member for East Antrim (Sammy Wilson), is in the Chamber—and the Welsh Government, those Administrations are free to negotiate within the parameters in the Bill and the cost ceiling that has been set out. I understand that such negotiations are ongoing. Should Scottish, Welsh or Northern Irish Ministers wish to offer more financially generous terms, they are entirely within their rights to do so, but the additional costs will have to be met from their budgets. They have complete freedom to do that and I know that they will want to consider it.

[Mr Anderson]

The Chief Secretary said that there was a fairness imbalance between employers, employees and the taxpayer. What was fair about a public body such as Royal Mail taking a 13-year pension contribution holiday when the members of the scheme had to carry on paying?

[Danny Alexander]

The hon. Gentleman will know that Royal Mail is a public corporation, and therefore not within the scope—

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

rose—

[Danny Alexander]

Let me respond to one intervention before I take another. I know that the hon. Gentleman is keen for me to clarify one of my points—I am sure that I will be able to do so—but let me respond to the important matter raised by the hon. Member for Blaydon (Mr Anderson). As part of our measures to support Royal Mail, we recently took its pension scheme on to the Government’s balance sheet. Many schemes took holidays during the previous Government’s time in office—

[Mr Anderson]

And the one before them.

[Danny Alexander]

Indeed. Perhaps schemes took holidays even under the Government before that one. In many cases, members regretted such action in retrospect. The Bill is about public service pension schemes—by and large unfunded, with the exception of the local government scheme—that desperately need reform.

[Mr Russell Brown]

In response to my hon. Friend the Member for Central Ayrshire (Mr Donohoe), the Minister made it clear that the devolved Administrations would need to fund anything different that they wished to do. However, will he clarify the situation fully? We know that the devolved Administrations must fund those differences, but will there be an additional financial penalty through the block grant allocation?

[Danny Alexander]

No, there will not. Let me describe how this works. The negotiations that my ministerial colleagues and I conducted in UK Government Departments allow considerable flexibility within the parameters of the Bill—for example, the link between the state pension age and normal pension age, and the move away from final salary—and within the so-called cost envelope set up around the schemes. For example, the hon. Gentleman will note that the teachers pension scheme has agreed a different balance between accrual rates and revaluation factors for its new scheme from that for the health workers pension scheme. There is great flexibility in the provisions, provided things stay within the cost envelope. Under the Bill, the devolved Administrations are free to make more generous provision, as happened with the offer for prison officers. The Ministry of Justice agreed to fund an additional element of the proposed scheme to enable prison officers to have enhanced early retirement factors beyond those that were affordable within the cost envelope. The Ministry had offered to put additional resources on the table from its own departmental expenditure limits, and that was part of the offer that prison officers sadly rejected. Should the devolved Administrations wish to do something similar, they will be within their rights to do so, at their own expense.

[Sammy Wilson (East Antrim) (DUP)]

One of the options open to the devolved Administrations was for their pension schemes to be included in the Bill. In Northern Ireland, the Executive decided not to take that option, which could mean that, simply because of the timing of the legislation, the new scheme will be in place here, but not in Northern Ireland, even if Northern Ireland decides to follow suit. Will there be a penalty if there is a time gap between the implementation of the legislation in the rest of the United Kingdom and any delayed implementation in Northern Ireland?

[Danny Alexander]

I am not aware of any technical reason why a time gap should occur, but I know that officials in the Northern Ireland Department of Finance and Personnel discuss this regularly with my officials in the Treasury. If there is any evidence of such an occurrence, I will be happy to consider it in the normal way. There have been regular discussions on these matters, not least in our Finance Ministers quadrilateral. We will meet again in a couple of weeks in Edinburgh, when this subject will be on the agenda, so we can discuss it then.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Chief Secretary will be aware that several of the Bill’s provisions will affect Scottish pension schemes for the first time. There is a debate in Scotland about whether a legislative consent order is required, so will he address that point in detail in his speech?

[Danny Alexander]

I certainly will, when I come to it.

Lord Hutton’s first set of recommendations consisted of safeguards to ensure that the long-term cost of pensions was sustainable through a link between state pension age and normal pension age, and included a cost-cap mechanism to protect the taxpayer in the event that other unforeseen costs arose. He recommended that the new schemes should be fairer by smoothing the current disparities between high and low-income earners and ensuring that benefits are distributed more equally, which was why he recommended a move from final salary provision to career average revalued earnings—CARE—schemes. Finally, he recommended stronger governance provisions for the new schemes so that scheme members and the public could understand how the schemes were run and what they cost.

We accepted all 27 of Lord Hutton’s recommendations as the basis for discussion with trade unions and scheme member representatives across the public service, and designed our blueprint reference scheme in a way that reflected the recommendations of the Hutton report without any cherry-picking. Our aim was to strike a deal that would last, unchanged, for 25 years. Talks with the unions took place on all elements of that deal. I should stress that the Government did not do all the talking in those meetings—we listened carefully, too. Agreeing the design of these pensions has taken a considerable cross-Government effort over the past 18 months. The Minister for the Cabinet Office, the Home Secretary, the Lord Chancellor, the Education Secretary, the Defence Secretary, the Communities and Local Government Secretary and the former Health Secretary worked hard to understand the concerns of the trade unions and member representatives in their sectors.

[Richard Fuller (Bedford) (Con)]

The Chief Secretary talks about a deal on pensions that will last over the long term. Lord Hutton specifically ruled out moving from defined benefit to defined contribution schemes. We currently do not account for the cost of public sector pensions within our public debt numbers. Would it not have been wiser to have looked for a system that included the long-term costs for public sector pension schemes if the Government wanted to achieve such long-term sustainability?

[Danny Alexander]

The hon. Gentleman will know that Lord Hutton addressed that issue. The costs of such a transition would have been enormous and very disruptive, and I think that the recommendation on the career average revalued earnings scheme is preferable from that point of view. He will also know that the new whole of Government accounts presentation of the public finances takes detailed account of the unfunded liabilities in public service pension schemes. That means that the public and the House have precisely the information that he wants transparently available, so I hope that he regards that as progress.

[Andrew Selous (South West Bedfordshire) (Con)]

On the issue of fairness, does the Chief Secretary agree that private sector workers can only look at guaranteed retirement benefits with envy, especially because most of them would have to pay more than one third of their income to achieve equivalent benefits?

[Danny Alexander]

Yes, I agree. We need better pension provision across the work force. That is why I think the national employment savings trust scheme is an important step forward. That basic pension scheme, which is available to the 12 million or so members of the country’s work force who do not have any pension provision, was recently launched by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), and had its origins under the previous Government. It is a good thing all round that we have agreed a reform to public service pensions that makes significant cost savings and ensures that public servants continue to have access to among the best pension schemes available.

We all wanted to find a solution that was sustainable, affordable and fair, as did the vast majority of trade unions and negotiators for the non-unionised work force. Thanks to both sides’ commitment to constructive talks, I am pleased to say that the final proposed designs have been issued for all major public service schemes. I thank Brendan Barber and his TUC negotiating team for the mature and constructive way in which they approached these talks. It has taken many hours of discussion to get where we are today, and I am grateful that the majority of trade unions brought sensible, workable solutions to the negotiating table, rather than grandstanding. The final scheme designs reflect that hard work.

The trade unions took those scheme designs to their memberships as the best that could be achieved through discussion, and the majority of the unions have accepted the proposed agreements. The turnout in the ballots held by the unions that rejected reform was low—less than 30% in most cases—which is hardly a compelling mandate for an ongoing dispute. The Public and Commercial Services Union decided to reject the offer before it was finalised, without first seeking the views of its membership, which was not a reasonable way to approach a set of reforms affecting more than six million public servants.

There is no point in further dispute or threats of strikes regarding public service pensions. We have set out a good and fair deal that protects those rights already earned and puts fairness at the heart of future pension provisions.

[Mr Jim Cunningham]

The comparison between private sector and public sector pension schemes is variable, as not all public sector schemes are good. However, what discussions has the right hon. Gentleman had about the various provisions in the Bill affecting employees? More importantly, if the Bill is passed, what method of consultation will he allow on changes to the various schemes?

[Danny Alexander]

We have taken great care to work with the TUC. We have taken it through the text of the Bill, listened to its concerns and made adjustments where necessary. This has not just been done through the scheme negotiations; we have also been open by sharing the Bill with trade union colleagues. Given the long-term nature of the reform and the fact that it affects so many people, it was important to engage properly. My departmental colleagues have engaged closely with representatives of the relevant work forces to ensure that that has happened.

The Bill sets out a framework for the schemes, with some restrictions, and in due course we will have to produce regulations to set out the design of each scheme. There are well-established processes within Departments for working with employers and employees on such details. My experience is that those processes work pretty well, and there is a pretty good co-operative spirit among the pensions experts around the table. I therefore do not foresee any problems but, of course, if the hon. Member for Coventry South (Mr Cunningham) does, I would be delighted for him to bring them to my attention so that I can try to resolve them.

[Katy Clark]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will make some progress and give way to the hon. Lady later.

I return to Lord Hutton’s four key tests for the future design of public service pensions: affordability, fairness to public service workers, fairness to the taxpayer and transparency. Those objectives have prevailed throughout the process and remain the cornerstones of the Bill. First, on affordability, it is clear from Lord Hutton’s report that the new scheme should be affordable and sustainable. The Bill represents a significant proportion of the total of more than £430 billion of savings that our reforms of public service pensions are estimated to save over the next 50 years.

[James Duddridge (Rochford and Southend East) (Con)]

Those of us on the Government Benches are quite often accused of reminding those on the Opposition Benches that they left us with a massive deficit and unsustainable debt, but in fairness is it not true that these reforms would have had to happen even without the awful economic legacy we were left?

[Danny Alexander]

I agree with that, and I would add that, frankly, these reforms could have been made in the 1980s or 1990s, as well as the 2000s. In fact, we have to go back quite a few decades to find the root of the problems we are having to tackle in this Bill, which I think we are doing very effectively.

The remainder of the £430 billion of savings are generated by the Government’s decisions to change their policy on the indexation of pensions and payments from the retail prices index to the consumer prices index, and, as has been mentioned, to increase the contributions that public servants pay towards their pensions, rebalancing the costs more fairly between them and other taxpayers. The combined effect of those changes will help to restore the health of the British economy, reduce the size of our deficit and correct the unsustainable 40% increase in costs there has been over the last 50 years.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I am grateful to the Chief Secretary for giving way. Does he recognise that the Government have to be careful and approach this issue in a much more balanced manner? There is a danger that if more people opt out of occupational pensions because they find them unaffordable, that could end up costing the Treasury more in the long run through means-tested benefits.

[Danny Alexander]

I would say that we have handled this process in a balanced and sensitive way throughout, in recognition of the fact that the changes affect millions of public service workers. In response to the hon. Gentleman’s concern, which was raised a number of times in the talks, I would say that none of us wants to see increased opt-outs from pensions, for the reasons that have been mentioned on both sides of the House. We have put in place a process for reviewing the next stage of the contribution increase in the light of opt-out data from the first year. I am sure he will be pleased to hear that there is no evidence of increased opting out in response to this year’s increase in contributions. However, we will review the matter again next year before proceeding with the third phase of the increases, so he makes a serious and important point.

The reforms treat not only the symptoms of delayed reform but the underlying problem. Therefore, they are forecast to reduce the cost of providing public service pensions by around 40% over the next 50 years, returning costs to their historic long-term average. Clause 9 deals with the principal risk that needs to be managed if pensions are to be affordable and sustainable: longevity. Longevity has improved significantly over recent decades, which is a very good thing. As a result, the state pension age has increased. The Government are therefore asking public service workers in due course also to retire later. In a society where we are all living longer and where fellow citizens in the private sector are expected to retire later, it is both fair and right that the public sector retirement age should rise with the state pension age. As Lord Hutton says, improvements have continuously been underestimated in the past, which has led to the cost of providing pensions rising significantly over recent decades. As such, clause 9 provides that in future the normal retirement age in the public schemes will be set at the state pension age. As Lord Hutton identified, this change will move the proportion of adult life in retirement for public service pension scheme members back to where it was in the 1980s. More important, by linking the scheme retirement age to the state retirement age, we will ensure that further improvements in longevity are tracked. That is the main way in which the Bill will ensure that the cost of public service pensions cannot again spiral out of control, but will remain affordable and sustainable long into the future.

[Mr Anderson]

The Chief Secretary talks about longevity, but what does he think the proposals will mean for the longevity of a mental health nurse who is 67 and a half years old, goes to work every day and ends up literally fighting with patients?

[Danny Alexander]

We will conduct a regular review, as Lord Hutton suggested, which will enable issues such as those the hon. Gentleman has raised to be taken into account. They were raised and discussed in the scheme talks. In the end, employee and employer representatives both agreed that the modelling we are using—which is similar to that used in the deal struck under his Government—is the right, fair and balanced way to take such matters forward across the whole work force.

[John Healey]

The Chief Secretary will be aware that there is a working longer review in the NHS that is looking into the question of working longer in particular disciplines in the health service. Will the provisions in the Bill allow flexibility in the link between the normal pension age and the state pension age, depending on the conclusions of that review?

[Danny Alexander]

If I may, I will come to that issue in a moment. The arrangements for the NHS pension scheme have been agreed, and the reforms have been taken forward on that basis. That includes the link between the normal pension age and the state pension age.

[Mark Durkan (Foyle) (SDLP)]

Will the Chief Secretary give way?

[Danny Alexander]

I will go on with my speech, if I may. I hope that I will be able to answer the hon. Gentleman’s question as I do so. I will not take interventions at the moment, as this is an important subject. I will perhaps take some at the end of this section.

We have all heard the cries “68 is too late”, along with similar slogans, but it is crucial that people understand the facts behind the proposals in the Bill. The pension age is a calculation point, not a fixed date up to which people must work in order to receive their pension. Public service workers will still be free to choose when to retire, either earlier or later than the state retirement age. When a person retires at a different age, their pension benefits will be adjusted, to take account fairly of the fact that they are taking them earlier or later than the date against which they have been costed. People will still have the freedom to choose when to retire, however. The Bill does not deprive public servants of that choice.

Lord Hutton said that the Government should ensure that the link between the public service schemes and the state pension age should be reviewed to ensure that it continued appropriately to track longevity. We will do that. The Bill does not provide for such a review, however, and nor should it. We have already committed to come forward with details of how the review of the state pension age will be conducted. We will review the normal pension age of the schemes, to consider whether the state pension age appropriately tracks longevity in the public service schemes. The process will be determined once the detail of the state pension age review system is settled. That is the right way to proceed, and it would be inappropriate for the Bill to attempt to second-guess that.

[Mark Durkan]

The Chief Secretary is emphasising the importance of clause 9 in facilitating future adjustments in relation to pension ages. Why, then, does he also seek to justify the Henry VIII provision in clause 3, which will allow the Government radically and retrospectively to alter pension terms at any time, or times, in the future?

[Danny Alexander]

The hon. Gentleman will know that the provisions in the clause to which he refers mirror directly those in the Superannuation Act 1972, which this Bill in many cases replaces. It was passed in the year I was born, and it has been used by a number of Governments to make adjustments to public service pensions. We have set out in the Bill certain elements of the scheme, particularly the pension age link, and the fact that the schemes need to be CARE schemes and certainly cannot be final salary schemes in future. The provisions to which the hon. Gentleman refers are in fact more limited than those in the 1972 Act. It is appropriate that we continue in broadly the same way, because that has stood the test of time. I hope that, by setting out the Government’s intentions here and in Committee and by undertaking detailed negotiations with work forces, we will have ensured that people know precisely how we intend to use these powers. I think it is clause 23—I might have got that number wrong—that refers directly to the 25-year guarantee that I mentioned earlier. I hope that that will give people some assurance that our scheme designs will stand the test of time.

[John Healey]

With respect, intentions are one thing but the terms of the legislation are another. Is my reading of it wrong? As I understand it, the provisions will not allow flexibility for some groups of NHS workers in the link between the normal pension age and the state pension age. Clause 9(3) states:

“The deferred pension age of a person under a scheme under section 1”—

including NHS workers—

“must be…the same as the person’s state pension age”.

That suggests that there will be no flexibility. Am I right or wrong?

[Danny Alexander]

The right hon. Gentleman is absolutely right to say that the link between the state pension age and the normal pension age is fixed in the legislation. That is a matter that was discussed in the negotiations, including the detailed negotiations with health service unions. The point I was seeking to make was that, as Lord Hutton recommended, we have agreed to review how that link operates at each stage at which the state pension age is increased, to enable those issues to be debated.

[Katy Clark]

rose—

[Danny Alexander]

I will give way one more time, then I must make some progress. There is a lot of detail to get through.

[Katy Clark]

Clause 9(2) means that firefighters would not be able to retire with a pension until they were 60. Many in the industry believe this is unworkable. What would the right hon. Gentleman suggest to firefighters who cannot work until they are 60?

[Danny Alexander]

In that case, we followed the recommendations of Lord Hutton—and, indeed, previous practice. The point I made just a moment ago—I am sure the hon. Lady was listening carefully—is that the provision does not stipulate the date to which people must work. Clearly, if people wish to retire earlier, they can do so and take an actuarially reduced pension or, indeed, retire later and take an actuarially enhanced pension.

[Mark Durkan]

rose—

[Danny Alexander]

I am going to make some progress, if I may.

The second and third tests of Lord Hutton were fairness to public servants and fairness to taxpayers. The Government have worked hard to ensure that the reformed pensions are fair and continue to provide a generous level of retirement income for public servants as a fair reward for a career spent serving the public. The Government made a commitment that these schemes would be at least as generous at retirement for those on low and middle-income earnings. We have delivered that commitment in a number of ways.

First, clause 16 allows transitional protection to be provided for those who have already had a long career in public service and are approaching retirement. I said in November last year that the offer provided that those within 10 years of their normal pension age on 1 April this year would not see any changes to their pension, nor the date at which they can draw it. The Bill ensures that the current final salary schemes will remain open to people who are covered by the transitional protection criteria in those schemes. Most of the proposed final scheme designs include the transitional offer as we set it out; however, the local government scheme in England and Wales has chosen alternative arrangements as sought by their trade unions and employers.

Secondly, we have honoured our commitment to retain the final salary link for people who have already built up some service in final salary schemes, as the provisions in schedule 7 make clear. Although these people will move on to CARE schemes by 6 April 2015 at the latest, their accrued years of final salary benefits will be calculated and paid at their final retirement salary—not their 2015 salary.

Most importantly for low and middle-income earners, we are putting the fairness back into public service pensions. Clause 7 provides that the new default for public schemes will be based on career average earnings, rather than on final salary. Final salary schemes are unfair to the majority of the work force as they disproportionately reward those who progress to senior roles compared with the majority of staff who have more consistent career paths. These outmoded schemes provide lower effective benefit rates to the people that carry out the core front-line work in our public services—the nurses, police officers and our armed forces whose work is so valuable to everyone here.

Career average schemes are fairer to the members and to taxpayers alike. Under final salary schemes, it is the taxpayer that picks up the cost of those high flyers who attain high salaries by the time they leave public service. Such members can receive twice as much in benefits per £1 of contributions that they have paid towards their pension. This is clearly unfair, which is why this Bill will not allow final salary schemes to continue after 2015. For members, pension benefits will be based on the amount that they earn over their career. That means their pension benefits will directly reflect the contributions that they and their employer make over their career.

The Bill ensures that these pensions remain among the very best available—and rightly so, if we are to continue to be able to recruit and retain the right people to undertake these crucially important roles. A key objective of the reforms is to ensure a fair balance of risks between scheme members and the taxpayer. To achieve this, Lord Hutton recommended that the Government establish a mechanism to control the future costs of pensions.

Clauses 10 and 11 establish an employer cost cap in the public service schemes. This will provide backstop protection to the taxpayer to ensure that any unexpected risks associated with pension provision are shared between employers and scheme members. With foreseeable longevity risk controlled through the pension age link, this really is a backstop, which under normal circumstances should not need to be used. Everyone in a public service pension scheme will see their pensions reformed along the same lines. I do not believe in special cases at a time when we are reforming the pension arrangements of those who provide essential services to the public.

[John Healey]

I promise not to intervene on the Chief Secretary again, but I want to ask about the employer cost cap in clause 11. On the front of the Bill, the Chancellor has signed a declaration that the provisions of the Bill

“are compatible with the Convention”.

It is clear from clause 11(7), however, that the Bill allows schemes to provide for reduction of accrued benefits as part of the employer cost cap. This would be a fundamental breach of scheme members’ rights under article 1 of protocol 1 of the convention, so how can the Chancellor’s statement on the front of the Bill be true?

[Danny Alexander]

I do not think that the right hon. Gentleman is right in this instance. In fact, had the “cap and share” arrangements introduced by the last Government been allowed to operate, they could have manifested themselves—[Interruption.] No, the right hon. Gentleman is wrong. They could have manifested themselves in both a reduction in benefits and an increase in costs to members. The right hon. Gentleman is free to explore the matter in Committee, and I am sure that he will.

I should add that I have some further information relating to the right hon. Gentleman’s earlier intervention. The working longer review is acknowledged in the proposed final agreement on the NHS pension scheme, which specifically states that early retirement factors allowing retirement before the state pension may be considered should the review suggest that that is necessary.

As we have established, public body pension schemes and public service schemes operated by the devolved Administrations are required to make equivalent changes to their schemes as swiftly as possible. In the case of public body schemes, it has not been possible in all cases to complete the reform process according to the same timetable. As I said in a written ministerial statement on 16 July, reform is definitely on the cards for these organisations, and the Government aim to complete the work by 2018.

Speaking of special cases, the House should note that the Bill will also close the generous and outdated “great offices of state” pension schemes. They have outlived their usefulness in the modern world. I am glad that the Bill will close them to new office holders and will ensure that people in such roles are given the same pensions as Ministers. As I am sure Members are aware, the Prime Minister waived his entitlement to such a pension when he took office. The current Lord Chancellor is making arrangements to do likewise, as did his predecessor. Mr Speaker announced on the day that we published this Bill that he would retain the pension, but would take it only when he reached the age of 65 rather than drawing it as soon as he left office.

Lord Hutton’s fourth key test related to governance and transparency. The reformed schemes should be widely understood, both by scheme members and by taxpayers. People understand what is in their pay packet each month, and it should be just as easy to understand how their pension works. Under the Bill, the schemes will have robust and transparent management arrangements.

Clause 5 provides for each scheme to have a pension board which will work to ensure that the scheme is administered effectively and efficiently. There will be local pension boards in the case of the locally administered police, fire and local authority schemes. The boards will consist of member representatives, employer representatives and officials. They will operate in a similar way to boards of trustees, holding scheme administrators to account and providing scheme members and the public with more information about the pensions. The board members will be identified publicly, and their duties will be made clear to scheme members. I welcome the greater transparency that the Bill will bring to this area of public pension administration.

Clause 15 and schedule 4 provide for an extension of the role of the pensions regulator, who will improve and police the management and administration of all the new schemes. The regulator is independent of Government, and will be able to utilise its full range of powers to ensure that the public schemes are managed properly and to consistently high standards. Clauses 12 and 13 will ensure that all schemes collate and publish information to improve transparency and enable comparisons to be made between them.

Since the Bill was published, I have received a number of questions about its design. It establishes a common framework of delegated powers which enable schemes to be made in respect of the public service work forces. The common framework constrains the use of those powers on core parts of pension scheme design, such as the link between state pension age and normal pension age, the career average pension structure, and the abolition of the final salary link. Those core elements are fixed in this legislation in order to create fairness and an even degree of cost control across the work forces.

At the same time, the Bill allows flexibility when that is appropriate, enabling the secondary detail of the pension schemes to be adjusted in recognition of the differences between different areas of public service work. Members will know that the final scheme designs agreed vary significantly from work force to work force, properly reflecting differing priorities and concerns within the cost ceilings that I established. The approach builds on that taken in the Superannuation Act 1972, which set out a framework of delegated powers some 40 years ago.

[Mark Durkan]

The Chief Secretary has just mentioned the Superannuation Act 1972 again. Does he accept that section 2(3) of that Act specifically prohibits retrospective effects, whereas clause 3 of the Bill specifically allows them?

[Danny Alexander]

There are some technical areas in which that may be necessary, but in practice the adjustments that we are making in the clause to which the hon. Gentleman has referred—and also in clause 11(7), which was mentioned earlier—allow the design of future benefits to change to ensure that costs are controlled, but do not allow changes to accrued benefits. The Bill, however, takes a more balanced approach than the Superannuation Act. The core elements for all public pensions are set out in the Bill. This serves as an important constraint on the delegated powers, to ensure our main objectives for reform are met.

I have also heard representations from Members of the devolved Administrations, but I think we have addressed that matter through earlier interventions. The Bill contains some minor areas that touch on devolved matters in Scotland and Wales, and I have written to all the devolved Finance Ministers to request that they seek legislative consent motions for the appropriate provisions. The Bill covers Northern Ireland, and the Minister of Finance and Personnel there—the hon. Member for East Antrim—has indicated that the Executive are considering a legislative consent motion to that effect. As to the progress of reform discussions in Scotland and Wales, the Government have made it clear that these Administrations have exactly the same flexibility in discussions with their trade unions as Whitehall Ministers have had, and within those parameters there is a great deal of flexibility.

Members who have followed this issue closely will know that the path to these reforms has been a long one, but it has also been a collaborative journey. The public debate on these pensions has been happening ever since this Government came to power more than two years ago. Some 18 months have passed since the Independent Public Service Pensions Commission published its final report, and discussions with trade unions and negotiators have taken place continuously since then. It is now time to take the final step by codifying the key elements of these reforms in legislation.

The framework set out in the Bill provides Parliament, public service employees and taxpayers with an assurance that the new schemes will be consistent, transparent and effectively managed. More than that, it requires new schemes to have common retirement ages, to provide benefits on a fairer basis and to include cost control mechanisms to protect members and other taxpayers from unforeseen changes in the cost of providing pensions.

The Government have set out a settlement that represents a good deal for public sector employees and a good deal for the taxpayer. It recognises the enormously valuable contribution that public sector workers make to our society and ensures a fair balance of contributions between public sector workers and other taxpayers. Taken together, these reforms will ensure that these pensions are sustainable for a generation. That is why the Bill proposes to create a high barrier for future changes to these elements of pension scheme designs. That means that any Government wishing to adjust them within the next 25 years would be required to jump a very high hurdle to do so.

In the UK’s long-term interests, we are facing up to tough decisions that Labour failed to address during its time in office, and we have done so while engaging with the unions every step of the way. We have made huge savings that were long overdue while protecting the entitlement of public service workers to a very good pension in retirement, giving public servants the confidence that future Governments will not need to make further reforms, and giving taxpayers confidence that never again will these costs be allowed to balloon out of control. These reforms therefore also help to repair the mess that Labour made of our public finances.

Fair, affordable, sustainable, good pensions that last: this is a new pension settlement for a generation, and I commend this Bill to the House.

17:53

[Rachel Reeves (Leeds West) (Lab)]

With advances in medical science meaning people are living longer and a pressing need to ensure that our public finances are on a sustainable path, it is right that we put in place the long-term reforms we need to manage the cost of public service pensions. That is why when in government we took important steps to ensure public service pensions were sustainable, and it is why we regret that this Government have behaved in a way that has made reform harder and that has undermined confidence in occupational pensions for teachers, nurses, police officers and others who work in the public sector.

We remain of the view that the Government’s imposition of steep contribution increases across the board and a permanent switch in the uprating of pensions to a lower measure of inflation were unfair and unnecessarily provocative. However, we support in principle the Bill’s main measures.

[David T. C. Davies (Monmouth) (Con)]

Do the hon. Lady’s comments mean that if she were the Minister, she would reverse that Government reform?

[Rachel Reeves]

We have said that we support the shift from the retail prices index to the consumer prices index for the period of this Parliament to reduce the deficit, but we do not support a permanent shift from RPI to CPI that will continue long after the deficit has been eliminated. I will discuss shortly some evidence from the Pensions Policy Institute and the Royal Statistical Society on the appropriate measure of inflation for uprating pensions.

[Andrew Gwynne]

My hon. Friend realises that the vast majority of public sector workers do not have massive gold-plated pensions. Instead they have very modest pensions, and they are concerned about their employment prospects as well as their contributions. Does my hon. Friend agree that those are the kinds of concerns that people out in the real world we speak to are talking about?

[Rachel Reeves]

My hon. Friend is entirely right. The average public sector pension in payment is under £6,000 a year, and it is considerably less for women who work in the public sector, so we are not talking about huge pensions in the vast majority of cases. Instead, we are talking about modest pensions to which people have contributed throughout their working lives.

We support in principle the main measures in the Bill, however, so we will not oppose it on Second Reading, but we will work in Committee to improve it, in order to ensure that it underpins, rather than undermines, the progress made in negotiations. We will seek to ensure it facilitates a smooth and stable transition to new scheme designs, entrenching good standards of governance, transparency, administration and consultation, thereby allowing those who give their working lives to serving the public to save for their retirement with confidence, while establishing a workable system for managing change and controlling costs to the taxpayer.

The Government and public service employees do need to find ways of adjusting to the welcome fact that people are living longer. In government, Labour had agreed and established a framework for negotiating reform and the “cap and share” mechanism to manage long-term costs, and it was always clear that this would mean increases in contributions and, as the population lives longer, a rise in retirement ages.

We have always said that the Hutton report provided a useful starting point for negotiations. Lord Hutton was right to suggest that career average schemes could be fairer than final salary schemes, and we think his proposal that public service pension ages should rise with the state pension age is right in principle. Lord Hutton also stressed the need to approach these issues in a careful and balanced way, however, with particular care for the affordability of any additional contributions for lower paid public service workers, and for avoiding fuelling a race to the bottom on pension provision. Reform needs to be fair to taxpayers and public service employees, as well as being genuinely sustainable for the long term, and that would be endangered by a search for quick cash savings or the playing of political games.

The vast majority of public service workers retire on very modest pensions. The average public service pension in payment is less than £6,000 a year, and even less for women. Tearing up decent public service pension schemes, or imposing punitive and unaffordable contribution increases, would be entirely counter-productive if that resulted in lower saving and inadequate retirement incomes.

[Margot James (Stourbridge) (Con)]

Does the hon. Lady not accept that the Government have made great strides in protecting low-paid public sector workers in response to Lord Hutton’s report, so that anyone earning £15,000 or less will not have to make any increased contribution at all, and for those earning less than £21,000 the increase will be capped at 1.5%? Surely that is the evidence she requires?

[Rachel Reeves]

That is simply not true. There are 800,000 part-time public service workers earning less than £15,000 a year, 90% of them women, and their pension contributions will rise by, in some cases, 50% or more because their full-time equivalent salary takes them above the minimum salary threshold.

Instead of building on our reforms, the Government have ripped them up. They have made it much harder to make progress by seeking to impose, prior to any negotiations, a steep 3% rise in contributions and a permanent switch in the indexation of future pension income from RPI to CPI. The “cap and share” arrangements agreed and established by the last Labour Government provided the mechanism for delivering the adjustments as needed, but the current Government chose to undermine that agreement and instead announced a 3% increase in contributions in the October spending review without any discussion or negotiation with employers or employees.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

As the hon. Lady is discussing the previous Labour Government’s reforms, will she say whether she accepts any responsibility on behalf of the Labour party for the decimation of private sector defined-benefit pensions as a consequence of the disastrous decision in the 1997 Budget of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) to end the repayment of dividend tax credits?

[Rachel Reeves]

If that was such a disastrous thing, why have this Government not reversed it or made any efforts to do something about it? They have no intention of doing so.

The contribution increases in this Bill were based on no assessment of the future funding needs of public sector pensions and were simply a tax on public service workers who were already facing a pay freeze and redundancy risks. The increases came long before Lord Hutton had published his final report. He warned that excessive increases could hit lower-paid workers hard and result in a counter-productive increase in opt-out rates. He has said that although it is for Ministers to decide by how much contributions should rise,

“there must also be a careful examination of the implications of any possible increase in opt out rates in these schemes as well.”

But the Government chose to plough on, not mindful of the increase in opt-out rates and with little regard for the consequences.

The Government promised that lower-paid workers would be protected from excessive and unaffordable increases, but the reality is that as many as 800,000 part- time workers earning less than £15,000 a year are already paying higher contributions. As I said, for many of them the contributions are 50% higher, because their full-time equivalent salary takes them over the minimum threshold. That approach had nothing to do with long-term reform and everything to do with a cash grab by the Treasury, which made it much harder to deliver progress on the real reform we needed, because the Government acted arbitrarily before Lord Hutton reported and lost the trust of public service workers.

In addition to imposing that hike in contributions, the Government used their June 2010 Budget unilaterally to change the indexation of pensions from RPI to CPI. On average and over time, public service workers will be 11% worse off in retirement as a result. According to analysis published last week by the Pensions Policy Institute, this is a bigger hit than the extra contributions, the raised retirement age and all the other changes to pensions put together. Independent experts, such as the Royal Statistical Society, have emphasised that CPI fails to reflect the spending patterns of pensioners and the rising costs they face. As pensioners worry about the hikes in energy bills this winter and expected steep increases in food prices, we should be particularly mindful of the challenges that retired people face in meeting ever-rising costs.

Again, those changes were imposed on public service workers without any negotiation or discussion. Lord Hutton stated:

“If these reforms have any chance of succeeding then people need to know that they are being treated fairly.  We have seen…the anger that has been triggered on the state pension when older women feel the finishing line is being put back at the last minute with very little time to adjust. So there should be full and proper consultation and discussion with the trades unions. That is how we do things in Britain—the public would take a very dim view of any government that fails to honour this basic requirement. We must try and avoid the confrontation and division that marked previous decades and must not turn the clock back.”

I regret to say that the Government did not follow that advice. Sometimes it seems that they are turning the clock back to the conflicts and divisions of the 1980s, and perhaps that was exactly their objective. Their aggressive and provocative approach to these serious and sensitive issues resulted in months of stalemated negotiations and several days of strike action, which resulted in closed schools, cancelled operations, and disrupted lives for families and businesses across the country.

[Richard Fuller]

There are times when the hon. Lady seems to be making a coherent argument and then she goes back to using rhetoric. She said that the change from RPI to CPI is the most significant one. If she seeks to make amendments on that issue and she does not want to make savings on the basis of a change from RPI to CPI, will she set out where she would make the savings in order to make the overall numbers add up as they are at the moment?

[Rachel Reeves]

I am sure that the hon. Gentleman has read the Bill. The RPI to CPI change was imposed before it, so it is not contained in the Bill and we will not be able to make any amendments in terms of RPI and CPI when discussing it. The point is that the Government acted arbitrarily before Lord Hutton reported, thus making it harder to deliver the long-term reform to public service pensions that we need.

Labour Members think that those strikes could and should have been avoided last year, and that it is a matter of deep regret that this Government have lost the trust and damaged the morale of millions of public service workers, whose engagement and commitment is vital at a time when they are being asked to accept prolonged pay restraint while delivering continued improvement in the quality and efficiency of public services with fewer resources.



Let me turn from the Government’s mishandling of the issue to the specific provisions in this Bill. The Bill is designed to put the new schemes on a clear and consistent legal footing, with clear lines of accountability to scheme members, public service employers and taxpayers. That, in itself, is a worthwhile objective. I have already emphasised that our big disagreements with the Government’s approach to public service pensions lie elsewhere, so we will not oppose the Bill on Second Reading.

However, we have a number of concerns about the Bill that we hope to address in Committee. It is an ill-prepared and poorly drafted Bill containing a number of mistakes, including giving the wrong dates for the transitions to new schemes. The Bill fails to deliver on the commitments and assurances given by this Government to underpin the provision of decent pension schemes that allow public service workers to save for their retirement with confidence. In short, as we have come to expect from this Government, it is a shambles of a Bill that has not been properly thought through, risks creating more problems than it solves and fails to deliver on the promises that Ministers have made.

First, we think it is right that pension ages rise in line with longevity, but it is essential that that is done carefully and fairly, with due notice given to people whose retirement plans may need to change and due consideration given to the impact of working longer on people in front-line or particularly strenuous occupations.

[Derek Twigg (Halton) (Lab)]

My hon. Friend makes an important point. Many of my constituents contact me about the impact on pensioners of the wholesale changes that the Government are proposing and have made in respect of this notice period and the fact that people are having to change their plans. That has caused great distress and worry to many of my constituents. I am pleased that she is addressing the point, because the Government seem to be ignoring it.

[Rachel Reeves]

I thank my hon. Friend for his intervention. We argued exactly the same point when the Government arbitrarily increased the state pension age for women in their late 50s with just six years’ notice given. When Lord Turner carried out the review of state pensions for the previous Government, he recommended a 15-year notice period be given, and the Pensions Policy Institute recommends a 10-year notice period. Such notice needs to be given and it is not enshrined in this Bill.

[Andrew Gwynne]

Does my hon. Friend recognise that one of the reasons why that notice period is required is that as the retirement age rises careers may also have to change to ensure that employees are not forced into ill health and are not forced to do work that is unsuitable for their age?

[Rachel Reeves]

I thank my hon. Friend for that intervention. We also believe that this Bill should not pre-empt or cut across ongoing discussions—this builds on the point that he raised, as did my right hon. Friend the Member for Rother Valley (Mr Barron)—between the Department of Health, NHS employers and NHS workers about the implications of working longer for some staff groups, especially those, such as paramedics, in physically demanding roles.

We think that the Bill should reflect Lord Hutton’s recommendations that the link between public service pension ages and the state pension age should be kept under review and that this should be conducted by a properly independent body, with public service employees and employers represented and consulted. The Chief Secretary to the Treasury said in his speech that that will happen, but it is not guaranteed in the Bill—indeed, it is unclear whether it is even compatible with the Bill. These are all issues that we will be raising in Committee to get the commitments that public service workers deserve and thought they had been given during the negotiations behind the Bill. These are also issues that we will have in mind as we look to any future increases in the state pension age itself.

For our finances to be sustainable, and for decent pensions to be affordable, it is right that retirement ages rise with longevity. However, as Malcolm Wicks, the late Member for Croydon North reminded us in some of his most recent work, many people doing manual jobs started work at 16 or 18, with some doing so even earlier, and find it harder to continue work into their late 60s. We should be mindful of people’s capacity to work later and later, especially if support is not in place for them in the workplace.

Secondly, there are real worries that the Bill fails to take due account of the special characteristics of the local government pension scheme. Members will know that it is a fully funded scheme administered by local authorities and we should welcome the hard work of local councils and trade unions, who have made very valuable progress in negotiations on a mutually agreeable agenda for reform. The Bill threatens to unravel the agreements that have been reached and destabilise financially the local government pension funds by forcing a disruptive and potentially disastrous closure of existing schemes instead of facilitating a smooth transition to the new scheme design. That extension of Treasury interference into aspects of scheme valuation and design could prevent local authorities from delivering on the deal they have agreed with their work force. Indeed, the view of the pensions manager at the Chartered Institute of Public Finance and Accountancy is that the relevant provisions in the Bill represent

“a major shift in the governance of local authority pensions and”

raise

“questions about future local democratic accountability for those pension funds.”

Again, we expect those concerns to be addressed in Committee.

Thirdly, on the question of good governance, the Bill must underpin and not undermine high standards of scheme governance. As Lord Hutton stated in his final report,

“there is a powerful case for…much stronger governance of all the public service pension schemes. This should keep government, taxpayers and scheme members better informed about the financial health of these schemes. There should be minimum standards set for scheme administration. There is also a proper and legitimate role for representatives of the workforce to be formally involved in these new governance arrangements.”

The Bill fails to include key recommendations from Lord Hutton’s report, such as the inclusion of member-nominated and independent members on pension boards; the establishment of pension policy groups to consider major changes to scheme rules; the need to ensure that pension boards are responsible for the oversight of financial management and, in the case of funded schemes such as the local government pension scheme, for investment management; and the commissioning of a review into how standards of administration in public service pension schemes can be improved. Those measures would improve the efficiency and cost-effectiveness of scheme administration and would ensure that public service pension schemes matched best practice in the private sector.

Finally, we must ensure that the Bill adequately reflects and reinforces the progress made in negotiations. We should give public service workers a system they can trust and pensions that they can save towards with confidence, ensuring protection against retrospective or arbitrary detrimental changes. We also have concerns in this regard, which some hon. Members have already mentioned, and we will seek to address them in Committee. For one thing, the Bill subjects many aspects of public service pension provision to unilateral Treasury control. Although it is right that mechanisms should be in place to ensure that costs to taxpayers are contained, public service employees also have a right to know that critical changes will be consulted on and that their pension savings will not be vulnerable to arbitrary interference and opportunistic cash raids.

Furthermore, Lord Hutton has stated that

“there must…be full protection of accrued rights”,

but the Bill does not rule out retrospective changes that reduce benefits already accrued, going against the fundamental principle that pension benefits accrued are pay deferred and must therefore be honoured. The Government have reiterated their commitment to maintaining defined benefits in the public sector, and the Chief Secretary reaffirmed that to the House last year. He said, as he has on a number of other occasions, that his commitment was that

“public sector schemes will remain as defined benefit schemes, with a guaranteed amount provided in retirement”.—[Official Report, 2 November 2011; Vol. 534, c. 927.]

Clause 7, however, provides for the creation of new schemes that are

“defined benefits…defined contributions…or…a scheme of any other description.”

That should not be a means to drive a coach and horses through the commitments the Government have given and allow another round in the race to the bottom on pension provision.

In addition, the Government have made much of their promise of

“no more reform for 25 years”.

In his foreword to the Treasury’s document on new scheme designs, published last December, the Chief Secretary wrote that

“we need a long term solution that will last a generation”.

Clause 20 specifies “protected elements” of scheme design that cannot be altered for the next 25 years without clearing a “high hurdle” of comprehensive consultation and a report to parliament.

We think it is right that public service workers should be given an assurance that their pension savings will not be vulnerable to further arbitrary and unfair changes without adequate scrutiny and debate, but the Bill seems to be riddled with loopholes, excluding a number of important scheme features from the list of “protected elements” and stating that the “high hurdle” can be bypassed in order to meet a cost cap that is in turn set by the Treasury with no such requirement for consultation and report. Furthermore, it was a critical part of the agreements reached with employee representatives that protection should be provided to staff transferred to alternative providers as a result of public service outsourcing —the so-called fair deal policy. The Chief Secretary told the House last year that

“we have agreed to retain the fair deal provision and extend access for transferring staff. The new pensions will be substantially more affordable to alternative providers, and it is right that we offer workers continued access to them.”—[Official Report, 20 December 2011; Vol. 537, c. 1203.]

Yet there is no guarantee in the Bill that public service workers transferred to new employers will be able to keep their public service pensions. We will seek to address all those issues in Committee to improve the Bill and the protections granted to public service workers.

In conclusion, we think public service workers with understandable fears for their financial futures deserve better than being treated as pawns in this Government’s political games, with the consequence that it has been harder to reach agreement on reasonable reforms that control costs to the taxpayer. Indeed, perhaps the best case for the Bill is that it should ensure that never again can an opportunistic Government create unnecessary conflict and disruption by imposing unfair and arbitrary changes without adequate consultation, scrutiny and accountability. Let us ensure that it fulfils that objective.

Finally, let us remember that the real pensions crisis is not in the public sector but in the private sector. It is right that we should ensure public service pensions are sustainable and affordable for the taxpayer, but we should not allow that to distract us from the unacceptable inadequacy of pension provision in the private sector. Too often, it has sounded as though the Government’s answer to disparities in pension provision across the public and private sectors is to level down, not level up. Indeed, we have seen more than a million lower paid workers excluded from automatic enrolment when we should be ensuring that the National Employment Savings Trust can deliver low-cost, high-quality pensions to all who could benefit.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the hon. Lady accept that in the 10 years since the previous Prime Minister decided to get rid of advance corporation tax relief on pensions, that decision has destroyed £100 billion of private sector pension savings? Does she accept that that was the fault of her Government?

[Rachel Reeves]

I look forward to the hon. Lady’s private Member’s Bill to restore that relief. The real crisis is that some people are not saving at all for their retirement and are not in any type of occupational scheme.

[Andrea Leadsom]

rose—

[Rachel Reeves]

I shall take another intervention so that we can hear about the hon. Lady’s private Member’s Bill.

[Andrea Leadsom]

How on earth does the hon. Lady think that anyone can put right £100 billion wiped off the value of private sector pensions? How does she expect anybody to right that wrong today? It has been done; it is too late.

[Rachel Reeves]

It could be reversed so that dividends were not treated in such a way in the future, but the Government have no intention of doing that. I do not think the hon. Lady understands the real crisis: some people are not saving at all for their pensions and have no occupational pension to save into, and the 20% of people who earn less than a living wage do not feel that they can put money aside every month. That is the real crisis we face and the Government excluded 1 million people from automatic enrolment and have done nothing to tackle the excessive fees and charges automatic enrolment schemes can charge. The Government should be focusing on that challenge to bring up the quality of pension provision for everybody so that nobody risks retiring into poverty and having to rely on means-tested benefits.

Improving governance and reducing costs across private pension schemes while cracking down on the excessive fees and charges that erode pension income should be the Government’s priority, but it is not. Instead, to address disparities they want to level down the pensions enjoyed by those who work in the public sector.

[Kelvin Hopkins (Luton North) (Lab)]

My hon. Friend is right to draw attention to the pathetic performance of private sector schemes. Is not the answer a compulsory state earnings-related pension scheme for everyone in the private sector?

[Rachel Reeves]

Automatic enrolment could bring into saving for retirement 10 million people who are currently not saving. They would not just be contributing their own money, but getting a contribution from their employer that they have never had before. That scheme started in October this year and by October 2017 it will be fully rolled out.

The pensions Minister is now in his place. It is disappointing that people on low pay and in part-time work are excluded from that scheme, and that the waiting period was increased to three months, which means that some people who could have benefited from it, particularly those who change jobs regularly, will be excluded. The Government need to do more to bring people into saving for occupational pension schemes through automatic enrolment, and they need to ensure that excessive fees and charges do not erode that pension income. We urged the Government to amend the Pensions Act 2011 to cap those fees and charges, but the Minister did not take those proposals on board.

Lord Hutton argued that public service pensions should remain a gold standard, so let us make sure that the Bill delivers on that objective and then seek to spread that standard across the wider economy so that everyone can benefit from good quality pension schemes. Instead of this Government’s divisive political games, pitting public sector against private sector, union member against taxpayer, we need to work together—Government, businesses, employees and civil society—reforming our economic institutions to give everyone a stake and a fair share in prosperity, building the one-nation economy that our nation needs to succeed.

18:21

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

I am pleased to follow the hon. Member for Leeds West (Rachel Reeves). She would have been better to avoid the issue of private sector pension schemes because of the enormous damage that was done by the Labour Government in those early years, in the July 1997 Budget. As my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) said, they took £100 billion out of private sector pension funds, which at that time had an asset value of £650 billion. It was the envy of the world, and £100 billion was a very large proportion of that sum.

I welcome the hon. Lady’s acceptance of this very important Bill and the fact that the Labour Opposition will support it in the Lobby. Despite her assertion, my view is that the negotiations were handled extremely well by the Treasury, the Cabinet Office and the individual Departments involved. There was engagement and a willingness to compromise, but there was also a firm approach to ensure fairness between the taxpayer and the public sector employee.

I support the Bill not just because of its importance in tackling this country’s historically high budget deficit, but because of its vital importance to ensuring that we have high-quality, well-rewarded public sector employees, in the teaching profession in particular. We need a well-rewarded profession that continues to enjoy a defined benefit pension scheme on a sustainable basis when such schemes are increasingly rare in other sectors of the economy. As my hon. Friend the Member for Rochford and Southend East (James Duddridge) said, even without the budget deficit, these reforms are necessary to tackle increased costs and life expectancy.

The Government’s education reforms are built on trusting the teaching profession, ensuring that we have the best people coming into teaching, and raising the status of the profession. Indeed, the schools White Paper was called “The Importance of Teaching”. In the opening chapters it made the point:

“The evidence from around the world shows us that the most important factor in determining the effectiveness of a school system is the quality of its teachers. The best education systems draw their teachers from the most academically able”.

Countries around the world that have the best education systems, such as Singapore and Finland, recruit their teachers from the top third of their graduates, and South Korea recruits from the top 5%, but Singapore and South Korea pay their teachers more than any other country in the world relative to average earnings in their own country. Finland pays its teachers at about the OECD average.

In its 2007 report, “How the world’s best-performing school systems come out on top”, McKinsey made the important point that the quality of an education system cannot exceed the quality of its teachers. Its 2010 report, “Closing the talent gap: attracting and retaining top third graduates to a career in teaching”, looked at precisely how Singapore, Finland and South Korea manage to recruit graduates from the top third. It concluded that the key to recruiting the best graduates is attractive starting salaries and attractive top salaries.

A report that examined the US education system concluded that a starting salary of $65,000 and a top salary of $150,000 were needed. In this country starting salaries outside London are about £21,600 and £27,000 in London. Top salaries for teachers are about £105,000 outside London and £112,000 in London. Although the McKinsey report was about the United States and looked at the US employment market, it is nevertheless fair to draw the conclusion that compensation packages are an important element in determining the calibre of graduates recruited into teaching, and pensions are an important part of that remuneration package. Defined benefit schemes are particularly attractive, and in my view they are an important part of that package, which is why the Bill is so important.

In his final report Lord Hutton stated:

“Given the current design of public service pension schemes, the general public cannot be sure that schemes will remain sustainable in the future.”

The issue of sustainability is therefore critical. Is a scheme sustainable in terms of its costs, given increased life expectancy? As Lord Hutton pointed out,

“In 1841, someone who reached the age of 60 might expect to live a further 14 years on average, but most people did not live to this age. By the early 1970s…the life expectancy of a 60 year old had increased to about 18 years and this has now risen to around 28 years. In addition, many more people can now expect to reach 60.”

Public service pension costs have been rising significantly over recent years—by a third in the past decade to £32 billion. Expenditure on teachers’ pensions is projected to double from £5 billion in 2005-06 to almost £10 billion in 2015-16. As Hutton pointed out,

“between 1999-2000 and 2009-10 the amount of benefits paid from the five largest public service pension schemes increased by 32 per cent. This increase in costs was mainly driven by an increase in the number of pensioners, a result of the expansion of the public service workforce over the last four decades, longer life expectancy and the extension of pension rights for early leavers and women.”

Hutton also said that it was important to look at the pension position as a whole, comparing the situation in the public and private sectors. One of the over-arching principles was to achieve fairness between taxpayers and public sector employees. The divergence, he said, between the public and private sectors is of concern. That does not mean, as the hon. Member for Leeds West asserted, that public service pensions should follow the trend in the private sector. Hutton said:

“This downward drift in pension provision in the private sector does not however provide sufficient support or justification in my view for the argument that pensions in the public sector must therefore automatically follow the same course. I regard this as a counsel of despair. In making clear I believe there is a case for further reform I have therefore rejected a race to the bottom as the only answer, and hope that reformed public service pensions can be seen as once again providing a benchmark for the private sector to aim towards.”

It is worth pausing a moment to look at how extensive this downward drift in private sector pension provision was, and its causes. According to the 2010 occupational pension scheme survey by the Office for National Statistics, the peak provision of occupational pensions was in the mid-1960s, when there more than 12 million active members, of whom 8 million were in the private sector and 4 million were in the state sector. By the mid-1990s active membership had fallen to about 11 million, but 90% of that 11 million continued to have defined benefit schemes. This means that more than 5.5 million private sector employees of that time were in some form of final salary or defined benefit scheme. By 2010 membership had fallen to 2.1 million and, as Hutton points out, only about 1 million of those members were in schemes that were still open to new members and an increasing number of schemes were closing to new accruals for existing members.

The fall in membership was due in part to the private sector making a realistic assessment of the costs of increased life expectancy. There had been a modest trend away from defined benefit schemes and towards defined contribution schemes in recent years, but that accelerated after 1997, in my view because of the decision taken by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in his first Budget to end the repayment of dividend tax credits to pension funds and other tax-free funds, which took about £3.5 billion a year from pension funds. At the time, Britain’s private sector pensions were the envy of the world, with assets of more than £650 billion.

Many people, including in the pensions industry, said that that policy would have a very damaging effect on pension provision. Treasury civil servants shared those misgivings. In 2007 the Treasury was forced to release a number of internal papers from 1997 assessing the likely impact of the policy to end the repayment of dividend tax credits. A Treasury paper, dated 15 May 1997 and headed “Paper Four: Pension Schemes and Insurers”, pointed out that 90% of employees in occupational pension schemes had defined benefits but warned:

“In recent years we have seen a small but steady shift towards defined contribution schemes.”

The Treasury paper alerted Ministers to the risks arising from ending the repayment of dividend tax credits, stating:

“The present shift towards defined contribution schemes might accelerate…One of the claimed merits of defined contributions schemes is that they give employers more control over costs since the investment risk is transferred away from employers and onto employees. This factor would become ever more relevant with the proposed tax credit change.”

Despite that clear warning, the right hon. Gentleman pressed ahead with the policy, and the predictions made by his civil servants have come to fruition. That is why we have the problems we face today and why we are debating the Bill.

[Mr Iain Wright]

The hon. Gentleman mentioned the 1997 Budget. First, what does he think was the impact of the then Chancellor’s decision to cut corporation tax by 2p in the pound with the aim of encouraging more long-term investment in pension funds? Secondly, what impact does he think the long payment holidays for employers have had on defined contribution and defined benefit schemes?

[Mr Gibb]

The whole basis of the decision was the argument that the stock market was rising and so the tax cut would lead to more profits, more dividends and further rises in the stock market. Unfortunately, after 2000 the stock market started to fall and the whole basis of the argument fell apart, and therein lies the problem. Those pension holidays were temporary because of the over-exuberant stock market. Indeed, the Treasury papers from 1997, released under duress in 2007, made the point to Ministers that there was a danger that the stock market was overvalued.

As a consequence, the public sector faced a situation in which the private sector was moving away wholesale from final salary and defined benefit schemes while it was increasingly becoming the exclusive preserve of such schemes. The issue of fairness thus became paramount, particularly as the cost of those schemes was rising so quickly. Although Hutton rejected the notion that public sector pensions were gold-plated, he did conclude that longer-term structural reform was needed because

“current schemes had proved unable to respond flexibly to changes in working lives and longevity.”

Therefore, the only way to ensure that teachers and other public sector employees continued to enjoy high-quality defined benefit pensions was to engage in structural reform.

The final arrangements represent a very good deal. They now link the normal pension age to the state pension age in order to deal with longevity issues. No one within 10 years of retirement age will be affected by the changes and there is a tapering arrangement for those within 13 years of retirement. Although final salary schemes will be replaced by career average schemes from April 2015, all the accrued rights to that date will be maintained and the final salary will be the final salary on retirement, not the final salary in April 2015, as my right hon. Friend the Chief Secretary confirmed again today. Career average is still a defined benefit scheme, and it is fairer. Its generosity, of course, depends on the actual accrual rate. Currently the teachers’ pension final salary accrual rate is one 60th, and that will become more generous under the new scheme, with an accrual rate of one 57th. The salary that determines the career average will be indexed by CPI plus 1.6%, as far as teachers are concerned, although that varies in the different schemes.

These arrangements have been accepted by the Association of School and College Leaders, the Association of Teachers and Lecturers union and the National Association of Head Teachers, which have said that they are planning no further action over pension reform. These arrangements, and the Bill that will implement them, will ensure that public sector employees, including teachers, can continue to benefit from a defined benefit pension scheme that is sustainable in the long term and that will be supported by the public. That, along with other education reforms, will help to ensure the teachers are well rewarded and that we will have a teaching profession that continues to see its status rise and, with it, standards in our state schools. I fully support the Bill and, if there is a Division tonight, look forward to voting for its Second Reading.

18:36

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Bill and, perhaps more significantly, the delegated legislation that will follow it, will undoubtedly have far-reaching consequences for all those who receive public sector pensions in this country, as the debate has clearly highlighted. Analysis from the Pensions Policy Institute suggests that the proposed changes to the NHS, local government, teachers and civil service pension schemes will reduce the average value of the benefit offered across all schemes by more than a third compared with the value of the schemes in place before the coalition Government came forward with these proposals and the other steps they have taken since coming to power. The Minister has already spoken about a 40% cut in costs over time, so I assume that he will accept that figure.

We find it shocking that while there have been pay cuts of 40% in Greece as its austerity programme has been implemented, pensions in the UK are facing equivalent cuts yet most people are unaware that that is happening, perhaps in part because many people find pensions complex and difficult to understand. Of course, pensions are as much a part of our employment package as other benefits, such as pay. Indeed, many argue that pensions are in fact deferred pay, so in effect we are discussing significant cuts in the terms and conditions of all public sector workers in this country, which will, of course, have all sorts of ramifications for the private sector.

According to the Pensions Policy Institute’s analysis, following the coalition’s proposed changes, the scheme value across the four largest public sector pension schemes will reduce on average from 23% of a scheme member’s salary to 15% of their salary, with the net effect that the pension will form a much smaller part of an employment package. I argue that we should not support that. I have listened with interest to the debate on private sector pensions—I hope that we have can have a much fuller debate about it on another occasion—but I think that the message that should be coming from the House is that we want the pension to form a much bigger part of a person’s employment package. We should put in place a framework whereby the individual is required to save, as is the employer, and the Government have a role to play by ensuring that the policy framework is in place to enable that to happen.

My hon. Friend the shadow Minister said that the change in the indexation for public sector pensions from RPI to CPI is wiping 11% off the value of pensions in the public sector. In effect, that means that the pension of each public sector worker will be 11% lower in each year of their retirement. We have already heard about the implications of people opting out if these proposals are implemented, but we must also consider the implications for the public purse if people have lower incomes in retirement and therefore need to look to the state for support through welfare benefits. Half of all women workers who have a pension of less than £4,000 will be worse off, and the TUC estimates that 60% of all public sector part-time workers earning less than £15,000 a year will have to pay higher contributions. We need to look at the wider implications of the proposal.

In previous debates in the Chamber on public sector pensions, many figures have been cited to show the low salaries that most people who receive such pensions receive. As we know, public sector pensions are far from gold-plated. The Hutton report said that the average pension paid to scheme members was about £7,800 per year, with the median payment being £5,600 per year, while half of all women public sector pensioners get less than £4,000 per year. In reality, however, many people in receipt of public sector pensions receive smaller sums. The proposals suggest that those people should be required to pay greater pension contributions, to work longer, and to receive a worse pension at the end of the process.

Tribute has already been paid in this debate to the former right hon. Member for Croydon North, Malcolm Wicks. It is incredibly sad that he is not here to explain, in his most articulate way, why it is not the case that everyone should be expected to work longer, especially those who have worked in heavy manual jobs from an early age. Perhaps such people should have a lower retirement age, with the retirement system and their pension schemes taking that into account. I remember chairing a sitting of the Committee that considered the Bill that became the Pensions Act 2011 during which Malcolm Wicks entertainingly and powerfully highlighted his passion for this issue as he strongly led a rebel Labour effort to make the case that we need to look seriously at how we deal with those who carry out manual tasks.

[Richard Fuller]

Does the hon. Lady share my particular concern about firefighters whose retirement age will be extended? It is argued that fire prevention roles requiring less manual work will be made available to them, but does she agree that that will probably not prove to be the case for the vast majority of firefighters as they reach their later retirement age?

[Katy Clark]

I am grateful to the hon. Gentleman for that intervention. I referred earlier to clause 9(2), which clearly states that firefighters will be required to work until the age of 60 before receiving their pension, whereas at the moment they have to work only until they are 55. My understanding of the fire service is that jobs requiring lesser physical skills would not be available, so I asked the Minister what he expected people to do. Labour Members fear that they would retire early, but would then have to get other employment, such as a part-time job in Tesco, or to sign on. That is not an adequate way to deal with people who do such jobs over a lengthy period.

Of course, it is not only firefighters who will be affected. Many people in the public sector work in very physical jobs, whether they are the paramedics in our ambulances or nurses—particularly grade A nurses. Those who carry out manually demanding tasks would not be able to work until they were 68, but other jobs might not be available to them. We need to think this through very carefully. Having listened to the Minister, I am worried that the Bill has very little flexibility. We need to be able to think far more flexibly about working ages. We must recognise that while it may be appropriate for some people to work for longer—indeed, many people might want to work until they are much older than has traditionally been the case—for others that is simply not appropriate.

The Bill will have significant implications for the various public sector schemes in Scotland, where there has been considerable debate about its impact. Of course, the civil service schemes are a matter for this Parliament, but the local government, national health service and police pension schemes, as well as those of teachers and firefighters, are devolved. When Westminster legislates on matters that are devolved to Scotland, it usually needs to obtain a legislative consent motion from the Scottish Parliament. I appreciate that the Scottish National party spokesperson, the hon. Member for Banff and Buchan (Dr Whiteford), is in the Chamber, so she might address this later, but I am told that Scottish officials have advised Ministers in the Scottish Government that such a motion is not required, although the view of the trade unions in Scotland, on the basis of legal advice that they have obtained, is that a motion would be necessary. I was interested to hear what the Minister said about that, because there are very significant implications for Scotland. The negotiations that have taken place there are not identical to those that have been held with Ministers down here. I hope that the Scottish Government will wish to ensure that they are able to enact measures on the basis of whatever agreements are made with the unions in Scotland.

I believe that this is a devastating Bill, not only for pensioners in the public sector, but for those in the private sector. It sends all the wrong messages about what we should be seeking for pensions. We need to put in place frameworks through which we collectively save far more than we have in the past to ensure that we have provision in retirement. That does mean that individuals who can afford to should be paying more into their pension schemes, but it also means that the employer should be paying more and that the state should be playing a greater role in ensuring that that happens. In 2007 and 2008, the then Labour Government implemented reforms to the four largest public sector schemes that took account of the changing demographics that we faced. My view, which is shared by most people who have looked seriously at this, is that those schemes are viable and that sufficient funds are available to ensure that pensions are paid out.

[Mike Freer (Finchley and Golders Green) (Con)]

Will the hon. Lady give way?

[Katy Clark]

I was about to conclude, but I am happy to take an intervention.

[Mike Freer]

In actual fact, the Audit Commission report on the local government pension scheme, which is by far the largest scheme, says that it can meet only 75% of its future liabilities. Far from being sustainable, it has a shortfall.

[Katy Clark]

My understanding is that there will be a review of the scheme. Having spoken to some of those who are directly involved in the negotiations on the scheme, I am firmly of the view that we need to look carefully at those figures. On the basis of the financial information that we have, which is, of course, dated, because there has not been an up-to-date review, the reality is that the scheme is viable and there is no reason to believe that that will change.

[Andrew Gwynne]

May I advise my hon. Friend of a successful local government pension scheme, namely the Greater Manchester pension scheme, which is administered by my own local authority—Tameside metropolitan borough council—and is fully funded? Is it not the case that best practice therefore exists, and should not other local government pension schemes utilise it?

[Katy Clark]

I am interested in the scheme to which my hon. Friend refers, and I might get more information about it from him later.

[John McDonnell (Hayes and Harlington) (Lab)]

It is worth putting on record that under the deal negotiated by the Labour Government, if there were increased costs with regards to longevity, there would be a cap on the employer’s contribution and the additional cost would be borne by the contributors—the scheme’s participants. The issue of longevity was therefore dealt with by agreement with the unions.

[Katy Clark]

I listened carefully to the hon. Member for Finchley and Golders Green (Mike Freer) and I can say to him that while there needs to be a review of the local government scheme, I understand that the current position is that it is perfectly viable. This proposal has been made because Government Members take the view that public sector schemes are too generous and form too large a part of the employment package in the public sector. We actually need to use the public sector schemes as a model to ensure that pensions are a much greater part of everybody’s employment package. If we do not do so, we will simply end up paying in other ways, whether that is because people opt out, or because people will rely on the state as they are living in such poor circumstances. We should have a debate about how we can move towards a situation whereby, collectively, we save more for retirement, so that people have decent pensions that they can afford to live on and do not need to rely on the state in other ways.

18:49

[Robert Neill (Bromley and Chislehurst) (Con)]

I do not agree with the conclusions of the hon. Member for North Ayrshire and Arran (Katy Clark) about the Bill, or with some of the details of her speech, but I am sure that every Member of the House will agree with her warm remarks about the late right hon. Member for Croydon North, Malcolm Wicks. I knew Malcolm as a fellow London politician for many years. Indeed, I knew his late father, who was a former chairman of the Greater London council. I think that everyone would agree that it is a tragedy that Malcolm is not here, because his expertise in this field was recognised throughout the Chamber.

During my time in government I had a measure of responsibility for two of the schemes under discussion, namely the local government scheme and the firefighters scheme. I very much agree with my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb) in his analysis of the Bill, the overall pressures that need to be redressed and the need for reform of public sector pensions. I wholly endorse his analysis of how the negotiations—to which he, I and the Chief Secretary to the Treasury were, in varying measure, party—proceeded. There was greater realism and sophistication to be found in my dealings and negotiations with various public sector unions than in the analysis provided by Members on the Opposition Front Bench. That is a sad commentary.

I want to deal initially with the local government scheme. It has been observed, rightly, that this is the most significant of all the schemes in financial terms. It is hugely important and involves 81 funds. It is the biggest pension fund in the United Kingdom and the fourth largest in the world. We are talking about £145 billion in investments and assets, so getting the local government scheme right is critical for its members, many of whom I have worked with for years, going back to the day on which I was first elected as a councillor at the age of 21, about which all I can say is that I was keen.

[Mr Iain Wright]

In 1862?

[Robert Neill]

Yes, it was shortly after the Municipal Reform Act.

The scheme is important for its members and the council tax payers who fund it. We should also not forget—I will come back to this later—that it is important for the overall British economy, because of its investment potential. Getting it right is important. It is worth emphasising that it is different from the other schemes, because it is largely funded. The Chief Secretary to the Treasury recognised that significant factor, as, I am sure, will the Minister who responds to the debate. It will have consequences, once the Bill is enacted, for how we deal with regulations and secondary legislation with regard to the scheme’s governance and other related matters. There is nothing in the Bill itself—which I warmly support, because reform of all the public sector schemes is necessary—to prevent that from being achieved.

There is clear evidence that reform of the local government scheme is necessary. Reference has been made to the Audit Commission and, at the risk of taking a little longer than I had intended, it is worth quoting what it said in order to make the point. It accepted that the local government pension scheme had funds

“to cover about three-quarters of its future liabilities”

and that it had a positive cash flow. The commission then concluded that the current approach could not be continued indefinitely, the reasons for which included:

“The cost of providing pensions for local authority employees is rising in absolute terms and as a proportion of pay because of increasing life expectancy and action needed to recover funding deficits.”

It was not possible to fund the whole lot. There is no doubt that local government pension funds

“have been affected by lower than anticipated investment returns”.

At the time of the commission’s report in 2009, the value of assets was “about 15% lower” than had been anticipated in the previous revaluation in 2007. I have to say that Opposition Members cannot escape some of the responsibility that the previous Government have for the investment performance of the funds.

[Mr Anderson]

Given his long experience of local government, does the hon. Gentleman have any idea how many councils, including the one that he led, took pension contribution holidays?

[Robert Neill]

I certainly never took any pension contribution holidays. Indeed, I only became a member of the local government pension scheme in 2000, when I was a member of the Greater London authority, so I do not think that the hon. Gentleman’s point is realistic. The performance of the scheme is down to the investment climate in which it operates, and the investment climate is determined by the macro-economic policies of the Government. The hon. Gentleman does not accept the failure of his Government in this context. One of the by-blows of that failure was that the investment returns for the scheme were less than expected and that has added to the pressures on the scheme. It is not the sole pressure, but it has added to them.

The Audit Commission also noted that the cost of pensions affects the amount of money available for local authorities to fund services and it influences council tax decisions, so there were questions about whether the LGPS benefits were affordable in the long term. Although some of those matters have been picked up by prior reforms—I do not pretend otherwise—they were not adequate to deal with the pressures. The Audit Commission concluded that, despite the fact that the scheme had funding, unlike others, reform was needed none the less. It is not just the Audit Commission that has recognised that—so too have the professionals in the local government pensions world. In October 2009 Mike Taylor, the chief executive of the London Pensions Fund Authority—I declare an interest, having been a member of that body for a short period—said that the LGPS needed to respond to increasing longevity because it

“is not designed to pay benefits for ever increasing periods of retirement and, without change, will face extinction…Employer or taxpayer contribution rates currently take all the strain of increasing liabilities in the LGPS. This situation cannot continue and either those costs must be reduced, or employees bear a fairer share of the increasing costs.”

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the hon. Gentleman discuss with the chief executive of the LPFA his opinion of clause 16, which will close the existing local government pension scheme and start a new one? As I understand it, closing it might trigger what are known as section 75 crystallisation of debt arrangements, and the burden could fall heavily on local authorities. Does he agree that the Economic Secretary needs to ensure that the crystallisation of costs does not fall disproportionately on local taxpayers?

[Robert Neill]

I certainly agree that the impacts of crystallisation have to be considered carefully. It is worth saying, however—I was going to come to this point later, but I will deal with it now—that the reason why we are dealing with the matter in this way is in no small measure the result of an agreement between the unions and local government employers. They agreed that it was desirable to have a single reform of the system to deal with both short and long-term pressures, which was referred to as a “single event”, and that it should take place in 2014. There is a technical debate to be had about how best to achieve that while avoiding the risk of crystallisation, and I hope that my hon. Friend the Economic Secretary and his ministerial colleagues will have that debate. However, that is certainly not a reason for opposing the Bill, and I do not think for one moment that it undermines the major thrust of the Government’s reforms. The structural issues that require reform in all the public sector funds, including the LGPS, need more radical work than that.

It seems to me that there is scope to reflect the particular circumstances of the LGPS within the parameters of the Bill, and I hope that Ministers will recognise that. It is still significantly funded, and at its best it has very high standards of governance. Many of us in local government have wanted to examine the capacity of some of the smaller schemes, and I believe that there is scope for the Government to encourage greater collaboration between some of them, or perhaps even mergers. The large and well run ones such as those in Greater Manchester, London and elsewhere have good governance arrangements, and I concede the point that was made about the Greater Manchester scheme. There is no reason why we cannot ensure that those arrangements are reflected in the secondary legislation that flows from the Bill. That will be a desirable outcome.

I hope that there will be democratic local accountability through elected members serving on the boards of schemes. I do not think it is necessary to impose a one-size-fits-all approach on the governance of schemes in order to achieve the important financial and structural reforms that are needed, which I support the Government in taking forward. We can reflect the particular circumstances of the local government scheme within the parameters that the Government have rightly set. That also applies to certain aspects of the scheme’s design, because there were constructive negotiations on the LGPS on the basis that the key point was to achieve the required cost envelope, which, as I recall, was 19.5% of salaries. Particular parts of the scheme enable us to do that while reflecting the particular nature of the local government work force and the scheme’s governance arrangements. I hope Ministers will ensure that the commitment to do so is maintained, and I have no doubt that they will.

I referred earlier to the investment potential of the local government scheme. It is already a significant player in many investment markets, but it could do more. I support the Government proposal to lift the cap on the amount that local government schemes can invest in local infrastructure schemes, which is currently an arbitrary 15%. When I was a Minister, I believed passionately in ensuring not only that local authorities had more resources of their own to put towards local investment but that they made the best use of their current assets, so it does not seem unreasonable that we should remove that cap. The professionals in the field have suggested that something like 30% would be a more realistic cap, and I am open-minded about the exact amount.

I recognise that Brian Strutton, from one of the public sector unions, has some concerns about that idea. If I may say so, I regarded him as a responsible interlocutor in my dealings with the trade unions. He rightly recognises that it might be possible to achieve our objectives either through changing the cap, which I think the unions are wary of, or through the creation of a new asset class for infrastructure. I hope that my hon. Friend the Economic Secretary will consider how we can achieve the important objective of giving local schemes a greater ability to invest in local infrastructure. We should not miss that important opportunity.

I turn now to the firefighters scheme. Again, I accept that it has differences from other schemes. A particularly important issue in all my negotiations with the Fire Brigades Union was the retirement age. The final agreement that was achieved, on which I reported to the House shortly before the summer recess, provided us with adequate and proper flexibility to take on board the concerns of our firefighters, whom I greatly respect. Two matters were put forward in that agreement. The first was that there would be a review of contribution levels from 2013-14 onwards, taking into account the impact of opt-outs, to which the hon. Member for North Ayrshire and Arran referred. I am sure the Economic Secretary will confirm that that remains the position.

Secondly, it will be recalled that I commissioned Dr Tony Williams to examine the evidence base for the case that was made about the physical impact of a firefighter’s job and its relation to the retirement age. The new firefighters scheme has had a normal pension age of 60 for new entrants since 2006, so the situation will not change for many firefighters. In addition, the retirement age of 55, or 50 after 25 years’ service, has been protected for entrants from before 2006. There are significant protections built in for long-serving firefighters. Dr Williams is extremely reputable in this field. He is the medical director of Working Fit and has 15 years’ experience as an occupational physician in the NHS as well as experience of firefighting. I hope that my hon. Friend the Economic Secretary will be able to confirm that the Government will look very closely at the outcome of his review.

[Mr Russell Brown]

The hon. Gentleman is absolutely correct in saying that there is some element of protection for firefighters, but we need to look forward, because that is what pensions are about. The new retirement age will keep firefighters working to 60 years of age in future. Are we about to breed supermen and superwomen who will be able to withstand such work at the age of 60?

[Robert Neill]

We need to look with care at the evidence, but that does not mean that we should keep the current generous—I use that word with care—retirement age. Firefighters work very hard, but the nature of jobs changes, and there is a case to be made—I put it no stronger than that—that the job of a firefighter is less physical than it was in some respects, because of the amount of technology and kit that they happily have to assist them. There is also a case to be made that increasing health levels in the population should not be taken out of account.

Equally, although I take on board the point raised by the hon. Member for North Ayrshire and Arran, it is realistic to accept that there are generally fewer “light duty” jobs in the fire service than in the police service. That is because fire authorities generally operate within a lean and flat structure, and there are fewer civilian-style jobs to which people can be moved. We must take all those important considerations on board, which is why the report was commissioned.

[Margot James]

My hon. Friend speaks with considerable authority on the firefighters’ situation, but is he as surprised as I was to hear that increases in longevity have meant that the average policewoman now spends more of her life drawing her pension than she did earning it, which is surely unsustainable? That situation will pertain to male police officers in a few years’ time if nothing is done about the retirement age.

[Robert Neill]

I take on board my hon. Friend’s point, and we must be realistic in all areas of this discussion. Longevity creates a pressure on the scheme, as well as providing greater life opportunities for people who have retired. It is, in part, a result of greater fitness and better health among the population, which can—among other things—enable people to work for longer. That applies in pretty much every other kind of activity, and we cannot regard any scheme as exempt. I accept, however, that there are particular pressures on firefighters, although I suggest to the House that the Government’s proposals recognise that and provide a sensible and evidence-based mechanism for dealing with it.

[Grahame M. Morris (Easington) (Lab)]

I am grateful for the informed contribution from a former Minister. Does he acknowledge that, besides the pressures of longevity, there are risks in increasing contributions for employees? For the firefighters fund, 7% is the magic figure in terms of opt-out. I understand that a poll by YouGov, commissioned by the Fire Brigades Union, indicates that a larger number—12% —of people are very likely to opt out, and that 25% are likely to opt out when the new contributions come into effect.

[Robert Neill]

When I was a Minister, it was precisely for that reason that I included in the agreement a provision for a review of opt-outs in the firefighters scheme before decisions were taken on increases in years 2 and 3. That was in accordance with the proposals set out by the Chief Secretary to the Treasury. We have built in a mechanism to review that risk, but I hope we will find that it does not materialise. I come back to my point that we must probably move away from our slightly entrenched positions on this issue, and be prepared to look sensibly at how to strike an appropriate balance based on the evidence.

We all want the strongest possible pension schemes for those in our public services. I have referred to the two sectors with which I have been most closely associated, and to which I feel the strongest personal commitment, but one could say similar things about many other sectors. If there is a Division tonight, I would not support the Bill without hesitation if I did not believe that we had put in place a framework that will enable us to deliver on our obligations. There are technical matters to address, but I am confident that we will be able to do so as the legislation proceeds. The Bill deals with an important and necessary reform, and I commend it to the House.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I gently inform the House that no time limit for speeches has been imposed in this debate as yet, but contributions are going up in length, not down? We started with speeches of 15 minutes, and we have just had one of more than 20 minutes. If Members cannot ensure that their speeches are a little shorter—I put it no stronger than that at the moment—it will be necessary to impose a time limit to ensure that every Member gets into the debate.

19:14

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I will try to keep my remarks to the point, Madam Deputy Speaker, and enable other Members to get in.

We have heard a lot about some of the changes that have already started to take effect, but one aspect of the Bill that is undoubtedly causing most concern, and proving a sticking point in negotiations with the public sector work force, concerns the equalisation of the normal pension age with the state pension age, and the implications of that for those who may have to work until they are 68.

Although I welcome the exemptions that have been conceded for some of the more obviously physically demanding public sector occupations—police officers, firefighters, members of the armed forces—that is by no means an exhaustive list of public sector jobs that can be extremely physically challenging. Most people would struggle to do many of those jobs into their mid and late-60s, and I hope the Government will listen carefully to employee representatives, and look again at the proposal and at what it might mean for nurses, paramedics, auxiliaries, prison officers and teachers, and others who do stressful and physically demanding jobs. That was one of the principal issues raised across the spectrum of trade unions and other employee representative groups, and the Bill does not currently seem to contain any flexibility to look at the issue in the context of overall negotiations, which is a particular issue in the devolved context.

We need to look at the normal pension age and its alignment with the state pension age in a slightly wider contextual framework, and inject a bit more practical realism into our actuarial spreadsheets. It was a pleasure to follow the hon. Member for Bromley and Chislehurst (Robert Neill), and the issue of life expectancy that he mentioned is important. We all acknowledge that life expectancy is increasing, but that top line trajectory masks great and very marked divergences on a range of demographic and geographic indicators. At this point, may I add my tribute to those of other hon. Members who have mentioned the late right hon. Member for Croydon North, (Malcolm Wicks)? It was he who raised some of these important points during previous debates.

People who have worked in heavy industry, for example, tend to die younger than those who have worked in professional occupations. People in deprived neighbourhoods live shorter lives than those in affluent areas, and on average women tend to live several years longer than men. One aspect of that divergence that does not receive nearly enough attention yet is pertinent to the debate is healthy life expectancy—the number of years in which we can expect to enjoy good health. Healthy life expectancy is rising, but it is not rising as quickly as life expectancy.

In Scotland we have one of the lowest life expectancies in Europe, and men and women can expect to live almost two years less than the UK average, at just over 76 years for men, and just over 80 years for women. The key point, however, is that healthy life expectancy is only 61.9 years for women and 59.5 years for men. The health of many men has already been seriously compromised several years before they reach the current retirement age. Those figures come from the Registrar General for Scotland; they are official Government figures.

Last month, the TUC published research indicating that in the UK as a whole, only 54% of men aged between 60 and 64 are actually in work, which, on the face of it, seems fairly consistent with official figures on healthy life expectancy. Women can obviously claim their state pension at an earlier age so they fare a bit better, but even then only 62% of women between 56 and 60 are in work. We as legislators must be a lot more realistic about how long we can expect people to be fit for work. Furthermore, those figures do not include people who have moved into part-time work because of their health, or taken on unpaid caring responsibilities for a spouse whose health has been compromised. Many people also leave the workplace to look after grandchildren.

I am sure all Members know people who work into their 70s and beyond with robust health and enviable levels of energy, and thanks to equality legislation fewer barriers are now in the way of older people who want—or need—to continue working beyond the state pension age and are able to do so. However, we cannot just cross our fingers and hope that older people will be able to continue in their jobs until they are 68. All the evidence tells us that most people will have developed some serious health problems by that stage in their lives, which may well affect their ability to work. That is not just in heavy occupations, but across the board.

Even if we allow for continued improvement in health outcomes, which I am sure everyone aspires to, and if life expectancy continues to rise, we need to factor in the realistic likelihood that a significant proportion of people will not be fit for work in physically demanding jobs by the time they reach 68. My worry is that those who are forced to leave their jobs early because of ill health face having to live on actuarially reduced pensions. That might well save the public pension schemes money, but it will significantly reduce their standard of living and quality of life in old age. It might even force some to rely on state benefits. The hon. Member for North Ayrshire and Arran (Katy Clark) alluded to that. We currently spend about £13 billion a year in means-tested benefits for older people, most of whom have worked hard all their lives, often in low-paid jobs or in unpaid caring, and do not have occupational pensions. Supporting those people through means-tested benefits is probably the least efficient way we could ensure they have a dignified old age.

As other hon. Members have said, today is not the day to debate the chronic problems with, and abysmal state of, private sector pensions and the reasons for them, but the warning is there: we should not pull the public sector down to the base level—the absolutely inadequate level—of private and voluntary sector pension schemes. That would be a recipe for spending a lot more on means-tested benefits in the long term.

I was struck by the briefing from the Prison Officers Association, not least because the proposed reforms will affect hundreds of prison officers in my constituency who work at Peterhead prison. The POA points out that, although the average age of prison officers in the UK is rising, prisoners are getting younger, and, in its words, “more dangerous”. It is concerned that many prison officers in their 60s might struggle to pass the physical fitness test that all prison officers undertake to ensure they have the physical strength, stamina and stability to, for example, use control and restraint techniques in the course of their duties. Prison officers make the case that there is a direct parallel between their job and that of police officers, and cannot understand why the recognition that police officers might not be able to do their job effectively beyond 60 has not been extended to them. Will the Minister offer some clarification on the Government’s thinking? Is there scope to reconsider the situation for prison officers? Prison officers point out that, if people are forced to leave their job early through ill health, they could put greater financial strain on the system. For example, it could cost a great deal more if they retire on work-related medical grounds than if they retire normally at a sensible age.

Nurses are another group who do heavy work, so the pension age has potentially significant implications for them. The Royal College of Nursing has formally rejected part of the Government’s proposal, but it makes the point that the Government need to keep the link between the normal pension age and the state retirement age under review, as recommended by Lord Hutton. It has asked that that commitment is made explicit in the Bill, and that the review process is conducted independently. I hope Ministers take that on board.

The RCN has also asked the Government to postpone making a decision on the equalisation of the normal pension age and state pension age until the working longer review in England has reported and the Government have had time to consider its recommendations. In the light of what I have said, I hope the Government take that point seriously, because it would be a sensible approach—the review will help to inform good decision making in the longer term.

Another major concern of trade unions and employee representatives—hon. Members have made points on this, so I will not repeat them—is that the retrospective powers in the Bill allow the Government to amend it with limited consultation. Trade unions and employee representatives are legitimately concerned about instability and uncertainty for scheme members. The consequences of people losing confidence in the pension system and dropping out of it are much bigger—that has happened in other sectors when pensions have become unsustainable. I hope the Government consider that in Committee.

The hon. Member for North Ayrshire and Arran raised specific aspects of devolved pensions regulation. I am by no means a spokesperson for the Scottish Government—I urge hon. Members to direct their questions to the Ministers responsible—but I hope I can shed some light on certain parts of the Chief Secretary to the Treasury’s opening remarks. I also want to ask questions for clarification from him and the Minister who will wind up the debate. My understanding is that occupational pensions policy is largely reserved, although Scottish Ministers have Executive responsibilities for the NHS, teachers, firefighters, police and local government pensions schemes, subject to a number of constraints. The major constraint is budgetary—the Treasury controls the purse strings, and Barnett consequentials have a knock-on impact on a Government who are working on a fixed budget and have no borrowing powers.

Will the Minister confirm that formal approval is needed from the Treasury for any legislative changes to the NHS and teachers schemes? What is the Government’s thinking on the Treasury approval required in relation to the firefighters and police schemes? My understanding is that the Government are trying to introduce a Treasury approval requirement for those schemes. Will Ministers confirm what they are doing? Are they seeking a memorandum of understanding to claw back powers from the Scottish Government on police and firefighters’ pensions? Scottish Ministers have had discretion to determine the design of the police and firefighters schemes, although the settlements have always mirrored agreements in other parts of the UK. So far, the benefits of consistency have been thought to outweigh any benefits of divergence. I am not sure whether that balance of opportunity will be seen in the same light if the proposals are implemented.

I believe Scottish Ministers have responsibilities in relation to the local government scheme, provided the powers are exercised within primary legislation. In practice, that scheme, too, has mirrored that of the rest of the UK. To return to points made earlier, I understand that the local government scheme has been reformed, and that “cap and share” arrangements are in place. It is funded differently from other public sector schemes, and decisions on it are made in Scotland by those who manage it. It is worth pointing out that, in Scotland, the public sector local government scheme does not seem to have any financial problems. There is no immediate shortfall—in fact, it is currently running a surplus—and neither the Convention of Scottish Local Authorities nor trade unions are of the view that there is any need for reform. The Government could helpfully clarify why they believe that scheme needs to be reformed. Is this the right time to do so? Public sector workers are in tight financial situations. Most have seen their contributions increase dramatically, and many had their incomes squeezed.

I cannot with any confidence answer the question put to me by the hon. Member for North Ayrshire and Arran on the legislative consent motion. My understanding is that there is no need for a legislative consent motion for most of the Bill, because pensions policy is largely reserved. However, I believe legislative consent would be required for some of the reforms to non-departmental public bodies and some judicial offices. I am guided by the Bill’s explanatory notes, so perhaps the Minister could explain if the situation is different. The Unison briefing asserts that further legislative consent is required with regard to the local government scheme, but I have not seen the legal arguments that back that up or substantiate it. Perhaps UK Ministers are in a position to clarify the UK Government’s understanding of the situation.

[Katy Clark]

I am grateful to the hon. Lady for going through the detail as she understands it. The Bill will have massive implications for our constituents. Does she agree that, if the Unison legal advice is correct—that a legislative consent motion is necessary in relation to the local government pension scheme—everything should be done by the Scottish Government to ensure that the negotiations taking place in Scotland between them and trade unions take precedence in terms of the outcome for our constituents?

[Dr Whiteford]

I certainly agree that it is important that we get a fair and equitable solution in the local government pension scheme. I cannot speak for the Government, but I know that some of the negotiations have been very difficult. From speaking to trade union representatives in recent weeks, it is clear that they recognise the constraints within which the Government are working—and they value the tone of some of the negotiations that have taken place so far—but Ministers in Scotland have been negotiating with one hand tied behind their backs. Greater flexibility, especially on age, would go a long way to helping to reach an equitable conclusion.

Underlying this debate is the need to maintain confidence in public sector pensions, which are really very modest. They keep people just above the poverty line, especially women who have worked in low-paid jobs most of their lives and have very modest pensions that keep them just above the level of means-tested benefits. People are not unreasonable in their expectations, but asking them to pay more, work longer and receive less is not a reasonable proposition to put to our public sector workers. I hope that the Government can and will do better.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am going to put a time limit on speeches now. It will be 12 minutes from the next speaker, after which I will review it. We may not get to all the Members who wish to speak by 9.30, when the winding-up speeches will start. If Members take a lot of interventions and go considerably in excess of 12 minutes, I will have to cut the time again.

19:31

[Stephen Williams (Bristol West) (LD)]

I shall try to keep within the 12 minutes: it is my intention to make only a short contribution.

First, I wish to establish some general principles for why reform is needed. They can be grouped into two areas. The first is the general societal changes that have taken place that necessitate reform and to which the Government must respond, such as the increase in life expectancy and the changes in employment practices over recent decades. The second is the changing balance over time between the sharing of the cost of public sector pensions between the taxpayers, through the Government acting as employer, and the employees who receive the pensions.

It is important to establish that the reforms in the Bill would be needed with or without the current cost pressures that the Government face. We hope to bring public sector borrowing under control by 2017, but these reforms are intended to last for a generation. They are not driven by the short-term need to recover costs: they are driven by a long-term desire to ensure that public sector pensions survive into the future in a sustainable way.

Any reform should be done fairly and, as far as I and my Liberal Democrat colleagues are concerned, protect those in the public sector on the lowest earnings. The overriding principle should be that the public sector should continue to act as an exemplar to other employers. There should not be a race to the bottom: the public sector should set the gold standard for affordable and attractive public sector pensions that attract the very best people into the public sector, who are paid in a fair way and guaranteed a secure and attractive income into retirement.

The first principle is that of life expectancy. We all know that we would hope for ourselves and people in our families to live longer. Indeed, people retiring now at age 60 can expect to spend 40% of their adult life in retirement—so only 60% of their adult life would have been spent in work. The state pension age has been changed relatively infrequently over the 103 years of its existence. If it had been uplifted in line with life expectancies, people would now be drawing their state pensions at age 75. Several other countries, in particular Scandinavian countries, have ongoing commissions that examine life expectancy and uplift pension ages according to that evidence. That might be a good approach in the future for this country.

The biggest societal change driving the need for reform is the difference that has arisen over time between private sector and public sector remuneration. It always used to be much quoted that pay in the private sector was more attractive than in the public sector and that part of the balancing factor to make public sector employment attractive was a good pension, and perhaps other good terms and conditions. In recent decades, that maxim does not hold. Indeed, the Institute for Fiscal Studies said that in 2011 people in the public sector doing a broadly similar job to people in the private sector were likely to be paid about 8.3% more. But pension provision in the public sector continues to be much more attractive and offered on a much wider scale than to people in the private sector.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Does the hon. Gentleman regret the way in which the Government have pitted public sector pensions against private sector pensions, when in fact the average local government pension for men is £4,000 a year and for women is £2,600? There is no doubt in my mind that this is an intentional attack on public service and the public sector as a whole.

[Stephen Williams]

The hon. Lady’s final sentence illustrates her prejudice against the Government’s intentions. This is not an attack on the public sector. The coalition Government are trying to ensure that public sector pensions remain across the board, so that every person in the public sector is able to access a pension, which is not the case in the private sector, as I am about to say; that they are affordable to the taxpayer; and that they are offered on very good terms. Without reform, those provisions would not be in place. I would not want to be associated in any way with an attack on public sector employees who perform services that are absolutely vital to all of our constituents. I would not want to be associated with any reform predicated on that basis, and I genuinely think that that is not the basis on which the reforms are being carried out—from the perspective of both parties in the coalition.

On coverage, 100% of public sector employees are in theory eligible to join a pension scheme, because it is offered to everyone, but only 35% of employees in the private sector are able to join a scheme, and only about a third have a contribution made to their scheme by their employer. There are many schemes in the private sector in which the employer simply does not make a contribution. There may be a scheme, but it is not funded by the employer. The biggest anomaly is in the type of scheme available to people in the different sectors, between those on defined benefit, final salary or career average schemes, and those who are on defined contribution schemes. Currently, just under 80% of people in the public sector are in defined benefit final salary schemes, but only 9% of people who work in the private sector are able to access such schemes. That percentage is falling year on year, and soon nobody will be joining a final salary scheme in the private sector. Many of them will be closed and no further contributions made by current members.

There is also the cost to the public purse of maintaining public sector pensions, which puts an onus on us to look at the case for reform. Those costs have to be shared between the Government as the employer, all of us as taxpayers, and the employees themselves, who will ultimately be the beneficiaries. Between 1999 to 2009, the cost of the NHS pension scheme rose by 47%, the cost of the civil service scheme by 23% and, as we heard from the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), who is not in his seat, the cost of the teachers’ pension scheme by 37%. That has necessitated a shift in the contribution rates of the employee, who is the beneficiary, and the employer, who is the Government and the taxpayer. For instance, there used to be rough parity in the teachers’ pension scheme—the employee put in 5% and the Government 5%—but employees now contribute 6.4% and the Government about 14%. That is unfair on the general mass of taxpayers who cannot access these types of schemes. So there is an imbalance between the public and private sectors, and the cost to the Exchequer of public sector pensions is now £32 billion. Those costs cannot be allowed to grow uncontrollably.

The pension reforms must be done fairly, however, so I am pleased that there will be no change to the terms and conditions and contributions of employees who earn up to £15,000—about 15% of the public sector work force. Some 750,000 people will see no change in their pension contributions and will still be able to draw the pension they expect at the moment. Those on salaries of up to £21,000 will have their increases capped at 1.5%, so a typical employee on £21,000, after 20% tax relief—everyone gets tax relief on their pension contributions—will pay just £8 extra a month to remain in a defined benefit scheme. And, of course, employees within 10 years of retirement this April will see no change in their terms and conditions and expected pensions.

It is also entirely fair that over time we move to a career average scheme. That will benefit the broad mass of people in the public sector, who have annual salary increments but whose starting salary after inflation is not drastically different from what they start with. A final salary pension scheme, on the other hand, disproportionately benefits those in the public sector who someone described as the star performers—the people on huge incomes, the senior managers, head teachers and directors. It is fair, then, that we move to a career average scheme.

Our own arrangements, which no one has mentioned thus far, are now entirely a matter for the Independent Parliamentary Standards Authority. If, however, the public sector moves to a career average scheme, Members should expect IPSA, which now sets our terms and conditions, to move us on to a career average scheme, rather than a final salary scheme, as well.

There is no doubt that reform is needed—that is shown by demographics and the change in employment practices—and it is right that the Government are doing it in a way that is fair to public sector employees as well as to taxpayers. That will ensure that public sector pension schemes are not only the best on offer in the country but are offered on terms that are sustainable.

19:43

[John Healey (Wentworth and Dearne) (Lab)]

It is a pleasure to follow the hon. Member for Bristol West (Stephen Williams), who made a very balanced speech. He is right that reform is required. That is accepted and supported by hon. Members on both sides of the House.

I start from a simple principle: pensions are pay deferred. They are part of people’s terms and conditions, often part of their contract of employment, and, in the public sector, part of the deal for public service workers who often give a lifetime’s commitment to the service in which they work. Two things follow from that: first, pensions are principally the property of the scheme members, who defer their pay and put that pay in the hands of managers and trustees; and, secondly, changes to people’s pension terms should involve those members—those whose money it is—through consultation, negotiation and agreement.

That is what the Labour party did with the far-reaching reforms we put in place in government. We agreed and established changes to reflect the increasing age of the population, to manage the changes effectively, to control the costs to taxpayers and to increase contributions overall from scheme members. We did that with the armed forces in 2005, the police, firefighters and local government workers in 2006, and teachers, the NHS and civil servants in 2007. Across all areas, we introduced increases in the pension age, changes to the contribution rates from members—especially the higher paid—and a “cap and share” arrangement that limited absolutely the liability of taxpayers to future increases in costs. As a local government Minister, I was responsible for the local government pension scheme, which we radically reformed not just for new members but for existing members. Furthermore, we did so without closing the scheme, and there is no need to accept what is provided for in clause 16 and do that this time around either.

The reforms recognised the pressures of cost, population and life expectancy. They also recognised that pensions were deferred pay, that changes to contribution rates and benefits should be consulted on and agreed, that most public sector workers were low-paid and that their pensions were far from gold-plated. The average pension for NHS workers last year was a little over £7,500, while the average for a local government worker this year is just £4,406. After our changes, in 2010 the National Audit Office concluded:

“As a result of the changes, which are on course to deliver substantial savings, long-term costs are projected to stabilise around their current levels as a proportion of GDP. The changes are also set to manage one of the most significant risks to those costs, by transferring from taxpayers to employees additional costs arising if pensioners live longer than is currently projected.”

The Government have failed to build on those reforms. They did not even wait until the Hutton review, which they commissioned, had fully reported before in October 2010 the Chancellor hit public service workers with a 3p in the pound surcharge—a public service pensions tax that had nothing to do with long-term pension reform and everything to do with a short-term cash grab to try to deal with the deficit; and this from a set of workers that, at the same time, was being squeezed by a public sector pay freeze, hit by a VAT increase, subject to rising energy bills and suffering from deep cuts in tax credits. That is where the Government lost the moral authority to claim we were all in it together and to be a one-nation party. Furthermore, changes such as the switch from the retail prices index to the consumer prices index were imposed without warning, consultation or agreement.

The Government are legislating after losing the trust of public service workers, who simply do not trust them with their pensions or with this pensions legislation. It might not be the Government’s intention to reduce benefits already accrued, to prevent the flexibility to link the normal pension age with the state pension age, or to make further sweeping and radical changes or reforms without proper scrutiny or consultation, but the legislation, as it stands, can be used in that way, whatever the intention of Ministers. That is why it is important to get this legislation right. It is even more important because this is a broad, sweeping framework Bill in which many of the detailed changes will lie in the regulations and scheme rules.

As both a former local government Minister, like the hon. Member for Bromley and Chislehurst (Robert Neill), and a former Treasury Minister, let me say that my main concern is about the local government pension scheme. The Treasury has never really recognised the difference between the local government pension scheme and other public service pension schemes. Unlike other main schemes, the local government scheme is a funded scheme. It has £150 billion in assets, it raises an annual income significantly greater than its expenditure each year and it has seen its investment income cover at least a third of its expenditure on benefits in each of the last few years. Unlike all the other main schemes, employer contributions in the local government pension scheme are set locally by 89 separate funds, each with its own investment strategies, its own member demographics and its own range of employers—in other words, the flexibility to match the responsibilities and pressures that those funds face.

Unlike in other main schemes, the governance of the local government pension scheme reflects local municipal roots, while the respective roles and responsibilities of those managing and overseeing the scheme are different from those for the national schemes. Finally, unlike in all the other main schemes, simply meeting the liabilities is not the only concern of those managers. Stability is a vital element, as is the participation rate. The reforms that we put in place—those now being negotiated—reflect those concerns. This is a broad-brush Bill, and the same centralised powers, controls and restrictions over the unfunded schemes do not fit well with the local government pension scheme. As the shadow Chief Secretary said, some significant debates and amendments are required in Committee.

There are some serious flaws in the Bill. I will offer the Minister four for starters. First, the Chief Secretary confirmed in response to interventions from me and the hon. Member for Foyle (Mark Durkan) that clauses 3 and 11 allow scheme regulations to make retrospective changes to the benefits that people have already worked for and paid for. As such, they threaten one of the central tenets of pension saving: that what one has accrued is safe and that the terms on which it was accrued will be honoured, which is as true for the private sector as it should be for the public sector. Secondly, a running theme throughout all 38 clauses is a Treasury power grab—the centralisation of control over all elements of schemes, from valuations to scheme regulations, with no requirement to consult even the scheme members, who are most directly affected.

Thirdly, there is a legislative lock in clause 9 between the normal pension age and the state pension age for all but firefighters, the police and the armed forces. Therefore, even if there is a strong case, which is now being looked at, for that link to be made flexible for some workers in the NHS, the legislation does not permit it. Fourthly, last December the Chief Secretary made an important commitment to the House on behalf of the Government on the retention of current protections for public sector workers who are outsourced and the extension of fair-deal provisions for all staff transferring employers. Schedule 9 enables that to occur in the civil service, but it does not ensure that it will occur, and it must.

Finally, let me say this to the Treasury Minister and his colleagues. There are many excellent minds among the civil servants in the Treasury, but frankly they do not know everything. They sometimes make mistakes and sometimes others know more than they do. I shall give a couple of examples. The dates for the so-called closure of the local government scheme in clause 13 are wrong, as is the date for ensuring that transitional protection, as promised, is in place. As the Minister prepares for the debates and the amendments in Committee, I hope he will take seriously the points and concerns raised tonight. I hope he will be ready to make amendments where there is a good case for doing so, because in the end that is how we get a public pensions system that is fair to taxpayers for the long term, but remains fair to those public service workers who give so much of their time—their whole lives—to support others.

19:54

[David T. C. Davies (Monmouth) (Con)]

I will try to keep my comments as brief as possible. I want to address some of the remarks that I have had thrown back at me as a supporter of this Bill and this coalition Government—not so much by Members, whom I have listened to carefully this evening, but in the newspapers, from the unions and from politicians in other political parties who have sought to make capital out of this issue.

Let me say clearly from the start that I—and, I believe, every single member of this coalition Government, whether from our position as Members of Parliament or from personal experience—very much support and respect the role of public sector workers across the United Kingdom. I know from personal experience about the very hard work done by the police officers in London with whom I work. I know about the paramedic who came to the aid of a member of my family recently and solved a problem for them. I also know about those who are teaching my three children the three Rs in a local state school. I know from personal experience, not just through my work, just what a good job public sector workers do, and I do not think there is anyone in this coalition Government who wants to do anything to undermine the pensions of public sector workers or undermine their role in any way whatever.

It was the hon. Member for Banff and Buchan (Dr Whiteford) who talked about the problems in the private sector. Although we should not be making comparisons, it is perfectly true to say that people in the private sector have lost out greatly, and they have done so partly as a result of the previous Government’s policies. We have heard all about the tax on dividends, but there are all sorts of other, subtle ways in which private sector pensions were undermined by the previous Government. They included, for example, demanding that financial institutions buy Government bonds and gilts, instead of allowing them to invest larger proportions of their money in stocks and shares, as well as enacting policies that kept stocks and share prices down. However, those are matters to be debated on another occasion.

What is clear is that we are not going to allow what happened in the private sector to happen in the public sector. We saw the misery that that caused for people—our constituents—and we do not wish to see it happen to other hard-working people. At the same time, however, we cannot ignore the fact that although people may well be doing physical jobs in the public sector, there are people in the private sector who also have to do physical jobs. We do not seem to have heard much about them. What about the lorry drivers? I used to do that job for four or five years, and it can be hard and physical. What about all the people who work in factories? What about builders? Why should they have to work so many extra years to pay for the pensions of people retiring years before them who may not be doing physical jobs at all? To some extent we have to make some comparisons.

[Mr Anderson]

I agree with the hon. Gentleman about workers in the private sector who should also have better arrangements. If he comes forward with a private Member’s Bill, will he allow me to become part of that process, so that we can legislate to ensure that those people are looked after properly, as public servants should be too?

[David T. C. Davies]

There is of course a wider problem. When I bring forward that Bill, which the hon. Gentleman will be supporting, I will be looking carefully at the maths, because what I think is absolutely disgraceful is promising people in the public or private sector things that cannot possibly be afforded.

I have heard the argument from trade union officials that says: “Why is this happening? It’s all because of the banks.” It has not been mentioned today, but that is something that people have come out with. However, when we examine the figures, we see that the problem has absolutely nothing whatever to do with the banks. The Treasury Committee looked at the amount of money that some banks were given—on a temporary basis; most of it will be coming back—which it calculated as about £120 billion. However, the national debt today stands at £1 trillion, which is almost 10 times that figure. Most of that debt has been caused by politicians overspending. However, when we take into account public sector pensions, the figure for the national debt goes from £1 trillion to £2 trillion at the very least. Indeed, last April the Office for National Statistics issued figures suggesting that the total amount that Britain will need to cover its pension liabilities over the next few years is £7 trillion. I must admit that I do not know how many years ahead that figure covers—I assume it covers quite a few—but it is an absolutely astonishing sum of money. I did a quick calculation and worked out that if £1 million represented 1 cm on a graph, we would need a graph that was 40 miles long, stretching all the way to Reading, to show our current liabilities. We cannot ignore the current financial situation.

Thinking about what has gone on with pensions in the past few years reminds me of an analogy. I used to work in the private sector, for a small family transport business. I wonder what would have happened if, one day, the directors of the company had gone through the books and, instead of collecting money from their workers over the years and investing it for the pensioners of the future, they had simply taken their workers’ contributions and used them to pay for the pensions of the people who were retired at that time. It would have been a sort of giant pension Ponzi scheme, and it would probably be illegal if it were ever tried out.

Anyone bringing about such a situation would have two options. One would be to pretend that there was no problem, and to try to gain short-term popularity with their work force by continuing to pay generous pensions that they could not afford. One way of doing that would be to borrow a vast sum of money from the banks to employ more people whom they could not afford, and to use their contributions to pay for the pensions of the workers who had just retired. That is more or less what has been happening over the past few years.

The alternative is far more sensible, and it is what this Government have done. We have opened up the books and said that we simply cannot afford to do this. We know that a much larger work force is going to retire in the future, and that they are going to live even longer, so there is no point in making promises that we cannot possibly keep. We have only to look at the recent history of the past 30 or 40 years to see what happens when countries can no longer balance their books. That is happening in Greece at the moment, and it has happened in recent years in Russia and Argentina, and across south-east Asia in countries such as Thailand. It happens over and over again, and we must not think that, just because this is the United Kingdom, we can somehow buck the basic rule of economics.

I am proud that this is the first Government to have gone into an election saying, “We’re not going to spend more of your money. We’ll spend as much as we can, and we will spend it well, but we are not going to make promises that we cannot afford to keep.” We are going to protect public sector workers, particularly the lowest paid, but we are also going to ensure that the country is in a financial situation that will allow it to guarantee the pensions of those public sector workers who are going to retire not just in the next few years but in the decades ahead. In other words, we are going to trade short-term popularity—the easy thing to go for—for the long-term interests of public sector pensioners in this country. I hope that Opposition Members will, for once, do the responsible thing and support us in this vital work.

20:02

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

It is ironic that we are discussing pensions today, given that much of what we have seen in the press over the past 10 days or so has been about the comments of the Secretary of State for Work and Pensions on whether we, as taxpayers, should support unemployed families with two or more children. No thought has been given to who those children are, but they will become the next few generations of taxpayers who will be making contributions to support pensions, either through public sector pensions or by putting money into the pot to provide benefits for others. I am pleased that we have moved on from having a go at households in which no one is working to looking at a different group of people.

I want to put on record the fact that some of the poorest paid people in our country are public sector workers. As my good friend and colleague, my right hon. Friend the Member for Wentworth and Dearne (John Healey), said earlier, pensions in the public sector are actually pay deferred. That is exactly right, and when we end up with poor pay in the public sector, we also end up with poor pensions.

Much has been said about Lord Hutton’s report. The commission firmly rejected the claim that current public sector pensions were gold-plated, and we have heard that the average pension paid to public sector scheme members is about £7,800 a year, while the median payment is about £5,600. We have also heard that half of women public sector pensioners get less than £4,000 a year.

Labour Members recognise that public sector pensions need to be reformed, which is why we have consistently argued that there will need to be some kind of an increase in contributions and, as the population gets older, an increase in the retirement age. We have also been clear that any settlement or agreement should meet three tests, which are slightly different from the Government’s four tests, although there are elements on which we agree.

The first test is affordability: will the changes deliver a fair deal for taxpayers when times are tight, when taxes are rising and when spending is being cut? The second test is fairness: will the changes deliver a fair deal for public sector workers on low and middle incomes whose pensions are far from being gold-plated and who have given a great deal to the services in which they work and on which each and every one of us—in the House and throughout the country—depend? The third test is sustainability, because anything that any Government do needs to be sustainable. Will the changes deliver a workable settlement for the long term that does not undermine the sustainability of existing schemes and that can be flexible in the face of rising life expectancy?

I recently took the opportunity to meet several serving police officers in my constituency, and I have been tasked with raising their concerns in the Chamber this evening. We often talk about the good job that the police do, but I almost never hear people talking about police service pensions. For the sake of clarity, I should point out that although certain public sector pensions in Scotland are administered by the Scottish Government, the reality is that the decisions reached here in Westminster are followed—or mirrored, as the hon. Member for Banff and Buchan (Dr Whiteford) said—north of the border.

Despite the stated opposition of the Scottish Government’s Finance Secretary, John Swinney, to the increase in pension contributions, he confirmed in a statement to the Scottish Parliament on 21 September 2011 that the Scottish Government would apply the increase in employee contributions for the NHS, teachers, police and firefighters schemes in Scotland. As my right hon. Friend the Member for Wentworth and Dearne said, that represents an additional 3% tax on those workers in the public sector.

[Dr Whiteford]

Is the hon. Gentleman aware that, before that decision was made, the Chief Secretary to the Treasury wrote to the Scottish Finance Secretary to say that if those contributions were not increased, £8.4 million a month would be removed from the Scottish Government’s financial settlement until such time as the Scottish Government followed the lead of other parts of the UK? I do not know what the hon. Gentleman thinks John Swinney should have done in those circumstances, but I believe that his hands were completely tied. Not only would the Scottish Government have lost that money out of the block grant, but they would have had to find it from another budget. In effect, therefore, they would have had to pay for those contributions twice.

[Mr Brown]

I am pleased that the hon. Lady has come into the debate. I am not sure whether she was here when I intervened on the Chief Secretary to the Treasury to ask whether any such penalty had been suggested, but he did not answer my question in a straight manner, so I thank her for that intervention.

The serving police officers whom I have met are seriously concerned and feel that they have been let down by their representative body, the Scottish Police Federation. We all know about the technique of divide and conquer, yet with regard to the pension changes, it has become clear that we are seeing protection—understandably—for those nearing retirement age, but that that is being provided at a cost to those who joined the police service between 1992 and 2006. Those who fall into that category feel that they have been abandoned and hung out to dry.

Those people joined the police service under certain terms and conditions, one of which was that after paying their contributions into the pension fund, they could retire after 30 years and then qualify for a lump sum and a pension. One officer pointed out that he was halfway through that 30-year period. It was difficult for him to get a forecast, but the closest he could get was an indication that having worked an extra seven years, his lump sum would be about 30% of what was first anticipated, while the pension would be about 70% of what was expected. We all go through life making plans, and for some of us retirement comes that little bit sooner. When people cannot recover ground as they move towards retirement age, it leaves them in a real dilemma. As one chap pointed out, “I had looked at retiring at a specific age. My lump sum would have cleared my mortgage. I now need to rethink where I am going.”

There is a strong belief that section 2 of the Pensions Act 1995 prevents the Government from changing pensions, so I hope that the Economic Secretary will put a clarification of that point on record. The first Winsor report of many years ago stated that officers could not work beyond the age of 55, but we are now seeing a significant change. Officers will be subject to a fitness test, but what will happen if someone fails such a test? Will they be made compulsorily redundant?

We know about some of the activity on our streets today. We should not just condemn groups of people, but there are criminals out there, and I would hate to think that police officers will be trying to chase younger people on foot. If officers are between the ages of 55 and 60, there is every chance that criminals will be significantly younger than them. We will be asking the police to do a task that is beyond many people’s comprehension.

Police officers are asking the Government why there is a further review, given that the scheme was changed in 2006 and every officer who joined after that time is on the new 35-year scheme. Many who joined after 1992 are halfway through their service period and their financial future looks extremely uncertain. We all recognise that police officers are not in a position to take strike action—in all honesty, I do not think that they would—but the fact is that those who joined between 1992 and 2006 feel as if they have been singled out.

Although, according to my Front-Bench team, we will not divide the House on Second Reading, I share colleagues’ real concern about retrospection, which has been raised on several occasions. I look forward to colleagues seeking to improve the Bill in Committee and working to offer some protection to those who work —day in, day out—to deliver the services in our public sector that each and every one of us demands.

20:10

[Jackie Doyle-Price (Thurrock) (Con)]

I am pleased that Labour Members have acknowledged the need for the Bill and the need to reform our public service pensions. I was struck by several good points made by the hon. Member for Dumfries and Galloway (Mr Brown) and the right hon. Member for Wentworth and Dearne (John Healey), although I found the desire to pit Government Members against public servants disappointingly partisan. I have to advise Opposition Members that Government Members equally respect the contribution of our public servants. We have retired teachers and former armed service personnel here, and we greatly value their contribution. What sits behind the Bill is the desire to make public service pensions secure and beneficial for the long term.

Given that we are all living longer, it is simply necessary to ask people to pay higher contributions. Unless we do so, we will have to find more money from all taxpayers to support the deficit and the provision of public sector pensions. That is simply not fair. The cost to the taxpayer of public service pensions has risen to £32 billion a year, which is an increase of a third over the past decade. They cost just under 1% of gross domestic product in 1970, but the figure is 2% today and, without change, it will continue to rise. The average 60-year-old now lives 10 years longer than was the case in the 1970s, so it is simply not sustainable to leave pensions as they are.

We are tackling the challenge of funding public sector pensions at the same time as we are attacking our structural deficit and the aftermath of a financial crisis. That has led some of our public servants to conclude that they are being asked to bear the consequences of the actions of the bankers, but that is simply not the case. We are where we are because our current system is not financially sustainable, and it is disappointing that Opposition Members allow people to think otherwise. Even without the deficit, and even if the financial crisis had never happened, we would have to reform our public pensions to make them affordable and to secure their long-term future. With these reforms, our public servants will be guaranteed a secure pension with terms that are as generous as those enjoyed by anyone.

The need for change is simple. We all need to make provision for our own retirement, and if we do not put more in, the taxpayer will have to. The Bill will cut the costs to taxpayers by nearly half, while continuing to ensure that the public sector receives the best pensions available. The Bill is therefore a good deal for taxpayers and a good deal for public service workers. It is frankly unfair to expect future generations to pick up the tab by paying more taxes, especially when they are already dealing with the consequences of financial irresponsibility by facing higher taxes and higher house prices. I want all people—whether they work in the private or the public sector—to be able to keep more of what they earn and to pay less in tax. All taxpayers will benefit if we can reduce the burdens on the state and make public pensions self-funding.

Even with these changes, our public pensions will continue to be among the best available. They will also be progressive. A switch to career average pensions across the board will reduce taxpayer liability while letting employees keep their defined benefits. The pensions will also be fairer to all. Final salary schemes disproportionately benefit those on the highest earnings, and many low-paid workers will get a better pension under the Bill. I am pleased that the Government have made changes to benefit the lowest earners, meaning that 15% of our public sector workers will not have to make an increased contribution. I am also pleased that benefits that have been built up will be protected and that members will continue to receive a guaranteed benefit in retirement.

[James Wharton (Stockton South) (Con)]

I am listening to my hon. Friend’s speech with great interest. We have already heard a lot about retrospection and the importance of certainty. Is it not the case that the reforms will hopefully give long-term certainty about the affordability of public sector pensions, so that future Governments will not have to review these pensions yet again and people will be able to plan properly for their retirements?

[Jackie Doyle-Price]

I completely agree with my hon. Friend. It is important that we bite the bullet now and lay the foundations for future security. If we delay, we will be asking for more contributions from taxpayers and workers themselves, so it makes perfect sense to deal with the problem. We cannot postpone the inevitable, and Government Members are not prepared to do so.

I am sure that many Members will have received representations on these issues. Most of those that I have received have come from police officers who are worried about the changes. Most public sector employees have recognised that the terms under which they were paying into their pensions were not sustainable in the longer term, not least because they have seen what happened to the pension provision of their friends and family members in the private sector. People in the private sector would have to contribute more than a third of their salary each year to get an equivalent pension, so I am not surprised that only a third of public sector workers voted to strike over this issue last November.

[Mark Reckless (Rochester and Strood) (Con)]

I understand that the public schemes are generally generous in comparison with those in the private sector, but does my hon. Friend have a view on the relative generosity of the police scheme, on which we have received a lot of representations? The police clearly have quite a high pension, but they pay a large amount in. Is it fair that they have had to pay so much more than civil servants, for example, whose contribution is much smaller?

[Jackie Doyle-Price]

My hon. Friend makes a good point. We will benefit from an examination of the individual schemes in Committee. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) made several good points about the financial sustainability of the local government scheme compared with others. We need to look at what we expect of all our public servants in the round, and the issues raised about the police are quite persuasive. We need to look in detail at what we are proposing not just for public sector workers as a group, but for individual worker groups. We also need to remind public sector workers who are witnessing the debate that their accrued rights are protected, and that there will be protection for those who are within 10 years of retirement.

The Bill will deliver sustainable public service pensions. It will almost halve the cost to taxpayers, and it will rightly ensure that public sector workers continue to receive the best available pensions. It provides a good deal for the taxpayer and for public servants, and I am happy to support it.

20:20

[Mr David Anderson (Blaydon) (Lab)]

Let me begin by declaring an interest. For 20 years I was a member of the mineworkers pension scheme, for 16 years I was a member of the local government pension scheme, and for the past seven years I have been a member of the parliamentary pension scheme.

This is a debate about trust, or rather about the breakdown of trust. The people who are covered by the Bill are those we trust with our most precious possessions: our children, our partners, our parents, our families and our communities. As we all know, when things are going wrong it is the public servants we turn to, and in whom we place the maximum trust.

We turn to the firefighters when our safety is compromised, our homes are at risk and our lives are in danger. We turn to the police when we are in trouble, when we face the despair caused by burglary, car crime or petty theft, when our kids go missing, and when we are being persecuted by nuisance neighbours or antisocial behaviour. We turn to the nurse when we are at our lowest ebb, when we are desperate for help, and when we need real human kindness. We turn to the doctor when we are at a loss to explain our pain, when we need their skills to put us back together again, and when we feel that there is nowhere else to turn.

We turn to the social worker when we are in despair because of our parents’ dementia, when our youngsters are hooked on drugs, and when we need real help to sort out life’s real problems. We turn to the home care worker when we cannot cope any longer with our daily lives, when we need a stranger to come into our homes and become a friend, and when only an extra pair of hands will do. We turn to the teacher to take our children on to the next stage of life’s journey, to shape our kids for the world to come, and to inspire our most precious gifts.

There are so many more: the bin man, the caretaker, the school meals lady, the gravedigger, the gardener, the midwife—and, among the hundreds of others, the so-called back office staff. They are the people who make the front line work effectively, and the people whom the Government disparage most of all. All those people are trusted by us to do the right thing when we need them to. We expect—no, we demand—that they do their jobs properly, and we trust them to do so. But trust is not a one-way street: if we expect those people to do the right thing, we should do the same.

For decades, many of those workers have been putting their trust in us as representatives of the state, and have paid into pension funds every week or every month in the belief that they will be rewarded properly for their work. Let no one in the Chamber claim that public servants somehow get a free ride when it comes to pensions. As was pointed out earlier by my right hon. Friend the Member for Wentworth and Dearne (John Healey), they have given up a percentage of their pay in order to have a decent retirement and not to have to rely solely on welfare payments in old age.

There is no free lunch for those workers, no matter how much the divisive policy of the Conservative party or the TaxPayers Alliance may try to claim it is so. The Bill clearly undermines the trust that these workers have been able to place in their pensions for decades. Just five years after the agreement to changes that were supposed to be affordable and sustainable, they are seeing the imposition of changes that will significantly weaken their potential to plan properly for their retirement.

We should hear no more about unaffordability until we in the House face up to our culpability in terms of where we find ourselves today. It was Members of Parliament who allowed public sector scheme employers to take lengthy contribution holidays while the lads and lasses at the front end had no such luxury. The classic example, which I raised earlier—and it is not the only one—is Royal Mail. Between 1998 and 2001, it made no contributions whatsoever to the pension fund. Now we are told that the service must be privatised because there is a huge black hole in the pension fund.

[Richard Graham (Gloucester) (Con)]

Why didn’t you do something about it?

[Mr Anderson]

Actually, we did do something about it in 2001.

Just think what ordinary postmen and postwomen could have done with a 13-year contribution freeze. They could have bought a new house or a new car, or taken better holidays. But no, these were not things for the workers; they were just for the employers, and now the workers are feeling betrayed again.

The Government are using the economic mess that global capitalism got us into, and which they have entrenched, as an excuse to attack the future well-being of the people in whom we place our trust. Instead of letting sensible negotiations take place on sector-specific schemes, they are pressing ahead with a Bill that will have huge consequences for millions of dedicated public servants. Yes, Hutton means change, but it does not mean destabilisation and mistrust.

If people do not have trust in their pensions, two things will happen. First, those who are already in schemes will opt out, and secondly, new starters will not join. What will be the result? Ultimately, the schemes will fail, and that will not just be bad for scheme members who will not be able to rely on decent pensions when they retire. It will impose an enormous burden on the welfare system, and—as was pointed out by the hon. Member for Bromley and Chislehurst (Robert Neill)—there will be a huge impact on the country’s investment potential if the schemes do not flourish.

Can anything be done to prevent such an outcome? We are starting from a pretty bad place. Public servants are feeling badly bruised as they face pay freezes, cuts in living standards and job losses. Three quarters of a million will be on the dole after receiving their P45s from the Chancellor of the Exchequer. They face service cuts—people who have worked for donkeys’ years will go out of the door—and they have already been hit by increased pension contributions. They are having to work longer to receive their pensions, and when they do receive them, the payments will be smaller. Only a radical rethink in Committee will give us an opportunity to rebuild the trust that those people feel has gone. We must clarify what is being said here tonight and secure some real commitments from the Government if we are to have the slightest chance of giving them any confidence.

Clause 3 grants huge and retrospective powers to the Government to make further radical public sector changes without real consultation. That must be wrong. If the Government can include measures in the Bill that make it clear that the retrospective changes will not have an impact on pensions, that must be done.

Then there is the issue of the link between the state and normal pension ages. A number of Members have raised the worrying discrepancy affecting people who have worked from the age of 15 or 16, perhaps for more than 50 years, in very hard circumstances. The Government have shown a lack of faith by pressing ahead with these changes while a review is being undertaken jointly by unions and employers in the NHS. It is incredible that they should say that they will pay attention to the review after they have passed the legislation, as if it had no meaning whatsoever. What will we end up with? The potential for 68-year-old nurses to be working in mental health establishments, for 67-year-old home care workers to have to put older people to bed, and for prison officers aged 65, 66 or 67 to be fighting with men who are locked away. That is lunacy.

Clauses 5 and 6 deal with the establishment of a pensions board in the NHS. We need a real commitment from the Government to allow member representation on those schemes. Clause 10 empowers the Treasury to take control of valuations of pension schemes. That has never been the case before; there has always been partnership working. If the unions are cut out of the decision making on pension schemes and the schemes are seen to be determined by the Treasury, people will lose faith in the new system, as they will if the actuarial valuations are dictated by the Treasury. People do not trust the Treasury to look after them properly. The hon. Member for Bromley and Chislehurst and my right hon. Friend the Member for Wentworth and Dearne spoke about the local government pension scheme. I hope the Minister takes on board the points raised, because it is different from other schemes.

The Chief Secretary to the Treasury told us that the trade unions and the Government have come to a collaborative view. I know he is from another part of the country from me, but I think he must be from another planet. The fact that the Government have done what they want to do and the unions have faced that reality and have done what they have to do, day in and day out, to try to get the best deal for their members should not in any way be mistaken for collaboration.

It always used to be said that pensions were saving for a rainy day. Well, I have got news for the Government: “It’s raining cats and dogs, and you’ve stolen the umbrellas.”

20:30

[Andrea Leadsom (South Northamptonshire) (Con)]

I was rather delighted by the Bill. I think it is an unmitigated good news story, so it is rather depressing to follow the hon. Member for Blaydon (Mr Anderson) who, more than any other contributor today, is talking down an extraordinarily fair, logical and sensible settlement. I would draw to his attention the comments of his colleague the shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls), who told the TUC annual congress on 11 September this year:

“We must be honest with the British people that under Labour there would have been cuts, and that on spending, pay and pensions there will be disappointments and difficult decisions from which we will not flinch. Because the question the public will ask is: who can I trust?”

It is a great shame when Opposition Members deliberately talk down a settlement that is extraordinarily fair to both the taxpayer and our public sector workers.

This is an unmitigated good news story, of course, because we in Britain have some of the best public service sector servants in the world and the best public services in the world. Is it not fantastic that we are all living longer—that we can now expect to live a good 10 years longer than in the 1970s? That is an unmitigated good, but it has enormous consequences for public policy.

One of the consequences is that people will need to work for longer. It is ridiculous for people to be retired for a third of their lives. That is not only unaffordable; it is nonsensical for those individuals. It is appalling to think of people spending 20 or 30 years fully retired with nothing to do but tend their garden and look after their grandchildren. People do not want to do that. It is completely ludicrous to suggest that people should continue to retire at the age of 60 when they are going to continue to live for another 20, 30 or even 40 years. That is completely unsustainable and illogical. The Bill makes sense of such points in a way that is completely fair to the taxpayer and the public sector workers. I congratulate the Government on producing such an extraordinarily fair Bill.

I want to disabuse the Opposition of a couple of the myths. They say that the unions claim that average local government pensions are just £3,800, and that for women they are less than £2,800, but they fail to point out that that includes people who have worked for only a very short time in the public sector. They should be talking about what people would be retiring on if they were to spend their entire career in the public sector. The fact is that many women will be far better off than is claimed. Members on both sides of the House have been very concerned about lower paid women in both the public and private sectors retiring in poverty. Under our proposals, women will be far better off because the Bill safeguards the lowest earners’ pensions. They will not face increased contributions to their pensions, and they will be better off than they previously were. That is very good news.

[Dr Whiteford]

One misleading aspect of the pensions contribution debate is the claim that people earning under £15,000 will be protected. It is often overlooked that these figures are calculated on a full-time equivalent basis. Many women work part time, and they will find that they have to pay high pension contributions even though their salaries are very modest.

[Andrea Leadsom]

I think what the hon. Lady is saying is that somebody who would be on, perhaps, £60,000 a year but who is working a day a week and is therefore taking home about £12,000 a year will have to pay higher contributions. Is that what she is saying?

[Dr Whiteford]

I am thinking of nurses or teachers, whose salaries would be more in the average earnings category. If they work half-time, they will find that their pensions contributions increases will be calculated on the basis of a full-time equivalent so this measure will not help women on low incomes.

[Andrea Leadsom]

That is a rather extraordinary point. Public sector pensions will be paid and calculated on the basis of a full-time equivalent salary, so our approach is entirely consistent. Moving to career average schemes will also make things much fairer for women. It will mean that high flyers who are promoted late in their career and then earn a significantly higher salary will no longer retire on an extremely generous pension. Those who have spent their career sometimes doing part-time work and sometimes doing full-time work will have a career average pension, which will be much fairer.

It is also right that we link public sector pensions to the normal state retirement age—that is a matter of fairness. If the state retirement pension kicks in at 66, it is right that, with exceptions—notably those who have armed forces, firefighter and police pensions—people start to draw their public sector pension at the same time as their state pension. That is all about fairness.

[Chris Leslie]

The hon. Lady will know that in the past—I believe this was in the Pensions Act 2011—people were given short notice about changes to the pension age. Does she agree that, ideally, a good 10-year notice period should be given so that people can plan ahead? If this is pegged to the state pension age, people should have sufficient opportunity to plan with enough forethought.

[Andrea Leadsom]

The hon. Gentleman will recall that the Government made great efforts to ensure that the cliff edge affecting certain women born in a certain couple of years disappeared. He will also be pleased to note that the pensions of those with less than 10 years until retirement will not be affected by this measure, which provides the ring-fencing for those with not long to go until retirement age. I would have thought that he would welcome that—again, on the basis of fairness between those workers and the taxpayer.

Of course, two thirds of private sector workers are not members of a pension scheme. We have heard hon. Members from all parts of the House say that we do not want a race to the bottom. We are proud of our public sector pension provision, and nobody would wish to see it brought down to the abysmal level of private sector pensions. However, it would be pleasing if Opposition Front Benchers were to concede their part in the destruction of private sector pensions, which has made a significant contribution to putting us into this pitiful position; private sector pensions have been decimated by the actions of the previous Prime Minister.

An important point of fairness is involved in the fact that the taxpayer contributes three times more to a civil service employee’s pension than the average private sector employer pays in. The employer contribution rate to the civil service pension scheme is 19%, whereas the average private sector employer contribution rate for a defined contribution pension scheme is only 6.4%. To get the same pension in the private sector, someone would have to contribute about a third of their salary.

[Sheila Gilmore (Edinburgh East) (Lab)]

There is something extraordinary in what the hon. Lady has just said, which several of her colleagues also said. They say, “We don’t want to compare with the private sector. We don’t want to have a race to the bottom.” They then say, “But” and come out with a long string of comparisons about employers not paying as much. If this has nothing to do with comparisons with the private sector, they should stop comparing.

[Andrea Leadsom]

The hon. Lady makes an extremely good point. I am not advocating that we reduce public sector pensions to the private sector level, but this does, of course, absolutely bear comparison. This Government are not reducing public sector pensions to the pitiful state the Labour Government left private sector pensions in when they left office. That is precisely the point I am trying to make. We are proud of the fact that our public sector pensions will remain among the best in the world. That is something to be very proud of, and the Opposition should be congratulating the Government on having achieved that at this extraordinarily difficult time.

Let me disabuse Members of one final myth. The Opposition like to say that private sector workers earn more, so private sector pensions make up for the shortfall in salaries. That is not the case. The Institute for Fiscal Studies calculates that on average hourly public sector wages are 7.5% higher than hourly private sector wages, even when we take into account an individual’s education, age and qualifications. That is a very important point. Public sector pensions do not subsidise lousy working rates—quite the opposite, in fact. Those in the public sector rightly have a good deal in their employment and in their pension. That is what we wanted to achieve and I commend those on the Front Bench for doing so.

The most important aspect is sustainability, because what we had was unsustainable. Over the past decade, public sector pension costs increased by a third in real terms. Between 1999-2000 and 2009-10, the amount of benefits paid from the five largest public service pension schemes increased by 32% in real terms. In five years’ time, we are set to spend £33 billion a year on public sector pensions—more than on police and transport combined and 1.8% of GDP.

[Richard Fuller]

On that point about overall fairness and sustainability, does my hon. Friend believe that the Government could have gone further in ensuring sustainability by looking to move towards a fully funded form of public sector pension scheme? There is still an exposure for the public purse in the future. and although the Minister is putting in some cost control, we could have gone further, could we not?

[Andrea Leadsom]

Of course, my hon. Friend is quite right: we could have gone much further. Across Europe, public sector pensions and terms are being cut with immediate effect to deal with the appalling debts that countries have run up, whereas this Government are putting in place measures that are entirely fair and sustainable both for the taxpayer and the public sector worker.

Let me conclude by saying again that it is an unmitigated good thing that people are living longer, healthier lives, and that we should celebrate our public sector workers and the job they do. They do a fantastic job for us of which we are very proud and we want to ensure that they are fairly rewarded, in a way that is sustainable for the public purse for many decades to come.

20:42

[John McDonnell (Hayes and Harlington) (Lab)]

I declare an interest as a member of a local government pension scheme.

Let me put it clearly on the record that the Bill does a number of simple things: it means that civil servants—teachers, firefighters, hospital workers and council workers—will work longer, pay more and get less. That is the reality. It was said that this has been agreed by the trade unions, but it has been rejected by the Public and Commercial Services Union, the National Union of Teachers, the Prison Officers Association, the Fire Brigades Union and the National Union of Rail, Maritime and Transport Workers, which represents the royal auxiliary workers. Not a single union has supported the Bill or expressed satisfaction with it, and that includes all those in negotiations, the Royal College of Nursing and the British Medical Association. Why? For me, the Bill embodies the Government’s policy and prime objective that the economic crisis will be paid for by public sector workers rather than those who caused the crisis in the first place. It typifies the Government’s approach.

[Richard Fuller]

One issue is the fact that the cost that will fall not during this Parliament but on future taxpayers—our children and grandchildren. Does not the Bill do something to relieve some of the burden on future taxpayers? As the Intergenerational Foundation has said, that is a fair way to proceed.

[John McDonnell]

Let me quote the Treasury, which has said that the cost of the unfunded public sector schemes—I am particularly interested in the civil service one—as

“a share of GDP was 1% in 2007-08 and was projected to rise to only 1.2% in 2057.”

Only 18 months ago, the National Audit Office produced the report, “The cost of public service pensions”, and showed that

“when projections of liability are based on earnings, the total annual payments from the civil service pension scheme will be largely stable over the next 50 years.”

So no, I do not accept that analysis, and neither did the Treasury at the time.

I oppose the Bill. Members of my Front-Bench team will abstain tonight, I believe, because they hope they can amend the Bill. The Bill is unamendable to make it acceptable to me. Therefore I oppose it and I wish to have the opportunity to vote on the Bill if I can. If that means walking through the Lobby on my own, I will. I will find a teller somewhere, I hope.

The Bill is extremely damaging to the well-being and living standards of ordinary working-class people. We know that. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) quoted the definitive piece of work, an independent analysis from the Pensions Policy Institute, which is a charity funded by the Nuffield Foundation to undertake the research. It confirmed that the Bill means that pension benefits will be cut by a third. My hon. Friend the Member for Leeds West (Rachel Reeves) referred to the shift from RPI to CPI, which was a further 11% cut. What the cuts in pension benefits mean is exactly as others have said—a reduction in participation that will ultimately threaten the viability of the schemes. Perhaps that is what the Bill is about—the degradation of the schemes so that they will eventually be replaced by the private sector.

Let me deal with the issue of private sector pensions, which is dragged out on every occasion. It is a rewriting of history. Let us go back to the 1980s and 1990s. The state pension was undermined by the Thatcher Government when they broke the link between earnings and pensions. That also undermined the earnings-related element of the state pension. They encouraged people to enter private sector schemes but, as we heard, they allowed many employers to take pension holidays, not for one or two years but for long periods. Eventually that undermined the schemes and a number of them in my constituency were wound up almost overnight.

Individuals were urged to enter into their own arrangements, which they did, only to be fleeced on their endowment policies and other mechanisms. Previous Governments, particularly in the 1980s and 1990s, destroyed private sector pensions and now this Government are moving on to destroy public sector pensions in the same way.

[Mark Reckless]

I do not want to let this point go—the hon. Gentleman’s claim that somehow Baroness Thatcher broke the link with earnings. Between 1974 and 1979 Labour claimed to link earnings and pensions, but for much of that time wages went up by less than prices, and for five months of the highest inflation in that period they were not linked at all, giving pensioners a very bad deal.

[John McDonnell]

Under legislation promoted by Thatcher, the House in 1981 broke the link. That undermined in the long term the value of the state pension—it is irrefutable—and then undermined the earnings-related portion of it.

[Mark Reckless]

Will the hon. Gentleman allow me to refute that? For the first two years of the Thatcher period, there was a link. The only other period in which there was purported to be a link was under the previous Labour Government. For much of the Thatcher period there was no link and wages went up by less than prices.

[John McDonnell]

There was always a link with earnings or inflation, and pensions went up accordingly. Why did the previous Government not replace it? I sought on every Budget to enable that to happen and I wish we had done so.

[Andrea Leadsom]

rose—

[John McDonnell]

Let me press on with the points that I am making.

What the Government are now doing is exactly the same as they did to private pensions, but we were told by the Chief Secretary that this is a settlement for a generation—that it will restore stability and predictability to public sector pensions for the next 25 years. No, it does not. As has been said before, the Henry VIII clauses in the Bill not only have the potential to undermine future benefits but are retrospective. I urge Members to look at the BMA’s legal advice on clause 3 and the vast remit that that gives future Governments to undermine future protections. Under clauses 3 and 21 and other clauses, public sector pensions do not even get the protection afforded in the private sector. In the private sector, if an alternative benefit is proposed, it must be actuarially evaluated as a viable alternative and one that does not undermine an equivalent benefit.

I agree with my right hon. Friend the Member for Wentworth and Dearne (John Healey)—we all agree on this—that pensions are deferred earnings, something people invest in and, therefore, something they should have some say in, but the Bill will take away all participatory control by the members who contribute. As he said, the Treasury will now control the design of the schemes, the revaluations and how they are undertaken, and the cost cap and what is included within it. There is a lack of commitment in the Bill, contrary to all that Hutton said, to ensuring that any future changes or reforms are made on the basis of agreement or at least joint engagement.

I am now secretary of the Fire Brigades Union parliamentary group and wish to circulate the evidence the FBU provided to Ministers on the physical work firefighters now do. Under the new pension scheme the retirement age in the fire services has been lifted to 60. The previous Government argued that there would be preventive measures to enable firefighters who could no longer undertake the physical rigour of the job to undertake lighter duties, as the hon. Member for Bromley and Chislehurst (Robert Neill) said. This year, 16 posts in the whole the country have been offered for redeployment alone, so that is unreal. Frankly, I do not believe that a 60-year-old firefighter can cope with the rigours of the job, no matter what improvements there have been in technology.

The hon. Member for Banff and Buchan (Dr Whiteford) mentioned the briefing from the Prison Officers Association. There are five physical tests that every prison officer has to undertake in order to be able to continue doing the job. If they fail in any one, they cannot do the job. The POA therefore predicts, quite rightly, that the cost of medical retirements will outweigh any savings gained as a result of the increased pension age. The same information came from the Royal College of Nursing with regard to nurses and paramedics and from the National Union of Teachers with regard to teachers teaching at 68.

The Government said that they would set up the longer life review. Its first meeting was held in September and the results will not be out for at least another six months, yet this Bill allows no flexibility. My right hon. Friend the Member for Wentworth and Dearne was right: even if the money is there and the employer agrees with it, the Bill provides no flexibility in any of the proposed schemes. It is lunacy to bind the hands of negotiators in that way.

There is no legal requirement on the pension boards to consult or negotiate, contrary to what Hutton recommended, and we can see no representation from the work force. There should at least be some assurance in the Bill that there will be an element of representation on the boards. With regard to the closure of the existing schemes, some protections are being put forward, but there is none on ill health or redundancy. I find clause 23 almost sinister. It will enable employers to offer benefits as an alternative outside the schemes, which is another way of using private sector schemes to undermine the public sector overall.

I am worried about this Bill, which is why I want to vote against it. I think we will look back on today as the day when public sector pensions started on a downward slope, with the erosion of benefits and increasing contributions leading eventually to the undermining of the schemes and their closure. I think it will result in many people being impoverished and greater inequality being created in our society. That is why I will oppose the Bill tonight.

[Mr Tom Harris (Glasgow South) (Lab)]

On a point of order, Mr. Deputy Speaker. I apologise for interrupting the flow of the debate, but I need to raise an important matter. It will be recorded in tomorrow’s Hansard that the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), told Members that the Government’s commitment to introducing a ban on the use of wild animals in circuses was confirmed by the fact that such a commitment was made by Her Majesty in the Queen’s Speech to Parliament. You will, I know, agree that that is a powerful riposte to those of us who had dared to doubt the Government’s good faith on this issue. However, a subsequent inspection of the two most recent Queen’s Speeches of this Parliament finds no mention whatever of such a commitment. Is it in order for any Minister to pray in aid of his argument a part of Her Majesty’s Gracious Speech that turns out to be wholly fictitious? Has the Minister in question contacted you or Mr Speaker to schedule an apology to the House?

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Gentleman for his point of order. I have not been notified that any Minister wishes to make a statement on this matter or any other matter from the Dispatch Box this evening. As for whether the Minister was in order to give the response that he did, Ministers and, indeed, all right hon. and hon. Members are responsible for their own speeches.

[John McDonnell]

Further to that point of order, Mr Deputy Speaker. On a serious matter such as this where a Minister has inadvertently misled the House, it is the norm for him to be asked to return to the House as soon as possible to correct the record and explain his position. May we now express the view on the Floor of the House that the Minister has time now to come back to the Chamber to explain the situation?

[Mr Deputy Speaker]

I thank the hon. Gentleman for his point of order, which I am sure those on the Treasury Bench will have heard. Should a request be made to make a statement or to raise a point of order, the Chair will be notified and I will make sure that the House is informed in the usual way.

20:56

[Richard Graham (Gloucester) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this long and important debate on pensions. This is a subject on which we would surely all agree that the object is to get cross-party agreement on issues that affect so many of our constituents, and that should be achievable. Indeed, the coalition Government have already achieved it across the two parties, and by seeking and taking Lord Hutton’s advice they hoped to secure agreement from Labour. In that sense, it is good news that this Second Reading will be unopposed, but it is none the less sad that we have heard so many speeches in which Labour Members were unable to rise to the challenge of reaching agreement and seeking harmony and instead sought to make a series of party political, aggressive and disagreeable contributions to the pensions debate.

Let me start with the hon. Member for Leeds West (Rachel Reeves), who led the debate for the Opposition. She said, for example, that the Opposition had accepted the need for a move from RPI to CPI as an index for pensions only as a temporary deficit reduction measure for the life of this Parliament, and she criticised its timing. However, she completely failed to mention that the Labour party itself had already changed the index for its own pension scheme for its party workers from RPI to CPI before the Government did likewise for all public sector workers. Unfortunately the hon. Lady is not in her seat, but the right hon. Member for Wentworth and Dearne (John Healey), who is here, said that the change had been imposed without warning and called it the moment at which the Government had lost their moral authority. I am sure that he will be able to explain to his own party workers quite what moral authority his party has on this issue, having made precisely the same change. The reality is that both the Labour party and this Government have had to face uncomfortable facts— above all, the consequences of the fact that so many of us are living for so much longer—and have had to tailor pensions accordingly.

The hon. Member for Leeds West rightly expressed concern for public sector workers. She may be a deferred public sector scheme worker herself, as am I and many other Government Members, and it is important for Labour Members to understand that we do not all represent purely the private sector. This is about seeking agreement for public sector and private sector workers from Members of Parliament who have themselves worked in both sectors. She rightly stood up for public sector workers but was unable to give any credit to this Bill, which has completely protected workers earning less than the full-time equivalent of £15,000 a year—some 15% of the work force—and provides considerable protection for people, many of whom live in my constituency, who earn less than the full-time equivalent of £21,000 a year.

The Bill also protects everybody who is within 10 years of retirement, which is very important for so many of our constituents who are in their 40s and early 50s. Crucially, it increases accrual rates, which is a technical point that will be appreciated by those who have worked in the sector, such as the right hon. Member for Wentworth and Dearne. Above all, and most importantly, the Bill protects the risk-free investment nature of a defined benefit scheme.

On that point, I must refer to the speech by the hon. Member for Hayes and Harlington (John McDonnell), who is in his place and whose integrity I respect. He quoted, as he would in his role as the Public and Commercial Services Union representative, the PCS briefing for this Second Reading debate and came to the same conclusion that

“members will work longer, pay more and get less pension.”

The reality, however, is that all of us will live longer, work longer and, if we are lucky enough to have one, get a pension for longer, and those who are public sector workers will have a much better pension than anyone else in the land.

My point to the hon. Gentleman and the hon. Member for Blaydon (Mr Anderson), who is not in his place, is that it is no good simply championing the status quo for today’s workers and betray tomorrow’s. In many ways, that is what happened—I am afraid that the trade unions are partly culpable for this—to private sector DB schemes, which the right hon. Member for Birkenhead (Mr Field) has often referred to as the jewel in the crown. Many of them have closed precisely because the unions could not and would not see the future and adapt before companies decided that they could no longer afford the schemes and closed them.

The point of this Bill—this should be something on which every Member of this House can unite—is that this Government are trying to work with unions and Opposition Members to keep defined-benefit schemes for the public sector, despite the fact that we will all live for so much longer than our fathers and mothers, and that, therefore, the cost of those pensions will be so much greater. To use the analogy of the hon. Member for Blaydon, it may be raining, but this Bill will make sure that the umbrella is kept for public sector workers.

[Chris Leslie]

The hon. Gentleman says that we should all stand together to defend ongoing defined-benefit schemes, so could he explain why the Bill does not honour that commitment? Clause 7 states that schemes created under the Bill can be defined-benefit schemes, but they can also be defined-contribution schemes or

“a scheme of any other description”.

Where is the guarantee that these will be defined-benefit schemes?

[Richard Graham]

I have no idea whether the word “guarantee” is in the Bill. In life, only two things are guaranteed as far as I know: taxation and death. We are talking about not guarantees as such, but a defined-benefit scheme in which the entire risk is taken by the taxpayer and the certainty that gives people the chance to budget in their retirement is with the scheme’s beneficiary. In fact, it is even better than that. As the hon. Gentleman will know, because he has studied these things carefully, the advantage of a career average defined-benefit scheme is that it benefits precisely those workers whom I would have imagined he would be most in favour of protecting.

The Pensions Policy Institute, which the hon. Member for Hayes and Harlington referred to, says:

“The Coalition’s proposed reforms will remove the different outcomes for high-flyers and low-flyers which exist in final salary schemes.”

It goes on to estimate that, under the current scheme, a high flyer

“would have had a pension benefit of 29% of salary, compared to 11% of salary for the low-flyer.”

Under the reforms proposed by this Government, both high and low flyers will have

“the average value of the pension offered being worth 15% of salary”.

That is a significant improvement for the low flyers. I would be astonished if all Members of the House were not in favour of that reform.

The hon. Member for Leeds West recognised that something had to be done, but tellingly, she made no reference at all to three of Lord Hutton’s four tests—affordability, fairness to the taxpayer and governance and transparency. Did she not think they mattered? Should they not be at the heart of what any Government do? That was a disappointing series of omissions.

[John Healey]

The hon. Gentleman said a moment ago that the total risk of the schemes was borne by the taxpayer. Does he not realise that he is making the same mistake as Ministers in not recognising that the local government pension scheme is a funded scheme? The income from its investments last year topped £3 billion, and there is also a strong contribution from employees alongside that of employers. That makes it a case apart from his general argument.

[Richard Graham]

The right hon. Gentleman makes half a good point. I know local government pension schemes very well, as many of them are my former clients. The reality is that they have never been as separate from the public sector balance sheet as he might be implying. One of his predecessors as Economic Secretary, Ruth Kelly, tried to amalgamate the whole lot, recognising their fragility. As the National Audit Office has revealed, the schemes are significantly underfunded, and I think I am right in saying that 20% of all money paid in council tax now goes towards paying the pensions of scheme members. He is right to say that local government schemes are different from others, but they are not quite as different as he suggests.

The hon. Member for Leeds West mentioned the fear that public sector workers would opt out of schemes altogether, because they might become unaffordable, and thereby become a burden on the state in a different way. I think it is fair to say that she did not recognise that opt-out rates have not altered. There is good reason for that, because although contributions are higher than they were, the value of a defined-benefit scheme is still considerable. In case her concern becomes real and there are large numbers of opt-outs, the Government have built into the Bill a provision for regular reviews to address the situation if and when it arises.

Several Opposition Members have expressed the concern that the Government are trying to set the private sector against the public sector. I have already totally rejected that point. All Government Members are as committed as anyone to helping every worker get some form of pension as quickly as possible. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) missed the crucial point that the Government are trying not only to make defined-benefit schemes sustainable for the public sector, but to get millions of workers in the business sector to have a pension at all through the auto-enrolment scheme. It is disappointing to me, and I think to others, that she did not understand that.

Several Members have claimed that the real scandal is the lack of pension provision in the private sector, but it is a curious fact that one legacy of the previous Government is that 13.5 million workers in the private sector have no pension at all. Some Ministers in the Labour Government did good work, including the late Member for Croydon North, to whom I pay tribute for his work in the pensions sector. However, as with so many things, it has fallen to the current Government to seek an agreement and to implement reforms that will give people without pensions the chance to have something to retire on for the first time in their lives.

Today’s debate has covered many aspects of the Bill. As I said, it is a good thing that its Second Reading will not be opposed today, but I can see that there will be many arguments ahead in Committee.

Let me leave with hon. Members the points that I make to everyone in my constituency who is employed in the public sector and is in a defined-benefit scheme, whether they are teachers, nurses or other workers. First, the defined-benefit pension has fabulous benefits for all those involved, especially lower-paid workers; secondly, the increase in accrual rates means an improvement of some 8% for public sector workers; thirdly, anyone within 10 years of retirement is completely protected; and finally, I hope that the Opposition will drop their instinctively tribal approach, and recognise that the Bill tries to reform public sector pensions in a way that will, above all, be sustainable. Should our children and grandchildren work in the public sector, they will receive a career average defined-benefit pension, as will today’s workers, should the Bill go through successfully.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The winding-up speeches will begin at 9.30 pm.

21:10

[Sheila Gilmore (Edinburgh East) (Lab)]

I have a feeling that an instruction has gone out to those speaking in support of the Government, and it appears to have been, “Be nice to the public sector.” Speaker after speaker has taken great pains not only to praise the public sector and public sector workers, but to accuse the Opposition of daring to suggest that there might be another view.

I have sat in the Chamber over the past two and a half years, and I do not think I imagined the numerous occasions on which Government Members spoke of gold-plated pensions and the overall extra cost of pensions, or indeed imagined the whole way in which the public sector has been treated. We are clearly now meant to assume we imagined that, but public sector workers have had a pay freeze and are facing job losses in many parts of the country.

On top of that, the view expressed for two and a half years that the public sector is holding back the economy formed much of the justification for many of the policies that followed. We have been told time and again that if we cut back the public sector, the country’s economy will spring to life, and that the public sector is exercising a great drag on the economy. If we put those things together, it is perhaps not surprising that Opposition Members, and many workers in the public sector, have concluded that the coalition Government do not particularly like or support the public sector, however supportive they may be of individuals or people they have come across. That is the backdrop against which the whole debate has been set, and that is why people are still sceptical and concerned about some aspects of the Bill.

If contributions had not been made, quite separately, on the restructuring of the pension schemes, and if we were not working against the general backdrop of the Government’s view of the public sector, many people, including Opposition Members and public sector unions, would perhaps not be asking: where is the guarantee? It is not good enough to say that we want to put pensions on a firm and definite footing; we must ensure that that happens. When parts of the Bill suggest to any casual reader that that may not be the case, one can understand why people have doubts.

The Bill does not rule out further changes for any number of years, let alone 25 years; nor does it rule out the possibility that some public sector schemes in future might be defined contribution schemes. We have heard lots of praise for defined benefit schemes by hon. Members on both sides of the House, but the Bill opens up the possibility—this is what people have spotted when reading it—that we could see the introduction of a defined contribution scheme.

We must be clear, therefore, on whether we are giving long-term protection. Pensions are a long-term business. The problem for pension provision in this country—whether state, public sector employee or private sector pensions—is that taking the long-term view has proved to be difficult. I will not take lectures from Conservatives, who suggest that the only reason why the private sector moved away from defined benefit schemes, or indeed from providing pensions altogether, is due to a policy of the previous Labour Government, because the Tory Government under Mrs Thatcher destroyed the state earnings-related pension scheme. They did not reform it and say, “Over the longer term this may prove to be quite expensive and we might have to look, for example, at its accrual rates,” which were generous; they destroyed it, in the name of giving people the freedom to make their own choices. I remember exactly what happened. People said, “Oh well, if I don’t have to pay in to this, I won’t pay in to anything.” Twenty or so years later, those people are no doubt approaching retirement with very little pension. That was extremely destructive legislation. In its place, people did not at that stage get defined benefit schemes. Often, they were encouraged to go to insurance companies and other such organisations to take out pensions of a defined contribution type, but those schemes have not provided them with an adequate pension in their upcoming retirements. If we are to have a cross-party consensus—I do not know whether we will—security for the future must be built in to the Bill.

Hon. Members have said warm words about why some people will not be fit to work through to normal retirement age. However, if people are not fit to work, we need flexibility in the Bill—it cannot be left until later. Ministers have criticised previous legislation on a range of issues for being too inflexible, and have argued that that makes it difficult to make changes later. We need flexibility on the pension age. If we lock the normal retirement age for public sector pensioners to the state pension age in the Bill, it will be difficult to have flexibility, even if it proves to be needed on health or other grounds. We do not want people who do not work to that later age claiming benefits and losing a lot of their assets. Nowadays, many people who claim employment and support allowance can do so on a contribution basis for only a year. If they have other income, they will not get means-tested benefits. Many people who end up leaving work early on health grounds lose a great deal of money.

We are concerned about those in the private sector who are in that position. Even with the state pension age as it is, many people, particularly men in the 60 to 65 age group, are not working on health grounds. I therefore urge the Government to look again at that factor. If they are serious about their concern for people who might find it difficult to work in public sector jobs on health grounds, they need to make it possible to relax the rules in future.

Parts of the Bill require changing. It is important that we go ahead and make those changes, and that we do not say, as has been suggested by some Government Members, that the Bill is already perfect.

21:19

[Grahame M. Morris (Easington) (Lab)]

In the limited time available, I wish to highlight a particular concern. The Chief Secretary’s contribution seemed to suggest that this is a done deal, and various coalition Members suggested that this is a wonderful Bill with cross-party consensus. I agree with the grave concerns expressed by my hon. Friends the Members for Blaydon (Mr Anderson), for North Ayrshire and Arran (Katy Clark) and for Hayes and Harlington (John McDonnell), not least about the retrospective powers the Bill will give to the Secretary of State without reference to Parliament. In my view, we should have a sensible negotiation on sector-specific schemes, as alluded to by the hon. Member for Bromley and Chislehurst (Robert Neill).

The deal has not been agreed with the firefighters. The key issue for them is normal pension age, which other hon. Members have mentioned, and the proposed increases to the employees’ pension contributions. The Government’s offer published on 24 May 2012 included a commitment to review both the normal pension age for firefighters and firefighters’ contributions. That review is ongoing, and the issue of normal pension age for firefighters is key.

Clause 9 sets a normal pension age of 60 for firefighters in the proposed pension scheme. The NPA is defined in the Bill as

“the earliest age at which the person is entitled to receive benefits under the scheme (without actuarial adjustment) after leaving the service to which the scheme relates”.

This means that, in effect, the Government propose that firefighters should continue to attend house fires, factory and office fires, car accidents, explosions, civil disturbances, terrorist incidents, floods and other emergencies until they are 60 years of age.

At present, nearly 24,000 or two thirds of firefighters in a pension scheme are members of the firefighters pension scheme—the FPS. The normal pension age for those firefighters is 55, with most able to retire in their early 50s. The Fire Brigades Union believes that the proposal is unworkable for firefighters and will destroy the firefighters pension scheme.

This issue goes to the very nature of firefighting. Firefighters perform a number of activities, individually and in teams, such as running, crawling, climbing, lifting, lowering, carrying and hammering. Common activities include ladder lifting and raising, hose running and connection to water supplies, manipulating and operating portable pumps, rescue and evacuation procedures, and wearing breathing apparatus. Worst-case scenarios involve casualty evacuations, search and rescue, operating heavy search equipment, propping and shoring up buildings—as we saw in my area recently during the floods—and carrying equipment over uneven surfaces, which we saw during the dreadful train disaster on the west coast main line.

The public rightly expect the fire service to operate in inherently dangerous situations to save life and property and to render other assistance. The firefighters pension scheme reflects the nature of the job. Firefighters’ work can be

“physically demanding and require sustained effort for long periods, often in arduous conditions”.

It is a career widely recognised as among the most extreme non-military occupations in modern life. I remind the House that currently less than 1% of our firefighters work beyond the age of 55—for good reason. The national pension age of 60 proposed in Lord Hutton’s pension report is for the Government to consider—he did not recommend it as a figure carved in stone—but no evidence was provided to justify it. The Fire Brigades Union has written to him seeking his supporting evidence for it, but as yet it has received no reply.

There are several issues relating to ongoing reports into the merits of a firefighter NPA beyond 55, but the important point, which the hon. Member for Bromley and Chislehurst, the former fire service Minister, referred to is that fundamentally the role of firefighters has not changed. The introduction of IT and changing working practices have fundamentally changed how Members of Parliament and other professions operate, and perhaps have made our lives easier, but that is not the case for firefighters—at least, I can find no evidence for it.

No evidence has been produced to show how firefighters can maintain their health and fitness in order to work safely until they are 60. There are recognised aged-related declines in physical potential. We all suffer from them—well, perhaps you do not, Mr Deputy Speaker, but the rest of us do—and, because firefighting is a physically challenging profession dealing with safety-critical emergencies, such concerns are a matter of life and death for firefighters and the public. Academic papers generally conclude that only elite athletes can maintain well into their 50s the levels of fitness required by the UK fire and rescue service, and the majority of fire and rescue services already have fitness policies in place.

My hon. Friend the Member for Hayes and Harlington referred to the limited opportunities for redeploying firefighters no longer fit for active service. The FBU recently surveyed every fire and rescue brigade to determine what opportunities there were for redeploying firefighters deemed unfit for operational duty on health grounds. In England, fewer than 100 firefighters are in that position, but that is with an NPA of 55. Out of the 46 English fire and rescue services, only five confirmed that they currently had any redeployment opportunities, while the total number of opportunities currently available in the whole of England amounted to 16 posts—and that, remember, is with the normal pension age at 55, so we can imagine how much greater the demand would be if it was 60. I am concerned that such a scenario will end up damaging an essential public service and costing the public purse more.

I referred to studies that the FBU carried out through YouGov. I do not propose to rehearse those points. However, it also engaged the services of an expert actuary to carry out an assessment. It indicated that a considerable number of firefighters would no longer contribute to the scheme. The public will not thank the House or the Government for advocating a pension scheme based on an unworkable NPA and on sacking hard-working firefighters in the years before they can retire after a lifetime of public service.

Higher NPAs could be more expensive. During previous discussions on firefighters’ pensions, the Government Actuary’s Department confirmed that increasing the NPA from 55 to 60 would lead to more ill-health retirements. As I mentioned, the FBU, seeking to quantify that, engaged a specialist firm of actuarial consultants to assess the potential impact of a rise in ill-health retirement under the existing scheme. The evidence shows the substantial cash-flow problems that such contribution increases would create for the sustainability of the scheme. Indeed, the worst-case scenario is that the new pension scheme will prove unworkable and will crash. There is a danger of a significant number of firefighters opting out of the new pension scheme, thereby making it unsustainable for the rest. I believe the Department for Communities and Local Government estimated the savings from the new arrangements at £33 million a year. However, if more than 7% of firefighters opt out—the true figure may well be 12% or more—the likelihood is that those savings will be wiped out, with an even greater cost to the public purse.

Firefighter pensions are rightly seen as part of a social contract with firefighters—men and women who risk their own well-being throughout long careers to help others. I do not believe that the general public will support breaking this well-established covenant, and neither should the Government.

21:30

[Chris Leslie (Nottingham East) (Lab/Co-op)]

This has been a thorough debate, and I welcome the contributions made by Members from both sides of the Chamber.

We need reforms that enhance the sustainability of pension schemes. In an era of significant demographic change, it is right to reform the pension system to ensure affordability for both employees and employers—which in the case of the public sector is the taxpayer. The sustainability of a decent pension scheme was the focus of several tough decisions made by the previous Labour Administration. The changes made to public service provision when we were in office included raising the pension age from 60 to 65, introducing a “cap and share” approach that would protect Exchequer revenues and share costs between employees and employers, and reforming contribution levels, which rose by 0.4% for teachers and up to 2.5% for NHS staff. The Public Accounts Committee says that those changes would save the taxpayer £67 billion over a 50-year period, so considerable reform took place under the previous Administration.

However, the Government have mishandled subsequent reform. As we have heard from some of my hon. Friends, when the Government were formed in 2012 by the Conservatives with their good friends the Liberal Democrats, instead of building on the changes that we made, they decided to rip them up, thus causing major problems. Their incompetent and shambolic handling of the reform process has also made it much harder to build a consensus on some of the many sensible long-term reforms proposed in my noble Friend Lord Hutton’s report, as my hon. Friend the Member for Blaydon (Mr Anderson) said. We have to find better ways of rebuilding trust and achieving consensus on these vital matters.

The Government are compelling major changes without negotiation in a way that is both crude and unfair. In particular, by unilaterally imposing a steep 3% rise in contributions prior to any negotiations or even the completion of Lord Hutton’s review, and by making a permanent switch in the indexation of future pension income from RPI to CPI, the Government provoked strike action, at a cost to the country and the users of public services. They also provoked deep cynicism among public service workers. These changes were not recommended by Lord Hutton, but were unilaterally introduced, in an unfair and provocative way. The Government’s aggressive approach to this serious and sensitive issue resulted in months of stalemated negotiations. It is a matter of deep regret that the Government have lost the confidence and damaged the morale of hundreds of thousands of public service workers, whose engagement is vital at a time when they are being asked to accept ongoing pay restraint.

Many hon. Members have noted that Lord Hutton produced a thoughtful and comprehensive report on the way forward, using a number of the changes made by the previous Administration as a starting point for negotiations. The document was very useful. He was right to suggest that career average schemes could be fairer than final salary schemes—several hon. Members have made that point—and to say that we should be asking people to work for longer, given the increase in life expectancy. He was also right to stress the need to approach these issues in a careful, balanced way, and to avoid a race to the bottom on pension provision. It is those aspects of Lord Hutton’s report that I wish the Government had looked at more carefully and taken to heart. The Bill is only part of the story, as the unfair increases in contributions and the changes in indexation that have already been imposed do not appear in it.

The Bill contains a series of proposals that we need to consider on their merits. As it consists mainly of enabling legislation that is designed to put new schemes on a clear and equal footing, we will not oppose its Second Reading, but we will hope to address a number of serious concerns in Committee. My hon. Friend the Member for Hayes and Harlington (John McDonnell) has very strong opinions on these matters, which I respect, but I want us to try to find opportunities to improve the Bill in Committee.

All too often when Opposition amendments are tabled in Committee, we see brand new Ministers, with the advice of their officials, opening up their briefing books to find the word “resist” in block capitals, and then simply parroting the notes that have been put into their folders. However, I am sure that that will not be the case with the Economic Secretary to the Treasury, for whom I have great hopes. Let us pray that the Bill’s Committee stage will involve a genuine exchange of views, and give us the opportunity to look into the detail and dig into some of the Bill’s anomalies and, indeed, failures.

Several hon. Members referred to key aspects of the Bill that contain glaring deficiencies. For example, my hon. Friend the Member for Dumfries and Galloway (Mr Brown) and my right hon. Friend the Member for Wentworth and Dearne (John Healey) referred to the retrospectivity involved in the changes to scheme regulations. By allowing scheme regulations to make retrospective changes, the Bill gives the Government the power to reduce benefits that have already been accrued. Many hon. Members will be surprised by that, because most assume that such things are sacrosanct.

My right hon. Friend the Member for Wentworth and Dearne was right to point out that the proposal comes into conflict with the European convention on human rights. It also goes against the central tenet of pension provision, which is that what has been accrued cannot be reduced, because it has already been earned. That is an important principle, because how can public service workers have any security about their future retirement if they know that the Government can retrospectively reduce the benefits that they have already earned at any point? This should not be a partisan matter, but the contract between the employer and employee is important, so I urge the Minister to listen to the genuine concerns that have been raised in the debate.

[Mark Durkan]

Earlier, in response to an intervention that I made, the Chief Secretary to the Treasury tried to say that the retrospective provisions in clause 3 would be used only for technical and incidental purposes. Will my hon. Friend test the Government by tabling an amendment in Committee that would stitch that commitment into the Bill?

[Chris Leslie]

What a splendid idea. If that were the Minister’s purpose, I agree that there would be no reason not to specify it in the Bill. That would normally happen in the case of incidental, supplementary or consequential issues but, of course, many people suspect that that is not what is involved.

I also want to talk about the employer cost cap, which can unilaterally result in staff benefits decreasing or their contributions increasing. What is particularly pernicious is the fact that the Bill exempts such changes from even the meagre protections for consultation with staff under clause 20. That clause deals with the consultations and discussions that should be held with staff, but it explicitly excludes the arrangements for the employer cost cap. Clause 11 provides for the cost cap to be determined entirely by the Treasury with no requirement for parliamentary scrutiny, which means that the Treasury can set the cap at an unreasonable level, or use it to reduce pension benefits unchecked, thereby further undermining the security of schemes for retirement provision.

Other hon. Members raised issues under the assumption that the Government’s commitment to a new defined benefit scheme was enshrined in the Bill. It turns out that the Bill does not, in fact, honour such provision. In fact, clause 7 says that a scheme that may be created is “a defined benefits scheme”, “a defined contributions scheme” or a scheme “of any other description.” The only restriction is that a scheme cannot be a final salary scheme. In other words, the Government are enshrining in the Bill the side of the agreement that benefits the Treasury, but they have left out the corresponding promises that they made to public sector workers.

My right hon. Friend the Member for Wentworth and Dearne talked about the fair deal, as it was known, for public service workers who might be outsourced to a private provider. Following the transfer of employment, they should be entitled to accrue pension benefits that are broadly comparable to those that they would have accrued if they had remained in the public sector scheme. The Government’s promise does not extend beyond the civil service, however. We shall press for a commitment for the benefit of other public sector workers, as there is an anomaly in the Bill that such a commitment is provided only to employees of central Government and not to other public service workers.

I have further anxieties about the Bill. It will tie pension arrangements to the state pension age, but of course that can be changed, with no protection for those approaching retirement. The pegging of the Bill to the state pension age erodes security and certainty about the age at which members of various schemes might receive their pensions. In 2011, the Government gave only eight years’ notice of the state pension age changes, which caused great concern at the time. While we accept that actuarial changes to reflect demographics might need to be made from time to time, the Bill ought to prevent any changes from being made to the normal or deferred pension age for those with 10 or fewer years to go before they are due to retire. It is incredibly important to help people to plan ahead with their pension provision, and the Government should be able to offer a concession to ensure that such planning is possible.

Once upon a time, the Government talked about the Hutton report as something to welcome and take forward, but they have ignored Lord Hutton’s recommendation that the link between the state pension age and the age at which members of public service schemes receive their pensions should be regularly and independently reviewed. I am told that the Government agreed in negotiations that such reviews would take place, but that is not enshrined in the Bill. I will be more than happy to give way to the Chief Secretary so that he can clarify whether he is going to make a concession by providing for such a review in the Bill—[Interruption.] If he does not wish to clarify that, it will be for us to press that point by tabling amendments in Committee. I know that Ministers will keep an open mind on many of these points.

There are serious problems with questions of governance. Lord Hutton made a number of important recommendations about scheme governance, such as on the implementation of the pension policy group to consider major changes to scheme rules, on the inclusion of nominated members and independent members of pension boards, on ensuring that pension boards are responsible for the oversight of financial management, and on the commissioning of a review into how standards of administration in public service pension schemes can be improved. Such governance measures would improve the efficiency of schemes’ administration and would follow some of the best practice for scheme governance in the private sector, but the Government have not enshrined many of these recommendations in the Bill. Those omissions are important, so I hope that Ministers will look at them.

My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) talked about the importance of local government pension schemes—they are indeed schemes apart. We welcome the fact that the LGPS is funded, but as I said in an intervention, if Ministers are closing the LGPS in 2014, albeit opening new ones going forward, they must explain what will happen to the obligations under section 75 rules relating to the crystallisation of some of those debts? Hon. Members may not realise that academies and third sector organisations such as charities are part of the local government pension scheme. Forcing them to crystallise some of those deficit arrangements at the point at which the existing schemes end and the 2014 schemes begin could be financially crippling and cause major crises. The Bill also centralises a great deal of control and makes a great many anti-localist changes. Changes to the local government pension scheme will transfer power from local authorities to Ministers.

The Bill is enabling, but it is only part of a story and it needs significant amendment. We will not oppose its Second Reading, but I hope that the Economic Secretary will genuinely engage himself in the Committee stage, will keep an open mind, and will work with us on improving protections for public service workers as well as the taxpayer.

21:45

[The Economic Secretary to the Treasury (Sajid Javid)]

I thank Members for the lively debate that we have had this evening. In the short time that I have spent as Economic Secretary, I have been helping the Government to try to get three Bills through Parliament, this being the third. In each case, the Opposition have backed off from calling a Division. I am becoming a little concerned: I hope that that does not become a pattern of behaviour.

The Bill represents a milestone in the history of public service pension provision, and I am not surprised that some Members feel strongly about it. Legislation that affects the pension rights of more than 6 million public servants is worthy of serious consideration and scrutiny.

I think that we should bear in mind the economic backdrop to these reforms. During its last year in government, the Labour party burdened the UK with the largest budget deficit since the second world war and the largest in the developed world. It amounted to £159 billion. Labour was borrowing £5,000 a second, which means that it would have borrowed about £90 million between the moment we started today’s debate and now. [Interruption.] The hon. Member for Leeds West (Rachel Reeves) asks how much we are borrowing. That gives me a good opportunity to remind everyone that we have cut the deficit by a quarter. That is what has brought the country economic credibility, and that is what has kept interest rates low and given us the time in which to make serious long-term adjustments to public spending costs.

[Sheila Gilmore]

Will the Minister give way?

[Sajid Javid]

I will in a moment.

Because of their long-term nature, pension reforms will not save money quickly, but they make an essential long-term contribution to the health of public finances. We have heard that today from a number of Conservative Members, including my hon. Friends the Members for Bognor Regis and Littlehampton (Mr Gibb), for Bromley and Chislehurst (Robert Neill), for Monmouth (David T. C. Davies), and for Thurrock (Jackie Doyle-Price). As the Chief Secretary has said, it has been forecast that the Bill will save UK taxpayers £65 billion over the next 50 years.

[Richard Fuller]

My hon. Friend talks of savings for the taxpayer. Will he admit that this was a golden opportunity for us to convert public sector pensions from a “tax as you go” model to a fully funded scheme, saving future taxpayers billions and bringing true fiscal prudence to the way in which public sector pensions are set? Why has my hon. Friend missed that golden opportunity to go further and save future taxpayers more money?

[Sajid Javid]

My hon. Friend raised the same issue in his speech. I think it fair to say that that would have involved an excessive fiscal cost, and would have been much more complex than the approach that we have taken. I hope my hon. Friend accepts that.

In preparing this policy, we have been careful to follow the recommendations set out by the former Labour pensions Minister Lord Hutton in his independent report. We have heard much about trade unions today. The head of the TUC, Brendan Barber, whom I met recently to discuss our reforms, has described the report as a “serious piece of work”. He has taken a very constructive approach to the problems that the Government are trying to address.

While we are on the subject of trade unions—

[Sheila Gilmore]

Will the Minister give way?

[Sajid Javid]

I will give way to the hon. Lady in a moment. If I remember correctly, she said in her speech that she was taken aback by the support for the public sector that she observed among Conservative Members. Well, she had better get used to it. My father was a bus driver. He was a proud trade union member, and he was the first person from whom I learned about the importance of our trade unions, and I will never forget that. That is why, in putting this important piece of legislation together, we have been working with trade unions to win their support, and I am pleased we have got it.

I think the hon. Member for Hayes and Harlington (John McDonnell) said that not a single trade union supported our approach. A majority of trade unions have accepted the deal. Unions representing approximately two thirds of members have accepted our proposed schemes.

[John McDonnell]

The Minister must listen to debates. What I said was that not a single trade union supports this Bill in its current form.

[Sajid Javid]

As I said, unions representing two thirds of union members have accepted our proposed schemes, and the vast majority of unions have taken a very constructive view.

[Sheila Gilmore]

rose—

[Sajid Javid]

I give way to the hon. Lady.

[Sheila Gilmore]

I thank the Minister for giving way. I want to take him back to what he said previously. As usual, he chose to frame his comments in the context of the deficit. His Government came to power saying that they would eradicate the deficit within the term of this Parliament. Now, after two and a half years, he says that we should be grateful that he has reduced it by a quarter. His economic policies are not working.

[Sajid Javid]

I was expecting a lot more than that from the hon. Lady. I am proud that this Government have already cut the deficit her Government left behind by a quarter. That is a significant achievement. The shadow Chief Secretary, the hon. Member for Leeds West, said she was unable to commit to keeping the CPI change we have introduced to public sector pensions beyond the term of this Parliament. According to the Office for Budget Responsibility, that would leave a black hole in the public finances of up to £250 billion in current GDP terms over the next 50 years. I look forward to hearing how the Opposition plan to fill that black hole.

[John Healey]

The Minister spoke warmly about his father and trade unions. Which trade unions support this Bill as it currently stands? Can he name even one?

[Sajid Javid]

Since we received the first interim report from Lord Hutton, we have been in negotiations with trade union representatives from almost all the major trade unions. I am pleased to say that most of them have taken a very constructive approach. As I said, trade unions that represent two thirds of trade union members have accepted the schemes we have put forward.

These reforms are not easy, but they are the right thing to do for the long term because they are in everybody’s interests. We must stop the cost of these pensions spiralling out of control. I shall now turn to some of the issues raised today.

Several Members, including the hon. Members for Banff and Buchan (Dr Whiteford) and for Blaydon (Mr Anderson), mentioned the link between the normal pension age and the state pension age. The reality is that we are all living longer and enjoying healthier lives in retirement. The average 60-year-old is now expected to live 10 years longer than in the 1970s. Pension ages of 60 and 65 were set in times when people spent only a few years in retirement, but that is no longer the case. Some fortunate people spend more years drawing their pension than earning their salary. If everyone is living longer, it is only fair that people work a bit longer, too; otherwise we will be asking those in the private sector to work longer and pay more so that those in the public sector can retire earlier having paid less. We cannot ask those people to pay twice over—once for their own pensions and once for those of public servants.

Let me be clear, however: this Government are not forcing anybody to work for longer. As now, it will remain possible to retire earlier than the normal pension age and draw a reduced pension, subject to any minimum age rules that exist. Of course, any benefits from the current schemes can be assessed in full and reduced at the current pension age for those schemes.

Secondly, I must remind the House that the Government have honoured their commitment to protect the rights of those closest to retirement. The Chief Secretary has made it clear that people who were 10 years or less from their normal pension age on 1 April 2012 will see no change in their pension. The Bill delivers that in clause 16.

[Dr Whiteford]

I take the Minister back to the point he made a moment ago. Will he concede that most people who give up work early do so not through choice but because their health has collapsed or they have developed long-term debilitating conditions that prevent them from doing their job?

[Sajid Javid]

The hon. Lady makes a fair point, which is why in many of the schemes, particularly those where that might be a bigger issue, the rules try to take it into account. I hope that she will welcome that.

I do not have much time left and I wish to address some of the specific points that have been made. Some questions were asked about the cost cap embedded in the Bill. That cap is designed as a backstop only, and it will be triggered in unforeseen circumstances that lead to large potential changes in costs. It ensures that cost increases do not go unchecked again, as they did for decades before the introduction of this Bill.

A number of Opposition Members talked of the “cap and share” arrangement put in place by the previous Government as though it meant that no further changes were required to public sector pensions. Let me remind hon. Members of what Lord Hutton said in his report:

“cap and share cannot take account of the increases in cost of pensions over recent decades because people have been living longer.”

Had we kept the arrangements introduced by the previous Government, these questions would not have been answered.

A number of hon. Members also talked about opt-outs. As my hon. Friend the Member for Bromley and Chislehurst said, and as my hon. Friend the Member for Gloucester (Richard Graham) explained well, the incidence of opt-outs as a result of the changes to payments that have already been introduced has had no discernible effect on the use of these pension schemes, but the Government will continue to monitor opt-outs and take opt-out data fully into account before making any decisions on individual schemes.

A number of Opposition Members also raised the issue of public sector pay. Again, Lord Hutton’s commission examined that, and said that public sector workers, on average, had higher pay if account was taken of different qualifications, ages and experience levels. That was also borne out in a report by the Institute for Fiscal Studies.

We also heard some questions about the devolved parts of this Bill, with the hon. Member for Banff and Buchan asking a number. I will not have time to go into them all, but she is right to say that for parts of the Bill we will require a legislative consent motion, and we hope that that will be forthcoming. For the small parts of pension legislation where there is some flexibility for Scotland, Scotland has the flexibility to do something differently, but that would involve a change.

[Katy Clark]

Will the Minister give way?

[Sajid Javid]

I am afraid I do not have time.

In conclusion, we believe that the changes we have made are generous. They provide a fair settlement and deal with public sector pensions in a manner that is sustainable in the long term. The pensions allowed for under the Bill will continue to be among the best available, providing levels of retirement income that many in the wider economy cannot hope to achieve. There will be tapered protections. Public servants will know how much money they can expect to retire on and will have a greater say in the scheme. I therefore commend the Bill to the House.

Question put, That the Bill be now read a Second time.

21:59

Division 88

Ayes: 276

---

Conservative: 232
Liberal Democrat: 41
Democratic Unionist Party: 2

Noes: 19

---

Labour: 11
Scottish National Party: 5
Social Democratic & Labour Party: 3
Plaid Cymru: 1
Alliance: 1
Green Party: 1

Bill read a Second time.

Business without Debate

Monday 29th October 2012 Commons Chamber

Public Service Pensions Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Public Service Pensions Bill:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 22 November 2012.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Greg Hands.)

Question agreed to.

Public Service Pensions Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Public Service Pensions Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of—

(a) any expenditure incurred under or by virtue of the Act by a Minister of the Crown, and

(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided, and

(2) the charging on and payment out of the Consolidated Fund of any pension or other sum payable under or by virtue of the Act to or in respect of the judiciary.—(Greg Hands.)

Question agreed to.

Business of the House

Ordered,

That at the sitting on Wednesday 31 October, notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Greg Clark relating to Multiannual Financial Framework not later than three hours after their commencement or at 7.00 pm, whichever is the earlier; and such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved.—(Greg Hands.)

Committees

[Mr Speaker]

With the leave of the House, we will take motions 5, 6, 7, 8 and 9 together.

Ordered,

Administration

That Rosie Cooper be discharged from the Administration Committee and Mr Keith Vaz be added.

Communities and Local Government

That George Hollingbery be discharged from the Communities and Local Government Committee and John Stevenson be added.

Culture, Media and Sport

That Damian Collins and Dr Thérèse Coffey be discharged from the Culture, Media and Sport Committee and Angie Bray, Conor Burns and Tracey Crouch be added.

Health

That Dr Daniel Poulter be discharged from the Health Committee and Andrew Percy be added.

Work and Pensions

That Harriett Baldwin, Andrew Bingham, Karen Bradley, Oliver Heald and Brandon Lewis be discharged from the Work and Pensions Committee and Mr Aidan Burley, Jane Ellison, Graham Evans, Nigel Mills and Anne Marie Morris be added.—(Geoffrey-Clifton Brown, on behalf of the Committee of Selection.)

Local Government Finance

Monday 29th October 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

22:16

[Graham Jones (Hyndburn) (Lab)]

I wish to raise the issue of 12 district councils that face substantial reductions in the overall funding they receive as a consequence of the proposed reforms to local government finance. The councils affected are Great Yarmouth, Bolsover, Barrow-in-Furness, Hastings, Pendle, Preston, Chesterfield, Copeland, Thanet, Breckland, my own constituency of Hyndburn, and that of my neighbour, the hon. Member for Burnley (Gordon Birtwistle).

I welcome the Minister to his place and congratulate him on his promotion; I hope it is successful. However, its great irony in the context of this debate is that he is now the Minister responsible for making the decision on funding. To add to the irony, his council is the one most affected, with a reduction of £3.167 million—equivalent to a 29.3% reduction in core spending. Another irony is that because my researcher took ill last week, I have had the assistance of a researcher who works for my hon. Friend the Member for Luton South (Gavin Shuker), Lara Norris, who is hoping to be Labour’s prospective parliamentary candidate in the Minister’s seat, Great Yarmouth. I thank her for her out-of-hours commitment.

The nub of the issue is that most of these 12 councils face a reduction in Government support of over 22% despite the Chancellor’s suggestion in the autumn statement of 2010 that no authority will suffer cuts greater than 8.8%. In 2012-13, the transition grant was provided to authorities whose spending power would have decreased by that figure. All 12 authorities are shire districts, and 10 of them are among the most deprived districts in England, according to the English indices of deprivation. Tonight’s debate is intended to make the case that the Government’s proposals on creating a new funding baseline should include the historical amounts that councils have previously received but apparently may now lose.

Local government finance is an area of deep complexity that central Government have struggled with for decades. Numerous weighty tomes have been produced on suggested reforms. This Government and the previous Government have taken steps to try to ensure that the system is fair and flexible, and, most importantly, meets the needs of the vast majority of the citizens of the UK. Over many years, the basis of Government funding to local authorities has been a national needs assessment that attempts to determine how much central funding should go to each local council.

[Gordon Birtwistle (Burnley) (LD)]

The hon. Gentleman is making a very strong case on behalf of the 12 district councils. Without the funding, our cuts in Burnley will be 28.7%. This situation arises from a history of make-up money that the previous Administration gave us over a few years and that has now been rolled up and is needed by the authorities. Does the hon. Gentleman agree that the authorities have done everything they can to balance their books and make themselves more efficient, but they would never be able to manage without that money?

[Graham Jones]

I am grateful to the hon. Gentleman for his comments, which I will address as I go along.

The system deals with more than £20 billion each year and funds more than 400 local councils, police and fire authorities. It is based on a vast array of data capture, statistical calculations, needs assessments, local taxation and an overall limit of the funding available. The Department for Communities and Local Government does its very best to produce a workable and fair system, and by and large the system is able to do that for the majority of councils. I believe that all Members accept that basis for local government financial settlement.

Successive Governments have recognised, however, that this imperfect system does not deliver the money needed at a local level in particular cases, especially those relatively small and few in number district councils that face severe depravation issues. District councils such as mine in Hyndburn and neighbouring councils such as Pendle and the hon. Gentleman’s in Burnley, as well as others further south, such as Great Yarmouth and Hastings on the south coast, are all disadvantaged by the complexities of the current system, which is not able to place the money collected centrally through taxation into local people’s hands in a systematic way.

All Governments have recognised the additional challenges faced by the most economically disadvantaged district councils and have provided specific additional funding to them over many decades in order to correct those deficiencies. This has been done by a series of extra Government grants under a variety of names, most recently by the current Government through the transition grant. This money recognises the additional challenges that these councils face and that the overall national system of sharing funds between all councils is simply not sophisticated enough to deliver what is needed and what is fair to the handful of district councils that face the same challenges as some of the most deprived urban areas in our metropolitan areas.

I do not believe that this is a race to the bottom or a party political issue. My own constituency, Hyndburn, was Conservative-run for 12 years until last year, yet made the empirical case for extra funding repeatedly. Similarly, Great Yarmouth was Conservative-run for 11 years until last year and has been predominantly Conservative since 1973. Pendle has nearly always had a Lib Dem or Conservative-led council. Hastings has had a Labour-run council for only six of the past 40 years and Burnley has been Liberal Democrat-run for 10 of the past 13 years. Pendle, Burnley, Great Yarmouth, Thanet, Breckland and Hastings all have Conservative or Liberal Democrat MPs. Those constituencies are deprived—they range from 11th to 58th out of the 350 or so local authorities—and it is the economic disadvantages that they face that create the depravation.

I know that there is some concern that the previous methodology of providing additional funding through a series of non-mainstream grants year after year to the most deprived areas appears to be a perverse incentive. However, I cannot accept that Liberal Democrat and Conservative councils and councillors have the ambition of creating greater deprivation or that their vision is simply cash handouts from the Treasury. Hyndburn council has an ambition—and this funding will help it to achieve it—to lift Hyndburn out of the 100 most deprived constituencies in the country and to be in a position whereby local circumstances are conducive to a better local economy that will result in greater prosperity for the people it represents. An 8.8% cut in funding is a serious enough financial blow to the ability of these authorities to meet their ambitions for their residents without it being escalated unfairly and, I would add, cruelly to a 20% to 30% cut.

The Government now have the opportunity, through the changes they are making to local government finance, to embody the transitional funding that those councils have previously received into their baseline funding. By taking that simple step of adding the previous transitional grant to the baseline funding for the 12 most deprived councils, the Government can permanently ensure that the previous practice of local government funding based on evidence and need remains. Without that simple step, there is a danger that those councils, which deal with some of the most economically challenged areas of the country, will, because of the quirks of the distribution methodology and the inability to achieve precision, have significantly less resources to deal with their challenges.

The overall level of funding needed to help solve the problem is very small, at about £20 million, but it would make a vast difference to what the councils in question can achieve, as it would represent a significant proportion of what they can spend. In the case of my council, Hyndburn, the money that the public face losing through general taxation—for it is their money, their council—is the equivalent of almost 24% of its net budget.

I worry that the sheer scale of cuts facing the councils in question may force them to make obscene decisions. I am sure the Minister will argue that Conservative and Liberal Democrat councils did not waste money when they were running the authorities I have mentioned. There is no fat to cut from them and there are no efficiencies to be made. They have already made efficiencies for several years, and most notably for the past two years. It is worth adding that as district councils they have very small overheads.

The 20% to 30% cuts to the core funding of those councils cannot be made simply through efficiencies. They can be made only through large cuts and the axing of services. In a survey of readers of the Eastern Daily Press, which covers Great Yarmouth, nearly half the 750 residents asked stated that they would want council tax to be increased by the maximum possible should transitional relief be lost. Some 41% wanted to introduce car parking charges, and when it came to cuts the arts and sports came top of the list. I would not be shocked if obscene decisions were made to meet the cuts, such as collecting rubbish every four weeks or selling off parks that do not have a protective covenant.

It is not perverse to ensure that the 12 district councils in question have the funds that they need to deliver the economic regeneration required in their areas. Adding to their funding the amounts that were previously allocated to them through the transitional relief grant is necessary and fair. That £20 million should be rolled into their baseline funding on a permanent basis under the new arrangements, to ensure that they do not receive a disproportionate cut above the 8.8% ceiling. Let us remember that some councils received no cut at all, or only a small reduction, in the 2010 autumn statement. The councils in question face the maximum reduction in funding and the loss of transitional relief, and asking them to shoulder unfair cuts will have a dramatic impact in areas that remain some of the most challenging in the country.

[Mr Dennis Skinner (Bolsover) (Lab)]

I congratulate my hon. Friend on raising the matter. His argument on behalf of the towns in question is very important. In Bolsover, every single pit was closed within a space of 10 years following the 1984-85 strike, and every single textile mill was closed at the same time. That thrust Bolsover into the few most deprived councils, which is why, like he says, it needs help.

[Graham Jones]

I am grateful to my hon. Friend. His council faces cuts of £1.93 million, the equivalent of 25.9% of its core funding. In Hyndburn, similarly, devastating economic impacts over the decades have made it hard for the constituency to compete economically. The loss of the cotton industry was the start of that. There now needs to be infrastructure investment in such areas, so that they can compete economically with others.

The figure involved is small—£20 million in the context of an overall budget in excess of £20 billion. Finding the £20 million needed from that £20 billion so that we can continue to have a fair settlement for the 12 district councils in question would require an adjustment of only one hundredth of 1%.

22:29

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

I congratulate the hon. Member for Hyndburn (Graham Jones) on securing this debate. He has comprehensively set out the pressures that many of us recognise are facing the 12 local authorities in receipt of the 2012-13 transitional relief, as well as highlighting the potential consequences of removing that funding.

The transition grant was paid in 2011-12 and 2012-13 to local authorities that would otherwise have seen a reduction in revenue spending power of more than 8.8% in either year, based on spending power figures as set out in the provisional 2011-12 settlement. The hon. Gentleman will know from the consultation undertaken last summer, following the local government resource review, that the transition grant was not included in the establishment of the baseline for 2013-14. That is because the grant was only ever intended as a one-off, temporary funding stream. Councils will have realised that from the fact it was referred to as a transition grant.

The hon. Member for Burnley (Gordon Birtwistle) made a strong case for those councils that have done excellent work to reduce their overheads, but that is not the case for all councils. The hon. Member for Hyndburn name-checked and promoted my constituency of Great Yarmouth a number of times in his speech, and I am grateful for that. However, that is a good example of an authority that did a lot of work towards shared services and management structures, right up until this year when the Labour council came in and put an end to that. The council is now trying to find the money that it had pledged not to spend, and it realises that it should have gone ahead with the shared services deal that it stopped, thereby saving itself a huge amount of money. The council now has a transition grant that it has not used for any transitional work. At the moment, it is looking at large potential payoffs for chief executives, which it argues is for the purposes of efficiency. That is not the kind of good work to cut back on costs that the hon. Gentleman highlighted and that has taken place in some local authorities.

[Graham Jones]

I appreciate the Minister giving way given that I took some time for my speech, but this is not a party-political issue. Most of the authorities involved were controlled by the Liberal Democrat or Conservatives over the period in question—as the Minister accepted—and the problem to which he refers in his constituency is perhaps a legacy issue with the chief executive. I would not like to make this a party-political issue. It is much broader and longer than that, and membership of these councils has come from parties on both sides of the Chamber.

[Brandon Lewis]

The hon. Gentleman makes a fair point, but we must be clear that his party stood in an election this year saying that it would not do shared services. It won that election and got the political mandate to do that, but it cannot now expect the taxpayer to cover that political vanity. It has to find those savings; it was a transition grant. If they were doing the right thing, councils will have used those grants to find savings and prepare themselves for when the grant ends, as it was always intended to do.

I am aware of the concerns about possible financial pressures raised by local authorities such as Hyndburn. A number of responses to the Department’s technical consultation on the business rate retention scheme raised queries relating to the funding of a transition grant. Those queries deserve full consideration, and I am sure the hon. Gentleman will understand it when I say that the Government will consider carefully all the responses that the consultation received before finalising the design of any scheme. I have also received a number of letters directly, and met people and heard direct representations from councils. I am meeting another group of councillors —including from Great Yarmouth—over the next few weeks.

Let me be clear about why we are introducing changes to the funding of local government from next April, as that will clearly have a knock-on effect and have an impact on the situation. Allowing local authorities to keep a share of business rates will deliver a radical reform of local government funding. It will put a strong financial incentive for economic growth at the heart of the local government funding system. Currently, councils that succeed in attracting new businesses bear burdens—for example, a bigger bill for street cleaning in order to look after busier roads. Under the current funding system, councils do not see any direct financial benefit from those successes. That is why we are introducing proposals that will enable local authorities to keep a proportion of locally collected rates to help fund the services that they provide. That will create direct links between rates collected and local authority income, thereby increasing the financial incentive for local authorities to drive economic growth.

[Graham Jones]

The Minister makes a good point, but it is almost as if he is re-reading a speech about the new homes bonus. There is no housing market in Hyndburn. We need investment in infrastructure, skills and apprenticeships, and, as he said, we need to clean up the industrial estates and attract business. Without the funding, we do not have the levers to make that an attractive proposition.

[Brandon Lewis]

I will come to the new homes bonus, but I would hope that local authorities have been doing what he suggests with the transition grant to do their part for the local community’s economic growth. The incentive in the business rate scheme is there to drive that and to provide greater flexibility and freedom for local authorities to make decisions and manage their budgets efficiently.

As the hon. Gentleman suggested in his speech, for too long, the finance system has encouraged a sense of dependency. Councils have competed with one another in a race to the bottom to present themselves as being more deprived than their neighbours to secure more handouts from central Government. In place of that system, this Government have set out reforms that could deliver a £10 billion boost to the wider economy in the period up to 2020. Councils will have a key role in growing their local economy through the planning system, local transport investment and other levers of which they wish to take advantage. The business rates retention scheme will give councils every possible incentive to create the conditions for local growth.

The new homes bonus, which the hon. Gentleman mentioned, is another way in which local authorities can increase the funding they receive. We have established the bonus as a powerful, simple, transparent and permanent incentive for local communities to increase their aspirations for housing growth. In 2012-13, only the second year of the scheme, we will pay out a total of nearly £432 million to local authorities in England, with an average payment of £1.2 million. The figures will be higher in 2013-14, because they will include the year 3 allocations.

[Graham Jones]

The Minister makes a powerful argument for some parts of the country, but not for the 12 authorities. Does he agree that it is not in local authorities’ gift to purchase houses? It is a question of whether there is demand in the market. Without the infrastructure and the attraction, and the jobs and skills, there is no housing market. The new homes bonus is therefore perverse in those 12 areas.

[Brandon Lewis]

The hon. Gentleman tempts me into creating a fictitious market in any given area. The reforms, including the new homes bonus and business rate retention, are part of a package. No one magic wand will fix every problem. The package will encourage local authorities to develop their infrastructure and economy. The business rate retention could bring about economic growth, and therefore there will be demand for building the right houses in the right areas, which will mean that local authorities can benefit from the new homes bonus.

For each new build, conversion, long-term empty home returned to use or new Traveller’s pitch, a council receives a sum equivalent to the national average council tax for that band. For one band D home, the council would receive £1,439 each year for six years, which comes to more than £8,500. There is also a premium each year for every additional affordable home. I therefore strongly encourage local authorities to take advantage of the opportunities that the new homes bonus provides, not only to improve the supply of housing, but to help increase their income.

Let me return to the business rates retention scheme. The detail of our proposals will enable local government as a whole to keep 50% of the business rates. Some have said that local authorities should keep all business rates, which is not realistic. We have been clear from the beginning that, within a business rates retention scheme, some business rates income would need to be retained by central Government so that the scheme operates within the existing spending control totals.

A 50:50 split means that, although central Government benefit from a share in growth, they also share any risks with local government. Crucially, we have made it clear that all the money will be returned to the local government sector in the form of grants. We have proposed that the local share of the business rates will be split between lower and upper-tier authorities on an 80:20 basis, with 80% going to the districts. That ensures that the strongest incentive is placed on the tier responsible for the planning decisions that are often the key driver for growth.

Two-tier councils also have a greater degree of protection. All two-tier county councils will be top-up authorities. Top-up amounts will be uprated by the retail prices index, thereby ensuring that counties benefit from more protection and less volatility in their budgets. That will help them to maintain their service levels while providing them with the opportunity to benefit from a proportion of growth in their area. The scheme will also include further protections, in the form of a safety net, for those cases where business rate income falls by a certain amount. This will help to ensure that support is available to local authorities who suffer from significant shocks to their incomes, such as the closure of a major local employer—as has happened in the past, as the hon. Gentleman has said.

We have consulted on the appropriate level at which this support should be available. We have proposed that it should kick in at a point between 7.5% and 10%—a range that reflects the need to balance protection, incentive and affordability. The safety net is to be funded by local authorities through a levy on those authorities benefiting from disproportionate growth. The levy arrangements will ensure that adequate levels of funding are available for the safety net, but it will also operate in such a way as to ensure that there is no absolute cap on growth—the more a local authority grows its business rates revenues, the more it will benefit from growth.

Our proposals for business rate retention will provide a real incentive for all local authorities to be proactive in taking decisions that will help to deliver growth and jobs in their areas and to receive a financial reward for those efforts. We recognise, of course, that different areas will have different opportunities, as the hon. Gentleman pointed out, and different challenges. We are confident that these proposals have the right balance of incentive and support.

I hope that my remarks have highlighted the opportunities that our new funding reforms will offer to local authorities through the business rate retention scheme, as well as some of the other opportunities available, such as the new homes bonus. I appreciate that we are also considering the response to this summer’s technical consultation, and we are preparing for the settlement we will put forward in December. Let me be clear that at the moment it is too soon to offer any certainty on decisions about transitional funding. However, as I said at the beginning, I am actively aware of the situation—with my own authority being involved, how could I not be?—and I am actively considering all the views that we have received from across the piece for the need for transitional relief funding for 2013-14. I will be able to inform the House further on that issue should we be able to develop any proposals in December.

Question put and agreed to.

22:41

House adjourned.

Written Ministerial Statements

Monday 29th October 2012 Written Statements

Monday 29 October 2012

Asset Protection Agency (Interim Report)

Monday 29th October 2012 Written Statements

[The Economic Secretary to the Treasury (Sajid Javid)]

The interim report for the Asset Protection Agency (APA) has today been made electronically available in the Libraries of both Houses.

The report contains commentary on key developments in relation to the APA and the asset protection scheme (APS) over the period from 1 April 2012 to 29 October 2012.

I am pleased to note the statement in the report that on 17 October 2012 the Government announced that the Royal Bank of Scotland (RBS) will exit from the APS on 18 October 2012. This represents an important milestone on RBS’s path of recovery and towards a return to the private sector.

It also removes a substantial contingent liability from the Government’s balance sheet. At its peak, the APS pledged £400 billion of taxpayer support to the UK banking sector, and by exiting the APS, this figure is reduced from approximately £40 billion to zero. During this Parliament the taxpayer guarantee to the sector has fallen by over £450 billion, a drop of almost 95%.

City Deals

Monday 29th October 2012 Written Statements

[The Financial Secretary to the Treasury (Greg Clark)]

The Government are today announcing a second wave of city deals, inviting a further 20 cities and their wider areas to negotiate for the devolution of the specific powers, resources and responsibilities required to deliver their locally-determined economic priorities.

The first wave of city deals involved the eight largest English cities outside London. In order to support our dual objectives of rebalancing the economy and boosting private sector growth, we are going to invite the next 14 largest cities, together with the six cities with the highest population growth, to participate in the second wave.

We will ask each of these cities to work across their functional economic area to put forward proposals for: the Black Country, Bournemouth, Brighton and Hove, Greater Cambridge, Coventry and Warwickshire, Hull and Humber, Ipswich, Leicester and Leicestershire, Milton Keynes, Greater Norwich, Oxford and Central Oxfordshire, Reading, Plymouth, Preston and Lancashire, Southampton and Portsmouth, Southend, Stoke and Staffordshire, Sunderland and the North East, Swindon and Wiltshire, and Tees Valley.

This second wave of city deals will build on the success of the first wave, accelerating the pace of decentralisation and unlocking new and innovative ways to drive local economic growth. Deals will represent a genuine transaction between cities and Government, with “asks” and “offers” from both sides.

Each city and their local enterprise partnership will be invited to put forward a landmark proposal to address a significant local economic issue which requires a transformative response. These bespoke arrangements will be complemented by a “core package”, consisting of measures that will devolve significant powers and functions to all cities and their wider areas that go on to negotiate a deal with Government. This will capitalise on the progress we have made so far, demonstrating our commitment to the devolution of powers from central to local government, if local areas are willing to offer significant reform in return.

There will be an element of competition in wave two, with the 20 cities being given up until 15 January to put forward initial proposals. Deals will not be guaranteed. Cities will need to demonstrate that they can meet the following five criteria:

i. to make proposals for stronger governance across their functional economic area, so that decisions necessary for the growth of the area as a whole can be taken quickly and effectively;

ii. to include proposals for harnessing significantly greater private sector input, expertise and resources;

ii. to demonstrate strong political commitment and readiness to put resources into delivering the deal;

iv. to present proposals that are consistent with the need to drive efficiency in the use of public money in the area, doing more with less, in pursuit of our medium-term goal to eliminate the deficit; and

v. to propose reforms for their area which represent the leading edge of the Government’s general economic strategy—to reduce regulation, create well functioning markets, promote an enabling environment for business and boost private sector growth and investment.

We will engage directly with leaders across cities and local enterprise partnerships, advancing only those that have the strongest propositions.

Alongside the city deals process the Government will work with all local enterprise partnerships, beyond those in the first and second waves of the city deals programme, to identify and respond to barriers which may be constraining immediate growth in their area.

South London Healthcare NHS Trust

Monday 29th October 2012 Written Statements

[The Secretary of State for Health (Mr Jeremy Hunt)]

I wish to inform the House that the trust special administrator appointed to South London Healthcare NHS Trust in July by my predecessor is publishing a draft report today making recommendations to me in relation to securing a sustainable future for services provided by that organisation.

Details about the appointment of the administrator, Matthew Kershaw, were given in a written ministerial statement issued on 12 July 2012, Official Report, columns 47- 48WS.

In accordance with chapter 5A of the National Health Service Act 2006, as introduced by the Health Act 2009, the trust special administrator has provided me with a copy of the draft report, which has today also been laid before Parliament. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office. The report will also be available at: www.tsa.nhs.uk.

I will consider the detail of the draft report but do not anticipate commenting on its recommendations at this stage. It is for the trust special administrator to now consult locally on his draft recommendations. That consultation will run from 2 November to 13 December. Significantly, it will give the public, patients, NHS staff and NHS commissioners, as well as all other key stakeholders, the opportunity to have their say about the future of services currently provided by South London Healthcare NHS Trust and the wider south-east London health economy.

Following consultation, the trust special administrator must make final recommendations to me as to the action I should take in relation to the trust in a final report by 7 January 2013. I expect those recommendations to consider the views of all persons and organisations taking part in the consultation. It will be for me, as Secretary of State, to make a final decision about whether or not to accept the administrator’s recommendations by 1 February 2013, after having also considered the responses to the administrator’s consultation. I will publish my final decision and the reasons for it, and lay a notice of such, in Parliament.

A key objective of the Government is to ensure that all NHS organisations deliver high-quality services to patients that are clinically and financially sustainable for the long term. The provisions in chapter 5A of the National Health Service Act 2006, referred to as the regime for unsustainable NHS providers, give the Government a mechanism to address fundamental, systemic issues that have rendered an NHS trust such as South London Healthcare NHS Trust unsustainable.

Past efforts did not succeed in putting South London Healthcare NHS Trust on a sustainable path. Using the regime is about protecting services for patients in the context of an organisation that is no longer sustainable and to ensure that a prolonged, challenging situation can be resolved speedily to give certainty to NHS staff. Despite some recent improvements in clinical performance, there are significant concerns about sustaining them because of the trust’s very considerable financial challenges. As the House has previously been informed, in 2011-12, South London Healthcare NHS Trust incurred the largest financial deficit of any of the 248 NHS provider organisations in England, at over £65 million. The trust is losing well over £1 million of taxpayers’ money a week, which means that vital resources are being diverted from other parts of the NHS. I am clear that patients and NHS staff of the trust must be given the benefit of services, in future, that can be delivered on a sustainable footing.

In making my final decision, next year, on the future of South London Healthcare NHS Trust and the services it provides, my objective will be to ensure that services are delivered more efficiently and to a high standard for the people of south-east London. Patients and taxpayers deserve this.



I fully understand that use of the regime may be unsettling for NHS staff and local residents. However, no decisions have been made at this stage and everyone affected should rest assured that the Government are seeking to bring about further improvements in quality of care as well as dealing with the financial challenges of South London Healthcare NHS Trust through a stable and sustainable solution that will benefit everyone.

Winterbourne View

Monday 29th October 2012 Written Statements

[The Minister of State, Department of Health (Norman Lamb)]

I wish to update the House about ongoing activity in relation to Winterbourne View private hospital.

The House will wish to be aware of two developments relating to Winterbourne View since the last written ministerial statement, issued on 25 June 2012, Official Report, column 2WS. First, the South Gloucestershire safeguarding adults board serious case review into Winterbourne View hospital was published on 7 August 2012 and can be found at:

http://www.southglos.gov.uk/Pages/Article%20Pages/Community%20Care%20-%20Housing/Older%20and%20disabled%20people/Winterbourne-View-11204.aspx.

Secondly, the House will wish to be aware that 11 former members of staff at Winterbourne View who were convicted of offences under the Mental Health Act 1983 and Mental Capacity Act 2005 received sentences on Friday 26 October. Six have been jailed, and five others given suspended sentences. I hope that these sentences will send a clear message that such criminal behaviour will not be tolerated and that there will be real consequences for the perpetrators.



This terrible case has revealed the criminal and inhuman acts some care workers and nurses are capable of. I want this case to reinforce to everyone, from front-line workers, to regulators, service commissioners, managers and board members, that they have a responsibility in preventing abuse of vulnerable people.

The abuse of patients at Winterbourne View hospital was horrifying. This was criminal behaviour—unacceptable in any part of our society, but particularly distressing given that these were people in vulnerable situations.

The BBC “Panorama” programme to be broadcast tonight continues to highlight inappropriate and poor quality care. There is no excuse for this.



The Department of Health review, set up by the former Minister of State, my right hon. Friend the Member for Sutton and Cheam (Paul Burstow), has found clear evidence that there are far too many people in specialist in-patient learning disability services (including assessment and treatment units) and many are staying there for too long. This must not carry on and must come to an end. People often end up in these facilities due to crisis which are preventable or could be managed if people are given the right support in their homes or in community settings.

Best practice and Department of Health guidance on this matter are clear—people with learning disabilities or autism and behaviour which challenges should benefit from local personalised services and should be supported to live in the community wherever possible. Only in very limited cases should in-patient services be used. This means that:

no one should be sent unnecessarily into in-patient services for assessment and treatment;

for the small number of people for whom in-patient services may be needed for a short period, the focus must be on providing good-quality care which is safe, caring and open to the community; and

people should move on from these services quickly—planning starts from day one to enable people to move on as quickly as possible to more appropriate care.

The key priorities are to address unacceptable failures of commissioning and to improve the capacity and capability of commissioning across health and care for people with behaviour which challenges with the aim of driving up the quality of care they receive, improving their lives and significantly reducing the number of people using inpatient services. This is best done through effective joint commissioning across health and social care and proper local planning.



I will publish the final report of the Winterbourne View review shortly. Alongside that final report, I will publish an agreement or concordat setting out the responsibilities of Government, commissioners, providers, professional bodies and regulators and the timetabled actions that each body commits to deliver.



We will continue to work with voluntary organisations, people with learning disabilities and their families so that they can hold health and social care bodies to account in making sure we deliver real change.

I will continue to update the House on this issue.

House of Lords

Monday 29th October 2012 Lords Chamber

Monday, 29 October 2012.

14:30

Prayers—read by the Lord Bishop of Wakefield.

Small and Medium-sized Enterprises

Monday 29th October 2012 Lords Chamber

Question

14:36

Asked By

[Lord Sharkey]

To ask Her Majesty’s Government what additional funding to small and medium-sized enterprises, particularly in deprived communities, has resulted from the Funding for Lending scheme.

[Lord Newby]

My Lords, the Funding for Lending scheme is not specifically targeted at particular regions or sectors of the economy; it is designed to incentivise banks to increase lending in aggregate, which will of course have a positive effect on the economy as a whole. The early indications have been encouraging but it is too soon to judge the impact of the scheme. The Bank of England will publish quarterly net lending figures for each participating bank from 3 December.

[Lord Sharkey]

I thank the Minister for that Answer. However, the fact is that the Bank of England’s last quarterly report shows that the stock of lending to SMEs continues to decline. It also shows that the number of loan applications themselves is down. I note that only 50% of SMEs had ever heard of Project Merlin. Could the same lack of awareness of Funding for Lending be contributing to the problem? Do the Government know how many SMEs are aware of this scheme? What are the Government doing to make sure that they are aware of the scheme?

[Lord Newby]

My Lords, the figures so far published do not take account of the impact of Funding for Lending, which only opened in August, and not least because it takes some time for loan approvals under the scheme to be finalised. I absolutely agree that promoting the scheme will be crucial. We are encouraged by the steps that the banks and building societies have already taken to do so, including double-page advertisements in national newspapers and promoting mortgage products very actively, not least through their websites. The Bank of England is administering the scheme but the Treasury is directly involved in monitoring it via a joint oversight board with the Bank.

[Lord Mitchell]

My Lords, Funding for Lending is the very latest of a whole plethora of programmes announced by the Government to stimulate SMEs. But here is the truth: very little of the money is getting through to the SME community. Why is that? It is because the chosen method of distribution is through the high street banks, and their interest is more in stuffing their own balance sheets rather than advancing funds for SMEs. When will the Government realise that the banks are chronically risk-averse and ill suited to this important task?

[Lord Newby]

My Lords, it is simply not true that the banks are stuffing their balance sheets as a result of this scheme. This scheme gives the banks incentives to lend, not to stuff their balance sheets. There is considerable evidence that the banks are offering loans to SMEs at significantly lower interest rates and offering new mortgage products. These are already beginning to generate new business.

[Lord Methuen]

Is the Minister aware that Rolls-Royce, in order to fund its suppliers, has lent them £500 million, because the banks are not doing so?

[Lord Newby]

My Lords, it is a very sensible approach for large companies to provide credit down the supply chain. It is not just Rolls-Royce—many other companies are doing the same, and I think that they should be encouraged to do more of it.

[Baroness Wall of New Barnet]

My Lords, I agree with the Minister that the banks are lending to small and medium-sized business. However, they cannot get the money for progressing their businesses where they are situated. I have recent experience in visiting a number of small engineering companies which are being offered money to move and establish bigger premises but not to develop where they are. It is becoming quite a problem for such companies.

[Lord Newby]

I do not think there is any general principle involved in that. The new products being designed under Funding for Lending would enable SMEs to get additional capital where they are. For example, RBS has introduced a new scheme under this programme that will cut the rate of lending by between 1% and 1.6% for small businesses and abolish arrangement fees for new loans. Those are not limited to companies that are moving but apply equally to companies which want to expand where they are.

[Lord Flight]

My Lords, the scheme makes lending very attractive to banks because the cost of funding is remarkably low, but there are many situations where what is wanted is equity rather than loan capital. Will the Government review some of the changes to the EIS arrangements for providing equity, where the changes in loss relief and the latest FSE changes in marketing EIS are discouraging the raising of equity capital for small businesses under the EIS scheme?

[Lord Newby]

My Lords, there has been a long-standing problem in small businesses raising equity in the UK. The EIS is one component in doing that. Of course, as we look towards next year’s Budget, we are reviewing all programmes that might offer any capacity to increase the flow of funds into small businesses.

[Baroness Brinton]

My Lords, given that the ITEM club has just predicted that lending to SMEs by banks will fall to a six-year low this year, with 38% of applicants being rejected in quarter 1, and given that banks seem to be using money from the Bank of England to lend rather to homeowners with equity, will the Minister consider ring-fencing a good proportion of the Funding for Lending scheme funds specifically for SMEs?

[Lord Newby]

My Lords, I think that a large proportion of these funds will be used for SMEs. That is why the banks have introduced new products specifically for SMEs following the introduction of the programme. I have already referred to RBS. Lloyds has done a similar thing and is reducing the interest that SMEs pay by 1%. Lloyds has placed double-page ads in some of the papers, which noble Lords may have seen. So the banks are directly targeting at SMEs a significant proportion of the funds that will now be available.

[Lord Barnett]

My Lords, given the urgent need for lending now, how soon does the Minister expect the first scheme to be in operation? Are the banks likely to offer 100% guarantees or will they require deposits?

[Lord Newby]

The scheme is already in operation and the process under which the loans are approved is going through. I do not know whether the noble Lord meant 100% in respect of mortgages as opposed to loans but, for mortgages, the scheme is being made available for first-time buyers, particularly in respect of the Government’s new buy scheme.

Alcohol: Pricing

Monday 29th October 2012 Lords Chamber

Question

14:44

Asked By

[Baroness Bakewell]

To ask Her Majesty’s Government, in the light of the recent Panorama programme about the scale of alcohol-related illness among the over-65s, when they will make a decision regarding plans for a minimum price per unit of alcohol.

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)]

My Lords, it is clear that harmful consumption of alcohol affects all age groups, not just the over-65s. The alcohol strategy published earlier this year sets out the Government’s commitment to introduce a minimum unit price for alcohol. The Government will consult on this and a number of other proposals in the strategy this autumn.

[Baroness Bakewell]

My Lords, I thank the Minister for that Answer. I should declare an interest. I was the journalist who made the “Panorama” programme. Last week, there was an indication that the plans to announce the minimum pricing of alcohol were being delayed and considerable concern about that was expressed by, among others, the BMA. Will the Minister press the Government to move urgently on this matter to stop wholesalers who are flooding the market with cheap ciders and cheap vodkas, which do a great deal of damage?

[Lord Taylor of Holbeach]

Although I missed the programme the first time around, I have been able to view the noble Baroness’s programme on iPlayer, and I congratulate her on the way she drew graphic attention to the issue. She makes a very good point. We are not dragging our feet on the issue, but we want to go out for consultation with all the details of an impact assessment to go with it, which will help inform the debate about at what level the minimum unit price should be set.

[Baroness Coussins]

My Lords, I declare my interest as an adviser to two drinks companies. Details are in the register. Is the Minister aware that the BBC has now withdrawn the programme from its iPlayer service, having acknowledged that in the original broadcast wildly inaccurate and exaggerated claims were made about the likely impact of minimum pricing? Can he assure the House that when the Government finally come to their conclusions on the issue, it will be genuinely evidence-based policy?

[Lord Taylor of Holbeach]

I thank the noble Baroness for drawing that to the House’s attention. I saw it this morning, so it must have been a pirated copy or something. I apologise if I misled the House, but, none the less, the programme did contain a particular inaccuracy about the calculation of the number of deaths that might be saved by a minimum unit pricing policy. Of course, that is the whole point of getting impact assessments right: so that we can consult on facts. But that does not reduce the effectiveness of the programme.

[Lord Taverne]

My Lords, having regard to strong results from Canada and from the Sheffield University research, which seem to indicate a very strong link between prices and the beneficial effects on hospital admissions, crime, absence from work because of alcoholism, and unemployment due to alcoholism, will the Government also consider a minimum price per unit of 50p, and will they link that with banning discounts, because the joint effect is all the more beneficial?

[Lord Taylor of Holbeach]

The consultation is likely to cover both those elements—when I talk about discounts, I mean the multi-buy type of arrangement. That may well be included. The Scottish Government have already come forward with the 50p figure, but there could be different figures. We need to ensure that we are getting the maximum benefit without unnecessarily impeding the business of retailing alcohol, which is a perfectly legitimate one, or the pleasure that most people get from restrained consumption of alcohol.

[Lord Winston]

My Lords, as a contributor from time to time to the BBC, I ask the Minister to recognise that occasionally the BBC withdraws programmes from iPlayer on the basis of just a single complaint, often not really related to the content of the programme. That may be important in the case of my noble friend Lady Bakewell.

[Lord Taylor of Holbeach]

I think I have made it clear that that does not, in my view, detract from the central thrust of the noble Baroness’s Question and, indeed, the programme: that excessive consumption of alcohol can be harmful and that we should take what measures we can to restrain it.

[Baroness Greengross]

My Lords, in acknowledging that there is a huge problem regarding older people and their intake of alcohol, will the Minister assure us that if the Government go through with these plans, the treatment that older people need to give up their habit will be at the same level as that for younger people with alcohol-related conditions, particularly given the change in the law since the beginning of October, which bans discrimination on the ground of age?

[Lord Taylor of Holbeach]

The noble Baroness raises an interesting question, which arose in the programme: a lot of people drink because they are lonely. The Government’s alcohol strategy is part of a broader strategy that needs to take into account the social support that is given to older people and indeed, if I may also say so, the rehabilitation of people who have had a lifetime of drinking to excess.

[Lord Naseby]

As the BMA consistently supports the moderate consumption of red wine, how will this measure affect those retailers who normally sell by the case, particularly, though not exclusively, in the wine trade, the unit price thereby quite often being considerably below the normal price of a single bottle, whether that be wine or beer?

[Lord Taylor of Holbeach]

I can reassure the noble Lord that the consultation is very much aware of that issue.

[Baroness Sherlock]

My Lords, is it true that more over-65s are admitted to hospital with alcohol-related problems than 18 to 25 year-olds? If so, what are the Government doing about this?

[Lord Taylor of Holbeach]

My Lords, that was one of the assertions in the programme—that the number had indeed increased—and it is a matter of concern. Although we have amused ourselves with this issue to some degree, there is a serious context in which we are discussing it.

[Lord Forsyth of Drumlean]

My Lords, at the risk of spoiling the consensus, will my noble friend explain how it can be right to make responsible drinkers pay more for their drink in order to deal with a problem that is perhaps best addressed specifically rather than by putting up the price for everyone?

[Lord Taylor of Holbeach]

Perhaps it is not so much a matter of putting up the price as of stopping the price dropping. The real price of alcohol has halved over recent years, which is a substantial reduction. I think the noble Lord would agree that some of the offers that are available to people are there to tempt them to buy more alcohol than they need.

Nuclear Waste

Monday 29th October 2012 Lords Chamber

Question

14:52

Asked By

[Lord Jenkin of Roding]

To ask Her Majesty’s Government what are their plans for a geological disposal facility for nuclear waste in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, government policy for the long-term safe and secure management of higher-activity radioactive waste in the UK, excluding Scotland, is to place it deep underground in a geological disposal facility. Our approach to implementing geological disposal is community-led. The Government are committed to voluntarism, working in partnership with areas that have come forward to take part in the site selection process. To date, three local authorities in west Cumbria have expressed an interest in that process, but the invitation for other communities to come forward remains open.

[Lord Jenkin of Roding]

My Lords, I am grateful to my noble friend for that Answer. However, as she will be aware, the local authorities have sent a letter, which I have seen, asking for a pause in the process of agreeing how this radioactive waste agreement might be reached. The letter recognises that:

“The economic future of West Cumbria is inextricably linked to the future of the nuclear industry”.

Will she assure the House that the outstanding issues listed in the letter are currently the subject of serious and positive negotiations? Given that it has been the policy of successive Governments that they,

“need to be satisfied that effective arrangements exist or will exist to manage and dispose of the waste”,

and given that there remains a possibility, however remote, that the Cumbrian authorities may not be able to reach agreement with the Government, will she confirm that the Government have a plan B?

[Baroness Verma]

My Lords, I congratulate the three councils in Cumbria. They are robustly engaged with the Government in ensuring that it is a community-led approach. We are also working closely with key decision-makers such as business, the unions and local Members of Parliament. As my noble friend knows, it is a staged process, and this pause has come about because the councils require some clarifications to be addressed. I am pleased that they are taking this issue so seriously. The process will take many decades, so a rushed response would actually not be helpful to anyone.

[Viscount Hanworth]

My Lords, our stock of plutonium waste would represent a valuable resource for power generation if we were to consider burning it in fast breeder reactors. Could the Minister tell us whether or not there are any genuine intentions to pursue this recourse?

[Baroness Verma]

My Lords, we are very serious about underground disposal. We are going to ensure that all the questions that are being asked are answered. We are working very closely with local authorities in Cumbria. We welcome other local authorities coming forward, but making sure that we safely secure radioactive waste is a serious question. That is the mission of this Government.

[Lord Avebury]

My Lords, I think my noble friend is aware that originally it was stated that the cost of storing plutonium was commercially confidential, but the Secretary of State wrote to me this morning saying that the cost is £1.9 billion, presumably only as far as 2020. When my noble friend receives the report from the Nuclear Decommissioning Authority on how to dispose of the plutonium, including the cost not only of storage but of credible alternative options, will that report be laid before Parliament and before the Select Committee on Science and Technology so that Parliament can have an opportunity of expressing its opinion before the Government make the final decision?

[Baroness Verma]

My Lords, my right honourable friend the Secretary of State would have given my noble friend a date of 2120, not 2020. The cost of storing plutonium is commercially confidential, but my department has assessed the cost of long-term storage alongside other options, such as MOX. Based on a discounted lifetime of 100 years, the cost is around £8 billion. My noble friend asked about the report being laid before Parliament. Once we have received the report, I am sure we will consider that.

[Lord O'Neill of Clackmannan]

My Lords, the noble Baroness has just taken on responsibility for this area. Will she share with us her first impressions? Most people who have followed this issue know that for decades there has been muddle, confusion and delay which, more than anything else, is likely to prejudice the voluntarism of a number of communities in west Cumbria that recognise, perhaps more than anyone else, the economic importance of proper and orderly disposal. That is not an excuse for delay. Will she please try to make this process move a lot more quickly so that the uncertainty can be removed?

[Baroness Verma]

The noble Lord is right that I have been in the department for seven weeks. My first mission was to go to meet people from Cumbria and Sellafield. It is important that we get some clarity, but it is also right that this process is community-led. If there are clarifications that need to be made, it is right that they are made. We do not want delays further down the process, so it is best that we get clarifications and sort out people’s worries and concerns at the beginning.

[Lord Wright of Richmond]

Will the Minister tell the House how much consultation is going on with our European partners, particularly with the French and Germans, on the disposal of nuclear waste?

[Baroness Verma]

The noble Lord raises an interesting point. Countries, including France, have opted for underground nuclear disposal.

[Lord Harris of Haringey]

My Lords, given the time that these discussions are clearly going to take, the absence of a plan B in the answer to the question asked by the noble Lord, Lord Jenkin, and the importance of ensuring that nuclear materials, whether waste or otherwise, are kept secure from those who might steal them, is the Minister satisfied with the resources available to the civil nuclear police to protect those nuclear materials, and is she satisfied with the arrangements whereby they can call on the assistance of Home Office forces in the event of any challenge to the security of those materials?

[Baroness Verma]

My Lords, to reassure the noble Lord and all noble Lords in the Chamber, I can say that safety and security are paramount to everything that we do. While we build consensus for underground disposal, it will be very important that everything kept above ground will be secure and safe. Of course, we will always be looking at security as time progresses.

Iraq: Chilcot Inquiry

Monday 29th October 2012 Lords Chamber

Question

15:00

Asked by

[Lord Dykes]

To ask Her Majesty’s Government what representations they have made to the chairman and secretariat of the Iraq Inquiry about possible delays in publication of its report due to responses from officials of the government of the United States.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

None, my Lords. The drafting of the inquiry’s report and the contents are entirely a matter for the inquiry, which is independent of government.

[Lord Dykes]

We remember, of course, the many thousands of Iraqi civilians, including women and children, who were killed after this illegal invasion. Will my noble friend the Leader of the House reassure the House that the Government will attach every meticulous attention to the contents of the report when eventually it is published? It is a very long process and the sooner it is published the better, but there is still a considerable delay. The particular implications of eventual submissions to the ICC should also be borne in mind.

[Lord Strathclyde]

My Lords, my noble friend is correct to draw attention to the report. I can confirm the seriousness with which the Government will accept the report. It perhaps is worth pointing out that Sir John Chilcot, the chairman of the inquiry, has advised that the inquiry will be able to submit its report to the Prime Minister once it has given those who may be subject to criticism in the report the opportunity to make representations to the inquiry before the report is finalised. The inquiry has concluded that it will be in a position to begin this process, known as Maxwellisation, by the middle of next year.

[Lord Tomlinson]

My Lords, in replying to the Question posed by the noble Lord, Lord Dykes, the Minister gave no reaction to the noble Lord’s use of the word illegal. Was that an oversight or does he agree with that analysis? If he does not agree with it, will he confirm that it was a quite legal action that we were engaged in?

[Lord Strathclyde]

My Lords, I would not want anyone to think that I was agreeing with either the word “illegal” or “legal”. The inquiry is taking an enormous amount of evidence, which, no doubt, will be published in several volumes. At that stage, we will be able to take a far better and more rigorous view as to exactly what happened.

[Lord Morris of Aberavon]

My Lords, if the report has been finalised, why will it take from now until the middle of next year for the consultations with those being criticised to take place?

[Lord Strathclyde]

My Lords, the inquiry has said that it is determined to be rigorous, fair and frank. It soon expects to be in a position to begin this process of Maxwellisation. Once that process is complete, the inquiry will submit its report to the Prime Minister. It is understood that that is unlikely to be until the latter part of next year.

[Lord Cormack]

My Lords, I share the concerns raised by the noble Lord, Lord Tomlinson. Does the Minister share my hope that at a very early opportunity after publication this House will have an opportunity to debate the report?

[Lord Strathclyde]

My Lords, I think that the House will have a great deal of interest in it—in fact, not just this House but another place as well. However, it is far too early to jump the gun on this issue. When the report is published, no doubt the usual channels will get together and I cannot imagine the circumstances in which we would not wish to give it a full debate.

Official Secrets Act 1989 (Prescription) (Amendment) Order 2012

Monday 29th October 2012 Lords Chamber

Motion to Approve

15:04

Moved by

[Lord Ahmad of Wimbledon]

That the draft Official Secrets Act 1989 (Prescription) (Amendment) Order 2012 laid before the House on 2 July be approved.

Relevant document: 7th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 23 October.

Motion agreed.

Electoral Registration and Administration Bill

Monday 29th October 2012 Lords Chamber

Committee (1st Day)

15:04

Relevant documents: 6th and 8th Reports from the Delegated Powers Committee, 5th Report from the Constitution Committee.

Clause 1 : Individual registration

Amendment 1

Moved by

[Lord Falconer of Thoroton]

1: Clause 1, page 2, line 8, at end insert “, but only if the Electoral Commission believes that the new electoral system is operating effectively”

[Lord Falconer of Thoroton]

My Lords, so many noble Lords are leaving—this is a disappointing reaction to such an interesting Bill, which goes to the very heart of our democracy. And still people leave, in such numbers that there is a blockage at both doors.

We on these Benches support the principle of individual electoral registration, as we indicated at Second Reading. Indeed, as has been pointed out on a number of occasions, we legislated for it in the Political Parties and Elections Act 2009, in the last Parliament. We believe that it is desirable to have a complete and accurate electoral register. We also believe that individual electoral registration is a system compatible with modern society, and we recognise that it is outdated to rely on the head of the household. In essence, the issue between us and the Government in this respect is how you introduce it, and the timing of how you introduce it. You have to make very sure that you are not losing too many people off the register before you introduce it.

Moving to individual electoral registration is a significant change; it is the right change, but it must be implemented correctly. The risks to British democracy if it is not are too great. So despite supporting the principle, as I have made clear, we have genuine concerns. Our amendments, to be debated over the coming three Committee days, have been tabled to reflect those concerns.

Data published by the Electoral Commission and the Electoral Reform Society and acknowledged in the Government’s impact assessment for this Bill show that anything between 3.5 million and 7 million people are missing from the electoral register. That is an unsatisfactory base to start from, but the Electoral Commission also predicts, and the Government have acknowledged, that the shift to individual electoral registration could see an initial further hit to the completeness of the register by up to 30%. Experience from Northern Ireland bears this out, although I accept that there may be special factors that apply in relation to Northern Ireland that may not apply on the mainland.

We need to do all that we can to address these issues and to ensure that the electoral register is as accurate and complete as possible. So the guidance provided for in Clause 1 is good, especially during the transition from one system to the other and in the early stages of the operation of individual electoral registration. We welcome the specific requirement on the face of the Bill, but our concern is over why the role of the Electoral Commission has been undermined. The Government’s Bill gives a very significant amount of decision-making power to the Minister while bypassing the Electoral Commission and Parliament. We feel that a five-year transitional period for issuing guidance may be too short; the Bill’s Explanatory Notes are no more certain than deeming it “likely” that the new system will have reached a “steady state” in five years. And how do the Government define “steady state”? Given the levels of uncertainty associated with the transition, we argue that at the very least the Minister should be advised by the Electoral Commission on whether the system is operating effectively before guidance is withdrawn.

The Electoral Commission is an independent statutory body operating outside the political system with responsibility for electoral matters. We feel that it has a proper role in reaching an objective decision on these issues and that this should be written into the Bill before us today. Amendment 36 calls for annual registration reports to be produced by the Electoral Commission, presented to the UK Government and laid before Parliament with time set aside for Parliament to debate each report. In keeping with the theme of this group of amendments, which is related to improving the accuracy and completeness of the electoral register, Amendment 36 also addresses our concerns about unchecked ministerial power and the bypassing of the Electoral Commission.

Finally, Amendment 59, which is the third amendment in this group, calls for the results of the ongoing data-matching pilots, to which the noble Lord, Lord Wallace of Saltaire, referred in his opening speech at Second Reading, to be reported and evaluated before the full transition from the old to the new register takes place. According to the Government’s implementation plan for the Bill published in July, data-matching pilots have been running since August 2012, and data-mining pilots to identify potentially eligible voters who are currently missing from the register will begin in early 2013. I anticipate that the Minister will reject our call for a delay until the results of these pilots are known but will argue that a second set of data-matching pilots be commissioned. We accept that the second set of data-matching pilots should be commissioned but will the Minister acknowledge the concerns of the Electoral Commission about the findings from the first? In its evaluation report, the commission wrote:

“Our main conclusion is that these pilot schemes do not provide sufficient evidence to judge the effectiveness of data matching as a method for improving the accuracy and completeness of the electoral registers”.

We are serious about the status of the electoral register and believe that all action should be taken to ensure that it is kept as up to date, complete and accurate as possible. We are serious about the most appropriate bodies and individuals being given the power to advise and issue guidance. We are serious about proper parliamentary scrutiny of an exercise of ministerial power, particularly in an area that is absolutely crucial to the effective working of our electoral system, as everybody agrees. We look forward very much to hearing what the Minister has to say in response. I beg to move.

[Lord Forsyth of Drumlean]

My Lords, I did not have an opportunity to participate at an earlier stage in this Bill but these amendments, particularly Amendment 1, which relates to the role of the Electoral Commission, about which the noble and learned Lord has spoken so eloquently, is very important.

The Bill sets out the rules that would apply for Great Britain. In replying to these amendments, will my noble friend give us guidance on where the Government are in respect of the changes which are being promised by the Scottish Government in the conduct of the referendum on independence? This is important because at the Scottish National conference the First Minister of Scotland said that he would bring in a Bill which would provide for a new electoral register which would include 16 year-olds. It would not provide for 16 year-olds being able to vote in the referendum who were already on the electoral register: that is, the so-called attainers who reach the age of 18 at a subsequent election in respect of the existing roll. My understanding is that the publicly declared policy of the Scottish Government is to create a new register, which would be based presumably on individual registration by 16 year-olds, expressly for the purpose of the referendum on independence. This seems to me to drive a coach and horses through what this Bill is about, which is establishing a uniform system throughout Great Britain. I just wonder what the Government’s attitude is.

15:15

Ministers are on record as saying that it would not be possible to have a new electoral register. I think that the noble and learned Lord, Lord Wallace of Tankerness, suggested this from the Dispatch Box in answer to a question from me during a Private Notice Question. However, my understanding is that that is the intention of the First Minister and that this is being done without any oversight by the Electoral Commission. What is the Government’s attitude to that, because the election for the House of Commons will take place a few months after the proposed date of the referendum? We will therefore have one register of 16 year-olds who will be able to vote on whether to smash up the United Kingdom, and then another when six months later the self-same people are told, “There is a different register of electors for elections to the United Kingdom Parliament, European elections and the rest and you can’t be on it”.

We seem to be getting into a bit of a mess here as regards whether the conduct of the register and its content is or is not a devolved matter. It seems to me that it is a reserved matter. However, by virtue of a private negotiation, Ministers have cleared the way for the creation in Scotland of a register that would include 16 year-olds and a change in the franchise that would have an impact, not just on people’s aspirations as to the franchise elsewhere but the register itself. One would have thought that the body which has responsibility for the conduct of elections, the Electoral Commission, would be central to ensuring that this kind of confusion does not occur.

I therefore have considerable sympathy for the noble and learned Lord’s amendment, which seeks to prevent any further dilution of the role of the Electoral Commission. I do not want to get out of order here but, for example, people keep telling me that the commission will be responsible for the referendum question. That is not what has been agreed. What has been agreed is that the Electoral Commission will be consulted as to the intelligibility of the question, not to its fairness, appropriateness and the rest.

I hope that my noble friend will give consideration to what the noble and learned Lord has suggested in looking at the role of the Electoral Commission. Perhaps my noble friend may be able to give us some reassurance as to what exactly the Government’s attitude is towards ensuring that we have a single, coherent, fair and properly co-ordinated electoral register throughout the United Kingdom for the purpose of carrying out all democratic procedures. I understand, of course, that referenda have been conducted on a different basis in the past, but this Bill, which is an attempt to try and pull this together, is somewhat remiss in not observing the elephant in the room—or, in this case, the elephant that is north of the Tweed.

[Lord Rennard]

My Lords, in the course of the Committee’s deliberations, it will become clear why I have considerable sympathy with what this group of amendments seeks to achieve. However, it is not right for the Electoral Commission itself to decide whether the arrangements for individual registration have been completed sufficiently well for the new system to be fully introduced and those registered only under the old system to be dropped from the voting registers.

A later amendment, Amendment 58, in my name and that of my noble friend Lord Tyler proposes to put this responsibility where it belongs—with Parliament. I accept, however, that many of us would in any event be properly guided by the Electoral Commission’s view as to the accuracy and completeness of the electoral register at the time. What is most clear to me is that we simply cannot proceed with elections and boundary reviews based only on the new individual election registration processes if the voting registers resulting from these new processes are significantly less complete than they are now. I discussed this very point with the former Minister, Mr Mark Harper, who said that he understood the difficulties of trying to conduct elections in 2016 if the voting registers were essentially “not fit for purpose” at that point.

There are of course important elections in 2016 to the Scottish Parliament, the Welsh Assembly and many English local authorities, as well as the next review of Westminster parliamentary constituencies, that should, under the terms of this Bill, be based on voting registers exclusively compiled on the basis of individual voter registration as at 1 December 2015. We cannot be sure at present that the new registration system will be working sufficiently by then. I should therefore be grateful if, later, the Minister could tell the Committee what consultation there has been with the Scottish Parliament, the Welsh Assembly and the Local Government Association over the major changes to electoral processes that are due to have come into effect in full by May 2016.

The debates on this Bill both in the other place and at Second Reading in your Lordships’ House have shown that the timing of full implementation is a matter of intense controversy.

[Lord Wigley]

Is the noble Lord aware of any consultation that there has been with the National Assembly for Wales on the implications of these changes for the next round of elections?

[Lord Rennard]

That is exactly my point. I am unaware of any consultation on this issue. I have asked a number of times by correspondence what consultation there may have been with the Scottish Parliament, the Welsh Assembly or the LGA, which is responsible for local elections. It seems that these bodies are unaware that, through the Bill, there will be significant changes to the electoral arrangements for those elections in May 2016. I believe that they should be aware of them and their view should be part of our consideration of this Bill.

As I said, the principle of IER is not really in dispute between the parties. All the parties agree the principle of it, and they agree that a household-based system is insecure, inadequate and leads to inaccuracy. However, the question is how you get from that system to a more secure and more rational alternative without losing from the register lots of people who are legitimately entitled to vote.

In that objective, the noble and learned Lord, Lord Falconer of Thoroton, the noble Lord, Lord Wallace of Saltaire, and I are all agreed, but the question is: what if we have not achieved our objective by 1 December 2015? I am convinced—and the Electoral Commission warns us of this—that there is a real possibility that we will not have achieved our objectives by 1 December 2015. Furthermore, I am convinced that the possibility of failure will be lessened if we do not in this Bill sign up to full implementation by then, irrespective of what progress is actually made on implementation in the next few years. In other words, a strong signal will be sent to government if they have to make this system work before it is fully implemented. I think that it would be invidious to expect the Electoral Commission, on its own, to push the “go” button on the final parts of the transition to IER. Therefore, to help to ensure that the stated objectives are met, I would prefer to see provision made to permit Parliament effectively to extend the carryover of voters from existing registers for a further period if, in the judgment of Parliament, the register is not in a sufficiently complete state on the basis of individual registrations alone. On that basis, we do not support Amendment 59, as we believe that there is a better, alternative approach, which we will set out when we reach a later group.

Turning briefly to Amendments 1 and 36, I should like to see the Electoral Commission reporting in this way, as it would inform our future debates. However, these reports themselves would be of little value if there were no possibility of Parliament providing for carryover to continue beyond 2015. Likewise, the capacity of Ministers to give guidance to electoral registration officers is of little value if the law says that electors on existing registers in their area should be removed from future registers, even if Parliament is not satisfied that we have been able to get a proper alternative registration system in place.

In due course, I hope that all concerned will accept that Parliament should have the final say on whether we are succeeding sufficiently well in our aims of having an accurate and complete electoral register before we exclude unnecessarily from the voting rolls perhaps several million people who will still be legitimately entitled to vote. We will not be able to make that judgment until we see how the new system is working.

[Baroness Jay of Paddington]

My Lords, like the noble Lord, Lord Forsyth, I regret that I was unable to take part on Second Reading, but since that debate the Constitution Committee, which I have the privilege of chairing, has issued its own report on the Bill. The report very much echoes some of the points that have just been made by the noble Lord, Lord Rennard. Overall, the Constitution Committee sought to impress on today’s Committee that the Government need to do everything possible to ensure that the completeness of the electoral register is matched by its accuracy. Concerns were raised—I know from reading the Second Reading debate—about the way in which the impact might fall heaviest on areas of urban population where, for example, many people in private rented accommodation—ethnic minority people, the young, and so on—might be unnecessarily excluded in the pursuit of the completeness, which might not necessarily reflect the accuracy and vice versa of the new register.

Although I take the point made by the noble and learned Lord, Lord Falconer of Thoroton, that there may have been special concerns and reasons in Northern Ireland, it is worth noting that the accuracy of the register fell by nearly 10% when individual registration was first introduced. The other major point that applies to this group of amendments—again I am echoing the noble Lord, Lord Rennard, and the concerns raised by the Constitution Committee—was about the necessity not to express many of these important concerns in guidance. The committee was concerned that there should be much greater parliamentary oversight of the introduction of the new register and that these matters should be put in regulations. We felt that for the Secretary of State to be able to determine requirements for exercising the right to vote without effective parliamentary oversight would indeed be constitutionally improper.

[Lord Maxton]

My Lords, I begin by apologising to the Committee because like the noble Lord, Lord Forsyth, and the noble Baroness, Lady Jay, I did not speak on Second Reading. I had a specific reason for not doing so. I was on the list to speak but unfortunately I was in the Information Committee. I thought that the business would go on longer but I suddenly realised that I could not make it into the Chamber in time to hear the beginning of the Minister’s opening remarks. I was therefore asked not to speak on Second Reading. I apologise to the Committee for making that mistake. The danger is that now I will fall into the trap of making the Second Reading speech that I would have made.

The noble Lord, Lord Rennard, in particular, roused me to my feet as I have one simple point to make. The Bill is designed to stop fraud and ought to be designed to encourage people to vote, and there is one simple way to deal with that. Unfortunately this House and the other place both voted to get rid of that simple way of dealing with this matter, which was the introduction of an identity card—a general register of all people. It would have been a compulsory identity card for everyone. It would have ensured that everyone was on the central register and we would not be in this position. The noble Lord, Lord Rennard, led the campaign, as much as anybody did, against ID cards, which was a major error on his part. By the way, the technology on ID cards, or smart cards, has moved on extensively even since we abolished the proposal less than two years ago. Now we could have a smart card that would ensure that people were on a central register and the register itself would divide and set up online registers for the whole of the country. Each constituency would have a register, not completed by a registration officer or by individual registration but automatically: by pressing a series of buttons on a computer it would come up with the right answers. Each individual would be able to vote only by producing an ID card. This would stop a great deal of fraud, provide a workable system and, I hope very rapidly, we would move to voting electronically and using the ID card to register our votes.

15:31

It is absurd that on “Strictly Come Dancing”—where although the results are announced on the Sunday they are known on the Saturday—every individual voter can use their mobile phone, their home phone, their computer or whatever it might be to register their vote. However, what do we do when voting in a general election? We go traipsing off to a school and are given a pencil with which to put a cross on a piece of paper. To many young people—and to people like me who are perhaps more technologically aware than others in this place—that view of how we should operate in this country is out of date and old fashioned. As a result, we are making ourselves—and, unfortunately, our system of democracy—look foolish.

We are in danger of damaging or threatening our democratic structures if we do not move toward reintroducing an ID card, reintroducing a central register and then moving quite quickly towards people voting electronically—first perhaps in one place and then, secondly, wherever they are capable of using an ID card which identifies them as being eligible to vote.

I remember being on the Culture, Media and Sports Select Committee in the other place when the contract for the lottery came up for renewal. Camelot, of course, retained it, but one of the companies said that it would introduce a system which would not only enable people to play the lottery on their computers but also to vote using their computers, should the Government eventually move towards that facility. I left the other place 11 years ago, so it was probably possible to do this 13 or 14 years ago. Technology has moved on fast since then. Surely the Government should withdraw the Bill, look again at ID cards and see what they can do in regard to a central register.

[Lord Tyler]

My Lords, I hope the noble Lord, Lord Maxton, will forgive me if I briefly return to this group of amendments.

I was looking forward today to a tour d’horizon by the noble and learned Lord, Lord Falconer, with historical analogies, assessments and context, because, as it happens, I am celebrating my birthday today and I thought this would be highlight of the day. I am sorry that the noble Baroness, Lady Gould, is not in her place because she shares my birthday but is not sharing the wonderful experience that we usually have.

The history is important because the discussion on this group of amendments is all about monitoring success and measuring progress rather than the principle of IER. There is unanimous support and—dare I use the word?—consensus in this House that we have to move. The previous Government said so and this Government say so. It is a question of timing and getting it right, a point made by the noble and learned Lord, Lord Falconer. I am therefore disappointed that he did not refer to the past history and how we got to where we are. It was in 2003 that the Electoral Commission advised Parliament that it was necessary to move in this direction to improve the accuracy and completeness of the register and it took five years, as the noble Lord, Lord Wills, will know only too well, for the previous Government to take this issue seriously. We would not be having the suggested problems if it was not for the fact that that delay took place under the previous Administration. It is disappointing that the Labour Benches have not been able to recognise that that delay has made it more difficult to achieve success.

That is not least, of course, because during the nine years since 2003, the existing register based on household head registration has dropped dramatically. It is less complete and less accurate than it was when the Electoral Commission first made its recommendation. Until a matter of months ago we had all assumed that the existing register was something like 90% accurate; it is somewhere around 80% accurate. As I pointed out during the Second Reading debate and as the noble Baroness, Lady Jay, has said, in some areas it is much lower than that for the reasons she so eloquently expressed. The delay has made the situation more difficult, and in assessing the progress we must now make, your Lordships have to take that into account.

[Lord Foulkes of Cumnock]

Do the experiments in Glasgow and elsewhere not show that if the local authority is given the necessary resources to go around and canvass to make sure that there are returns, the percentage is much higher? Is it not because of the cuts in local authorities’ expenditure that they are not able to do that as effectively as they used to?

[Lord Tyler]

That is for a later part of the Committee stage, but I have sympathy with the point made by the noble Lord. Indeed, I pointed out at Second Reading that the London Borough of Hounslow has done incredibly well over recent years, despite the difficulties that most local authorities have been facing. Hounslow has used a whole number of positive and negative ways to encourage people to register. It is not just where these things happen; it is the degree of attention that the local authority is able and willing to give to these matters.

As my noble friend Lord Rennard has indicated, we have a later amendment which we think would bring back to Parliament the last word in pressing the go button, particularly for 2016. I think that that is more appropriate than asking the Electoral Commission to be, as it were, judge and jury in its own case.

[Lord Wills]

My Lords, as always it is a pleasure to follow the noble Lord, Lord Tyler, and particularly so on his birthday. I should like to take this opportunity to wish him many happy returns. I am surprised, though, that in his interesting history of the previous Government’s legislation in this area he omitted to mention that the Political Parties and Elections Act 2009, to which my noble and learned friend Lord Falconer referred, was agreed as being the best way forward by the Conservative Front Bench in opposition and by the Liberal Democrat Benches in opposition. We have still not had any explanation of why that agreement has been ditched and we have to spend the time of this House and the other place on this new legislation. Perhaps he will return to that in due course and explain to those of us who are still mystified by it exactly why that was the case.

I support these amendments, which have been so ably spoken to by my noble and learned friend Lord Falconer. They all go to mitigate what many of us think are the risks of a decline in levels of registration as a result of this legislation. There is no certainty that the levels will decline, but we feel that there is a risk of that. We do not know whether the Government agree because so far they have studiously avoided saying whether they think there is any risk, but what we do know is that they are commendably committed to a comprehensive register. They have said that many times and I think we all agree on that. We also know that, again commendably, they are bringing forward a number of measures to that end, and they have the support of almost everyone in the House for those measures. But what we have also learnt is that they seem to feel that a level of registration of 85% to 87%—in other words where there would be 6 million people who would be eligible to vote but who would not be on the register—is a level of completeness that, in the words of the noble Lord, Lord Wallace, in an email to me, is, “as complete as is reasonably possible”. That at least indicates that they think there is some considerable difficulty in achieving a truly comprehensive register. We do not know exactly why the Government will not say whether they think there is any risk of a decline in levels of registration as a result of this legislation. It may be because they actually think that there is no such risk but that it would be imprudent for a Government to commit themselves in that way. It may be that they have done some work which shows that there are considerable risks inherent in the legislation, but again they do not want to tell us.

Governments are not infallible. Amendment 36, which I particularly support, offers Parliament the opportunity to assess the Government’s record in this area. This amendment would commit not only this Government but subsequent Governments. This Government may not be in power after 2015 so this amendment would commit a future Labour Government to bring before Parliament the opportunity to scrutinise levels of registration and, if necessary, to produce remedial measures. I think Parliament should have that opportunity.

This is not a minor technical matter, although some of the details are technical; it is about the very wiring of our democracy. The outcome of general elections depends on electoral registration. There are worries on this side of the House that this legislation, coupled with the PVSC Act, will lead to partisan outcomes in levels of electoral registration. These are important issues and Parliament ought to have the opportunity to scrutinise them regularly.

The Minister may say that the Electoral Commission will do its usual good job in bringing forward annual reports on the state of electoral registration and then it may be for Parliament to discuss the matter if it so wishes, but I hope that the Minister will not rely on such an argument. That would be to downplay the importance of this issue and the risks inherent in this legislation. I hope that the Government can agree with what is actually a modest amendment and allow Parliament the opportunity to scrutinise levels of registration on an annual basis.

[Lord Dobbs]

My Lords, it is a great pleasure to follow the noble Lord, Lord Wills. I always listen very carefully to what he says but on this occasion I must take a rather different view of him. The cat was rather let out of the bag this morning by the BBC, which said that many Members of this House, and indeed the other place, regard this Bill as being a partisan, party-political Bill—a conspiracy on the part of the Conservative Party to extract maximum electoral advantage. This Government have been accused of many things but being part of a Conservative Party conspiracy to extract maximum electoral advantage is not a characteristic that they display daily.

Clearly the Bill is of considerable importance. It gives more effective meaning to the principle of “one voter, one vote”. It is just too important to be played for party-political advantage. Indeed, from my point of view, it stands alongside redistribution of boundaries in ensuring that elections are fair and balanced. Surely it is no fault of this side of the House—at least this party—that at the next election the principle of “one voter, one equal vote” may not apply, although I live in hope that my colleagues in the coalition may yet see the way to a liberal dose of common sense and just a smidgen of consistency even on that issue.

Of course, the important question is: how do we measure the success of this Bill? I share the concern expressed by the noble Lord, Lord Wills, and other noble Lords that numbers are falling as a result of the current system of electoral registration. Figures of 3 million or 6 million missing voters have been mentioned. Indeed, the noble and learned Lord, Lord Falconer, mentioned 7 million, which is a figure that I had not seen before, but I suspect that voters are rather like those pesky badgers: every time you turn around there are more of them than you thought.

The noble Lord, Lord Wills, is right that everyone who has a right to vote should have a vote. It is that simple, yet surely it is not just a matter of numbers, which he concentrated on; it is also a matter of accuracy—that those numbers should be the right numbers. So many of the amendments that have been put down to this Bill emphasise completeness rather than accuracy; for instance, Amendment 36 talks about the Electoral Commission producing,

“a report on the accuracy and completeness of the electoral register”,

but it goes on to emphasise that what it is really interested in are “variations in registration rates”.

The current system is wide open to abuse. There has been a huge recent increase in postal votes on demand, which has opened up much scope for fraud. The problem is going to grow with the increasing growth in the private rented sector. The noble and learned Lord, Lord Falconer, and the Constitution Committee have implied that fraud is rare. However, I go back to stating that proven cases of electoral fraud are rare but of course it is incredibly difficult to prove that electoral fraud has taken place. Whether such abuse happens is not entirely the point. Our electoral system should be made as secure as possible. My concerns are not entirely hypothetical, as we can all quote cases of politicians of all political colours who have been convicted recently—

15:45

[Lord Maxton]

What the noble Lord is saying agrees with exactly what I have said. It seems that the identity card solves both the problems he is talking about. It ensures both accuracy and that the person who is registered is the person who is registered and not somebody else. It eliminates fraud.

[Lord Dobbs]

I recognise the noble Lord’s commitment to the identity card, but he is making a Second Reading speech rather than dealing with this amendment. There are many different ways to justice on this. I am sure we are all interested in having a robust electoral system at the end of the day but I am not sure that we have that at the moment. When postal votes are handed out like ice cream on a summer’s afternoon, it is not surprising that we have discovered cases where various people get their hands rather sticky.

We also seem to be tying ourselves in knots in this country in an attempt to prevent criminals from getting the vote. However, for a criminal to vote under the present system is the easiest fraud in the world. There are no checks in our electoral system as it is at the moment to see whether anybody on that electoral system should no longer have the right to vote because of a conviction. I hope that the Minister will be able to give attention to this and introduce some effective form of data-matching to make sure that that is no longer a problem.

I do not want to delay the Committee, but I want to give a couple of meaningful statistics that have been kindly provided to me from the Library. Postal votes nowadays account for a huge chunk of electoral turnout. In most constituencies the number of postal votes average around 10,000, which sometimes amounts to well over 20% of the total turnout. In some constituencies it is more than 30% of the total turnout. The 25 most marginal seats in the country are decided on majorities of around 500 votes or fewer. Quite clearly, it is more than possible for a fractured postal voting system to decide the outcomes not only of many constituencies but of an entire general election. We cannot turn a blind eye to the possibility that all the efforts we put into general elections could be turned over simply because of a very poor postal voting system.

Those who emphasise the need to get the maximum number on the register have all my sympathy. Let us by all means talk about numbers and get those numbers up. However, let us make sure that they are the right numbers.

[Lord Wigley]

My Lords, I apologise also for having missed Second Reading, for family reasons on that occasion. I will just throw in two or three examples of the dangers of fraud that have arisen from the comments of several noble Lords this afternoon and which any revision to the system must take into account.

First, whichever way a register is compiled, if it involves a canvass, those who are involved in undertaking that canvass could be open to pressure or could indeed be exerting influence. Forty years ago this year, I won a seat on a local authority by just some 50 votes out of a register of 8,000. To our great surprise, when the next register came out there was a reduction of several hundred voters in our ward. We attempted to see the correlation between our votes and those that had disappeared; there was something like a 70% correlation. What had happened was, yes, that forms had been dropped into every house, as they should have been, but in certain houses the knock on the door to pick them up was very light and they were not picked up. They had a right, of course, to take those forms in or to post them in but people did not do so. That was one avenue of fraud.

Another example, which noble Lords will be well aware of, is the pressure that is put on people with postal votes in a personal manner. In certain elections in my own area, I am aware of a motorcade following the postal van that was going around. As the postal votes were dropped, there would be a knock on the door: “Hello, Mrs Jones, can I help you? Do you want a witness? Do you want me to post this for you?”. The pressure that can be put on in that way obviates all the efforts that are made to ensure that we have a fair and reasonable system.

The third example that I would mention is, again, one that your Lordships will be very much aware of: the pressure that people felt at the time of the poll tax. Many people wrongly thought that there was a correlation between the right to vote and being on the register and there was a massive reduction in the number of people on the register. The outcome of the following general election was held to be because of the reductions in key constituencies that would have made a difference to that outcome. Often, as has been mentioned, those in private rented houses may have thought that they might avoid having to pay so much poll tax and were, in that case, avoiding being on the register. Other circumstances as well could lead to people wanting not to be seen at certain addresses. All these factors have to be taken into account when dealing with these sorts of changes.

I welcome the provision in Amendment 36, particularly its second half, to make sure that there is a relationship with the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly because there is a bearing on the elections that take place there, particularly in 2016. Careful thought needs to be given as to how things roll out in that year. However, we need to look even further at how we can ensure that the system is absolutely watertight.

[Lord Wallace of Saltaire]

My Lords, we have almost been having another Second Reading debate. Since this is the beginning of Committee, perhaps I might be allowed to say a few general things before answering on these amendments. As a number of noble Lords have already said, across the parties we all share an interest in restoring as far as we can the accuracy and completeness of the register as we go through this transition. We also share the principle of that transition: that we should be moving away from a household system of registration dating from the 19th century, when only the head of the household was allowed to vote, to one which is much more appropriate to the more varied households and the different relationship between the citizen and the state which we have today.

Over the summer, I have talked to a number of electoral administrators and read a fair amount. I would like to say a few things on that. I was struck by the strength of feeling that some electoral administrators have about making a faster shift to individual electoral registration than the previous Government proposed. It is faster, cheaper and clearer but we all understand that how we manage the transition is key. I remind the noble Lord, Lord Wills, that the transition in Northern Ireland was a big bang; here, we are taking it over more than two years. We all share the interest in getting this right, which is what these and some later amendments touch upon.

I hope that noble Lords will have seen a couple of interesting pieces of research that were published over the summer. There was, for example, the article published by Parliamentary Affairs in August on The Quality of the Electoral Registers in Great Britain and the Future of Electoral Registration.

It states that,

“the estimated level of completeness of the December electoral registers has fallen since 1950: dramatically so over the last 10 years”.

In other words, we already have a problem. The completeness of the register has fallen quite remarkably in the past 10 years. The noble Lord, Lord Wills, said that he did not like the phrase,

“so far as is reasonably practicable”,

but that recognises that we may not be able to get back to the wonderful period of the 1950s when the level was up to an estimated 95%. However, we certainly hope to restore as far as we can a percentage in the high 80s rather than the one in the low 80s to which we are heading.

Another weighty piece of research, undertaken for the Government and published in July, is on Under-registered Groups and Individual Electoral Registration. Among other things, it states that the motivation to register is closely associated with the motivation to vote, which should be sobering for all of us. Those who are not interested in voting are, of course, not interested in registering either. That is one of the strongest correlations in lack of interest or resistance to registration. We all recognise that turnout has fallen during the past 25 years. Party membership has fallen remarkably during the past 25 years. That is a much wider issue, which we again all share, of regaining the confidence of our electorate and persuading people to vote.

Both pieces of research show some interesting things. Age is the biggest single differentiator of registration; social class is not—I say this to Labour Peers in particular who may worry that there is a real differentiation between classes. However, we know that housing tenure and frequency of moving are a major differentiator and that young people in private rented accommodation are the hardest group to get at. There is some evidence that recent immigrants to Britain—people who are not British citizens but are EU or Commonwealth citizens—represent a disproportionate percentage of those who are not currently on the register but should be.

There are also some large issues around social change which I have discovered in talking to people who are concerned with this. Doorstep canvassing was much easier a generation ago than it is now. Fewer people are in; both members of a household are working; or it is a single-member household and that person is out working. People actively resist talking to a doorstep canvasser and think that they are interfering. Among the reasons why we think the annual canvass will in the long run have less utility are precisely those sorts of social change. Gated communities are more common. We were told that 24,000 households in Wandsworth, many of them the new flats going up along the river, are behind gated entrances. All of us who deliver leaflets and canvass know how much more difficult it has become in recent years to get into private accommodation and blocks of flats. That also makes it more difficult to discover who is there.

There are difficulties of communicating with young people. I have been told robustly, not only by electoral administrators but by friends and other parents, that young people do not answer letters. In particular, young men do not even pick up letters addressed to “The Householder” or “The Occupier”; you have to get at them if you can via their iPhone because that is something that they are more likely to answer. That is one of the reasons why among the experiments which we are undertaking is the introduction of online registration. A number of noble Lords came to see the demonstration that we offered. That is clearly the direction in which we have to go, in particular to catch the younger generation.

15:59

The data revolution itself offers real potential. We are attempting to reach that potential with data matching and mining at the moment. I was offered an extremely valuable briefing by the head of the Government Digital Service last week about what will be possible within the next four or five years in closer data matching and mining. I must say to the noble Lord, Lord Maxton, that some large questions will be raised with the liberties and privacy lobbies about how far public and private data sets are compared. So a number of things are changing. The data-matching pilots that we have conducted so far have been remarkably successful and have enabled us to match a good two-thirds of the names on the register with those provided on the DWP database.

However, we are dealing with voluntary registration. The noble Lord, Lord Maxton, wants to move us towards, in effect, compulsory registration. I note that he also wants us to move from local registers to a central register. Those are large changes in the traditional and established relationship between the citizen and the state. I think they go wider than this Bill. I was struck by that as I had to answer a Question some months ago on the wonderful experimentation in Georgia in the caucuses. Computers have been introduced there whereby the citizen can interact with every single agency of the state with which the citizen operates. Some enthusiasts for that system, including the Cross-Benchers, did not seem to understand that that would mean the state had all the information on you pulled together in one single entity. That is, again, not something that the citizens of this country would be entirely happy about. The outcome of the data-matching pilots so far has been very encouraging.

On the Scottish issue, I assure my noble friend Lord Forsyth that the agreement on 16 year-olds voting is limited entirely to the Scottish referendum. It does not apply to UK voting the following year. On the amount of consultation with the devolved Administrations, the Scottish Government have passed a legislative consent motion and the Welsh Assembly responded to the consultation on IER—so there has been consultation. Of course, there has been a great deal of consultation with local authorities within England as well.

[Lord Forsyth of Drumlean]

I asked my noble friend a specific question. I fully appreciate that the agreement reached by the Prime Minister in Edinburgh allowed for the Scottish Government to extend the franchise to 16 year-olds, but I think that my noble friend’s namesake, our noble and learned friend Lord Wallace of Tankerness, told the House that the Scottish Government would not be able to have a new electoral register: they would have to use the existing register. So I asked what the Government’s view is of the declaration by the First Minister that he intends to bring forward a Bill to create a new register for all 16 year-olds who would be able to vote on the referendum. For the first time in this country, we would have a devolved register that applied to the referendum and a register that applied to general elections. That is a constitutional nonsense. Are the Government content for that to happen?

[Lord Wallace of Saltaire]

I said that registers are compiled and kept locally. We do not have a single, central national register—to the deep regret of the noble Lord, Lord Maxton. There is some room for at what stage one puts what we call the attainers—those 16 and 17 year-olds—on the register. There are some differences already between local registers. I am struck by the strength of the difference between the electoral registration forms that I have seen from different local authorities. We do not have in the United Kingdom a single centralised approach to electoral registration.

[Lord Foulkes of Cumnock]

I do not think the Minister quite understands what is happening in Scotland. It may be that, whereas the UK Government are consulting with the devolved Administrations, perhaps a devolved Administration are not consulting with the UK Government. As the noble Lord, Lord Forsyth, said, our understanding from the media is that the Scottish Government are publishing a Bill that will allow people who are 16 years old on the date of the referendum—that is, some time in October 2014—to vote. That means an entirely new cohort of people on the register. It means going round to find out where people who are now 14 and 15 year-olds are, getting them on to a register, publishing the register—locally, as the Minister said. How is that to be done? Has he been consulted about that? Has he made any comments about it? Does he know what is going on in Scotland?

[Lord Wallace of Saltaire]

My Lords, I do not follow the Scottish media as closely as the noble Lord, Lord Foulkes, and it is very difficult for the Government to ask to be consulted on reports in the Scottish media. I will have to write to him on the detail of something which may or may not be what the Scottish Government are proposing if it has so far appeared only in the Scottish media.

[Lord Forsyth of Drumlean]

My Lords, let us forget about the Scottish Government for a moment and think about this Government. I was given an assurance by the noble and learned Lord, Lord Wallace of Tankerness, that the extension of the franchise to 16 year-olds would apply only to attainers—that is, to people on the existing register. Is that correct or not?

[Lord Wallace of Saltaire]

To be absolutely sure that I am entirely consistent with my namesake, I will write to the noble Lord when I have checked as thoroughly as I can to ensure that I am entirely accurate.

[Baroness Jay of Paddington]

To follow up the original question of the noble Lord, Lord Forsyth, which is a question of constitutional relevance, however the register is achieved—whether the attainers are dealt with from one particular date or another—is not the point the inconsistency between that referendum franchise and the one then applicable for Westminster elections and how will that be dealt with?

[Lord Wallace of Saltaire]

In allowing 16 year-olds to vote in a Scottish referendum, we are making an exception. That is evident; that is part of what has now happened. We have a register which has various people on it with different circumstances. There are those EU citizens who are entitled to vote in local and European elections but not national elections; there are Members of this House, who are entitled to vote, similarly, in European and local but not in national elections. So there are already some variations between categories on the register. I will check as thoroughly as I can on this to ensure that I am entirely accurate on a point which, I fully understand, is important.

Perhaps I may now turn to the three important amendments. The issue at stake for all of us is how confident we are that we will manage the two-year transition and what we do when we reach the end to ensure that we have gone all the way through the transition. The reason for having a two-year transition is precisely to ensure that we are successful as we come to the outcome. The Electoral Commission will be following that very closely. We will be reporting back to the House on how the new system operates, so we are confident that by the autumn of 2015—with, as the noble Lord, Lord Wills, correctly pointed out, a different Government, or certainly a new Government, in place—we will be able to make a full transition.

Amendment 1 asks for guidance to be maintained for registration officers beyond the five-year period. Again, we are into questions about central direction and local autonomy for registration officers. Having spoken to a number of electoral administrators, I have considerable sympathy for the strains under which they work and the efforts which they put in to maintain as complete and accurate a register as possible. We will come back to the issue of how electoral registration is maintained on our third day in Committee.

We will of course continue to monitor and assess the effectiveness of the system during the five-year period, but we are confident that at the end of it the transition will have been fully taken through and we will have achieved a relatively stable system. When I say “stable system”, I say to the noble Lord, Lord Maxton, that I am also confident that we will have moved to a considerable extent towards an online system. I recall telling the House some months ago that the DWP expects that the number of its customers who interact with it online will have moved from some 20% to some 80% over the next 10 to 15 years, so we are in a system in which we will be moving from paper and letters to online interaction. I am also confident that we will find that data matching and data checking will become more and more constructive and accurate as a means of checking whether someone who registers is precisely who she says she is.

[Lord Maxton]

Surely the point about data matching and so on ought to be that people go on the register rather than the other way round. Rather than checking whether or not someone is accurate, there ought to be a way of putting people on to a register and then saying to them, “Are you the person who the register says you are?”.

[Lord Wallace of Saltaire]

The noble Lord is asking some very large questions that of course relate to his preference for having a central register for all citizens, which would mean an ID card. That is rather larger than the remit of the Bill, as he well knows. Over the two years we will be conducting some further data matching and data mining to confirm existing electors. There will be individual invitations to those who are not confirmed by this process—in other words, concentrated individual canvassing rather than an overall individual canvass—a full household canvass in 2015 and a carry-forward to protect those who have not been contacted by the 2015 general election. There will be a civil penalty to encourage applications and the change will take place at the time of the next election when there will be the highest amount of popular interest in politics. I think I recall correctly that in the run-up to the previous general election some 500,000 additional voters registered in the two to three months before the election. That will bring a number of people back on to the register. We are confident that the efforts that will be made during the period of transition will complement each other to a point where we have reached at least the current level and, we hope, a great deal more.

On Amendment 36, as we go through this transition, the Electoral Commission will be carrying out research to give us measures of how well we are doing and to give us an after-measure using the December 2015 measures. We are confident that we can rely on the Electoral Commission to give us the figures that we need.

[Lord Wills]

Before the Minister leaves that amendment, will he say why, as I gather he is resisting it, he wants to deprive Parliament of the opportunity to debate what the Electoral Commission finds and propose remedial measures if necessary? Is he so confident in what he is producing, or is there some other reason why he does not want to give Parliament the right to scrutinise that report?

[Lord Wallace of Saltaire]

I envisage that Parliament will continue to scrutinise this as it goes through. I recognise that this is a concern for the whole House, and it may well be one of the things that we need to discuss off the Floor between Committee and Report. The Government are not convinced that we need to have an absolute point at which Parliament says yes or no to the entire transition, partly because, if we have gone through the two-year to three-year transition, there is the question of what the alternative should be if you have not gone far enough. That would mean a much more out-of-date register, which we would know would be extremely inaccurate by then if we failed to carry through. For myself and for the Government, we prefer a process in which a dialogue will be continuing as we go through the transition. A number of experiments will be taking place at that time to ensure that we achieve the aim that we all need. We are confident—

16:15

[Lord Falconer of Thoroton]

Will the Minister remind the House of the legal provision in the Bill which would allow the Government to retreat from compulsory individual electoral registration if everybody agrees that the transition has not worked and there is an unacceptable reduction in the completeness of the register? The Minister is talking as if the transition is bound to succeed, but everybody accepts that it might not. What happens if it does not?

[Lord Wallace of Saltaire]

My Lords, I said at the beginning of my speech that we have been suffering from a decreasingly complete and accurate register over the past 15 to 20 years. The current register is very imperfect. That is the reason why I hope that we all agree that we need to make this transition. If we were to come to a point halfway through the process where we recognised that there were some severe problems, we would have to look at those problems because the current register is increasingly suffering from inaccuracy and incompleteness.

[Lord Falconer of Thoroton]

Will the Minister confirm that there would need to be a new Act of Parliament at that point?

[Lord Wallace of Saltaire]

I will have to consider that and come back to the noble and learned Lord. I recognise that part of the reason that we are resisting this is because if you then say no to the transition, what do you go back to? That is something that we clearly need to think through.

[Lord Rennard]

There is a precise and important point that relates to this amendment. Will the Minister confirm that there is no provision in the Bill if we come to that conclusion that the system is less satisfactory than the present system? We know that the present system is far from satisfactory at about 82% complete. If under the new system IER is only 65% complete and there is no provision in the Bill to deal with that problem then, would it not be better to have some provision so that Parliament could look at the issue rather than just the Government deciding whether to start again with a new Act?

[Lord Wallace of Saltaire]

I think I need to take that away as well. If we were to go back to the old system, we would face the risk that we were retaining a much larger number of inaccurate and fraudulent entries in the system. Part of the reason for this Bill is to remove those fraudulent entries.

[Lord Rennard]

I do not wish to sound pedantic in relation to this issue, but it is not a question of going back to the old system rather than using the new one. The amendment that I have tabled for discussion later on is about whether the carryover from the old register needs to be continued for longer. It may be that if we have not succeeded with IER in the way that we hope, we might continue with the carryover for rather longer. That is a decision that Parliament should take at the appropriate time. It cannot take it during the passage of this Bill because we will not see how the data matching and data mining pilots have succeeded. We will not have that information, but we should have that information, and decide on it, before full implementation, by which I mean ending the carryover.

[Lord Wallace of Saltaire]

I recognise that we shall come back to some of the issues that have been raised when we come to debate the noble Lord’s Amendment 58, which we have almost been debating. The question of a further carryover at that point will unavoidably involve carrying over a large number of names about which we will all have less and less confidence because they will be people with whom electoral administrators have had no contact for the previous two years, in spite of considerable efforts—letters and attempts to canvass—to check their data. The Government would be very reluctant to carry over further than that, but I take the degree of concern that we hear around the Chamber seriously, and we will consider that further. Having offered these responses to a very wide-ranging debate, which has touched on almost everything from Scottish devolution to central registration and the authoritarian system of identity cards that the noble Lord, Lord Maxton, loves so much and a little on the computer revolution, I ask the noble and learned Lord to withdraw his amendment. We will continue to discuss many of these very important issues as we go through Committee and into Report.

[Lord Forsyth of Drumlean]

My noble friend has offered to write to me, which I appreciate, and I do not want to detain the Committee with too many matters Scottish. However, Amendment 36 suggests that a report should be brought by the Electoral Commission,

“on the accuracy and completeness of the electoral register in each part of the United Kingdom, which will detail variations in registration rates within and between the different parts of the United Kingdom”.

I have no idea what the First Minister of Scotland is proposing but it sounds to me like he is going to bring a Bill before the Scottish Parliament that will allow for individual registration by 16 year-olds on a voluntary basis. That would result in the political parties campaigning. No doubt he thinks that the Scottish nationalists will be able to get more 16 year-olds to be on the electoral register than otherwise. If, as my noble friend was suggesting in his earlier remarks, he sees that as being akin to the present situation where you have Peers on the electoral register who are allowed to vote in some elections but not others, I am deeply shocked by that. The reason why Peers do not vote for elections to the House of Commons is that we are our own representatives in Parliament, which is entirely consistent.

Are we not in danger here of ending up with a complete dog’s breakfast of an electoral register in Scotland which is not consistent with England because the Government appear to have washed their hands of responsibility for the electoral register and the conduct of elections? I thought that that was a reserved matter. It has nothing to do with devolution but everything to do with the Minister’s responsibilities.

[Lord Wallace of Saltaire]

My Lords, I recognise the importance of that issue, which has grown up, so to speak, since we began the parliamentary discussion of this Bill. I think it is fair to ask that I might take that back and check very completely, including the accuracy of these stories in the Scottish media, and that we should return to this issue later.

[Lord Foulkes of Cumnock]

The noble Lord, Lord Forsyth, is being rather unusually moderate in what he is saying. As the referendum is not until October 2014, it will be the current 14 and 15 year-olds whom they will be trying to get on the register. The significance of this is very substantial. I am grateful that the Minister has given an assurance that he will write to us about this. I hope that it will be after consultation with the Scottish Executive and that it will be a detailed response.

[Lord Wallace of Saltaire]

Of course, and I hope that the noble Lord will apologise in due course to the noble Lord, Lord Forsyth, for describing him as moderate.

[Lord Stoddart of Swindon]

Before the noble and learned Lord either withdraws or presses his amendment, perhaps I may say a few words. I have held back to hear the noble Lord speak from the Front Bench. We have had a very interesting debate. We have covered all sorts of aspects, from the Scottish aspect to whether we should return to the debate about central register and identity cards. We have discussed the nuts and bolts and the administrative problems that arise from the Bill.

The noble Lord said something very interesting about the motivation to vote, which is what concerns me. In a real democracy, the motivation should come from the heart and the mind, and because people believe that it is worth getting on the register and worth going out to vote. I am of an age when the register was about 90% accurate of those who were entitled to be on it. However, that has fallen considerably. People were on the register then because they wanted to be on the register, and they insisted that they were on it—and God help the registration officer if his or her name was not on the register.

Something has gone wrong, because people now do not do that. I go back—because I have fought many elections in my life, as other Members of this House have done. I remember the election of 1955 when in Reading Ian Mikardo was under pressure. In that election, because people were motivated to go out to vote and to be on the register, we got an 85% turnout—and of course he won. He was not supposed to win, but he won because of the people’s motivation. That was a good word that the Minister used. It does not matter what we say about going around and getting people on to the register; what we really need is the motivation of the people themselves to go on to the register and to believe that it is worth going out to vote because it makes a difference. At the moment, they see no difference between the political parties. They believe that it does not matter what they say or what they do because the Westminster and Whitehall elite will do what they think. As well as being concerned in this Bill about the nuts and bolts, the administration and even Scotland, we should really be thinking about whether the political class is doing sufficient to make people enthusiastic about getting on the register and going out to vote.

[Lord Falconer of Thoroton]

My Lords, the noble Lord, Lord Stoddart of Swindon, refers to a golden age when he himself sought office by election and when everybody was very keen to vote. Now we are in a different age, or so he identifies—maybe because he is no longer seeking election and, as a result, there is not that motivation on the part of people to vote.

It has been a very interesting and important debate. At its heart was the issue of what steps would be taken to ensure that the move from household to individual electoral registration would not lead to an undue reduction in the number of people registered. At the heart of our amendments was the idea that you have to have independent assessments made of that. What emerged in the debates was that the Government were so supremely confident that all would be well that they were removing the involvement of the Electoral Commission in giving independent advice, and there is no mechanism, other than a new Act of Parliament, to ensure—

[Lord Wallace of Saltaire]

It is important to understand that the concern is to prevent a further reduction in the completeness and accuracy of the register. I stressed very heavily in what I said at the beginning that part of the problem that we face is that the register has lost a good deal of completeness and accuracy over the past 20 years.

[Lord Falconer of Thoroton]

I agree with that, which makes it even more significant to ensure that there is no undue reduction in relation to the number of people who are registered.

The debate was very marked by the forensic power of some of the interventions. That of the noble Lord, Lord Forsyth, was very effective, because I have to say with respect—and I do not blame the Minister for this—no answers were given to the points that he raised. The noble Lord, Lord Rennard, gave a very well informed analysis of what the effect may be. My noble friend Lady Jay indicated what the constitutional importance of it is, while the noble Lord, Lord Maxton, urged us to vote in the way in which we vote in “Strictly Come Dancing”, although that may not necessarily be what we have in mind. I apologise to the noble Lord, Lord Tyler, on his 71st birthday, for not flagellating myself for my own historic failures. I can see that that was what he had in mind, and it would have been a birthday treat.

16:30

The noble Lord, Lord Wills, is dead right when he says the critical issue is how we check that there is no undue reduction and what we do if there is. The noble Lord, Lord Dobbs, rightly pointed out that completeness and accuracy are both important and indicated how important registration and the boundary changes are in that respect because they are obviously linked. The noble Lord, Lord Wigley, treated us to a trip round Wales in relation to registration, which is important.

I am grateful to the Minister for giving us an interesting update of general points in relation to this area. However, with respect to him, he has to deal with the basic point that has been made all round the House: namely, that you have to explain why you are doing this much quicker than you did before and what happens if it goes wrong or there are inconsistencies between the positions throughout the United Kingdom. Those were the questions that were being asked right round the House in this debate. There was real concern that there will be problems in relation to the intervention of individual electoral registration. With respect to the Minister, he gave me the impression that the Government had not given any thought to what would happen if those problems materialised. That is why these amendments are designed to get as much information as possible before Parliament before the final decision is made and to investigate what we do if this matter goes wrong.

The Minister has indicated that he will write to a large number of noble Lords. Therefore, it is obviously sensible to wait to see what he says. I will not press this amendment to a vote. However, real concerns have been expressed and the Government should take note of them. With the leave of the House, I wish to withdraw Amendment 1.

Amendment 1 withdrawn.

Clause 1 agreed.

Schedule 1 : Register of electors: alterations and removal

Amendment 2

Moved by

[Lord Falconer of Thoroton]

2: Schedule 1, page 16, line 20, at end insert—
“( ) The Minister must ensure that a formal appeals process is in place for any person in respect of whose registration a determination has been made under subsection (1).”

[Lord Falconer of Thoroton]

My Lords, this is a small but important point. It is a probing amendment, but I would very much like some assurance from the Minister.

Schedule 1 is about the registration and removal of electors on the register and Amendment 2 relates to an appeals process. We on this side of the House believe that people who are excluded from the register under the new system should have a legitimate right to appeal against the decision made by the electoral registration officer. The ability to cast a vote is a fundamental right and a key part of civic society. As the Government’s own implementation plan states:

“Registering to vote matters. It is the building block of our elections and an important civic duty. It provides people with an opportunity to elect their Member of Parliament, their local Councillor or Member of the European Parliament and is used as the basis for important activities like Jury Service”.

We believe that as many people who are eligible to be registered should be. I believe that the higher the turnout at elections, the better. I say that not just because I speak for a political party. As we have already mentioned today, and as I am sure will come up again as your Lordships’ scrutiny of this Bill progresses, there are known risks associated with the move to individual electoral registration. People will fall off the register, especially in the interim, and especially under this Government’s plan as so many of the safeguards that were in the 2009 Act, which my noble friend Lord Wills was instrumental in introducing and was referred to in the debate, have been scaled back.

In the spirit of tackling voter fraud, which we know is the key motivation behind this Bill, and behind its speeded up implementation plan, some of those who fall off the register will do so legitimately because they should not have been there in the first place. Of course, that is right and that is what should happen, but some people will be removed in error. Given the importance of the right to vote, and so the importance of being registered, those who do fall off should have an opportunity to appeal. Given the importance of the method, I would like to say a few things about the appeal.

At the moment, under the current system of registration, there is a clear appeals process. It derives from new Section 10A(3) of the Representation of the People Act 1983, and regulations set out in 2001. The relevant legislative base is sufficient for the current system but will these provisions be suitable once the transition has been made to individual electoral registration? Could they be fully applied, will any amendment be needed to the appeal provisions, and does the Minister see any merit in incorporating the 2001 regulations into the Bill, so as to provide assurance that there is a valid appeal process that Parliament has dealt with and approved? It is a probing amendment and I should be interested to hear the Minister’s answers. I beg to move.

[Lord Tyler]

My Lords, I want to contribute briefly to the discussion of this amendment on the appeals process but, before I do so, perhaps I should put the record straight in relation to the 2009 Act. There was not unanimity, despite what was said earlier, about the previous Government’s timetable for the introduction of IER. Both my noble friend Lord Rennard and I, during the Second Reading of the Bill on 18 March 2009, made it clear that we hoped there would be an acceleration of the programme, which is of course what the present Government are doing. Since then we have found that the previous register was so incomplete that there was a greater case for accelerating the process.

[Lord Wills]

I am sure that the noble Lord would not want to distort the historical record on his birthday. I do not know whether he and his noble friend were speaking on behalf of the Front Benches in that case but, certainly in the House of Commons, what actually happened was that the Front Benches agreed on the Political Parties and Elections Act and the timetable for that legislation. That is a matter of record in Hansard.

[Lord Tyler]

My Lords, as may often be the case, your Lordships’ House was wiser than the other place on this issue, and I invite the noble Lord to look at Hansard for 18 March 2009, cols. 257 and 284.

Returning to the amendment of the noble and learned Lord, Lord Falconer of Thoroton, I too have some concerns. It is important to make sure that there is some form of transparent judicial appeal process in which everyone has confidence, not least because removals can be serious, not just to the individual concerns but more generally. I draw attention to the fact that the implications, not least in terms of the Political Parties, Elections and Referendums Act, could mean that a donor is found to be illegitimate because he or she has been removed from the register. There could be considerable consequences from any form of removal. Therefore, although I do not have a strong view about whether the tribunal process would be the right one—doubtless, the Minister’s officials may already be providing reams of advice on the cumbersome problems that could be caused by a new tribunal—will my noble friend consider extending the existing tribunal process that relates to the civil liability issue under the Bill?

I do not have a magic answer to this but surely if there is already a tribunal process under the Bill, perhaps it might be extended to deal with appeals of this sort. That would seem to be a neat way to deal with this issue, and I look forward to hearing whether my noble friend would find that a helpful way forward.

[Lord Gardiner of Kimble]

My Lords, I thank the noble and learned Lord for highlighting the important issue of individuals having a right of appeal if they feel that they have been incorrectly removed from the register. This is similar to an amendment tabled by the Opposition in the other place, and on that occasion Wayne David accepted that there is an appropriate appeals mechanism in place. Indeed, he said he was pleased that the Government’s reassurances were clear.

I therefore confirm that Sections 56 and 57 of the Representation of the People Act 1983 already make provision for appeals against the decisions of registration officers in Great Britain, including decisions to remove electors from the register. Paragraph 17 of Schedule 4 to the Bill makes the necessary amendments to ensure that this continues to apply under the new system. I refer noble Lords in particular to the proposed insertion of new paragraphs (azd) and (aa) into Section 56(1) of the 1983 Act dealing with appeals against decisions under new Section 10ZE.

My apologies to noble Lords for the technicalities involved in that. However, there is provision within the Bill which I hope will reassure the noble and learned Lord and, on that basis, I ask him to withdraw the amendment.

[Lord Falconer of Thoroton]

I am not only reassured but moderately crushed by the reference to Mr Wayne David. On that basis, I will withdraw the amendment.

Amendment 2 withdrawn.

Schedule 1 agreed.

Clause 2 : Applications for registration and verification of entitlement etc

Amendment 3

Moved by

[Lord Wallace of Saltaire]

3: Clause 2, page 2, leave out lines 13 to 28 and insert—
“(2A) Provision made under sub-paragraph (2) authorising or requiring a registration officer in Great Britain to—
(a) require a person who has made an application under section 10ZC or 10ZD to provide evidence that he or she is the person named in the application, or(b) require a person who has made an application under section 10ZC or 10ZD, or any person who has an entry in a register, to provide evidence for the purpose of enabling the officer to determine whether a person is entitled to be registered in a register maintained by the officer,must specify the kind of evidence that a person may be required to provide (for examples, see paragraph 3ZA(5)).”

[Lord Wallace of Saltaire]

My Lords, I shall speak also to Amendments 6, 8 and 9. Noble Lords will be aware that Amendment 7, in the name of the noble and learned Lord, Lord Falconer, is also in this group. These amendments all cover the question of what forms of acceptable evidence can be used to verify entitlement to register. The Government are responding to earlier criticisms that this should not just be left to ministerial guidance but should be prescribed in secondary legislation. It has always been the Government’s intention that the evidence required in an initial application will be prescribed in regulations; nevertheless, the Bill introduces permitted guidance to be used.

There is an important distinction between the evidence provided in an initial application, which we might call primary forms of evidence, and the alternative forms of evidence that may be used if an applicant cannot supply the primary evidence or if it is not possible to verify their identity without further evidence.

As set out in the Bill and in the proposed draft secondary legislation, published in September, the forms of evidence used in initial applications will be the applicant’s date of birth and national insurance number. We had intended that the accepted alternative forms of evidence, examples of which are set out in the proposed draft secondary legislation, would be set out in guidance by the Secretary of State. This was to allow flexibility to respond to any potential threat to the integrity of the register resulting from the security of a form of evidence becoming compromised by fraudsters with excellent skills offering to sell well designed things on the internet or whatever. In the case of evidence used in applications, this is most pertinent in responding to an increasing risk of fraud if a previously accepted form of evidence is found to be compromised and open to fraud. In such a situation, action must be taken quickly, and we felt that this justified the use of guidance in prescribing these forms of evidence.

However, in its report on the Bill, the Delegated Powers and Regulatory Reform Committee expressed concerns about the lack of a requirement for forms of evidence to be set out in regulations. This was echoed by the Electoral Commission and the Constitution Committee of this House. We recognise these concerns and are therefore seeking to amend the Bill to ensure parliamentary scrutiny of the prescription of forms of evidence, while allowing for flexibility.

The amendment will ensure that the list of evidence that is acceptable for the verification of applications is set out in regulations subject to the affirmative procedure. To attain flexibility in responding to extraordinary situations and unforeseen circumstances, we have also provided in the amendments that regulations removing allowable forms of evidence will be subject to the negative procedure. This will allow the Government to act quickly in response to information that an accepted form of evidence is no longer suitable for use in verifying applications. We feel that this strikes the right balance between parliamentary scrutiny and flexibility in response to potential threats to the integrity of the register. I beg to move.

16:44

[Lord Tyler]

My Lords, I shall speak briefly to this group. Because I am referring to the advice given by the Electoral Commission I should put it on record that I have served as a member of the cross-party informal advisory group for the Electoral Commission in the past.

The government amendments are very welcome and specifically take the advice of the Electoral Commission and the Constitution Committee of your Lordships’ House about the list of forms of evidence that could be used in the electoral registration process and how they should be set out. However, Amendment 7 in the name of the noble and learned Lord, Lord Falconer of Thoroton, would make the Bill less flexible in this respect by setting out that the national insurance numbers and dates of birth should be the primary evidence required when applying. Many of us may have some sympathy with that because it is obviously such a fundamental building block and it may be thought by Members of your Lordships’ House that at least that has the advantage of some clarity at the outset. However, there is clearly a danger that if the national insurance numbers prove more cumbersome than all of us hope, and certainly than the Government intend, the only way to alter that primary evidence would be by primary legislation, which is clearly very bureaucratic and perhaps a matter of administrative overkill.

I suppose that one’s judgment on the merits of Amendment 7 will depend on how paranoid we all are about future Governments and whether the likelihood is that the list might ever be changed to set too high a bar. For example, it might suddenly be required that not just the national insurance number but some other form of identity, such as a library card or a bus pass, in my case, should also be available. That may seem unlikely and the regulations would anyway be subject to affirmative procedure, but on the whole I prefer the Government’s rather more flexible approach. I look forward to hearing what the noble and learned Lord, Lord Falconer, and the Minister have to say. Inflexibility is something that your Lordships’ House is rather good at identifying in advance, so avoiding the bureaucratic nightmare that may result.

[Lord Maxton]

My Lords, first, I take the opportunity, if I may, to say to my noble and learned friend on the Front Bench that I was not suggesting that we should vote in the same way as on “Strictly Come Dancing”. I was suggesting that we are still voting in a very conservative and old-fashioned way, whereas in other forms of national life, we do it differently.

I am a little concerned that there has been great opposition to my idea of a national register of some sort, but we are now talking about national insurance numbers. Who holds them? Where are they registered? Who keeps them? Who says, “That is your national insurance number”? Is that not a form of national register?

[Lord Falconer of Thoroton]

My Lords, this is an interesting and important debate. The original draft of the Bill in effect allowed the Minister to determine, without parliamentary scrutiny, what the identifier should be. The amendment advanced now by the Government in effect says that Parliament has to approve the Minister’s choice, as it must be approved by the affirmative procedure. Our Amendment 7 would provide that Parliament has to decide in primary legislation what the individual identifiers must be.

Everybody agrees, including the Government, that the first proposal is not acceptable and that it would be wrong for the Minister to be able to determine it. People would be worried about the extent to which it might be used for political advantage. The second option has the problem that statutory instruments are rarely rejected by Parliament, so it gives pretty big power to the Minister. The third option has precisely the problem identified by the noble Lord, Lord Tyler—it is very inflexible. I recognise completely that the identifiers chosen might turn out not to be sensible at the end of the day, depending on how the system operates.

This is such an important issue that we on this side are loath to give the Minister the power that comes from being able to determine it him or herself or by statutory instrument. Subject to the Minister’s no doubt persuasive arguments, I currently favour our amendment, but I wait to hear what the noble Lord has to say.

[Lord Martin of Springburn]

We are all in a learning process but I am concerned about Amendment 7 and the requirement for a person to provide their date of birth and national insurance number. A register is tied in to a constituency and it would be irrelevant if someone’s date of birth and national insurance number alone could get them on to a register because that has to be tied in with their place of residence. I believe that an electricity or rates bill would provide more proof of whether a person was entitled to be on a constituency register than their age or national insurance number—although that may be in the list that was not available before now.

The Minister has touched on other evidence but I believe that there are more ways for a person to prove that they are a bona fide elector than by giving their date of birth. For example, I live in London for several days a week—many of us do; I am not the only one. But my main home is in Glasgow, and if I sought to get on the electoral roll somewhere in London just by turning up and saying, “My name is Michael Martin and my date of birth is 3/7/1945 but I cannot recite my national insurance number”—I can never remember it—that would not prove that I was entitled vote in a given constituency.

Perhaps there is something in the legislation that ties an individual into a constituency, but if I went to an electoral officer and said, “Here is an electricity bill, gas bill or community charge bill”, that proof would tie me in more than my date of birth.

[Lord Wallace of Saltaire]

My Lords, we are getting into some of the technical complexities of the Bill. One of the reasons for preferring national insurance numbers is that it is possible to buy off the web electricity bills that are specially designed for you. We are looking for ways of ensuring as far possible that we have accurate identifiers.

The noble Lord, like many of us in this Chamber, is one of the difficult exemptions of people who wish to be registered in two different places because they have two different homes and therefore do not entirely match with the first identifier, which is that your national insurance number is likely to have your current address attached to it; these naturally go together. I am told that some voters do not have their date of birth in their head either. There is a tendency in some of our ethnic communities to assume that your date of birth was 1 January of whatever year it was that you were born.

None of these things entirely matches everyone’s predicament and we are therefore attempting to design something which is as flexible as possible while recognising the importance of parliamentary scrutiny. The changes we have made between the draft legislation in 2011 and the Bill’s introduction into the other place in May this year and these further amendments acknowledge the concerns raised most recently by the Delegated Powers and Regulatory Reform Committee that we need to make sure that there is some parliamentary scrutiny. However, when it comes to the alternative evidence provided, we believe that, because of the changing circumstances in which we are operating, some flexibility is needed. We do not wish to box everyone into simply the NINo and the date of birth. I can almost remember my national insurance number—there are two numbers in the middle that I cannot quite get straight—but I must learn it off by heart.

The noble Lord, Lord Maxton, as he did earlier, wants to raise some much wider questions. I have considerable sympathy with where he is coming from. In 20 years’ time it is unlikely that we will vote using pencil and paper in polling stations, but that is a larger concern for the longer term, and as we have seen in some other countries, on occasion electronic voting is not without its own problems. We are retaining the principle of local registers. When talking to electoral administrations, something I am told immediately is that they have for many years used council tax registration as a means of checking where people live and whether these are accurately placed on the register. The council tax, of course, only gives the head of the household. Indeed, perhaps I should have said in responding to the previous debate that one of the reasons given in recent research for incomplete registration is that the single person’s discount for council tax encourages some people not to put down the others living in the household because that would raise the level of council tax. We have moved on from the poll tax as a disincentive, but the single person’s discount is, we are told, is a disincentive in a number of ways. There is a whole range of different factors to look at as we go into the details of the register.

The noble Lord, Lord Maxton, and the rest of us will enjoy debating the impact of the data revolution on the way the citizen interacts with the state. I find it fascinating myself, and I think that it will revolutionise that interaction over the next 10 years. However, noble Lords in this House may be among those who are slower to take part. I am sorry that the noble Lord was unable to come to our demonstration of online registration. The Government are considering many other options in terms of how one puts various things online. For example, some experiments show that if, when someone reregisters their car online, they are also offered the choice of transferring to their local authority and checking for a parking ticket, that increases radically the number of people who apply for a ticket.

[Lord Maxton]

As someone who is of the age where they have to renew their driving licence every three years, I can inform the noble Lord that when I do so, all I have to give is my passport number. The photograph that is used on my passport is then automatically used on my driving licence as well.

[Lord Wallace of Saltaire]

The noble Lord makes a useful point. That is precisely the sort of direction in which we wish to go. The noble Lord will also know, of course, that a large proportion of our population does not hold a passport.

I hope that the Committee will be happy to accept these government amendments. We think that they strike the right balance between flexibility and scrutiny. I hope that the noble and learned Lord, Lord Falconer, will also accept that while we understand the direction in which his amendment is going, it threatens to make us a little too inflexible. It is important to retain a degree of flexibility in terms of the alternative forms of evidence because the most appropriate alternatives may well change over time.

Amendment 3 agreed.

17:00

Amendment 4

Moved by

[Lord Rennard]

4: Clause 2, page 2, line 32, after “description)” insert “, and must require a registration to an officer to impose a civil penalty (under section 9E of the Representation of the People Act 1983) where a person refuses to give information prescribed in regulations under this section”

[Lord Rennard]

My Lords, I wish to speak also to Amendments 5, 21 and 22 tabled in my name and that of my noble friend Lord Tyler. These amendments concern the detail of potential civil penalties. From the outset of the consultation on the draft Bill, I argued strongly that the existing legal requirement to fill in a registration form when invited to do so must continue under individual registration.

At the moment, electoral registration forms have something like an 80% response rate. Although that is not as high as we would like, it is a clear indication of the value of the statement on the form that there is a legal requirement to complete it and to return it. The civil penalty is a distinct arrangement for individual registration as opposed to the household inquiry form. In my view, the present criminal offence for failing to fill in a household form is proportionate in that failing to do so can prevent others from having the right to vote. That criminal offence will remain for the household inquiry forms under IER. The civil penalty associated with the follow-up individual registration process should be welcomed by electoral registration officers since it retains a serious sanction for them to use as a last resort when someone fails to fill in an individual registration form, but one that would be less cumbersome than having to initiate a full criminal prosecution.

I am very pleased that the Government have given us the benefit of seeing in draft form the regulations that will govern the operation of the civil penalty. Like all our amendments, Amendments 21 and 22 are there simply to encourage the Minister to look at whether the civil offence of not filling in the form when requested to do so by an electoral registration officer should be one of strict liability; in other words, can not knowing or not understanding that you were supposed to fill it in and return it be a proper defence? I am sceptical that anyone, after a registration officer has gone through all the steps set out in the draft regulations, could not know or understand that there is a legal requirement for them to register. A great deal of time and money could be wasted with people claiming that in fact they did not know or understand.

Ministers have talked about the level of the civil penalty being akin to a parking fine. I see that the noble and learned Lord, Lord Falconer of Thoroton, wishes to address that in his Amendments 23 and 29. I suggest that if it is to be like a parking fine, the idea that you can escape it by simply saying that you did not know you were responsible or you did not understand the rules is misplaced. As anyone who has received a parking fine—as I suspect many of us will have done at some point—will know, not understanding or not knowing that you have to pay it is not a defence. If we could all claim ignorance, many more of us would park illegally with impunity. I would be most grateful for the Minister’s comments on that point in his response to Amendments 21 and 22.

Amendment 5 deals with trying to ensure that people are indeed fully aware of the potential fine. If it is made a strict liability matter, as it probably should be, it is clearly even more important that people are informed at every opportunity of the risk of a fine if they do not register. To that end, we believe that this fact must be spelled out on the individual registration form itself. The draft regulations before the House suggest that the prospect of a penalty will be mentioned only in the “invitation to register”, which is effectively a covering letter to the form. Clearly, there is a risk that any covering letter could be set aside in haste and that an elector would not know of the legal requirement to register if it is not printed clearly on the form as well.

Finally, Amendment 4 seeks to equip electoral registration officers with a civil penalty as a means of obtaining necessary information from people when they request it. The Government’s present plans, as I understand them, are for the civil penalty to be imposed only if someone fails after several times of asking to return a form. However, there is a risk that someone may not provide enough information to permit the electoral registration officer to proceed with a registration. The Government’s position is that someone who has not provided enough information should not be subject to criminal prosecution under the present offence of failing to provide information when requested, yet the Bill and the draft regulations do not provide any way for the established alternative to criminal prosecution—the civil penalty—to be used instead. We believe that this needs to be addressed. In tabling all these amendments, we are seeking some reassurances for the record—to see in Hansard—that these issues will be dealt with and remedied in the final version of orders which come before this House.

Commenting briefly on Amendments 23 and 29, I do not personally think that it would be right to put the level of the penalty in the Bill. Clearly, it will need to change from time to time, just as the previous criminal penalty changed many times, from £20, I think, when it was first introduced in 1991 to £50, £400 and then to £1,000 over the years. Since this will change from time to time, I am not sure we should fix it now for ever at £100. However, if the process does work, people will ultimately find that it is simply easier to register than it is to pay any fine. All I would hope in this part of our deliberations is that the Committee will be told the latest government thinking on the level of penalty.

[Baroness Hayter of Kentish Town]

My Lords, I will address the two amendments in this group in my name and that of the noble and learned Lord, Lord Falconer. They concern the new civil penalty in the Bill, separate from the criminal offence, with, as we have heard, a possible penalty of £1,000. The civil penalty is for failure to co-operate with the electoral registration officer.

It remains a serious civic matter for people to be on the register, not least of course for jury service, for which nearly all are eligible, although not myself and my noble and learned friend Lord Falconer. Having been on the judicial bench—in a small way in my case, as a magistrate—we are I think are excluded from jury service. However, for the vast majority, of course this is the important source for identifying those who will serve on juries. Also, as democrats, as was mentioned by the noble Lord, Lord Dobbs, it is an important right that everyone who has the vote—for which many have fought in the past—is able to exercise that right. They need to be on the register because they need to be able to vote at the moment at which the mood so takes them. Often, that may be only days before an election, when they suddenly want to kick out whoever is there or, on the contrary, maintain the incumbent; or in some way influence the Government or the local authority. However, it is only if they have registered at the appropriate point, rather than a day or so before the election, that their right can be exercised. It is for this reason that it is so important for us to get this registration accurate and complete as early as possible.

We will hear—and already have heard—a lot about the importance of the register being complete, but it behoves all of us to play our part in that by responding to the request for information from an electoral registration officer, so that we can, if eligible, be correctly entered on to the register. The noble Lord, Lord Rennard, suggested it could perhaps be done by statutory instrument but the significance of Parliament writing it into law in the Bill and deciding the penalty for failure to comply with this part of our civic responsibility should not be underemphasised. For that reason, Amendment 29 would remove from Schedule 3 the power to determine the amount of the civil penalty by regulation and Amendment 23 would write into the Bill that it should be £100.

The exact amount perhaps need not detain us this afternoon, although it surely should be at the very least the same as a parking ticket, which some in the Committee may find themselves frequently having to pay. We can perhaps discuss the exact amount some other time but surely the principle is that Parliament, with this new system of registration, should fix the amount clearly in the Bill as an indication of the seriousness with which it views registration. That is the point that we want to make.

I shall speak to the amendment moved by the noble Lord, Lord Rennard, and his birthday compatriot the noble Lord, Lord Tyler. I also wish him a happy birthday, and I am sorry that the noble Baroness, Lady Gould, is not here to pass her wishes on; if she is watching, we can wish her a happy 80th birthday today. I will add emphasis to what has been said about those civil penalties and their use by registration officers. Particularly for the initial use of this brand-new system of registration, it will be important to impress on registration officers the significance and importance of the task that they are undertaking on our behalf, in part so that they communicate this effectively to all those with whom they will have dealings in obtaining and then registering relevant information. If individual electoral registration is to be the success that we all hope for, everyone must play their part. With the penalties being the only real weapon in the hands of those on whom we will depend to produce the register, we must give the EROs the backing to employ civil penalties if need be, and particularly the ability to have the threat of using them to the full.

[Lord Martin of Springburn]

My Lords, we are in Committee and it is therefore good to explore these matters. I am worried about there being a penalty because when I was first allowed to vote at the age of 21 I was a journeyman on a journeyman’s salary. Now, however, people can vote at 18. We are talking about a young person of 18 having a fine imposed on him or her for not co-operating, and I worry about that. If the amendment said that it was to be someone over 21, I would be less concerned, but I worry because I have had experience of arguing and campaigning against the poll tax. Bearing in mind that boys and girls of 18—young adults—had to pay that the poll tax, which was had changed from a household debt to an individual debt, one of our big worries was that they would not have the assets to do so. We were proved to be right: when a youngster went into arrears, the parents would bear the responsibility of the cost so that the family would not be shamed by the sheriff’s officers turning up.

The danger here is that we are going to impose fines en bloc on anyone who is an elector. It might be argued that, previously, the householder had responsibility and that there was a fine there anyway. However, when someone takes a on home they realise that there are responsibilities tied to it. At 18 years of age, however, I can tell your Lordships that there was not much in the way of assets in my situation. Usually, as an apprentice, when you got your wages on a Friday, they were spent by Monday morning. That is what is going to happen to some of these youngsters.

Another thing is that when trying to get some young people to co-operate with filling in a form, we might cast our minds back to when we were 18 ourselves. The form that we got every year was a tax form and we usually did not bother filling it in because someone would tell us, “If you don’t fill it in, they tax you as a single person”, and we were single people. This amendment would cause problems to the registration officer because it is a catch-all. We are going to have concerns about those between 18 and 21. I would certainly be worried about supporting anything that would impose a fine on young people. The thing with electoral registration is that if you are not on the electoral roll, you cannot exercise your right to vote. I know that if a youngster should complain, “I’m not able to vote and I’m not happy with our Member of Parliament or local councillor”, their parents or someone else—even the electoral officer—might put this to them: “That’s your fault because you did not bother to fill up the forms”. But to impose a fine and to compare it with a car parking fine is erroneous. When you get a car, you have at least made a certain amount of funds available to yourself; that is not necessarily the case with a young person. When you go on the road in a car, you run the risk of putting it in a place where it should not be and getting a parking fine. If you put two hours’ worth of money in a meter and you are there for two-and-a-half hours, you take the chance that a parking warden will catch you. It is not a comparison of like with like. For those reasons, I would be uneasy to support a fine for that age group.

17:15

[Lord Wallace of Saltaire]

My Lords, we are now navigating the delicate area between voluntary and compulsory registration. I think that we all recognise that, for a British state which is by tradition a limited-government state in which citizens have a right not to be too closely engaged with it, this raises a number of very delicate issues.

The purpose of the civil penalty is to encourage citizens to fulfil what we all regard as their civic duty and to make it clear that there are consequences for them failing to do so. It is not intended that it should be imposed on every single person who for whatever reason fails to go through to the complete process. Indeed, the evidence is that prominent inclusion on the registration form of the words, “This is your civic duty. You are subject to a fine if you do not fill in the form”, significantly increases the number of people who fill in that form. That is particularly valuable. But to move on from there to pursuing everyone who fails to fill in the form accurately, or who refuses point blank after many attempts to fill in the form, takes us a little further down the road from voluntary to compulsory voting than many of us wish to go.

I think that we all recognise that one of the important aspects of the transition, which again takes us outside the immediate focus of the Bill but draws on the Northern Irish experience, is that we need to pay more attention to citizenship education—getting into schools and telling young people between the ages of 16 and 18 about what citizenship really involves. We should get them to want to make sure that they are on the register, which too few of them now do, while also perhaps explaining to them that, if they want to obtain credit in future, being on the register is one of the prerequisites for getting a good credit rating. So we are negotiating our way around a range of different factors.

I say to the noble Lord, Lord Rennard, that not understanding that you have to fill in the form as a defence for not applying is also a very delicate area. We know that there are not a insignificant number of voters who are functionally illiterate. We know also that there are a number of voters whose knowledge is English is not ideal. So there is a range of limiting factors. This part of the draft secondary legislation is aimed at those who generally have issues about understanding the requirement being placed on them, whether it is matter of literacy, learning difficulties or knowledge of English. We will look at the language very carefully between Committee and Report to take the noble Lord’s points into account.

In relation to the noble Lord’s Amendments 4 and 5, I emphasise that the civil penalty is intended above all to serve as an encouragement to apply. The Government’s preferred approach to reforms is to keep details of this sort out of the Bill, instead using secondary legislation and guidance to ensure flexibility. It will be for the Electoral Commission to design the forms and the envelopes used in individual electoral registration. Having collected a number of these forms from different electoral administrators over the summer, I am struck by the current diversity in the forms provided, some of which put the importance of civic duty and the potential threat of a civil penalty very prominently and others have it down in the bottom left-hand corner where people are much less likely to see it.

These proposed draft regulations set out a small number of requirements for the content of paper application forms and the invitations that are sent to voters. They include mention of the civil penalty in the invitation but it will be for the commission to decide how best to approach the prominence and wording. For example, it may be that testing shows that a gentle mention of the penalty in the initial invitation works best, increasing the prominence of the message with successive invitations. We are currently undertaking targeted consultation on this publication and we welcome views on the contents. A certain amount of testing is under way on how best to design the forms.

The Government are firmly resistant to Amendments 21 and 22, which seem ultimately to force registration officers to impose the civil penalty on any person who does not make an application to register. Their purpose is the same as that of my noble friend’s other amendments. They would reduce the capacity of registration officers to use their own discretion in judging whether to issue a requirement to register to a person who has failed to make an application to register after being issued with an invitation. Again, we feel that this would take us too far down the road towards compulsion. After careful consideration with key stakeholders, we do not think it appropriate to create a new civil penalty for individuals who, after being required to make an application, fail to do so. We therefore urge my noble friend to withdraw his amendments.

On Amendments 23 and 29, the noble Baroness will recognise the very firm reasons why, in an age where—happily at the moment—inflation is low we nevertheless do not wish to put details of this sort firmly into primary legislation. I am sure that the noble Baroness is too young to remember the old notice that one used to see in trains:

“Penalty for improper use £5”.

When that was first established in railway legislation, £5 was a great deal of money. By the time I was in secondary school, it was rather less money than before—although, when I went out to tea in the local manor house and was tipped £5, it seemed an awful lot of money at that time.

[Baroness Hayter of Kentish Town]

I hope the noble Lord can assure us that he never misused that facility.

[Lord Wallace of Saltaire]

Of course I did not. I would never have thought about it while the train was in the station. I am sure that noble Lords will be as familiar with the song around that as I am.

We intend that the civil penalty should be modest and reasonable. That is why the phrase used is that it should be in the same range as parking fines. The intention is that the amount of the fine should be set out in secondary legislation so that it is flexible. We do not intend and no Government would wish to have to introduce primary legislation on the electoral registration system every two or three years.

[Lord Martin of Springburn]

I understand what the Minister says here, but the non-payment of a fine can lead to other court actions. Is he not worried that we will get into a wrangle if someone digs their heels in and says, “Look, I do not want to register. I do not want anything to do with registering”? Non-registration is a right that can be exercised by a person, ensuring that their name is kept off the roll—but now we are changing things. Does that then mean that if they refuse to pay the fine, there will be other penalties imposed on that person—even imprisonment?

[Lord Wallace of Saltaire]

The noble Lord has been testing the difference between the Government’s approach and that of my noble friend Lord Rennard—who I think wants to be much fiercer on imposing civil penalties. The Government’s position is that the civil penalty is there as a backstop but should not be used to enforce compulsory registration. It should be very much a means of ensuring that forms are returned, not of insisting that everyone registers. That then takes us over into a different situation which, again, would be a change in the traditional, established relationship between the citizen and the state.

[Lord Rennard]

My Lords, as I said, the amendments are probing. We seek to continue a dialogue with the Government about the regulations to try to ensure that the system works as well as it should. As we said at the beginning of Committee, we are concerned about what we do if it does not work. Our major concern in considering the Bill is to try to ensure that it does, so the register is accurate and complete.

It is particularly valuable in the new process that the Electoral Commission will be designing the forms for registration, rather than individual registration officers. However, I would still like to press further with the Minister at some point that if those forms are in future to be centrally designed and the Government are laying out in regulations what is required to be on the form, it is important to state on the form the legal requirement that if you do not return this form you could be subject to civil penalty. Thinking in particular about the contribution from the noble Lord, Lord Martin, it is clear to me that legislatures at either end of the building are unaware of the existing rules. For example, at the moment, a young man of 20 in, say, Glasgow, is subject to a fine of up to £1,000 if he does not return the form, because if he lives on his own, he is the householder responsible.

[Lord Martin of Springburn]

I agree, but a young person of 20 acquiring accommodation and, in effect, creating a household, realises that he or she is taking on the responsibility of a householder. That is different from the carefree attitude that a young person of 18 would have in a house where there is mum and dad and the only worry they have is the price of getting out to the disco and making sure that they have a good time. I accept that once a person becomes a householder, they take on a different type of responsibility.

[Lord Rennard]

My Lords, as someone who became a householder at the age of 17 through my family circumstances, I understand the point about responsibility at a young age, but I do not accept that 18, 19 or 20 year-olds will necessarily be worse off under these arrangements. The fact is that they will no longer necessarily be subject to the £1,000 fine if they are on their own in a household; it will be a civil penalty of much lower value. We have talked about that being akin to a parking fine. The obvious point for the 18, 19 or 20 year-old is that all they have to do is to register to vote and then they will not be subject to the fine. That will be a simple and easy process. In future, they can do it online as well as by returning the form. That should not be difficult, and then they avoid the penalty.

My point is that the form should spell that out so that someone of any age or with any language as their first choice can easily see what are their obligations. Some direction is required on that. Looking further on at Amendment 24, tabled by the noble and learned Lord, Lord Falconer, and the noble Baroness, Lady Hayter, I am not sure that they have appreciated that those forms will in future be centrally designed by the Electoral Commission and that it will no longer be the job of the individual 400 or so electoral registration officers to design their own form. That is why I am so keen to ensure that this form follows the best possible practice and to continue discussion with government. We have seen how in Denbighshire, Hounslow and a number of other authorities, that the paperwork has been of great effect in persuading people that they should register, of greater effect than in some other places.

On that note, I am happy to withdraw my amendment.

Amendment 4 withdrawn.

Amendment 5 not moved.

17:30

Amendment 6

Moved by

[Lord Wallace of Saltaire]

6: Clause 2, page 3, line 4, leave out from “(3)” to end of line 7 and insert “must specify the kind of evidence that a person is required to provide”

Amendment 6 agreed.

Amendment 7 not moved.

Amendments 8 and 9

Moved by

[Lord Wallace of Saltaire]

8: Clause 2, page 3, line 8, leave out from “that” to “person’s” in line 9 and insert “may be specified include a”

9: Clause 2, page 3, line 19, at end insert—
“( ) In section 201 of the Representation of the People Act 1983 (regulations), before subsection (3) insert—
“(2C) Regulations made for the purposes only of omitting a particular kind of evidence from the kinds of evidence that a person is or may be required to provide by virtue of regulations under paragraph 1(2A) or 3ZA(3) of Schedule 2 shall be subject to annulment in pursuance of a resolution of either House of Parliament (and subsection (2) does not apply to regulations made for those purposes only).””

Amendments 8 and 9 agreed.

Clause 2, as amended, agreed.

House resumed.

Mental Health Act

Monday 29th October 2012 Lords Chamber

Statement

17:31

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I shall now repeat a Statement made earlier this afternoon by my right honourable friend the Secretary of State for Health on the subject of the Mental Health Act. The Statement is as follows.

“With permission, Mr Speaker, I wish to make a Statement about an issue relating to the Mental Health Act 1983. It has become apparent that there are some irregularities around the way that doctors have been approved for the purpose of assessing patients for detention under the Act. For assessments and decisions under certain sections of the Act, including detention decisions under Sections 2 and 3, three professionals are required to be involved—two doctors and an approved mental health professional, usually a social worker.

In 2002, when strategic health authorities came into being, the then Secretary of State properly and lawfully delegated his function of approving doctors under the Act to them. However, it came to light last week that in four out of the 10 strategic health authorities—North East, Yorkshire and Humber, West Midlands and East Midlands—in a period of time dating from 2002 to the present day, authorisation of doctors’ approval appears to have been further delegated to NHS mental health trusts. I was made aware of the issue and kept up to date with the actions being taken. Our latest best estimate is that approximately 2,000 doctors were not properly approved, and that they have participated in the detention of between 4,000 and 5,000 current patients within institutions in both the NHS and independent sectors. Rampton high-secure hospital is in one of the affected areas. Some patients at Ashworth high-secure hospital are also included.

There is no suggestion that the hospitalisation or detention of any patient has been clinically inappropriate, nor that the doctors so approved are anything other than properly qualified to make such recommendations, nor that these doctors might have made incorrect diagnoses or decisions about the treatment that patients need. All the proper clinical processes were gone through when these patients were detained. We believe that no one is in hospital who should not be, and no patients have suffered because of this. The doctors would have no reason to think that they had not been properly approved. They acted in good faith and in the interest of their patients throughout this period.

In the light of our legal advice, we do not believe that any decisions that have been made about patients’ care and detention require review because of this irregularity. Doctors should continue treating patients who are currently detained under the Mental Health Act in the usual way. We have received advice from First Treasury Counsel that there are good arguments that the detentions involving these particular approval processes were and are lawful, but Counsel also argues the need for absolute legal clarity. The legal advice is that this should be resolved through emergency retrospective legislation.

As soon as the irregularity was identified, my department worked swiftly to identify the best course of action and put the necessary preparatory work in place. It first became aware of this problem last week. Officials immediately sought initial legal and clinical advice. We then swiftly analysed possible options, including the option of reassessing all potentially affected patients, working with the health leads in the regions affected and clinical experts from the Royal College of Psychiatrists. When I was briefed on the situation, I asked for detailed information on the time that it would take and the clinical risks involved in reassessing all potentially affected patients. On Friday, I asked for an emergency Bill to be drafted over the weekend, as a matter of contingency. I briefed the Prime Minister personally the following day. Following further discussions and analysis over the weekend, the decision to introduce emergency legislation was taken yesterday, and we have since worked to prepare the necessary materials. At all times, my priority has been to resolve this is a way that follows clinical advice about the most sensitive way to deal with a highly vulnerable group of individuals.

We have also worked to remedy the problem as it relates to current and future detentions. As of today, all the doctors involved have now been properly approved. The accountable officers for the four strategic health authorities in question have written to Sir David Nicholson, chief executive of the NHS, to confirm that they have made the necessary changes to their governance arrangements. Furthermore, the accountable officers in the remaining six strategic health authorities have written to Sir David to confirm that they have, in the light of this issue, reviewed their own arrangements and that they are in full compliance with the Mental Health Act.

Although we believe that there are good arguments that past detentions under the Mental Health Act were and are lawful, it is important that doctors, other mental health professionals and, most importantly, patients and their families have absolute confidence in the decisions made. That is why, in relation to past detentions, we have decided that this irregularity should be corrected by retrospective legislation. Although we are aware of the problem only in the four areas going back to 2002, the proposed legislation will apply in principle to the approval of all doctors under the Mental Health Act since its introduction in 1983. It will retrospectively validate the approval of clinicians by those organisations to which responsibility was delegated, up to the point when all the relevant doctors were fully reapproved and their status put beyond doubt. The legislation will not deprive people of their normal rights to seek redress if they have been detained for any other reason apart from the narrow issue of the delegation of authority by the SHAs, nor will it affect any future detentions or legitimise any similar failures in future.

We are proposing to introduce the draft legislation to the Commons and, through best endeavours, looking for it to complete its passage through all the appropriate stages in this House and the other place as soon as is practicable. While addressing this technical issue, it is also important that we get to the bottom of how this happened and that we learn any lessons to help inform the operation of the new system architecture from April 2013. As such, I have asked Dr Geoffrey Harris, chair of NHS South and former chair of Buckinghamshire Mental Health Trust, to undertake an independent review to look at how this statutory responsibility was delegated by these four SHAs; and, more broadly, the governance and assurance processes that all SHAs use for delegating any statutory responsibilities. I will also ask him to look at this in the context of the new NHS structures that come into force from next April, to see whether any lessons need to be learnt. It is imperative that this review is swift and I have asked Dr Harris to report to me by the end of the year with recommendations to ensure that every part of the system employs the highest standards of assurance and oversight in the delegation of any functions.

I stress to the House that I have reviewed with lawyers, clinicians and NHS managers possible alternatives to introducing this retrospective legislation. I have been advised that all alternatives would be highly disruptive to many of the most vulnerable patients, and would also deprive many other patients of the care that they need while any action is undertaken. However, all the advice that I have received has been unequivocal in stressing the need for absolute clarity of the legal status of any hospitalisation or detention of patients, in the interests of those patients, their families, those caring for them and the wider public. That is why, in such exceptional circumstances, this retrospective legislation is being proposed. Both a draft Bill and the accompanying Explanatory Notes will be published this afternoon. I commend this Statement to the House”.

My Lords, that concludes the Statement.

17:40

[Lord Hunt of Kings Heath]

My Lords, I thank the noble Earl for repeating the Statement and for giving me earlier briefing today. Detaining people under the Mental Health Act raises the most serious issues of fundamental rights and patient and public safety. Any reported failure will therefore always be a matter of the highest concern. I am sure I speak for the whole House in saying that I have been reassured by the Minister’s comments, in particular on three crucial points: first, that no patient has been wrongly detained or received care that was not clinically appropriate; secondly, that no doctor was unqualified to make decisions; and thirdly, that urgent action is being taken to correct the situation and bring the clarity that is so clearly essential.

I would like to put a number of questions to the noble Earl. Can he say a little more about the events that brought this to light last week? Was it discovered in one SHA, and by what process did the department establish that it extended to three more? Can the noble Earl tell me whether extensive checks have been undertaken in all 10 SHA areas? Is his department confident that no more patients and families are affected than the 4,000 to 5,000 mentioned in the Statement? Has he any plans for direct communications with the patients and families affected? Is it the case that these patients are living not just in the four regions mentioned but in other parts of the country? Will he comment on how many are in high-security hospitals or could potentially pose a risk to the public?

The noble Earl informed the House that, despite the regulations not being followed to the letter in four of the SHAs, the advice from First Treasury Counsel is that the detentions carried out by those panels, even where the relevant doctors were not signed off by the strategic health authority, were none the less lawful. I do not know whether the noble Earl will be able to clarify that or give some more detail of First Treasury Counsel’s advice. The noble Earl confirmed that the Government will be bringing forward emergency legislation to ensure, for the avoidance of any doubt, that the actions of those doctors have legal validity.

The compulsory detention of patients under the Mental Health Act for their own good or for the public good should always be a matter of great public and parliamentary interest and scrutiny. This is doubly so when legislation of an emergency and retrospective nature is contemplated in this area. Emergency legislation should always be used as sparingly as possible, and your Lordships’ House is rightfully nervous of retrospective law. The Official Opposition understand and support the noble Earl’s wish to remove any doubt about the legal status of the patients concerned, but that has to be set against the general undesirability of asking Parliament to legislate hurriedly. Over the next day, will the noble Earl ensure that your Lordships have access to the fullest possible information, including a summary of the legal advice he received? There will also be concerns about the precedent, particularly in the area of people’s rights, and I hope that the noble Earl can reassure me on that point.

The House and the public will, at the end of the day, want to know that this emergency legislation is being used in exceptional circumstances as a last resort, not as a convenient means of correcting administrative failures. In his Statement, the noble Earl mentioned that according to the advice that he had received from his officials none of the alternatives to legislation had proven satisfactory. Will he give a little more detail about what the possible alternatives were? It would be helpful to the House to know that. If he is not able to do that comprehensively tonight, when it comes to Second Reading of the legislation, which I presume we will be debating on Wednesday—I do not know whether that has been agreed yet—it would be helpful to know what the alternatives might have been and why his officials have concluded that they are not sensible ways forward.

Finally, I turn to the investigation. The Opposition support the review under Dr Harris to get to the facts and ensure that lessons are properly learnt. The noble Earl said that he thought the review would be completed by the end of the year. Will the review be made public? While one would not wish to prejudge it, is the noble Earl in a position to say whether it is proceeding on the basis that what has happened is a failure of policy implementation rather than any defect in legislation? This is important because practitioners working in this important field would not want any unnecessary question marks hanging over the mental health legislation in general.

Will the noble Earl clarify what is going to happen post April 2013? This is currently the responsibility of strategic health authorities, which are due to be abolished at the end of March next year. Will the Secretary of State take back this responsibility from April 2013 or will it be delegated to another authority? If it is, to which authority and how it will be ensured that the proper delegations will be carried out in practice? As well as establishing that and the historical facts, will the review consider whether the new arrangements are likely to be well understood post April 2013?

In conclusion, I commend the Minister for the approach that he and his colleagues have taken to this difficult issue. Clearly, the request of this House and the other place is exceptional, but I fully understand that failure to act would potentially cause unnecessary distress and uncertainty to many thousands of vulnerable patients and their families and risk to public safety. While I look forward to a rigorous examination of the emergency legislation, the noble Earl has our support in removing any uncertainty.

17:40

[Earl Howe]

My Lords, I am extremely grateful to the noble Lord for his supportive comments, and I shall do my best to answer as many of his questions as I can. He first asked me what train of events led up to this situation. Earlier in the year, a doctor challenged a refusal by the Yorkshire and Humber approvals panel to approve him under Section 12. This challenge highlighted the possibility that the Secretary of State’s approval function, which had been properly delegated to SHAs, may, in some areas, have been unlawfully further delegated to NHS trusts. Yorkshire and Humber and then the northern SHA cluster took their own legal advice, which confirmed that the trust had been acting ultra vires in issuing the approvals. The northern SHA cluster identified that this applied to the arrangement in North East SHA and alerted the Midlands cluster, where it was possible that the same issue might apply in East Midlands and West Midlands. On 22 October, the northern SHA cluster alerted the Department of Health to the issue surrounding the approval of doctors and the possible knock-on effects that that would have. Events then took the course that I outlined when repeating the Statement. I can confirm to the noble Lord that we are satisfied that all 10 strategic health authorities have now gone through the proper process for approving doctors under the Act. The four that may not have been compliant have regularised the situation.

The noble Lord asked whether more than the 4,000 to 5,000 patients that I indicated when reading the Statement might be affected. It is possible that more are affected, but the key point is that the legislation that we are introducing this week will cover all affected patients, whatever the process was that led to their detention.

The noble Lord asked whether there were any plans to communicate with patients. We have worked, and continue to work, with the Royal College of Psychiatrists to ensure that patients and staff will understand clearly what has happened, how it affects them and what the situation now is. Sir David Nicholson, the NHS chief executive, today has written to all SHA leaders setting out the situation and the immediate need for them to communicate across their mental health organisations. The Department of Health is also assisting in that process.

The noble Lord also asked how many patients were detained in high-secure hospitals. I do not have the exact numbers. However, a small number of patients in secure hospitals are detained under sections of the Act covered by approval under Section 12 but these patients are not in secure hospitals by virtue of a criminal section. On whether I could share with the House the legal advice that the department has received, I am sure that he will know that it has been the practice of successive governments not to do that for very good reasons. However, if the noble Lord is in any doubt about the advice that we have received, I am very happy to give him access to my officials in the department who can talk him through this.

Quite rightly, the noble Lord said that your Lordships’ House has in the past been extremely cautious about approving retrospective legislation and I am the first to acknowledge the validity of that comment. In no way do the Government enter into retrospective legislation lightly. As he said, it is very much a last resort. We looked at the only possible alternative, which was to reassess each and every one of the 4,000 to 5,000 patients currently detained in every setting. We would need to have done that within 72 hours, which is what the law allows. In our judgment, it was logistically impossible to do that.

Furthermore, if we had attempted to do that, it would have undoubtedly caused a great deal of anxiety and distress to the patients involved, and their families, while taking away from other patients the attention of the clinical staff who look after them. The very clear advice that we received from not only our legal experts but also the clinicians was that the retrospective legislation route was undoubtedly the best route to go down. It is not now necessary to reassess patients. I believe that that perhaps is the central consideration we should have in our minds.

The noble Lord, Lord Hunt, also asked whether this affair reflected a failure of policy implementation or the underlying legislation. Certainly, from our scrutiny, there is no defect in the legislation. What has happened is that powers have been inappropriately delegated by those four strategic health authorities. The panels whose job it is to approve the clinicians failed to refer back to the strategic health authority for ratification the recommendations that they were making, which is the only thing that we believe was not done under this process.

The noble Lord also asked what would be the arrangement after April 2013. The power under the Mental Health Act to approve clinicians in this context will revert back to the Department of Health. There will be a refreshed set of arrangements which will be co-ordinated and managed by the department. Those arrangements are being put in place over the next few months.

17:54

[Baroness Pitkeathley]

My Lords—

[Lord Lloyd of Berwick]

My Lords, perhaps I may speak later. I thought that the Liberal Democrat Benches wished to speak.

[Baroness Jolly]

My Lords, will the review look at whether the SHAs have made any approvals under any other legislation, such as the Mental Capacity Act?

[Earl Howe]

My Lords, the review by Dr Harris will take into consideration any lessons that need to be learnt. We have asked him to take into account any other possible lessons that we should take on board, particularly in the run-up to April 2013. However, I am happy to reassure my noble friend that her request will be passed on. If there is a relevance to the Mental Capacity Act, I will ensure that Dr Harris takes it into account.

[Baroness Pitkeathley]

My Lords—

[Lord Lloyd of Berwick]

My Lords, like the noble Lord, Lord Hunt of Kings Heath, I would hope that the Minister could tell us a little more about how these irregularities came to light only last week. The problem, of course, is that there is a well known maxim of the law that the delegate of a power—that is to say the person to whom a power is delegated—cannot delegate it to another. I think that it is expressed in Latin as delegatus non potest delegare.

It is no doubt that maxim which has caused the lawyers to have had some doubt about the lawfulness of the detention in these cases. Indeed, it is perhaps surprising—again, the noble Lord might be able to give us some understanding about this—that these irregularities have not come to light before. Now that they have, I agree with the advice given by First Treasury Counsel that there is here a need for absolute clarity and that the best way to achieve that is by legislation. The whole point of it is that it should have retrospective effect. I end by congratulating the Government on reacting so quickly.

[Earl Howe]

I am extremely grateful to the noble and learned Lord, Lord Lloyd. In front of me, I have a very detailed timeline of the events which have led to the current situation, starting from the early summer of this year when the doctor who was turned down for approval in Yorkshire and Humberside SHA challenged the decision. Subsequently, he dropped his appeal but the legal advice taken on his grounds for appeal highlighted the possibility that the arrangements for the panel convened by the Rotherham, Doncaster and South Humber NHS Foundation Trust to exercise this function were unlawful. From that point, questions were asked not only in that strategic health authority but in neighbouring strategic health authorities and the department was alerted a few days ago.

The noble and learned Lord rightly asked how this could ever have happened and not been picked up. We will rely on the review by Dr Harris to tell us the answer to that question, but I am grateful for his support.

[Baroness Pitkeathley]

In further clarification to the response that the noble Earl gave to my noble friend about communication with patients, will he tell the House more about how that communication is to take place, whether there is a timescale for it and whether the communication also will extend to patients’ families who will be particularly worried by some of these developments?

[Earl Howe]

My Lords, I would willingly give the noble Baroness further details. Unfortunately, I do not have any beyond those that I gave to her noble friend Lord Hunt. I will gladly pick up the very valid points that she has made and let her know as soon as I can. Perhaps when we reach Second Reading of the Bill, which I believe has been timetabled for Wednesday, I shall have a more detailed answer to give her. If she is not in the Chamber, I shall make sure that she receives it by other means.

[Lord Williamson of Horton]

I have a particular interest in the Mental Health Act 1983, because I played some role in getting some provisions on to the statute book. I am normally very against any retrospective legislation, but in this particular case I strongly support the view taken by the Government, because it is absolutely essential to avoid a situation in which we impose disruption and distress on a large number of people who are vulnerable and in difficult circumstances in any event. For what I may call “human reasons”, the alternative was rightly ruled out, and I support the Government’s view.

[Earl Howe]

I am most grateful to the noble Lord, Lord Williamson. Indeed, it was the well-being of patients that was central in our mind when we sat down to consider how to resolve this very unfortunate situation at the end of last week. I hope and believe that patients should not suffer any inconvenience or distress at all as a result of the remedial route that we chose.

[Baroness Ford]

I welcome a review by Dr Harris, but can the Minister say whether, outwith the sphere of mental health, the department has any concerns that there are other areas of health where the Secretary of State would normally delegate authority to strategic health authorities and where that delegation might be further delegated? Is there any belief in the department that any other areas could be similarly ultra vires?

[Earl Howe]

We know of no such instances, but again we have asked Dr Harris to investigate that issue. I am sincerely hopeful that he will not find any other irregularities, but we cannot of course rule out that possibility.

[Lord Laming]

We are all grateful for the way in which this matter has been handled, and particularly pleased that it will not result in any fundamental change in mental health legislation. I come to this from a point of ignorance, so I hope that the Minister will excuse what seems an innocent question. Does this mean that the future emergency legislation that will come to the House is aimed at deeming that the practitioners who dealt with these cases are now licensed to deal with them, or does it mean that the patients have been deemed to be appropriately assessed?

[Earl Howe]

The question that the noble Lord, Lord Laming, asks is not a naive one at all—it is a very important one. The draft legislation that has been prepared is very narrowly drawn and its effect will be to ratify retrospectively those decisions taken by the panels that assess doctors for approval and treat those decisions by the panel as if they had been lawfully made. So it does not apply directly to patients but to the approval of the clinicians involved.

[Baroness Barker]

Could the Minister say something about the role of regulators and professional bodies, and why none of them picked up this issue over time? Will that matter form part of Dr Harris’s review?

[Earl Howe]

Yes, it will, my Lords.

Arrangement of Business

Monday 29th October 2012 Lords Chamber

Announcement

18:03

[Baroness Anelay of St Johns]

As is clear from the Statement repeated by my noble friend Lord Howe, a Bill is required to put right the administrative defect that has been discovered in the approval of doctors under the Mental Health Act. Tomorrow the Government will invite the House of Commons to pass such a Bill. I am grateful to the opposition Chief Whip for agreeing in the usual channels that the Bill should be fast-tracked on its receipt in this House. Therefore, I propose that the Second Reading of the Mental Health (Approval Functions) Bill should be taken in the dinner break on Wednesday this week, displacing the Question for Short Debate of the noble Lord, Lord German, which I shall naturally make an immediate effort to reschedule to his convenience. Given the nature of the Bill, the usual channels have also agreed that it should not be committed and that its remaining stages should be taken formally immediately after Second Reading. My noble friend the Leader of the House will move the necessary Standing Order suspension Motion tomorrow after questions. It is of course open to any noble Lord to object to that Motion, but I hope that that may not be the mood of the House.

West Coast Main Line

Monday 29th October 2012 Lords Chamber

Statement

18:04

[Earl Attlee]

My Lords, with the leave of the House, I would like to repeat the Statement made by my right honourable friend the Secretary of State for Transport in another place. The Statement is as follows:

“Mr Speaker, with permission I would like to make a Statement on the progress we are making to put right arrangements for the west coast main line and rail franchising.

First, I will update the House on the Laidlaw inquiry. Secondly, I will explain how we will ensure not only continuity of service on the west coast line after 9 December but an enhanced service.

On 3 October I announced the cancellation of the competition to run the intercity west coast franchise because of the discovery of unacceptable flaws in the procurement process run by the Department for Transport. I made it clear at the time, and do so again today, that this was a very regrettable decision prompted by mistakes that should never have happened. I also launched two independent inquiries, one of which has reported its interim findings to me and which I am today delivering to the House.

I asked the first inquiry, led by Centrica chief executive Sam Laidlaw, to look into what happened and why with the aim of establishing the lessons to be learnt. I also asked the second review, led by Eurostar chairman Richard Brown, to focus on any lessons to be learnt for the future rail franchising programme. I promised that both would conduct their investigations thoroughly, independently and urgently.

Given the public interest in this matter, the Laidlaw inquiry was asked to deliver an interim report to me by 26 October, and a final report by the end of November. I am grateful to the inquiry for meeting this first deadline, and working tirelessly to meet the second. I stress that today’s findings are precisely that—an interim report. There is more work to do. These findings are clearly a first stage. As Mr Laidlaw explains, they set out what went wrong, and from that basis he will now carry out further investigations into why this happened. From the start, my aim in dealing with this situation has been to be open and come forward with information for the House at the earliest opportunity. It is in that spirit that I make this Statement today. In the interests of complete transparency, I am publishing this interim report, with its provisional findings, and placing copies of it in the Libraries of both Houses.

To be blunt, these initial findings make uncomfortable reading, but they provide a necessary and welcome further step in sorting this out. The Government will need to see the full and finished report before they can comment in detail on any conclusions. This is crucial because of the independent nature of the Laidlaw inquiry and the need for the Government not to prejudge its eventual findings. But it is clear that the inquiry has identified a number of issues which confirm that my decision to cancel the franchise competition was necessary. These include a lack of transparency in the bidding process; the fact that published guidance was not complied with when bids were being processed; inconsistencies in the treatment of bidders; and confirmation of technical flaws in the model used to calculate the amount of risk capital that bidders were asked to provide to guard against the risk of default.

The Laidlaw inquiry also mentions factors,

‘that appear to have caused or contributed to the issues raised’.

We will look at these with interest and care, although once again we will need to see the final report before we can comment further.

Secondly, I would like to update the House on the progress we are making to ensure continuity of service on the west coast main line once the current franchise expires on 9 December. As I have said previously, we will ensure that passengers continue to be served by the same trains, with the same front-line staff, the same services, using the same tickets and, I am pleased to say, enhanced future timetables.

The department is making good in its discussions with Virgin on how it will operate the line for a short period of up to 14 months while a competition is run for an interim agreement. We are discussing its proposals for improved services over this period and an enhanced compensation scheme for delayed passengers. In dealing with this my department has been frank and open about its mistakes and is absolutely determined to find out exactly what happened. In the mean time, we will keep delivering for passengers and continue with the unprecedented levels of investment in trains, stations and railway lines. Combined with our decision to limit train fare rises to an average of inflation plus 1%, instead of RPI plus 3%, for the next three years, this demonstrates this Government’s total commitment to Britain’s railways”.

I commend this Statement to the House.

18:11

[Lord Davies of Oldham]

My Lords, from time to time the noble Earl has a moment of difficulty at the Dispatch Box, but never one of such ignominy as to have to address himself to this Statement, which has already been delivered in the other place. It is noticeable that when Ministers are in control of their departments and the departments are carrying out their policies efficiently, you often hear them refer to “my department”. I repeat part of the Statement, although the Minister has already read it out, which states,

“because of the discovery of unacceptable flaws in the procurement process run by the Department for Transport”.

How remote that body appears, given that the Secretary of State is commenting on it. Like all other Ministers, the Secretary of State wants to be as remote as he possibly can from the shambles represented by today’s Statement and the answers we have had to Parliamentary Questions in the interim period. Nothing is more indicative of the failure of the Government than for the Minister again to emphasise today the independent nature of the reports being carried out. One of them will be carried out by a member of the departmental board. I have no criticism at all of Mr Laidlaw, who I know to be an extremely independent minded, efficient and proper individual. However, to ask him to carry out an independent review not just of the board but of Ministers as well when he is a member of the board, serving those Ministers, beggars description in terms of what this Government are prepared to defend in the wake of this shambles.

I have one or two precise questions to ask the noble Earl but I want him to be absolutely clear that the way in which Ministers have set about tackling this great difficulty with which they are confronted is not acceptable, and that they will have a difficult time on every occasion when they discuss these matters in one House or the other. We now know that some indication of difficulties with regard to this process was discovered as early as May 2011, with one executive telling the Financial Times with regard to the spreadsheet analysis of the bid:

“The spreadsheet contained certain assumptions that looked odd to our economic modellers, so we went back to the department and pointed it out”.

What did the department do? It ploughed on in its reckless way. Ministers did not intervene. Is it conceivable that when these difficulties arose Ministers were not informed? What grip did they have on the department when such a significant process was undertaken? I emphasise that this is the first of a series of decisions which have to be taken on these franchises. There are many more to come. Therefore, this matter ought to have been worked on in a very real sense as the model which dictated how all the others would subsequently be analysed. However, we have Ministers purporting to be so distant from the process that they knew nothing about these difficulties until months after the relevant events occurred. In fact, action was not taken by the department but when one party decided to take the issue to the High Court the department was forced to initiate a review. I take it that at that point Ministers at last took an interest in what was going on and forced the department to analyse criticisms of the process. At that late stage it was recognised that the process was flawed and had to be brought to a halt with very considerable costs.

So far, the department has owned up to the fact that the mistake may cost £40 million. However, everyone connected with the industry knows that that is only the start of the costs. The Secretary of State may stick to his figure but we know that this is just the cost of compensating the four bidders for the west coast main line franchise. It does not include the cost of rerunning the competition twice, preparing Directly Operated Railways to step in, or compensating bidders for the other stalled franchises because many months of delay are now built into the whole process.

It is clear that the department has been advised in this process by external companies which, of course, have provided their services at a cost. What steps is the Minister taking to review whether the department received value for money for well over £1 million spent on a flawed process, the results of which had to be jettisoned?

As regards the legal advice which the department has received, what is the department’s liability if any of the participants in these cancelled or stalled franchises seek costs from the Government as a result of the delay? What advice did the Minister receive on EU competition law, procurement law and the impact on the fairness of future competitions before deciding to extend Virgin’s contract? The noble Earl has emphasised what an excellent decision it was to extend Virgin’s contract. However, there were very few alternatives. Virgin is going to run the railway for the next 14 months although it was told that it was not as good at running it as the preferred bidder, according to the evidence which was provided and on which Ministers took a decision.

This Statement is a cover not for open government at all: it is a cover for a shambles.

18:19

[Earl Attlee]

My Lords, I am grateful to the noble Lord for his response—

[Noble Lords]

Oh!

[Earl Attlee]

—although it was, not surprisingly, a little bit aggressive. However, I would have done much the same if our positions had been reversed. I agree that it is not enjoyable to have to report such serious problems to the House. However, when answering questions on this issue I have aligned myself closely with my department and I have expressed confidence in all the officials who have briefed me. I still have confidence in all the department’s officials who brief me.

The noble Lord asked about the issue of pressing on with the franchising process when there was a possibility of something being wrong. We know that serious errors were made, and this interim report spells these out. The reasons why this happened and why the department pressed on regardless will be addressed in the full reports. However, in August, officials had assured the then Ministers that the department’s process had been robust.

The noble Lord, Lord Davies, also asked me about the roles of Ministers. Before 12 September, my right honourable friend was advised by officials that potential concerns about two aspects of the franchise process had been discovered, but at that stage it was not clear that these would have made any difference to the outcome of the competition. He was advised that the right course was to continue to prepare the defence to the legal challenge. He asked that further investigations be conducted. In the later stages, from 24 September, this work was assisted by PricewaterhouseCoopers. On Tuesday 2 October, he was advised that the flaws were so significant that the competition would have to be cancelled, and he announced this on that very night.

The noble Lord also talked about delay to the whole franchising process. We will have to wait until we receive the Brown report to see what it means for franchising as a whole—and of course we will get that at the end of the year. He asked about liability as regards the various bidders in the franchising process. He would not expect me to comment on any claims for compensation.

The noble Lord’s initial point was that Brown and Laidlaw are compromised by being non-executive members of the departmental board. Sam Laidlaw has outstanding credentials to lead this review. He is a very senior business leader with a deep understanding of how big organisations work. He is the lead non-executive director across government on procurement and is familiar with the issues surrounding public procurement. As lead non-executive board member for the DfT, he has a thorough knowledge of how the department works, while remaining independent of it. The Department for Transport board was not responsible for approving the award of the intercity west coast franchise competition, and the department’s governance procedures for major contract awards did not require the board to be consulted. I refer noble Lords to paragraph 2.2 of the interim report, which adds a little more.

18:23

[Lord Bradshaw]

My Lords, I am not going to join the chorus of criticism. That is water under the bridge, the situation is going to cost a lot of money, and it may take a long time to resolve.

I have some experience of models, how complex they are, and how very few people actually understand what is inside them. You virtually have to have a degree in econometrics to understand them, and to some extent it is in the interests of the consultants that it should be so, because it keeps them in work. The whole issue of subordinated loans, which is connected with long franchises, means that you are asking the banks to put up a lot of money into the very distant future. We know that the banks are risk-averse and a new method must be found of covering this liability, or else it will bring all long franchises down.

I would like an assurance from the Minister that all the stalled franchises will continue good housekeeping, small investment schemes, support for community rail trusts, and all those things in the time before a new franchise procedure is launched. I warn him that it is going to take a long time, possibly two or three years, to get a viable scheme going.

Is it not better, rather than having very long franchises, to build into the franchise process a reward for delivery of excellent service, whereby each year you get something off the next bid? If you have five good years and then rebid, you may get a 5% advantage over any other bidders. That would underwrite continuity, which is appreciated by the staff and the customers.

I have one final question: will the noble Earl give attention to the large-scale orders that are imminent from rolling-stock companies? I am talking about big money. These will not go ahead unless the department gives some reassurance to the rolling-stock companies that the franchises they let are going to use the rolling stock. That is extremely important, particularly for lots of jobs in Derby and Preston.

[Earl Attlee]

My noble friend Lord Bradshaw made some important points but, of course, for answers to many of them we will have to wait to see what the Brown report says. However, I agree that we need to be careful to keep what is good about the current franchising system. At this stage, in advance of the report, I would not want to comment on how long it will take to get the franchising system running again. Rolling stock is of course a separate issue from the franchising problems, but he makes an important point and I will draw it to the attention of my right honourable friend the Minister of State.

[Lord Martin of Springburn]

My Lords, I have stated to the noble Earl previously that every week when I come down here I travel on the Virgin Pendolino and travel home the same way. I hope that the officials in his department will take into consideration that the dedicated staff who work for the company feel insecure about what is happening. They had some relief when they were told that they had extra time—14 months—but that is not all that long when you are dependent on a livelihood. To illustrate to the noble Earl how dedicated these men and women are, perhaps he remembers the flooding in Cumbria that caused subsidence. At very short notice, these good people were able to get every passenger off at Preston and bus them beyond Carlisle to make sure that they continued their journey north. That is the kind of dedicated people the staff are. We often talk in this House about people raising families and working, particularly women. Many of those who work for Virgin are young women raising families. They arrange childcare so that they can get up early in the morning to carry out their work and ensure that their families are looked after. I ask that all concerned bear in mind that there is a dedicated workforce who are entitled to consideration.

[Earl Attlee]

The noble Lord makes an important point about the human element of this problem. I take this opportunity to make it quite clear that the front-line staff will not be adversely affected. It will be the same staff running the trains and the same rolling stock. In the short term, passengers will not notice any difference. As I said in the Statement, we may even be able to enhance the service. However, it is important to remember that there is a human element to this problem.

[Lord Snape]

My Lords, will the Minister accept some sympathy from me for having to deliver that preprepared Statement? It referred to the Government having been “frank and open” about this shambles, as my noble friend on the Front Bench rightly called it. Does the Minister accept that the Government have behaved in no such way and that, up to hours before the revelations emerged as a result of the proposals for judicial review, the previous Secretary of State and her successor were assuring us all that the contract was robust and that no problems were foreseen?

I wish to press the noble Earl on the question of cost, to which my noble friend on the Front Bench referred. None of us for a moment believes that the costs will be confined to the £40 million of the existing franchise. Has the department, for example, received any communication from FirstGroup, which was previously awarded this franchise and whose share price has declined by 20% since the emergence of the fact that the system was flawed? How much does the Minister estimate this whole thing is going to cost the British taxpayer? I repeat the noble Lord’s plea that in future the front-line staff who have to operate the west coast main line be kept fully informed about what is happening.

[Earl Attlee]

My Lords, as for the noble Lord’s last point, the staff on the west coast main line are of course the responsibility of Virgin. I assure the House that I have repeated many political Statements, and I have done so this time again without the opportunity of editing it because I am just repeating a Statement made by my right honourable friend in another place. As to the noble Lord’s substantive point about when my right honourable friend knew that there was a problem, as soon as he was told that the problem could have affected the outcome he cancelled the award of the contract immediately.

[Lord Trefgarne]

My Lords, I endorse what the Minister has just said. I have no detailed knowledge of these matters, and of course I share the dismay about the very serious difficulties that have emerged. However, I ask the noble Lord, Lord Davies, for example, speaking from the opposition Front Bench as he has just done, to take a little care. What would the reaction of the then Government have been if all this had happened, say, three years ago, when they were still in office? I dare say we would have had a whole lot of dissembling, lack of transparency and flannel and not the forthright and straightforward replies which Ministers have given on this occasion and for which I believe they are to be commended. Of course it is a deeply unfortunate situation but I think that Ministers have acted as best as they can and that they are to be commended for their transparency and forthrightness on this occasion.

[Earl Attlee]

My Lords, I suspect that the noble Lord, Lord Davies of Oldham, is thinking: there but for the grace of God go I. In defence of the noble Lord, he had to come to this House and explain the problems at HMRC, which, frankly, I think he did.

[Lord Low of Dalston]

My Lords, like the noble Lord, Lord Bradshaw, who spoke earlier, I do not wish to join in any hue and cry, but does the noble Earl not agree that what has happened calls into question the wisdom of the Government’s approach to downsizing the Civil Service as a response to the economic problems that the country faces? Does he not agree that this situation might suggest that they have been going too far and too fast in this? Is it not the case that what has happened here strikes a body blow at the credibility of government processes? When next we get a statement from any department that says that it has employed the most robust processes it is possible to conceive of, who is going to believe that?

[Earl Attlee]

My Lords, as Sam Laidlaw has stated, these are initial views about potential contributory factors that he will continue to investigate in advance of his final report. Laidlaw has chosen not to criticise any particular individual or groups of people. Tackling the deficit and getting the public finances in order require the Government to tighten their belt like any other organisation. In doing its bit, my department made careful and well considered reductions in its headcount that were designed to save the public money while continuing to deliver on all its priorities, including rail franchises.

[Lord Clark of Windermere]

My Lords, I raise my point this evening in the spirit of making sure that we learn the lessons of this very serious exercise. Today, the Minister has very clearly laid out the position. He described the situation from the report as very serious. He talked about things such as technical flaws in the bids and the lack of transparency. However, these revelations contrast markedly with what we were told merely a few months ago. My question to the Minister is simply this: why were Ministers not alert to these very serious flaws in the bid, and can Sam Laidlaw, in his investigation, look at this specific aspect and report on the person who chairs the board at the Department for Transport?

[Earl Attlee]

My Lords, the noble Lord talked about lessons learnt. As I said, the next stage of the Laidlaw report will look at why the errors occurred and at the lessons to be learnt. The interim report is not very long and should be available in the Library. I urge noble Lords to read all of it. I read it just this afternoon, so it is not a long report. The noble Lord asked me a point-blank question. Perhaps the answer is that officials did not realise that the flaw existed or how serious it was.

[Lord Stoddart of Swindon]

My Lords, I have no inhibitions at all about making strong criticism of what happened over this franchise. I think it has been a complete and utter disgrace and a fiasco. Indeed, when we consider the humiliating spectacle of the Government having to go cap in hand to the very franchisee who was rejected to ask it to continue running the railway, it is clear that we have got into a very serious situation indeed. Quite frankly, I believe that this Statement smacks of complacency about the whole matter. Let us just have a look at what the interim inquiry says about it. Sam Laidlaw refers to a lack of transparency in the bidding process and the fact that published guidance was not complied with when bids were being processed. Why not? Finally, he talks of inconsistencies in the treatment of bidders, and that is the most serious of all because it smacks of corruption somewhere in the department. I am sorry to have to say it but it has to be said in the light of that particular sentence. I ask the noble Earl whether the department is now shown to be not fit for purpose. Is there going to be a root-and-branch reorganisation of the department to see that this sort of thing never happens again in relation to railways or, indeed, any other franchises in which the department might be involved?

[Earl Attlee]

My Lords, the noble Lord, Lord Stoddart of Swindon, talked about strong criticism and of course it is justified. Ministers are not denying that the problem is serious. The Virgin bid was not rejected; it fell victim to a better bid from FirstGroup. The noble Lord talked about inconsistency in the treatment of bids. There is no evidence of bad faith on the part of officials. As we understand it, it was purely an error. Finally, he talked about reorganisation of the department. We will have to wait to see what Sam Laidlaw says about the reasons and the lessons learnt. I will not promise that we will reorganise the department but I assure the House that we will make sure that this problem does not arise again.

[Lord Stoddart of Swindon]

The noble Earl said that there was nothing wrong with the process, but it was shown that everything was wrong with the process. In fact, Virgin went to the High Court because it believed that the process was wrong. Quite frankly, I believe that the noble Earl, whom I respect and like very much, is being rather complacent.

[Earl Attlee]

My Lords, I am certainly not being complacent; I am talking about a very serious problem.

Police and Crime Commissioner Elections (Welsh Forms) Order 2012

Monday 29th October 2012 Lords Chamber

Motion to Approve

18:40

Moved By

[Lord Taylor of Holbeach]

That the draft Police and Crime Commissioner Elections (Welsh Forms) Order 2012 laid before the House on 15 October be approved.

Relevant document: 8th Report from the Joint Committee on Statutory Instruments.

[The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)]

My Lords, the House will know that on 15 November the people of England and Wales will go to the polls to elect their first police and crime commissioners.

The Police Reform and Social Responsibility Act 2011 sets out the basic rules for the elections, and the detailed rules, forms and notices can be found, in English, in the Police and Crime Commissioner (Elections) Order 2012. The Government are, of course, committed to ensuring that the Welsh language is given full parity with English in Wales, so have brought this further order to establish a bilingual ballot paper for use in Wales on 15 November. Our commitment to ensuring that the Welsh language is given equal status with English in these elections is shown by the fact that we have established Welsh names for the four offices of PCCs in Wales formally. We are also ensuring that our candidate website in Wales is also in Welsh, with a website address in Welsh too.

Should they wish, police and crime commissioners on election will be able to take their oath in Welsh. I can assure noble Lords that all other forms and notices for the election can be issued bilingually without an order. These suggested forms are available on the Electoral Commission website. However, ballot papers require an order and I am sure that all noble Lords will join me in supporting the need for these forms to be available bilingually. I beg to move.

[Lord Touhig]

My Lords, what a complete shambles this has become. We are less than 48 hours away from the deadline of five o’clock on Wednesday when the first ballot papers in both languages should be sent out to postal voters. Until we conclude our business this evening, there is no authority to use ballot papers in both languages. This is further evidence of the lack of interest that this Government show to Wales, her people and the Welsh language. The Electoral Commission points out in its helpful briefing for this debate:

“Welsh language legislation requires that in Wales the Welsh language is treated no less favourably than the English language”.

We are barely two weeks away from the first election for the police and crime commissioners and until this order is agreed there will be no bilingual ballot papers available. Some of us are sceptical about the whole idea of police and crime commissioners, coming at a time of the difficult economic situation in our country. Many of us question spending £75 million on this election. On top of that, I see in an Answer given to my right honourable friend David Hanson, the Member for Delyn in the other place, a further £350,000 has been spent on printing ballot papers in English only in case this order is not made in time. With the passing of this order allowing for the use of bilingual ballot papers, the English-only ballot papers, which have already been printed, will be thrown away. That means that £350,000 will have been spent on creating waste paper.

I share the Electoral Commission’s view that rules relating to any elections should be clear at least six months before the election. The commission has already told the Government of its concerns and about the unacceptable lateness of the Welsh ballot forms order that we are now considering. Indeed, in a letter of 28 September from Jenny Watson, the chair of the Electoral Commission to the Minister, Damian Green, she said:

“No draft legislation vital to the conduct of an upcoming election should be made only 16 days prior to polling day after candidate nominations have opened. In this case, the legislation is likely to be made only just before postal votes are dispatched, with the result that there will be significantly increased costs for the public purse”.

18:45

We have to ask: how have we come to this? This shambolic Government seem to stagger from one crisis of their own making to another. I accept that it is the responsibility of the Home Office, and I have great sympathy for the Minister having to come here to answer, but where were the Wales Office Ministers in all this? Did they know about this mess? If so, what did they do about it? After all, there are three of them now. The last time we had three Ministers in the Wales Office was before the National Assembly for Wales existed. In pre-devolution days, the Wales Office ran public services such as health and education. It was responsible for everything from agriculture to transport. The present Wales Office runs nothing at all. When the National Assembly was created it took over many of the responsibilities of the old Welsh Office and as a result, the number of Welsh Office Ministers was cut from three to two, and rightly so.

In the four years that I had the privilege of serving as a Welsh Office Minister, we had just two Ministers and we certainly had a much greater workload than the three there now have. That included responsibility for taking through legislation, which is something that the present trinity of Ministers do not have to do because the National Assembly for Wales now has legislative powers. The Wales Office has some 60 staff—23 in Cardiff and 37 in London. Seventeen of its staff are on loan from the Welsh Government. Did no one spot the fact that the Government had not made this order? Were none of the three Ministers aware of this debacle?

There is something called collective responsibility. When I was a Minister we took that seriously. We looked across the range of government departments to see what they were doing. All interdepartmental correspondence between Ministers was copied to all Ministers. Staff were alerted to bring to Ministers’ attention not simply matters relating to their own departments, but matters across a wide range of issues, usually specified by a diligent Minister. I suggest that the Wales Office Ministers be provided with a copy of the excellent book written by my friend Gerald Kaufman, How to be a Minister, because it seems that they do not know how to be Ministers. To be fair, I certainly exclude the noble Baroness, Lady Randerson, who has only just become a Wales Office Minister, but the Secretary of State for Wales was the former Under-Secretary of State for Wales. The other Minister, Mr Crabb, was also a Whip. Those sleeping beauties of Gwydyr House did not seem to be aware of what was happening at all.

I know that the noble Lord, Lord German, is seeking a debate stressing how the Welsh and UK Governments can work more closely in the interests of the people of Wales. Well, if this abysmal track record is anything to go by, Welsh Ministers will not be working in partnership with their colleagues in Cardiff for the benefit of the people of Wales. We have all heard the term, “sleeping partner”, but I am sure that we did not expect it to apply to an entire government department. Under this Government the Wales Office has no profile. The Ministers are invisible; they have no mandate; and it is clear from the mess caused by the delay of this order that they have no great interest in Wales. The lateness in laying the order is typical of this Government—a Government who only a while ago forced through a Bill cutting the number of Welsh MPs by 25 per cent. The voice of Wales will be heard. We will not be silenced, and whatever happens to the parliamentary boundaries, I have no doubt that the Conservative and Liberal Democrat MPs will certainly be given their marching orders at the next election.

[Lord Wigley]

My Lords, I am very glad of the opportunity to speak briefly on this order. I thank the Minister for his courtesy in pointing out last week that this debate was taking place, but having said that, I may not be quite so positive towards the Government. I certainly agree with the remarks of the noble Lord, Lord Touhig, in what has been an incredible episode in these events.

The deputy head of the Electoral Commission, Rhydian Thomas, has pointed out in no uncertain terms:

“Welsh language legislation requires that in Wales the Welsh language is treated no less favourably than the English language”.

That applies in this case. It is not something new. The first Welsh Language Act was in 1967, there was another in 1993 and there was a revision from the National Assembly two years ago. That is known to the Home Office and has been known all through the procedures relating to the police and crime commissioner elections. Why on earth are we now, two days before the deadline for these papers to be posted out for postal vote purposes, having to spend an extra £350,000 to cover the mistake made by somebody in the Home Office?

In his document, Rhydian Thomas states:

“Police Area Returning Officers have put in place contingency arrangements; they are printing both bilingual and English language ballot papers so that postal ballot packs can be issued promptly. If this Order comes into effect in time, bilingual ballot papers can be issued in postal ballot packs. If not English language ballot papers will be used. The UK Government has agreed to provide additional funding to cover the additional cost of printing duplicate postal ballot packs”.

That is £350,000 at a time when we are told that every penny is vital. With all the cutbacks going on under the Welfare Reform Act and other legislation we see this waste of money because no one thought about it in time. That is of great concern. Rhydian Thomas further states:

“We are strongly of the view that the rules relating to any elections should be clear at least six months in advance. We have already made clear to the UK Government the unacceptable lateness of the Welsh Forms Order and our concerns about the inconsistency in their approach to prescribing forms and notices in English and Welsh for these elections”.

He later states:

“This Order should incorporate any corrections to address errors in the forms and notices that have been identified in the statutory English language versions”.

So we have not only got a mess through not having a Welsh language version, but the English language version that was drawn up was also incorrect according to the deputy head of the electoral structure in Wales. That cannot be acceptable. I fear that it indicates an attitude within the Home Office towards what is happening in Wales which, at best, is remote and uncaring and, at worst, is disdainful and contemptuous towards the needs in Wales.

I noted what the noble Lord, Lord Touhig, said about Wales Office Ministers, who clearly have a responsibility in this, but the primary responsibility for these forms lies with the Home Office—it should have got it right—and if the Home Office is incapable of getting it right on something as basic as this when the legislation has gone through the House, then, as in the case of Scotland and Northern Ireland, the Home Office should come under the National Assembly where, whatever else happens there, it would not have made a mistake of this kind.

Whereas I welcome the fact that these forms are going through at the 11th hour, I hope some lessons are learnt and taken to heart.

[Lord Roberts of Llandudno]

My Lords, I join with the condemnation of the noble Lord, Lord Touhig—apart from his final remark, which I do not accept at all—and the noble Lord, Lord Wigley. This is a shambolic way in which to undertake any kind of election. We have it on good authority that the ballot papers will be going out within the next 48 hours but it is only tonight that we will say, “Yes, let us have the bilingual papers”. How the staffs in the various local authorities will manage to do this over the next day or two is beyond my comprehension. Not only is this part of the election process at fault but the whole issue has been conducted in haste and has not been thoroughly thought through.

As to the postal ballot papers that are being issued, in the previous Parliament I campaigned to ensure that members of the Armed Forces then in Iraq and in Afghanistan now received ballot papers to allow them to take part in any election. There is not a chance that they will be able to do that now. There is something seriously wrong with our democracy when we deny people who are fighting for our freedoms the right to vote for the party of their choice.

To divert a little—I make no apology for this—how will candidates access the electors in their constituencies? Greater Manchester has 2 million people—I do not know whether that is the number of voters—so how are the candidates standing there going to get in touch with those 2 million people? Liverpool has 1 million people and North Wales has about 500,000 people: who will be able to contact these people with details of the candidates and their policies; how will they get through? There is no free post but a polling card was sent out about two weeks ago. That could have been used to provide at least a page from each of the candidates standing in the various constituencies—as they do in London mayoral elections—but nothing came.

No one will be able to say that this is a fair election. They may say, “It will be on the internet” but 8 or 9 million people have no access to the internet. How will those people know who is standing, which party they belong to and what their proposals are for policing in their particular area? It could have been so different.

Only the wealthy or well-funded candidates in North Wales—which is only a small electorate—could possibly afford £50,000 to mail people in their areas. No ordinary person—certainly no independent person—will be able to afford this. So some candidates will have access because they have money; others will be unable to afford access. Would there not be a case for a legal challenge to the results when they are announced? Someone will have to think that through thoroughly.

While I am delighted that at long last we are to have Welsh ballot papers and that a prototype is in our briefing, so much else is wrong. This is a total shambles which does not reflect on the people of the areas it is supposed to represent. As to the point about this being approved at the last hour, we cannot call for the election to be declared invalid now but certainly we need to go through it thoroughly in the future.

I support what has been said. I am glad that there has been at least an acknowledgement of Welsh—which, of course, is one of the great languages of the western world—but we will try to ensure that discounting us without a thought will not happen again.

[Lord Elystan-Morgan]

My Lords, I endorse with enthusiasm the chagrin that has been announced by each of the three previous noble Lords who have spoken in this matter. I have no doubt that, at best, it is an embarrassment for the Government; at worst, it could well be a disaster. In saying that, I exculpate completely the Minister, the noble Lord, Lord Taylor, in this matter, and the new Minister, whom I congratulate on her position.

The noble Lord, Lord Taylor, has already shown himself a person of great sensitivity and sincerity in relation to Wales and has shown a considerable chivalry as well. He wears the gown, as it were, of defending counsel in this case. I know something of what that role sometimes involves.

There is no doubt that disaster lies very close to our elbow tonight. If this legislation is not carried by five o’clock on Wednesday, which is less than 48 hours away, it will be impossible for these Welsh forms to be part of the election. There is no dispute about that. If that can be done—and I have no intention of dividing the House; nor, I am sure, has any other noble Lord—it will have been a very close-run thing.

However, there are lessons that we have to consider in this connection. This is a tale of two statutes: one is the Welsh Language Act 1967. The combination of Sections 2 and 3 of that Act mean that anything that is done in the Welsh language has equal validity as if it had been done in the English language. The blade was pushed a little further by legislation passed in 1993 and thereafter, but the basic principle was established in that Act. I am very proud indeed to have been a Member of the other place at the time.

19:00

The effect of that is that there is a statutory obligation on Her Majesty’s Government to use the Welsh language whenever they possibly can so as to establish the principle of equal validity. On this occasion they failed to do so. I think they failed because the procedures were so convoluted. They meant that someone in the Home Office had to translate the title into a very simple Welsh phrase, “heddlu a throseddu”. Only one letter was wrong. “Throseddau” was the translation, but that means “offences” or “crimes”. “Throseddu” means “crime”. In other words, the title should be “Commissioner for Police and Crime”, not “Commissioner for Police and Crimes”. The difference is not infinite, but it is significant. Why ever was that particular responsibility left with the Home Office?

I have referred to the 1967 Act, but the other one is rather older. It is the Act of Union 1535 or 1536. That Act contains a massive preamble. If you want to know how to use 10 words whenever one can be used, read this preamble. It is a classic example of long-nosed Tudor verbosity. In the Act, Henry VIII enounces the principle that the people of the dominion of Wales use a language that is different from and in no way consonant to the mother tongue of the people of this realm. That began it all; it was an attack upon the Welsh language. By that Act, the Welsh language was effectively excommunicated from the realm of law. It meant that no one could hold a position unless he could speak the English language, that no document would have validity unless it was written in the English language, as well as many other instances in addition.

I am sure that the Minister will accept that we are approaching this with very considerable sincerity. It is not a matter of pettifogging Welsh lawyers logic-chopping, splitting hairs or in some way trying to be a nuisance to the established Government of the day. This is a massive insult to the Welsh language. The Act of Union tried to kill the Welsh language; the Act of 1967 tried to save it. It is as simple as that. So, looking to the future and in no way seeking to embarrass the Minister for reasons that I hope I have explained very fully, I will ask this question: is it necessary for procedures such as these to be in some way outside the ambit of the Welsh Assembly? As the Minister knows, 20 fields of legislative authority were transferred to Wales under Part 4 of the Act, all of them under the referendum of 1 March last year. The 20th is the Welsh language, save and except the status of the Welsh language in the courts. That does not apply in this case. This is a matter as exclusively Welsh as one would ever find. What could be more utterly Welsh than the Welsh language itself? Is there any reason, therefore, why the authority to deal with the matter should have rested not with the Home Office—I do not speak with any animosity towards that body because I had the great privilege of being a junior Minister there some 45 years ago, if I remember rightly—but within the purview of the Welsh Assembly?

As a fallback position, I would ask the Government to consider a matter that I have raised more than once in the House over the past few years. When the legislation to establish a Welsh Parliament was going through in the late 1990s, or rather the Welsh Assembly eventually leading to a parliament, the point was made that there were many areas where there would not be a direct transfer of authority, but that there should be an understanding. The word used—I do not think it is used in the Act itself, but it certainly was in the debates at the time—was “concordat”. There should be an understanding between the department in Whitehall and the department in Cardiff as to exactly how they could work together. If there were a concordat, I would prefer to see a transfer, but if there were no more than a concordat, this shambles would not have occurred. The quotation I rely upon comes from Tennyson, not from “Le Morte d’Arthur” in the Idylls of the King, but from “The Charge of the Light Brigade”: “Someone had blundered”. Let us see to it that it never happens again.

[Lord Rosser]

My Lords, this order needs to be effective by the end of this month, which is in a couple of days’ time, so that postal ballot papers can be issued in time to allow voters to receive and return their postal ballot papers for the police and crime commissioner elections in Wales before the poll closes on 15 November. If this order is not passed, the ballot papers used in Wales will only be available to voters in English, despite the fact that, as my noble friend Lord Touhig and the noble Lord, Lord Wigley, have said, there is a legislative requirement that in Wales, the Welsh language is treated no less favourably than the English language. The debate on this order seems to be being held remarkably close to the deadline for the issuing of postal ballot papers to begin. When he comes to reply, perhaps the Minister will tell us why this is the case. Was the need for the order overlooked until a late stage or is there some other reason why we are debating it just two days before it needs to come into effect?

The Electoral Commission is clearly unimpressed about the apparent delay, since it has made clear to the UK Government its view on the unacceptable lateness of the Welsh forms order we are now considering and its concerns about the inconsistency in the Government’s approach to prescribing forms and notices in English and Welsh for these elections. Statutory forms and notices, including all those used by voters in the process of voting, were prescribed in English in the Police and Crime Commissioner Elections Order 2012 which came into effect towards the end of July this year.

The Welsh forms order, in front of us now, prescribes only the form of the ballot paper to be used in Wales. The remaining forms and notices have been provided by the Home Office on a non-statutory basis to those involved in administering the elections. The Electoral Commission has stated that if English language material is prescribed and provided to those running elections, then it is an important principle of consistency that the same approach should be adopted for all Welsh language material, and that this is done at the same time—not, as in this case, more than three months afterwards and only a few weeks before polling day. Do the Government agree with the view of the Electoral Commission on this issue and is it the Government’s intention, as the Electoral Commission has urged, that a further Welsh forms order should be brought forward at the earliest opportunity in order that it will be in effect for future PCC elections, including possible by-elections?

Returning to the police and crime commissioner elections next month, if the order we are discussing is not made, the ballot papers used in Wales will only be available to voters in English, and postal ballot papers are due to go out in a couple of days. As a result of the late appearance of, and a decision on, this order, the police area returning officers have had to put contingency arrangements in place. Accordingly, they have had to print both bilingual and English language ballot papers in order to ensure that postal ballot packs can be issued promptly. It appears that the UK Government have had to agree to provide additional funding to cover the costs of printing duplicate postal ballot packs. Perhaps the Minister could indicate either what those costs actually are, or if that is not known, what it is estimated they will be? Is the £350,000 figure that has already been referred to the correct figure or not? The Government say so often that money is not available because of the financial situation but I take it that this will not be the case when it comes to finding the money to pay for the cost of government ineptitude, as in this instance.

The Electoral Commission has said that if this order does not come into effect on 31 October, it should not do so until after the election on 15 November to avoid there being two different sets of rules in effect at different points in the timetable for the same election. Do the Government share that view?

Of course, the Government attach great significance to having police and crime commissioners. They made their decision to proceed in 2010 and have since spent their time minimising the achievements of the police authorities, under which crime had fallen steadily and consistently during the period of the previous Government—and under which, this Government say, crime has continued to fall. Obviously under this Government the price of success is abolition.

We are now close to the PCC elections that will be held in November. These are national elections taking place across England and Wales. We do not normally hold national elections in November, since the weather and daylight hours do not encourage people to vote. When challenged about this in the House of Commons earlier this month, the Minister for Policing and Criminal Justice memorably replied that,

“every four years America holds what is possibly the most important election in the world in November and the American electorate seem to engage in it, so it is not insuperable for people to go and vote when it is a bit cold and wet”—[Official Report, Commons, 19/10/12; col. 677.]

So that’s all right then. The Government have imported the idea of police and crime commissioners from the United States and now apparently they have also imported the election date from the United States.

The Government have also introduced an arrangement for this election under which, unlike other national elections, there will be no written information about the candidates sent to the electorate and delivered free of charge from the candidate’s point of view unless an individual rings up a phone line and asks for such written information to be sent to them—this in an election where the Government claim that police and crime commissioners are needed to provide more visibility, transparency and accountability. The Government said that they wanted to encourage independent candidates to stand. However, unless independent candidates are well off and can afford to pay for a mail shot or delivery, they are invariably more dependent than other candidates on the free delivery to help get their name and message across. The Government say it is about cost, but if they were really concerned about cost, they would not be introducing these elections in the first place—certainly not at this time.

Today we are debating an order that appears to reflect a degree of incompetence on the Government’s part, in particular from a department that seems to have a happy knack of drawing adverse comments from your Lordships’ statutory instruments committee. The Electoral Commission seems to have cottoned on to this as well, since it will be publishing a report early next year on the impact of the content and timing of the passage of the legislation that enabled the PCC elections to take place—including, it says, the late laying of the Welsh forms order. The commission also says that its report will look at the role of the Home Office, and comments that this is a department not usually tasked with the running of elections. To task it with the running of an election was of course a ministerial decision.

Parliament has decided that elections should be held for police and crime commissioners in Wales. Those elections are imminent. Despite the typically incompetent way the elections have been and are being managed and handled at ministerial level, we shall not seek to stop this order coming into effect as intended.

19:15

[Lord Taylor of Holbeach]

Well, I thank the noble Lord for that support. This has been a stimulating and useful debate. It has given me the opportunity to inform the House and to some degree clear the air on some of the issues that have been raised, and I know they have been raised with some considerable passion.

As we know—and with this being a shared objective of all noble Lords who have spoken—the order will ensure that voters in Wales will have the opportunity to mark their vote bilingually. The House’s support of this measure means that it can be done in Welsh and English and both languages will have full parity.

Noble Lords can be assured that throughout this process the Government have consulted with the Electoral Commission and returning officers. As noble Lords will know, these are independent officers acting within local authorities, running the election, in developing the design of the ballot papers and the mechanics of delivering a Welsh and English bilingual ballot paper for the electors in Wales.

I should make it clear to the noble Lord, Lord Touhig, who I think had expected to find a Welsh Minister here today, that no criticism should be made of the Wales Office; the Home Office is the responsible organisation. As the noble Lord, Lord Rosser, made quite clear, the Home Office is responsible for conducting this election. The focus of the issue should be directed to the Home Office. It is indeed the Home Office’s intention to ensure that we have a long-term way of dealing with the Welsh language element of elections. As noble Lords will know, currently this requires a separate order from the general secondary legislation that is required to bring about publication of other forms.

The Law Commission is investigating the whole question of elections. Although it will take some time for the Law Commission to report, it is the Government’s intention to respond to that. It may well be that in future it will not be necessary to keep coming back for each election. I remind noble Lords that for the previous general election, the Government had to bring in a special order in April for the May 2010 election for exactly this issue: to produce a bilingual ballot paper. The process is complex, to the extent that we need to ensure that we have the form of the election material right in the English language before we seek to translate it into a Welsh or bilingual format. This has been a more convoluted process than noble Lords might at first think.

[Lord Elystan-Morgan]

Is there any good reason why translation from English into Welsh should not be the exclusive purview of the Welsh Assembly? That would avoid all these complications, would it not?

[Lord Taylor of Holbeach]

That will have to be for future legislators to consider. It is certainly not possible under current law. As I have explained, the responsibility lies with the Home Office to deliver these elections in England and Wales. The noble Lord, Lord Elystan-Morgan, showed a great deal of understanding about the complexity of statutes under which Welsh language elements of elections have to be conducted. He mentioned the two statutes and the complexity of the issue. I thank him for his understanding of that matter.

A number of noble Lords, including the noble Lords, Lord Wigley and Lord Rosser, mentioned the cost of £350,000. That is within the £75 million budget, and it will not cost any additional money nor extend the budget for these elections. It is within the contingencies that noble Lords have mentioned.

We take the Welsh language very seriously. I am an English-speaking Englishman who has to receive any part of the Welsh language culture second-hand. However, I appreciate it enormously. It enhances all our lives that we have a second living language spoken in these islands. It is greatly to our advantage and is one of the reasons why we support, in any way that we can, opportunities for Welsh speakers to express themselves in their Welsh language. Indeed, as I said, they can take the oath in Welsh if they wish on achieving office.

[Lord Wigley]

We all appreciate the noble Lord’s positive words towards the Welsh language and our heritage that goes with it. On the lessons to be learnt from these mistakes—I am sure he would accept that there have been mistakes somewhere, otherwise we would not be in this position—will there be an opportunity for the Home Office to review how they deal not just with Welsh language matters but with matters relating to Wales where there is an overlap with the National Assembly, such as the interface between crime and social services and the way in which they work with the devolved Administration, to make sure that we do not get into this mess again in any context?

[Lord Taylor of Holbeach]

I implied in my response so far that the key lies in getting mechanisms whereby some of these things that have required separate consideration by Parliament are automatic and part and parcel of the process. The translation of election material into the Welsh language is something that the Law Commission should be looking at. How that is delivered is a matter for the Government and Parliament to consider when the Law Commission eventually reports on elections. However, one lesson that comes out of this is that it gives us an opportunity to look at how we do these things in the future. I am grateful for that aspect of the debate, which has overridden, I hope, some of the other aspects of the debate that have not perhaps been quite so positive in the assessment of the Government’s intentions.

The Electoral Commission is right that we should take whatever steps we can to make sure that this order comes into effect by 31 October. That is the point at which returning officers can start to send their postal voting packs to voters. They cannot send them before. I hope that noble Lords will support this order and then I am sure that these voting packs will go out by 1 November.

There will be opportunities for us to look at this issue in the future and I thank noble Lords for their contribution to the debate today. I hope this order will have the support of the House and I commend it.

Motion agreed.

Electoral Registration and Administration Bill

Monday 29th October 2012 Lords Chamber

Committee (1st Day) (Continued)

19:25

Schedule 2 : Sharing and checking information etc

Amendment 10

Moved by

[Lord Rennard]

10: Schedule 2, page 17, line 15, at end insert—
“(1A) Provision under sub-paragraph (1) must authorise or require institutions providing secondary education (as defined by section 2A of the Education Act 1996), the Student Loans Company Limited, the Driver Vehicle Licensing Agency, tenancy deposit schemes (as defined by section 212 of the Housing Act 2004), and credit referencing agencies (as defined by section 145(8) of the Consumer Credit Act 1974), to disclose information to another person for the purpose of assisting a registration officer in Great Britain.”

[Lord Rennard]

My Lords, Amendment 10 is in my name and that of my noble friend Lord Tyler. The Government have been trailing data sharing with the DWP database since orders were passed through this House last year. We very much welcome their aspiration to data match some two-thirds of eligible voters from the old household register on to the new individual register using this process. However, we worry that this process will not prove to be as robust or successful as everyone hopes it will be. Other databases are, in our view, needed to make a success of this project. We have talked many times at the various stages of this Bill about the need for the electoral register to be complete. I believe this amendment about the use of other databases will show whether it is really the intention of the Government to walk the walk on this issue, as opposed just to talk the talk on it.

It will be a matter of judgment as to which databases may be appropriate for automatic registration, as the DWP’s will be, and which should only provoke invitations to register from electoral registration officers. What is clear is that to restrict ourselves to the DWP’s database, in either endeavour, is missing a real opportunity to improve the completeness of the registers, even from their present positions. For all the talk there will be about the dangers of the new system, we have to recognise that the old system has proved quite unsatisfactory. We now know that the electoral register is complete up to only 82% of eligible voters, as opposed to the 92% quoted by Ministers very frequently a year ago. Whether we have the old or the new system, we need better and more comprehensive data matching and data mining in order to help overcome the difficulties of registering voters.

We believe in particular that the information held by the DVLA—a comprehensive database of drivers—could provide a rich source of information better and more diverse than that of the DWP. Its database of national insurance numbers is of course notoriously unreliable: there are 80 million national insurance numbers in a population of only 51 million. We know there are many people on the DWP database who will have real trouble voting, since they died a long time ago. It would be particularly worrying if we restricted data matching to the DWP database only, as the Government could give the impression that they were keen only to see one demographic group of voters registered and not so keen on seeing other demographic groups registered.

Pensioners are not generally underrepresented on the voting registers or in the votes on election day. It is other groups where there is a more significant problem. There is a danger of unintended consequences in proceeding only with the DWP records, because they deal disproportionately of course with retired people. It is known that they vote disproportionately, although not exclusively, more in favour of the Conservative Party than perhaps other social groups. I know that our coalition partners would not want to give the impression that they are particularly keen on assisting with the registration of voters that may aid their cause and not with the registration of voters in general, in accordance with healthy democratic principles.

It therefore seems very important that the Department for Transport allows use of the DVLA’s database in the same way and with all the appropriate safeguards about personal data that the DWP applies. We are told by the Electoral Commission that the Department for Transport does not wish the DVLA database to be used in this way. However, the DWP has given permission for its database to be used in this way. My proposition is simple: that there should be consistency across government databases, using all of them to maximum effect, with the proper safeguards about personal data, in order to ensure that as many people as possible are registered.

[Lord Reid of Cardowan]

My Lords—

[The Deputy Chairman of Committees (Viscount Simon)]

Has the noble Lord moved the amendment yet?

19:33

[Lord Rennard]

No.

[Lord Reid of Cardowan]

I am very grateful to the noble Lord for giving way. I am not in principle against what he is suggesting but, as someone who bears the scars on my back of false accusations when in government of an intention to mine data, match data and cross-match data, can he tell us when the Liberal party came to the conclusion that it was perfectly legitimate to mine and cross-match the data from DVLA, from pensions, from national insurance, which the noble Lord mentioned, and from transport? Once you have created this precedent there will be very good reasons for using it, presumably with data from HMRC and others, right across the spectrum so it is not something that should be entered upon lightly.

[Lord Rennard]

Indeed, I understand that and we would not do so lightly. We had significant differences over the national identity card scheme, which we were told would cost something like £300 million. What I am suggesting in terms of electoral registration would obviously cost far less. The essential principle, rather than the costings, is that this is a one-way process with data whereby we are trying to make sure that everybody who is entitled to vote is able to vote. The safeguards that would be in place would ensure that the only information made available is someone’s name and address. If the database shows that they are there, they could then be invited to register if they are not on the register.

[Lord Reid of Cardowan]

My Lords—

[Lord Wallace of Saltaire]

My Lords, we are in Committee but I think I am right in saying that the procedure is that until the noble Lord has moved the amendment, no others should intervene. Could we allow the noble Lord to move the amendment? Then we can have the normal Committee stage open discussion.

[Lord Rennard]

I am grateful to my noble friend the Minister. All that I am arguing in my contribution is that there should be consistency across government use of databases. We should use the DWP database to help some people, and other databases which may help many other people, get on the voting register and have their democratic entitlement. We know that students, for example, are also very under-represented on the current register and may be even more under-represented under IER. However, there is an easy way in which this could be addressed. If the Government had the will to pursue what they say is their objective of maximising voter registration, students and former students could easily be located through the Student Loans Company, invited to register and reminded of their legal responsibilities to do so.

Attainers are a particularly important group. Sixteen and 17 year-olds could be identified through schools. There is a precedent for doing this in Regulations 41 and 42 of the Representation of the People (Northern Ireland) Regulations 2008, under which the previous Government brought in a system whereby schools had electoral registration officers visiting pupils at the age of 16 or 17 as part of their civic lessons. At the conclusion of their lesson about voting systems and registration, forms were completed to register those 16 and 17-year-olds at school. However, so far there is no such provision to do so in Great Britain. There is also a particular difficulty with transient tenants in the private rented sector. They could be tracked down through tenancy deposit schemes and, again, invited to register and reminded of their obligations to do so.

These are all government databases and my argument is that the Government should be consistent in using them for data mining and data matching to try to make sure that we improve registration to improve the health of our democracy. There are also private databases and a huge wealth of information available through credit reference agencies—many of which are used at the moment by local authorities, including many Labour local authorities. The credit reference agencies use the electoral register as their own starting point, so some of these people are already registered. Those agencies also know of many more people with perhaps several forms of credit made available to them, more than one bank account legitimately registered and, perhaps, several credit cards used legitimately. Yet they know that those people, who exist, are not on the voting register even though they are clearly entitled to be on it. I believe that they should be invited to be on the register and told of the requirements.

At the moment, many local authorities are using exactly these data to try to check on the single person’s council tax discount. They know from their data that there is often one person on the register yet several people are resident. Local authorities are using these reference agencies to write to the people they know within this household, pointing out that they know that those people are there and should be on the electoral register and that perhaps it is not appropriate for them to claim a single person’s council tax discount. Local authorities have no difficulty in doing this. I think there is a great deal to be said for using more effectively the data of the credit reference agencies. I know that the Government have been holding discussions with them. However, there is as yet no commitment from the Government to use either these other public databases to which I have referred or the private ones.

I turn briefly to Amendments 11 and 15 to 20. I would simply say that they appear to be also on the Marshalled List for the purpose of probing these sorts of issues, so I will not comment further on them from our Benches. However, we believe that the Government must look closely at all these areas and give some commitments before Report so that we can be sure that the final regulations on data sharing are far more ambitious than they are at present and that they are seen to be fair and in the interests of promoting our democracy. I beg to move.

[Lord Reid of Cardowan]

My Lords, I am sorry if I have breached the long-standing conventions of the House. I intervened at what I thought was the appropriate point but in terms of process, I should obviously be commenting now. I had not intended to comment when I came in to listen to the discussions but the precedent being suggested by the noble Lord has huge implications and significance. It ought to be regarded and scrutinised with some care before we proceed.

I do not for a moment doubt the noble Lord’s intention, which is to maximise the number of people on the voting register in order to enhance democracy, although perhaps I might express the wish that some of the comments made during earlier discussions had been listened to. It was predictable that we would end up with a shortfall on the electoral register and an anticipated greater shortfall. I think that lies behind the measures that the noble Lord has raised.

Let me make this point. If, however good the ends, we adopt the means of proliferating the use of data mining and data matching, that would be of considerable significance. If we are suggesting that we data mine and data match records from HMRC, the DVLA, the DWP—that has already been agreed—the Student Loans Company and credit reference agencies, that is a suggestion of huge import and ought to be scrutinised for its possible consequences.

It is, with great respect to the noble Lord who spoke, a complete red herring to compare this with identity cards. I say that for two reasons. First, they were voluntary and not all of what he suggested would be voluntary in so far as the person whose information is being mined would volunteer—although in some cases he suggested that they be contacted with a view to volunteering. Nevertheless, the ID cards were voluntary. Secondly, and more importantly, part of the reason for them was the spread of databases and the anticipation that data matching and data mining would become the norm in a cyberspace-dominated environment. Biometric protection was therefore enshrined in the ID card. In short, anticipating the use over the coming decade of greater dependence on an individual’s identity marked in a data bank and the possible loss of that identity or of that data bank by a government department, no one could have used that to gain access to any of the material in it—including bank accounts and so on—unless they had the fingerprints and the iris of the person whose bank account details were taken. In other words, it was a completely separate intention: to protect people should someone wish to use their identity if a databank was lost. It did not presuppose the Government going down this road of using records, which are exclusive to one purpose, for the purposes of data mining and data matching for another purpose, however well intentioned that might be.

I do not for a moment doubt that the intentions of the noble Lord are benevolent, benign, progressive and democratic, but the process of getting there, if it includes such widespread data matching and data mining as he has suggested, has profound implications and should therefore be subject to profound scrutiny in terms of the principle before this House.

[Lord Baker of Dorking]

My Lords, I, too, share some reservations on this matter. I was glad to see my noble friend Lord Rennard describe these as probing amendments, so, fortunately, they are not part of the coalition agreement. I share the view of the noble Lord, Lord Reid, that one wants to improve the methods of registration, particularly as regards students. I am always amazed that students are relatively lowly represented in political registration. That might change because, now that they have to pay for so much of their education, their association with citizenship is made much more vivid to them at an early age. I suspect that that will be reflected in their registration in the years to come.

My concern about this proposal is that it seeks to enact that information should be provided from a series of databases, including the Student Loans Company and further education and secondary education institutions—I presume that sixth-form colleges and FE colleges would be the principal area. Those institutions would be required,

“to disclose information to another person”—

not to a registration authority but to another person. “Another person”, I suppose, could be an election agent. They could be an election agent of the Liberal Democrats, the Conservative Party, the Labour Party or, presumably, the BNP—anybody could have the information. I would not be very keen on passing on some of the information to such people.

The provision would be a giant step towards a more prying society which I would be reluctant to go along with. I share some of the more general points of principle set out by the noble Lord, Lord Reid. Any data swapping has to be very carefully controlled for specific purposes. I am quite sure that the Liberal Democrats would condemn private companies getting into the business of data swapping in order to determine the patterns of consumer spending, for example. Many companies could justify that in the way the noble Lord seems to justify it for electoral purposes.

A method more suitable to our constitution would be the one cited by the noble Lord in the case of Northern Ireland. I see nothing wrong with registration officers of local authorities speaking in secondary schools and explaining to students the importance of electoral registration. That is a proper thing. If action were taken, as under some of the Labour amendments here, directly by the registration authority itself, rather than our seeking to tap into other things, it would be the right way to proceed. The action could be made much more effective if that procedure, which is the more constitutional practice in our country, was preserved, rather than our seeking a fundamental change whereby information of this sort, collected for one purpose, is made available for a variety of other purposes. That is a very big step which we should take most reluctantly.

19:45

[Lord Tyler]

My Lords, we have just heard from two very distinguished senior members of former Administrations. I find their cynicism about the way in which the public service operates rather discouraging. I am not suggesting that every word of our amendments may be precise, but I want to put it absolutely clearly on the table: nobody is forcing anybody to do anything. The purpose of the exercise is to make sure that the process of compiling the very building block, the foundation stone, of our democracy—the electoral register, which is important, as the noble Baroness said earlier, not just for voting purposes but for jury service and other purposes—is as well informed as it can be from public sources. As my noble friend said, the amendment does not propose that the electoral registration process should give back information in the opposite direction; it is one way. It has been very clear from successive Administrations and Ministers that it is for that purpose alone and not to provide information in the opposite direction.

I ask my noble friend Lord Baker to read very carefully how our amendment is worded. It does not suggest that the information could be given to any other person; it says very specifically,

“to disclose information to another person for the purpose of assisting a registration officer in Great Britain”.

In other words, it has to be for that purpose and that purpose alone. It may be that the wording can be tightened up still further by government amendment between now and Report, but I make it absolutely clear to my noble friend that not any other person could benefit from this data mining.

[Lord Baker of Dorking]

Would “another person” be an election agent of a party, or someone purporting to be?

[Lord Tyler]

No.

[Lord Baker of Dorking]

With great respect, that is what the amendment says. It does not say a registration officer or a local authority employee; it says “another person”. “Another person” in English law means anybody who says, “I’m actually going to seek this information in order to register more students. That is what I’m doing it for. I’m doing it for a public purpose. The fact that I am an election agent for my party, forget it. Forget that I am a registered Liberal”—that may be too difficult to forget, but—“Forget whatever I am”. That is what the amendment says.

[Lord Tyler]

My Lords, if the Government feel that the amendment is inadequate in that respect, and my noble friend has made his point eloquently, obviously they can adjust the wording at a later stage. However, the amendment is here for the very specific purpose of assisting a registration officer in Great Britain. In other words, I would take that to be somebody who was within their organisation. If my noble friend has better wording, that is fine, but the point that I have to make is simply this: we already have the precedent, which has existed for a very considerable time, of using data that are already available to Government for this purpose. We are seeking to make sure that that is as full as possible. I think that the noble Lord, Lord Reid, will understand that the great majority of DWP data, cited by my noble friend Lord Rennard, will relate to people who are already going to register, in particular elderly people. What we are concerned about is mobile young people, a concern which has been evident also in contributions from the opposition Front Bench today. One of the ways to get to them is clearly through the student loan data and those who register for provisional licences.

[Lord Reid of Cardowan]

I make it clear to the noble Lord, as I did previously, that I do not approach this proposal with cynicism, and I certainly did not suggest that I was in any way suspicious of either his motives or those of the noble Lord who moved the amendment. Indeed, it is courageous that representatives of Liberal Democrats want to put more students on the electoral register. That illustrates that they are not doing it entirely for their own benefit. What I am saying, however, is that you should not take a step down this road, which is to bring together data mining and data matching across government departments, unless you recognise the profundity of it.

Does the noble Lord accept that there will be increasing pressure, in times of austerity, for the government departments that he mentioned to move to the cloud, rather than retain their own databank and their own hardware? There will be great pressure—I see that the noble Lord agrees with me. Does he understand that many of the cloud servers have a business model that is dependent on mining the data that pass through their server in order to get to the databank? Therefore, you should not aggregate these data in such a way unless you recognise that the people in the private sector offering you the service of the cloud will mine those data. Maybe the noble Lord has already considered this but I am trying to make sure that we do not take such a step—not because I am cynical or doubt his motives but because real, profound questions arise out of it.

[Lord Tyler]

The noble Lord has been generous enough to say that he does not in any way question the integrity or approach of my noble friend or me. I do the same for him. I very much appreciate and endorse what he said. In the fast-moving world that we are talking about, these are proper concerns. The whole issue of who would operate the identity cards to which he and his Administration were committed raised precisely those questions, too. I think he would now accept that.

All we are saying here—I look forward to what the noble Baroness will say—is that, having already committed to the use of the DWP data, it is only reasonable to examine other databases that may be balanced in a different way demographically and politically. Maybe the terms in which our amendment is written need to be more carefully considered. That is fine; it is what a Committee stage in your Lordships’ House is all about. I entirely understand the concerns that the noble Lord expressed but we have to be very careful. If we went right down the road of being risk-averse on these issues, we would do no data matching or mining at all and the register would become even more inadequate than it is already. That is a very serious proposition.

I do not know if the noble Lord was in the House earlier, but we had to identify that the status quo now is totally unacceptable. We have dropped back to the low 80s in terms of the completeness of the register. We are not where we were 10 years ago. I think it is agreed on all sides of the House that we have to look at every possible way to improve the integrity of the register both in completeness and accuracy. That is the purpose of our amendments.

[Baroness Hayter of Kentish Town]

My Lords, first, I thank the noble Lord, Lord Rennard, for the little education he gave me in an earlier group about the precise wording of Amendment 24. I am very grateful for that. I also thank him for moving this amendment. I speak to very similar ones tabled by my noble and learned friend Lord Falconer and me. All these amendments seek to achieve essentially one thing: that those who hold, for quite proper and official reasons, the names and addresses of our citizens should make them available to election officers who then must write to those citizens, encouraging them to register.

I say to my noble friend Lord Reid and the noble Lord, Lord Baker of Dorking, that we are in a position where the Government want to move very fast from one system of registration to another. I hope they will both remain for the next group of amendments, which are about another device to ensure a full register—an annual canvass. That is a different group of amendments. Without these sorts of activities, we risk after the general election of 2015 suddenly moving on to a half register. Unless we take these sorts of steps, we will not have contacted a large swathe of people who absolutely have the right to vote and, I would argue, therefore have the right to be told that they have the right to vote and what they should do about it. Whether it is, as suggested by the noble Lords, Lord Rennard and Lord Tyler, the Student Loans Company, DVLA and tenancy deposits schemes, or, as we suggest, pension benefits agencies, the Passport Office, education establishments and landlords, they should all provide quite willingly information to the relevant election officers, who would then be under an obligation to write to those not on the register encouraging them to sign up.

One of the reasons for this is that we know from research—I think done by the Electoral Commission—that many of those not on the register believe that they are. That may even be the Minister’s own research. Forgive me for not getting the source quite right. We know that a large number—I think it is 45%—of people not on the register think that they are. There will be many of us who have done the political work on polling day of taking people round only to find that they are not on the list. There may be a number of reasons for that. One is the assumption that it just happens. Maybe they have lots of other dealings with the state: they may have applied for and been issued with a passport or driving licence, get a pension or a benefit, pay their council tax or visit their local hospital or GP. That gives them the feeling that they are part of society and a community, and are a citizen. A number of them probably assume that, as part and parcel of that, they are also on lists held by the Government so do not need to separately sign up to register to vote. We are coming in with a new system—in quite a hurry—so it is important to make clear that these other lists also held by the Government or government-authorised agencies do not of themselves give them the right to vote.

It is also important that the Bill should require EROs to let all people know of the other important uses made of the register. The Minister mentioned credit checks earlier in Committee and there is certainly also mortgage eligibility. When those of us of a certain age want our freedom passes, the first thing our local authority will do is see whether we are on the electoral register. There are many advantages to being on it.

Until my noble friend Lord Reid and the noble Lord, Lord Baker, spoke, I thought that it would seem obvious to most people that EROs would look to the sources of data that exist elsewhere to find those missing from the existing registers—or the new ones as individual registration comes up—and write to them. It seems that we should not just leave it to EROs to take that initiative, but write in the Bill that such data should be shared, and shared in a timely manner so that those of our fellow citizens not already on the register will receive a personalised invitation to register for what is their right—the ability to vote.

[Lord Wallace of Saltaire]

My Lords, before I address the amendments directly, I take up some of the broader issues raised by the noble Lord, Lord Reid, which were touched on by the noble Lord, Lord Maxton, in our first Committee session before dinner. They are extremely wide issues and I agree that they are important. It was for that precise reason that I went to be briefed by the head of the Government Digital Service last week.

As the noble Lord, Lord Reid, pointed out, as we move towards cloud computing, the questions of where data are stored, to what uses they are put and how far they are shared become a very delicate and important area. I also flag up that the question of what is a public database and what is a private one becomes a little more difficult than it is now. There is a whole set of issues there that we need to return to in other contexts because this has the potential to transform the way in which society, the economy and government work as a whole. I was assured that the protocols that now govern what is called identity verification—the very limited use of data sharing to ask, “Is this person real?”—are strong and, as used by the credit agencies and others, provide firewalls which prevent too much information being shared.

Some of us might differ on how far we would be happy for the DWP, HMRC and the National Health Service to share information on what people claim to be earning, claiming or whatever; those questions will also come into that debate. I strongly agree that this is an extremely important long-term issue. However, if I understand it correctly—and I am at the absolute outer limits of my knowledge of computers at this point—I am told that one does not need to amass new databases. That is the difference between what is now beginning to happen and the old ID debate. One can put different datasets in touch with each other for limited purposes to enable one to discover whether X is really X and whether there is a Y. I thank the noble Lord for his intervention; these are very important long-term issues.

The Government believe that maximising electoral registration and voting is not purely the function and responsibility of the Government. It is the function of political parties; it is the function of all sorts of voluntary organisations. We all know about Operation Black Vote and Bite the Ballot. Noble Lords may be interested that one person last week suggested to me that if Tesco was willing to offer a voucher to everyone who signed up to the electoral register at the age of 18, that would increase the number of 18 year-olds signing up. For myself, I would prefer the Co-op to do it. Perhaps we should consider the extent to which such incentives are, sadly, in our modern world, necessary.

The Government are sympathetic to the spirit of the amendments, but wish to stress that we are already working in this area. We want to retain a degree of flexibility, and a lot of pilots are under way. In last year’s pilots, we matched databases from not only DWP but HMRC, the Royal Mail, the address reallocation service, the Department for Education, HEFCE—the Higher Education Funding Council for England—the Department for Business, Innovation and Skills, the Department for Transport, the Student Loans Company, the Ministry of Defence for service voters and the Improvement Service company. The noble Lords, Lord Reid and Lord Martin, will understand about that company a little better than I do, because it holds data on behalf of local authorities in Scotland.

[Lord Tyler]

Perhaps my noble friend could address the particular problems found when the Cabinet Office funded additional research by the Electoral Commission about the completeness and accuracy of the register. As the noble Baroness said earlier, a high proportion, 44%, of those not on the register in April 2011 incorrectly believed that they were. Even more significantly, only 14% of those who moved between the 2010 canvass and those who appeared on the register in April 2011 were there. It is often the move that is the problem. That is why some of the data-matching suggestions made, to which my noble friend has just referred, were particularly addressed to those people. DWP does not particularly help with those; DVLA, Royal Mail and all that seem to be more relevant.

[Lord Wallace of Saltaire]

I entirely take the noble Lord’s point, and add that an information campaign is clearly an important part of the transition to get to those who think that they might be on the register but may not. I would be entirely happy for noble Lords to press us further on the question of attainers, education in schools and civic education, which must be part of the transition process.

We resist the exact terminology in the amendments, and ask for more flexibility on the terms that we are looking at all these areas. We do not want to limit such schemes to the organisations named; we are experimenting with the range of datasets that can be helpful in this regard.

As we stated in our response to the Delegated Powers and Regulatory Reform Committee:

“The Government feels that the categories of persons should not be prescribed in primary legislation in this regard—

because—

“the Government does not intend to introduce an amendment to restrict the categories of persons that may be authorised or required to provide information, but will listen carefully to the views of the House on this issue during Parliamentary debate”.

The Government will reflect carefully on all those points and make clearer our intention on Report. So we are considering the precise detail of the alternative verification procedure beyond the immediate, primary identifiers and will consider a range of options to provide an accessible but secure approach.

Amendment 11 would require local authorities to share their data with electoral registration officers. That already takes place. Electoral administrators are part of local authorities and have for some time accessed relevant other local authority databases for the purposes of checking names and addresses together. The Bill would allow for such data sharing if it were decided that it was necessary and valuable in addition to that which already takes place. The next phase of government data-matching pilots will look at which datasets are most useful for electoral registration officers to carry out their duties. Some of the pilots will target students; some will target recent home-movers, which the noble Lord, Lord Tyler, flagged up as particularly important; others will explore how sharing data between two-tier local authorities, in those parts of the country where they exist, may assist them further.

However, on local authority data, I repeat that registration officers are already authorised to inspect records held by the authority that appointed them and are required to inspect records where they are permitted to do so both under the 1983 Act and the Representation of the People Act 2001.

On Amendment 15 and the whole question of students, we are already working with the National Union of Students, which represents students, and organisations with which students interact, such as the Student Loan Company and universities, to establish ways in which the registration process and the transition for those groups can be as simple and accessible as possible, building on the changes that we are enabling to the registration system, which will make registering to vote more convenient for all. Again, that work is under way; we are discussing and consulting with the other relevant public and private stakeholders.

Similarly, as for sheltered accommodation, which is the subject of Amendment 16, registration officers already have the power to require information from an individual to maintain their election register. That would include requiring managers of sheltered accommodation to provide the names of residents. Once registration officers are aware of that information, Clause 5 would require them to write to each individual who was not already registered at that address to invite them to register to vote. Amending the legislation is therefore unnecessary to empower registration officers to obtain information about individuals in sheltered accommodation or to require a registration officer to invite them to register.

As noble Lords will gather, the Cabinet Office is already actively engaged in a programme of work with groups which represent students, helping to provide alternative channels of registration, looking at the elderly in sheltered accommodation and how we could signpost people towards registration as they come into contact with other government agencies.

Amendment 17 addresses the question of private landlords. The real question here is whether a requirement on private landlords adds sufficiently to the toolkit of electoral registration officers to be worth the additional burden being placed on private landlords. That, again, is something that we are investigating further but our current view is that the marginal benefits of that measure over, to take just one example, the canvassable properties in the area do not justify imposing that additional burden.

Amendment 18 talks about the local authority providing additional information on council tax and other documents. Again, the Cabinet Office is testing out where it is most valuable and useful to provide additional information and, as the behavioural unit puts it, to prompt people to consider more actively ensuring that they are registered to vote. There are some questions about the complexity of the council tax document. I am not entirely sure that I read the whole of my council tax documents either in Bradford or in Wandsworth last year, but I am sure that the noble Lord, Lord McAvoy, read his in great detail from cover to cover. We are therefore not entirely sure that this is the best document to use for these purposes.

Amendment 19 requires local authorities to invite individuals to register to vote when they first register and begin paying council tax. This idea has a certain amount of utility and there is certainly no reason why local councils should not do that on the initial council tax form, but of course this would capture only the bill payer. There is a need for additional mechanisms to be in place to capture other people living inside the same property.

On Amendment 20, on the whole question of awareness-raising in other, wider government services and other transactions, we are looking with organisations from the public, voluntary and private sectors—I emphasise that it is not just in government agencies—to see where we can identify a potential benefit to introducing, for example, some form of prompting or signposting during the course of a transaction. We will test the different options to establish the extent to which they will assist the citizen.

On Amendment 24, to provide the explanation of the other uses of the register, opinions might differ on whether that was a plus or a minus. There have been one or two suggestions that there are those who wish not to be on the register so that they avoid jury service; it is not one of the most popular aspects of civic duty. That is another issue that we should perhaps explore further.

To sum up after this very large discussion of different ways of using and accessing databases and encouraging people to register, this is very much what we as a Government are already engaged in. We are happy to brief people further on what we are doing, how the data-matching pilots are going and how the information campaigns will be planned. We hope that on that basis the noble Baroness and the noble Lord will be willing to withdraw their amendment at this stage, and we will be happy to have further discussions on how we go forward to ensure that our shared aim, which is to maximise the number of people who register under individual electoral registration, will be achieved to the satisfaction of all.

[Lord Rennard]

My Lords, I thank the Minister for his explanation of what the Government are doing and his confirmation that he is still willing to talk and listen about what we can do to ensure that the Government walk the walk to emphasise maximum voter registration. In his discussions with all parties who are concerned about this issue, I ask him to keep emphasising that while people talk about “data sharing”, imagining that these are a lot of data on someone, we are simply talking about name and address—nothing else. In his discussions with people on this issue, he should emphasise that it is simply a matter of names and addresses so that we contact people to ensure that they are aware of their right, and their obligation, to register to vote so that we have a healthy democracy. People are concerned about access to data, but these data are names and addresses. In this debate some people seem to be unaware that if you wish to get details of someone’s name and address in any area, you walk into a local library where a “database” called the electoral register is freely available, and you look at the names and addresses on the register. So the principle at the moment in this country is that the names—

[Lord Martin of Springburn]

My Lords, may I interrupt the—

[Lord Rennard]

If the noble Lord will forgive me, I am about to say that I will not press the amendment to a vote but I ask the Minister to consider further the remarks that we have all made during this debate. I welcome his open-mindedness on these issues, particularly with regard to 16 and 17 year-old attainers, and I am sure that he could alleviate the fears raised by a number of noble Lords in this debate by emphasising that the issue is simply a one-way movement of information about name and address, which should not be a severe threat to people’s civil liberties. On that basis, with the leave of the House, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

20:15

Amendment 11 not moved.

Schedule 2 agreed.

Clause 3 agreed.

Clause 4 : Annual canvass

Amendment 12

Moved by

[Baroness Hayter of Kentish Town]

12: Clause 4, page 3, line 39, leave out from “canvass” to end and insert—
“( ) The annual canvass must be held during the month of October every year in relation to the area for which the officer acts.”

[Baroness Hayter of Kentish Town]

My Lords, this is perhaps the most important of the amendments that we will discuss today. This group of amendments has basically a twofold purpose. One is to maintain the annual canvass. The annual canvass is a critical tool, not only in compiling the register but as the only way of judging whether the other systems, which we welcome, and all the other work that is taking place on getting information from a variety of data sources are actually working. Without the annual canvass, there will simply be no check on the completeness of the register.

I have discussed this with a number of people who have more current experience in this area than I do, and they are adamant that the old fashioned canvass remains a crucial tool in locating citizens domiciled in Great Britain. Simply put, as has been said for other reasons, houses do not move. Ensuring that their eligible residents are on the list is best done via the canvass—really, nothing else competes.

We will press the Government hard on this, so our other proposals in this group to make it harder to abolish the canvass and to ensure that this could happen only with the super-affirmative procedure would, we hope, not actually be needed. Certainly I think it would be unacceptable to this House for an elected politician in government to take the decision to dispense with this crucial democratic tool. Our amendments, should any such proposal to abolish be considered, would ensure that the Electoral Commission’s report on this came before Parliament, not just to the Minister, and that any similar report published on piloting proposed changes to the annual canvass also came here, with time for debate on those, and that any proposals to change the canvass were made only with Electoral Commission approval. The Electoral Commission was quite rightly set up to take many of these decisions about the running of elections out of the hands of those with a vested interest in the outcome; in other words, elected politicians. It is therefore right that any proposals to change the way the register is compiled, for example, should have the Electoral Commission’s public nod of approval so that everyone can see that fair play in the interests of voters and democracy is taking place. I doubt that anyone will argue with that.

There are other proposals in this group where I doubt the Minister will raise any objection, particularly that the local registration officers should ensure that they have addressed every residential property with which they have contact, whether for council tax or anything else, as well as those in the relevant gazetteer.

There is one further word in these amendments to which I would draw the Committee’s attention: October. It is no good having a January canvass because by the time the register is complete it is almost too late for all the systems to download all that information. It perhaps sounds an easy job but, because it is done locally, the computer formats used by local authorities are not quite the same. I have looked them up. Formats include three types of Strand format, a Pickwick format, a Pickwick variant, CSV files, Xpress formats and page image formats. If all those come in, it takes a lot of time. If the annual canvass takes place too late, there is simply not time to do all that data cleansing between these different computer programs, on which I do not profess to be an expert.

The Government said that they currently have no plans to remove the power to abolish the annual canvass. I wondered about the word “currently”. I hope it means that the Minister will listen to us about the need for an annual canvass and remove from the Bill that ability to abolish it. Only a few minutes ago, he said that instead of addressing landlords, it was much better to have a canvass of all properties—I think I wrote down his words correctly. Amen to that. A canvass of all properties is an essential tool for making sure we have caught everybody, and the idea that it could be abolished by a Minister without Parliament having a say is one that we could not go along with. I beg to move.

[Lord Rennard]

My Lords, the annual canvass is an established part of our electoral arrangements and, on the face of it, there cannot be a more effective way of finding people living in their homes than to go knocking on their doors. I am therefore instinctively sceptical about the prospect of abolishing this annual exercise. Like so much of the transition to individual electoral registration, the possibility of ceasing the annual canvass is very much contingent on the success of other parts of the package.

If there is a comprehensive process of data matching and data mining, of the sort we discussed in the previous group of amendments, and electoral registration officers get a serious suite of ways to discover that someone has moved into or out of a local address, the Government’s argument that the canvass may at some time in future become redundant starts to look more realistic. However, there should always be a duty on returning officers to visit a property where they believe an elector is based and to revisit and revisit again, if necessary, to find them in. We know that just sending letters is not enough, and to that extent Amendment 14 raises a particularly important point about what returning officers have to do. We will come back to look at that again in the context of a duty to take all necessary steps to establish a complete and accurate register when we get to Amendment 39 on Wednesday.

Turning briefly to the specific provisions in some of the amendments in this group, I would make the following observations. It does not appear, on the face of it, that there is a good reason for an annual canvass always to take place in October. Indeed, in many ways, it would be easier and more sensible to undertake such work in the spring, when evenings are lighter and days are longer. The tradition of the October canvass goes back to when 10 October was the fixed date of electoral registration and therefore the canvass was timed for October to coincide with it. Once we sensibly moved to rolling registration with the ability to go on the electoral register at any time, it was no longer necessary to have an October canvass, so the annual canvass can take place at any time. It seems to me that on a cold, dark night, people would be less willing to open their doors. We all know that from our canvassing experience. It would probably be better to do this canvass earlier in the year.

Like some of the earlier Labour amendments, Amendment 37 seeks to turn the Electoral Commission from a body that reports and gives advice to Parliament to one that makes decisions. We are not therefore inclined to support this amendment, which would mean that the commission had to agree every pilot which might take place. In general, like the previous Government, I am in favour of piloting and I do not think that it should be subject to the veto of an advisory body. Pilots of this nature generally should be welcomed.

No doubt in his concluding remarks, the Minister will make reference to Clause 7, which was added on Report in the Commons specifically to make sure that the Electoral Commission had a strong role. The role given to the Electoral Commission in the Bill appears to be the one that it asked for in its briefing at the time; namely, to make clear that the Electoral Commission must be consulted and its response made available to Parliament before any order is made to reinstate the annual canvass. We do not think that it is right to alter that very logical and consistent position.

Amendments 31 and 38 perhaps provide a neat reassurance. Looking at them, they probably provide a middle way between having this provision and not having it, in that the use of a super-affirmative procedure to remove the annual canvass in future would by definition ensure that such decision underwent thorough scrutiny. We would very much welcome that.

[Lord Martin of Springburn]

My Lords, I am very supportive of continuing the annual canvass because it is crucial. Anyone who has been involved in the front line of politics and has had dealings with people seeking to get votes at elections—whether they are for local government, national government or, in particular, by-elections—will know the importance of that canvass. It is no easy task and, in my view, some canvassers deserve a medal for going around some of the areas where they have to go. I do not like to talk about rough areas or to make the generalisations that some people make about housing estates but some places where people have to go can be very rough. There is a big difference between a canvasser going to a nice, leafy suburb or another area where, let us face it, there may be vicious dogs that are trained to attack strangers. Sometimes they mistake the canvasser for a rent-man or some other person.

It is very important that we keep that canvass. Any of us who has had a constituency as an MP often will have been surprised that, when we have walked by a factory, a sawmill, a garage or whatever, we had not realised that someone lived there. At times, it was not until you got some correspondence that you discovered that the person who owned the property as a commercial viability also was resident there. The canvasser can draw out information that would not be available when you depend on people downloading or sending information across a website. That also goes for disabled people who cannot get out. Often, at the time of the canvass, it is the canvasser who is the contact point.

I agree with the noble Lord, Lord Rennard. I know the reasons that the noble Baroness gave for having the canvass in October but, for the safety of canvassers, I would rather see them out on light nights. It is interesting that this week we have turned back the clocks and that we now have the dark nights, particularly in Scotland. Experienced canvassers know that that makes a big difference. When you go into a street on a light night, people are out in the gardens where you could speak to them and get the information that you want without having to go to the door. From a safety point of view, a canvasser feels safer when people are out on the street, rather than being out on a dark, miserable winter’s night. This legislation gives the Minister an opportunity to put before Parliament a power to dispense with the canvass, which would be the wrong thing to do. It would not help electoral registration.

Good luck to the Electoral Commission with the work that it has to do but I often wonder about its supervision. Perhaps the Minister can tell us what system is set up to keep in constant contact with the Electoral Commission, not on a day-to-day basis but perhaps on a regular basis, to find out exactly what it is doing and how it is approaching its work. We are leaving with it a very big responsibility, not only of seeing how the electoral register is drafted up, but we are due a referendum in Scotland, and it will be responsible for or helping with the wording of that referendum. We have a responsibility to know whether it is carrying out its job in a professional manner.

20:30

[Lord Gardiner of Kimble]

My Lords, having come to this debate and this Bill recently, I have found this evening very thought-provoking. I thank the noble Baroness and noble Lords for all their contributions.

The amendments in this group fall largely into two groups—those relating to the conduct of the annual canvass and those relating to the powers in the Bill as to the abolition, amendment or reinstatement of the canvass. Amendment 12 raises the question of when the canvass should take place. One effect of the Bill is the removal of the current requirement for the canvass to collect information about who is a resident at an address on 15 October. This would potentially allow registration officers to carry out a canvass at a time of their choosing, as long as the revised register is published by 1 December.

The reference date is not the only factor that drives registration officers to carry out the canvass in the autumn. Binding registration officers just to October is unduly restrictive, and I was interested in the comments made by my noble friend Lord Rennard and the noble Lord, Lord Martin. This issue has also been discussed with an expert panel of registration officers and electoral administrators who welcomed the removal of the reference date, which is seen to be confusing by many members of the public. For that reason, I do not see the need to include a reference date or a specified canvass period in the legislation.

Amendments 13 and 14 are more specific and relate to the duties of electoral registration officers in carrying out the canvass. I would question the necessity to set out in primary legislation, as Amendment 13 seeks to do, the precise categories of property that a registration officer must contact to comply with the requirement to canvass their area, as their duties under Section 9(1) of the 1983 Act, the Electoral Commission’s performance standards and our proposed draft secondary legislation set out the obligation to carry out a canvass. A difficulty with specifying those levels of detail in primary legislation is that it could inadvertently narrow the scope of what EROs are expected to do and make it difficult to change.

Similarly, Amendment 14 seeks to impose a requirement to carry out house-to-house inquiries. Indeed, my noble friend Lord Rennard referred to these matters. Section 9A of the Representation of the People Act 1983 already requires registration officers to take “all steps … necessary” to maintain the electoral register. This specifically includes making house-to-house inquiries on “one or more occasions”. This will remain in the 1983 Act, and it is therefore unnecessary to make the suggested amendment to the Bill. As well as carrying out house-to-house inquiries to obtain information when no canvass form has been received, or to supplement this information, the Bill also enables registration officers to make use of house-to-house inquiries before sending out canvass forms. Indeed, that proposal has been much welcomed by many registration officers.

The next set of amendments relate to the powers set out in the Bill allowing the Government to abolish or amend the annual canvass, but also to reinstate it, if it were to be abolished. Amendment 30 would remove the provision enabling the Minister by order to abolish the duty to conduct an annual canvass. If I may, before addressing this amendment I would like to set out the reason behind the provision to amend or abolish the annual canvass by order in Clause 6. This power is included in the Bill to allow provision to be made in future to help us build a modern electoral registration system, potentially using methods other than a traditional household canvass. However, I assure the noble Baroness that the Government would take the step of abolishing the annual canvass, whether in whole or in part, only if there was another or more effective way identified. In this situation the role of the annual canvass in the upkeep of the electoral register would be less significant than under the scheme set out in the Bill. Only when the annual canvass was less pivotal might it be amended or abolished. Indeed, this diminished significance of the annual canvass would then make it reasonable to use secondary legislation to make this change.

Clause 7 requires any proposal to amend or abolish the annual canvass brought forward under Clause 6 to be subject to rigorous scrutiny and safeguards. Indeed, I remind noble Lords that Clause 7 was in the Bill as from introduction. It sets out that the Minister bringing forward the order must ask the Electoral Commission to prepare a report assessing the extent to which the registration objectives have been met and the merits of alternative ways of achieving those objectives. Then, in turn, the Electoral Commission would be required to publish its report no fewer than three months after being asked to do so and the Minister would then be required to present the report to Parliament alongside the draft order subject to affirmative resolution of both Houses. Clause 6 also provides for the reinstatement of the annual canvass in the event of the abolition resulting in unintended consequences. Our aim with these provisions is to create a system that is flexible and able to respond to advances in technology, but one that has also to be transparent and has the right amount of scrutiny and safeguards built into it.

Amendments 31 and 38 also relate to the Government’s power to amend or abolish the annual canvass. They would mean that if an order was laid to modify or abolish the annual canvass a draft of the order would need to be laid before Parliament accompanied by a ministerial recommendation of the parliamentary procedure—negative, affirmative or super-affirmative—which the Minister recommends should apply. In responding to these amendments, I draw the noble Baroness’s attention to Clause 10(2) of the Bill which already provides that any order made under Part 1 of this legislation is subject to the affirmative resolution procedure. It may be made only if a draft of the order is approved by a resolution of both Houses. As the Bill already provides that an affirmative resolution is necessary to make any order under Part 1, the question to consider is what additional safeguards this amendment would introduce. The super-affirmative procedure is rarely used and is appropriate only where the extra scrutiny that it enables is necessary. One of the main features of the super-affirmative procedure is the inclusion of a consultation stage before each House is asked to approve the proposal. However, in the case of the provisions in Clause 6, there is already a two-stage process of a report from the Electoral Commission followed by the normal affirmative procedure in addition to the provisions for a report by the Electoral Commission set out in Clause 7. I believe that this negates the need for a consultation ahead of the laying of the affirmative order which would be required by the super-affirmative procedure.

Amendment 32 seeks to remove the power to reinstate the annual canvass if it has already been abolished. The power to reinstate the canvass if it has been abolished by an order made under Clause 6 is an important safeguard for the system. This provision ensures, for example, that in circumstances where the abolition of the canvass had an unexpected detrimental effect on the completeness of the register, the canvass could be quickly reinstated to reverse this trend.

Amendment 33 relates to orders amending or abolishing the annual canvass. The Government have no current plans to make any such order, but it is important that the provision for this to happen enables it to happen in the right manner. As it stands, Clause 6(5) provides that such an order may also include provision to create further secondary legislation. We would anticipate that an order under subsection (2) would make the main changes to the canvass, including amendments to the existing provisions of the 1983 Act and the main features of the alternative system. We would not, however, expect the detailed procedures to be provided for in this order. Instead, we would expect the order to transfer a power to make separate regulations containing this detail, enabling this to be included in the regulations prescribing other details of the registration system. Those separate regulations would themselves need to be subject to the affirmative resolution procedure. So this is not about avoiding scrutiny but about structuring the legislation in the most appropriate manner.

Amendments 34 and 35 relate to the Electoral Commission’s report that will precede the abolition or amendment of the annual canvass. Amendment 34 would mean that the Electoral Commission’s report on any future proposals to amend or abolish the annual canvass must be laid before Parliament and not given to the Minister. Clause 7(6) indeed requires the Minister, when laying a draft order under Clause 6—for example, an order amending or abolishing the annual canvass—to lay at the same time a report by the Electoral Commission about the proposal. That report must assess the extent to which registration officers are currently able to ascertain those unregistered people who are entitled to be registered, those people who are registered but not entitled to be, the extent to which the proposals in the order would meet this objective, and the merits of alternative ways of meeting the objective. Amendment 34 proposes that rather than giving the report to the Minister to be laid with the draft order, the Electoral Commission should itself lay the report before Parliament. While the commission’s report will undoubtedly be important for the consideration of any draft order, it will also be an important tool in determining whether the draft order should indeed be laid in the first place. The laying of this order will be at ministerial discretion. Unless the draft order is laid, the Electoral Commission’s report is not needed to assist parliamentary consideration of it. Therefore, in the Government’s view, this amendment is not necessary. In addition, once the commission has given the report to the Minister, we would expect the report to be published on the commission’s website and it would therefore be in the public domain for parliamentarians to read, if they wished to do so.

Amendment 35 would require that instead of the Electoral Commission’s report being provided by a date to be specified, it would have to be provided within three to five months of the commission being consulted. I agree that while it is important to allow the commission sufficient time to produce the report, it is also important that the report is produced in a timely fashion and does not delay important legislation. Indeed, from our position today, I cannot envisage circumstances in which a period exceeding five months would be required.

Amendment 37 raises the important and related issue of the role of the Electoral Commission in relation to piloting proposed changes to the annual canvass. Pilot schemes can be introduced to test whether it would be desirable to amend or abolish the annual canvass as a means of achieving the canvassing aims set out in Clause 4—that is, finding those people who are not registered but entitled to be, and those who are registered but not entitled to be.

20:45

While Clause 6 requires the commission to produce a report before an order is made to permanently amend or abolish the canvass, for pilot schemes the commission is required to produce an evaluation report after the pilot has taken place. This is so the evaluation of the pilot can inform the Minister’s decision on whether to propose a permanent amendment to the annual canvass under the power of Clause 6. The legislation as drafted already provides that the pilot scheme must be proposed by the registration officer for the area and agreed by the Minister, and the order providing for the pilot will be subject to the affirmative resolution procedure. For those reasons, I do not consider it appropriate to require an additional stage to be introduced into the formal scrutiny for an order that will have only temporary effect. However, it is of course extremely likely that in practice the Electoral Commission will be involved in the design of any pilot scheme proposed.

Furthermore, the decision to carry out a pilot should be taken by the Minister responsible, and I believe that the proposal in this amendment would undermine that ministerial accountability. I think that that was an additional point made by my noble friend Lord Rennard.

I should like to say to the noble Lord, Lord Martin, that the Electoral Commission is responsible to Parliament through the Speaker’s Committee, but there are of course frequent informal conversations between the Cabinet Office and the Electoral Commission.

[Lord Tyler]

I think we would also be wise to recall that in recent years additional commissioners have been appointed to the Electoral Commission from the political parties. I think that there was a concern at both ends of the building that the Electoral Commission was not sufficiently in touch with the real-life activities that the noble Lord, Lord Martin, and I experienced in our previous roles. I hope that there is now much less concern that the Electoral Commission may have got out of step with the reality of politics than perhaps was the case a few years back. In addition, as I indicated earlier, there is a cross-party group of informal advisers to the commission, and I hope that that, too, will reassure the noble Lord, Lord Martin. My noble friend is quite right in saying that the commission is very appreciative of, and answerable and accountable to, the Parliament and the public, which it, too, has to serve.

[Lord Martin of Springburn]

Perhaps I may add to that. I am well aware of what the noble Lord, Lord Tyler, is saying. I suggested that we should have the informal ad hoc committee because I felt that the commission was not in touch with the real world, where people met electors. The Government had a bar on people who were formerly election agents—that is, professional election agents—but I felt that that was ridiculous, because the professional election agents had the skill and expertise, and they knew exactly what was realistic and unrealistic. However, the point I am making is that we are putting more and more responsibility on the Electoral Commission, and there should be strong liaison between the Government and the Electoral Commission to see that the commission is up to the job that it has been given.

[Lord Gardiner of Kimble]

My Lords, I am very conscious of the experience of both my noble friend and the noble Lord, Lord Martin, on these matters. I agree entirely that there needs to be dialogue between the Electoral Commission and parliamentarians so that this is very much a live issue.

I fully appreciate that I have taken some time over the 11 amendments in this group. Given the grounds that I have set out, it remains for me to ask the noble Baroness whether she is in a position to withdraw her amendment.

[Baroness Hayter of Kentish Town]

My Lords, I thank the Minister for that response, but I am not happy. There are three elements. The first is whether the canvass should take place in October. I could live with by October, but my concern is that if it is in the spring it will be too late for a May election. The important thing, therefore, is to get it done by that stage so that there is time to work on it.

The main issue is the annual canvass and the power to abolish it, and all the rest is a way of making it harder to abolish it without the proper say-so of Parliament. I thank the noble Lords, Lord Rennard and Lord Martin, for their support for the canvass. I remain suspicious, particularly of the words of the noble Lord, Lord Gardiner, that “The Government would do this only if …”. That says it all. It would be the Government who do it. As for affirmative resolutions, we know that if you are in government you have a majority in the other House, and we in this House, quite rightly, do not vote against such instruments. Basically, it is a power in the hands of the Government. The whole Committee—there is not much of it at this moment—would be concerned about the Government having the power to abolish the annual canvass.

To some extent, the Minister has admitted that. He talked about the ability to put it back and re-establish it if there were problems and a safeguard was needed. That is a risk too far. The amendments seek to make it harder for the Government to abolish it. Before we come back at Report stage I hope that the Government will think about the need to keep the annual canvass in the Bill without just giving it to a Government to abolish. We will no doubt return to this, but, for the moment, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendments 13 to 17 not moved.

Clause 4 agreed.

Clause 5 : Invitations to register

Amendments 18 to 24 not moved.

Clause 5 agreed.

House resumed.

[Lord Wallace of Saltaire]

My Lords, the noble Lord, Lord Martin, remarked that there was much else for the House to do, but I am happy to say not for this evening.

House adjourned at 8.55 pm