Westminster Hall

Tuesday 30th October 2012 Westminster Hall

Tuesday 30 October 2012

[Martin Caton in the Chair]

Business Rates

Tuesday 30th October 2012 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Brandon Lewis.)

09:30

[Simon Danczuk (Rochdale) (Lab)]

It is a delight to serve under your chairmanship, Mr Caton.

Since I became Rochdale’s Member of Parliament, the local business community has raised business rates with me time and again, which is one reason why I initiated this debate. The other reason is that I believe the Government’s handling of this particular tax is doing real damage to economic growth. It is also fair to say that, in many ways, the Government’s handling of business rates mirrors the way they have mishandled other broader economic issues and failed to manage Government change.

I will start by providing some broad examples. The Government have talked tough on red tape, but their handling of business rates is making life a misery for thousands of businesses. The Government claim to be interested in helping the high street, but they ignore every retail voice that raises concerns about business rates. The Government talk about transparency and accountability, but they are postponing business rates revaluation without consulting business first. This weekend, through the Deputy Prime Minister, the Government talked about rebalancing our economy away from the City’s square mile to the rest of the country through more city deals, but they are now postponing business rates revaluation, which will have a major adverse effect on businesses in every region except the south-east.

The Conservatives have often peddled the myth that they are on the side of business. Well, if there is one policy that demolishes that myth—most businesses now know this—it is business rates. The Government are playing politics with business rates, which is hurting the high street and the wider business community.

On the recent business rate increases, the Government said in their recent circular:

“As business rates are linked to inflation, there will be no real terms increase in rates”.

On 2 July, the then Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps), said that business rates are having

“only an inflation-level rise”.—[Official Report, 2 July 2012; Vol. 547, c. 567.]

Do the Government think businesses believe that rhetoric? Does the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis) think that businesses are oblivious to the fact that last year’s increase was based on an exceptional September, when RPI was at 5.6%? Does the Minister think businesses are not aware that that major rise in business rates gave his Government a windfall in revenue? In 2011, the increase was 4.6%, a cumulative rise of more than £0.5 billion over those two years. Businesses see this Government as disingenuous when they talk about business rates increasing only by inflation.

Although the Government have had a windfall in business rates, including much from the retail sector, they have dedicated little to helping the high street. From the £350 million extra income last year, the Government spent just £10 million on the various Portas programmes. Latest figures show that more than 30 high street chain-store shops are closing every day. Empty shop numbers have gone up, year-on-year sales are down, footfall is down and insolvencies are up. That is the picture of the high street under this Government, and their mismanagement of business rates is a major factor in that.

Every week the newspapers are full of stories of businesses citing high business rates as their reason for pulling out of an area or being forced to close. The chief executive of Britain’s third largest shoe retailer, Kurt Geiger, recently said:

“Business rates actually are what are killing UK retail”.

Retail has accounted for 20% of our gross domestic product, and it accounts for 11% of UK jobs and is the largest private sector employer. Retail is often the first rung on the ladder into employment for young people, but the ladder is now being pulled away by the Government.

We are all aware of the Government’s Portas review, and we all had high hopes for what it might achieve. But we now know the Portas review was just window-dressing. It is no wonder that Mary Portas is now telling industry conferences that she fears her review may have been a “Government PR stunt.” One of Mary’s recommendations in her 28-point plan presented to Government was:

“Government should consider whether business rates can better support small businesses and independent retailers.”

Those words must have gone in one ear of Government and straight out the other, because they have been flatly ignored. Straight after the recommendation, the Government introduced the biggest business rates increase in 20 years.

The Minister said last month on “ConservativeHome”:

“I want to make myself obsolete.”

I do not have a problem with the Minister making himself obsolete—indeed, I welcome it—but I do have a problem with him and his Government making the high street obsolete.

Because of the inflation-busting business rate increases, it is no wonder the Valuation Office Agency has a total of 241,700 outstanding appeals on business rates for the fourth quarter of 2011-12. In that quarter, the VOA managed to clear just 11,960 appeals. Many businesses in Rochdale have testified to the slowness of that process.

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

I congratulate my hon. Friend on securing this debate and on all the work he does on this subject, which is valued and noticed by the House. He is right to highlight the problems with the Valuation Office Agency, and CVS, a major business rates specialist located in my constituency, has expressed its view that the delays are compounded by cuts in staff at Her Majesty’s Revenue and Customs. Does he agree that that is part of the problem?

[Simon Danczuk]

I do agree with that statement. I am also familiar with the excellent work of CVS in championing appeals for businesses across the country. The lack of resources in the VOA is a concern that I will address in a moment.

It is clear that businesses are having to wait years for the VOA to get round to processing their appeal. By my calculations, the VOA will now take five years to clear its 2010 revaluation appeals. That is just not good enough. In that time a lot of businesses will go bust, having had to pay unfairly high taxes. Setting the taxes at a fairer level could make all the difference and allow those businesses to stay in business.

The question now has to be asked of the Minister: is the Valuation Office Agency fit for purpose? The VOA pointed out in its 2011-12 annual report that it had closed nine offices and that complaints had increased due to the length of time that business rates appeals take. The truth is that the Government have starved the VOA of resources, that appeals are taking far too long, and that as a consequence many businesses are paying too much in taxes, which is putting many businesses out of business.

[Kate Green]

Does my hon. Friend agree that it is a tremendous irony that delays in the VOA, which is one part of HMRC, are causing another part of HMRC to put businesses at risk of bankruptcy by trying to recover tax that businesses cannot afford to pay because their rates have not been properly assessed?

[Simon Danczuk]

That is absolutely right. The failure to run the appeals process successfully is damaging businesses, particularly small and medium-sized enterprises.

As if that were not bad enough, out of the blue, with no notice given, the Government then told us that they had decided to stop the 2015 business rates revaluation and carry it out two years later. There was no consultation with business, no detailed discussion of how the policy might affect economic growth, no consideration of how the policy might prevent the economy from being rebalanced along geographical lines. The British Property Federation’s chief executive says that the move

“embeds injustices in the current system”,

and the British Council of Shopping Centres says that it will have a “very negative impact” on the high street. Those organisations are big figures on the distressed retail property taskforce, which the Government are backing, yet Ministers will not listen to them.

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate the hon. Gentleman on securing this important debate. One issue on high streets in my constituency is that landlords are having to pay business rates on empty properties and therefore do not have the cash to invest in those properties in order to attract new tenants. The previous Government introduced that system. Does he acknowledge that it might have been a mistake?

[Simon Danczuk]

That is an interesting point about empty property taxes. I will not address it in my speech, but it undoubtedly deserves examination and should be investigated further to see what impact it has on businesses.

Let me make it clear: I have yet to hear a single retail voice supporting the Government’s proposal to cancel next year’s revaluation. The Minister seems to think that he is right and everyone else is wrong. If he can identify somebody who supports the revaluation, I would be interested to hear who it is.

To put it bluntly, the business rates revaluation postponement is no way to do government. The decision to postpone next year’s revaluation of business rates has compounded the sense of injustice already felt by retailers and other businesses. To add insult to injury, the Minister has defended the policy by saying on radio that it is simply like being locked into a fixed-rate mortgage. What he did not tell radio listeners is that it is like a fixed-rate mortgage with an interest rate set at more than 40% for many customers. The Government must think that businesses are daft. Current business rates are based on rents that were set close to the property boom peak in 2008. Since then, property prices have fallen by up to 40% in many parts of the north and elsewhere in the country.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my hon. Friend on securing this timely and important debate. Does he not agree with the Association of Convenience Stores that what is needed now is a full consultation with business about the right approach going forward and a radical way of looking at business rates, instead of Government ploughing forward in a furrow of their own?

[Simon Danczuk]

I agree with the ACS, which does excellent work. The lack of consultation on the revaluation is a massive part of the problem in which the Government now find themselves. In fact, the property agents Colliers have called the decision

“nothing short of a scandal”

and have accused the Government of trying to

“pull the wool over the eyes of business.”

The policy will mean that many businesses will continue to pay more business rates than they should, and it will disproportionately hit regions outside the south-east. I cannot put it better than Richard Farr of Sanderson Weatherall chartered surveyors, who said in Newcastle’s The Journal:

“Those in lucrative locations such as London and the south-east, where rental values have increased, will benefit from the move, whilst hard-hit retailers in northern cities and elsewhere will continue to be suffocated by being charged business rates based on pre-recession values.”

The Minister attempted to defend his policy by saying in The Daily Telegraph this week:

“revaluations are revenue-neutral overall...Suspending the revaluation will not earn the Government a penny”.

What he failed to tell business is that by suspending the revaluation now, he need not increase business rates in the south-east and reduce them elsewhere. Like other examples such as the local government settlement, the new homes bonus and public health funding, business rates have been adjusted to serve a political purpose. If next year’s business rates revaluation were to go ahead as planned, new rates would come into force in April 2015, a month away from the general election. Rates would undoubtedly increase in the south-east and decrease significantly across the north and elsewhere to reflect the adjustment in property values. That is not the kind of news that the Government want to present to heartland supporters a month away from elections.

To top it all off, the Government are attempting to defend their policy further by telling journalists that the move to postpone next year’s revaluation will provide stability for businesses, and that they want to avoid the volatility of significant changes to business rates. The Government do not appear to understand the system of transitional relief, which is designed to reduce the impact of any significant changes in the rateable value.

[Mr Marcus Jones (Nuneaton) (Con)]

Much of the hon. Gentleman’s argument seems to be predicated on the north-south divide. However, there are town centres throughout the country—in the south-east, the south-west, the north, the midlands and across the piece—that are struggling. Does he not agree that the issue is not just a north-south issue but relates to the whole country?

[Simon Danczuk]

I agree. Not only the north but other areas outside the south-east will be adversely affected.

The Government also boast of offering small business rate relief, a policy introduced by the Labour Government. They say that they have given local authorities the power to reduce business rates under clause 69 of the Localism Act 2011, but what they never make clear is that the local authority must pay for any reduction in business rates. In order to cut business rates, a council must cut back on care for the elderly or disabled services. What a fantastic choice to offer local authorities. In Greater Manchester, an area with some of the highest numbers of empty shops in the country, freedom of information requests have shown that not one local authority is using clause 69 of the Localism Act 2011 to reduce business rates. It is a shocking indictment of a toothless Government policy that has made no impact whatever since it was introduced in April and is a completely ineffective tool against high street closures.

To conclude, the Government are trying to postpone a business rates revaluation to protect the south-east while being dangerously complacent about the consequences of businesses elsewhere having to pay until 2017 excessively and unfairly high rates that have lost touch with rental values. The Government are using the desperate euphemism of “stability” when what is really meant is political expediency, and they are boasting about localism powers to reduce business rates that councils are not using and cannot use due to massive budget cuts.

I say clearly to the Minister that businesses do not want an out-of-touch Government telling them that they will have to pay unfair taxes regardless. They want someone on their side who is prepared to fight for a system that takes a fair proportion of taxes and gives businesses the breathing space and support to grow and lead a proper, sustainable recovery.

09:48

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Caton. I am grateful to my hon. Friend the Member for Rochdale (Simon Danczuk) for securing this debate, and I welcome to the Front Bench my neighbour, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis).

I welcome the debate, as this is an opportune time to review the future of business rates. Business rates are attractive to the Treasury and always have been, no matter which party has been in Government. They are easy to collect, difficult to avoid and highly productive, representing 5% of the UK’s tax bill. However, there is concern that the Treasury’s over-reliance on business rates is having unintended consequences. First, it is hitting high streets particularly hard, contributing to the large number of vacant units. Secondly, it is holding back economic growth, as the retail sector in particular is an important engine of the economy. Thirdly, it hits hard businesses that are property-reliant and must be in a specific high-value location. Many profitable internet-based businesses that are less property-intensive are not penalised to the same extent.

I am not an expert on the subject of business rates, but I do have an interest in the subject: before I came here, I was a chartered surveyor for 27 years. I dabbled occasionally in business rates, but it is a very specialist subject. I am interested in playing a small role in encouraging the renaissance in the high street, and I commend the Government for the work they have done in that respect. Lowestoft, in my constituency, is a Portas pilot, and the town team is setting about its work with relish. It is important that we in this place provide the framework through which its work can come to fruition.

I shall concentrate on the retail sector, which pays a significant portion of all business rates—more than a quarter, at 28%. On average, 14.6% of retail units in our high streets are vacant. That is due to a variety of factors: the growth in out-of-town retail parks, the rise of online shopping, falling consumer demand and high business rates. In some cases, the business rates are higher than the rent. Often, a retailer is interested in a particular unit; the rent looks okay, and he is working things out, and then suddenly he is hit with how much the rates will be. Mary Portas has said that high rates are a deterrent to investment in town centres and to retailers occupying shops.

To be fair to the Government, they recognise the vulnerability of small businesses to high rates. There is a small business rate relief scheme, a business rate deferral scheme and discretionary rate relief. The problem is that those schemes have had a limited impact and are of limited benefit to many small retailers. As was mentioned, the retail sector is the UK’s biggest private sector employer. It provides crucial first jobs to approximately 1 million 16 to 24-year-olds. There is real concern that another hike in rates will lead to fewer chances of work, less investment in the fabric of our town centres, which are so important to the country as a whole, and a more troubled high street.

Any decision to postpone the five-yearly revaluation review needs more consideration, scrutiny and consultation. I note that the British Chambers of Commerce was taken by surprise by that postponement. I hope that as the Growth and Infrastructure Bill progresses through Parliament, we have the opportunity to consider the matter in more detail. Any property tax requires frequent revaluations to ensure acceptability and fairness. The five-yearly reviews that have been in place for more than 20 years are well understood and provide a level of certainty. A break in that precedent creates an air of uncertainty—people will not know whether a review will take place.

It is also important to take into account that relative property values change over time. Relatively, rents in some sectors and locations will rise, while those in others will fall. It is important that the rating system has an in-built review system that reflects the dynamic nature of the property marketplace. We can then be sure that the tax burden is spread fairly—that those with the broadest shoulders pay the most, and those whose business may not be as profitable at a particular time pay less. Liz Peace, the chief executive of the British Property Federation, sums it up well:

“A revaluation should shift the burden from those who are suffering to those who are prospering.”

With the proposed freeze, there is concern that those in lucrative locations will benefit and those in hard-hit areas will suffer.

[Mr Spencer]

Will my hon. Friend mention the tax on empty properties? That causes me great concern. People who want to start a business need access to a small property. Landlords who find themselves having to pay enormous rates on empty properties are literally flattening them, so that they no longer have to pay. That removes the amount of start-up properties for those businesses.

[Peter Aldous]

I am grateful to my hon. Friend for raising that important issue. I was not going to raise it myself, but I take account of what he says. The tax on empty properties was introduced under the previous Government. I was still practising then, and there were concerns at that time. I have seen a number of units—they may not have been in the best condition, but they were available, often with a low rental value—demolished by landowners and landlords. Reducing the supply of accommodation can lead to an increase in rents for small businesses that are just getting started.

[Mr Marcus Jones]

On that subject, does my hon. Friend agree that empty property business rates are also an impediment to developers and investors who wish to invest in new build in our town centres, as they may not be able to fill them with tenants straight away? The measures introduced by the previous Labour Government are leading to a situation that is stifling investment in our town centres, rather than encouraging it.

[Peter Aldous]

Yes, I agree. Investing in major town centre refurbishment schemes is expensive and challenging. Such schemes take a long time—often a number of property cycles. We therefore need to provide every incentive and encouragement for investors and developers to invest in town centres; otherwise, they take the easy option of going for out-of-town locations, which exacerbates the vicious circle of draining life and vitality out of the town centre.

I take note of the Valuation Office Agency’s research, which shows that 800,000 premises will see a real-terms rise in rates, while only 300,000 will see their bills fall. Having said that, I am also mindful of the views of Gerald Eve, which I think is recognised as the leading private practice firm in the specialist field of rates. It disputes the VOA’s contention and has carried out its own research, which reaches a different conclusion. We also need to bear in mind that at the time of the current valuation, April 2008, the market was at its peak. There is concern that postponing the review will lead to retailers facing incorrect and historical values for far longer than they should.

My hon. Friend the Member for Rochdale mentioned the backlog of appeals. One reason for postponing the revaluation is to address, and not add to, the backlog. We need to take urgent action to clear the backlog, and I would be interested to hear from the Minister on what proposals there may be. I hasten to add that I have no continuing involvement with any private sector firms, but we need to consider whether this is something that the private sector can do.

Let me turn to the annual increase in business rates. We need to review the mechanism by which that takes place—the increase in line with the retail prices index every September. If, next April, we keep to this September’s 2.6% rate, business rates will have gone up in the past three years by a compound rate of interest of 13.33%. That will mean that £500 million is added to the retail sector’s rates bill. At a time when council tax is frozen, Britain’s shopkeepers are carrying too heavy a burden on their shoulders.

I should like to mention three issues in closing. First, I hope that the Government, as soon as they are able, publish the data on which they have based their decision for postponement. We need to scrutinise this and have a consultation to look at it more closely. Secondly, we need to review the RPI link. Property is a declining proportion of the total economy, yet we are taking more out of it. I do not think that the golden goose has many more eggs left to lay. Thirdly, we need to look closely at the formula by which business rates are calculated. In particular, does the formula accurately reflect the rental value of out-of-town shop and retail park units? In the high street and town centre, people have to pay for a council car park, whereas car parking for out-of-town retailers is right on their doorstep and free. That is a real draw for shoppers, but it is not accurately reflected in the rates formula. I am grateful to hon. Members for listening to me.

10:01

[Ann Coffey (Stockport) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Rochdale (Simon Danczuk) on securing this important debate on business rates and on his comprehensive analysis of the effect that increased business rates will have on our high street.

Like many towns, Stockport is being squeezed extremely hard at the moment. We have one of the highest numbers of empty shops in the country, with nearly a third lying empty. There are various reasons for this, which I will mention later, but continuing high business rates are a major contributor to a difficult trading environment. The trend is that business rates are too high as a proportion of rents, and consequently many retailers are struggling to stay afloat. Small and medium-sized businesses are suffering disproportionately.

I have been looking in my constituency at the balance between rents and rates of many empty shops, which we desperately need to reopen. The problem was articulated by the head of north-west high street chain, Timpson, at a business event in Manchester on 15 October. James Timpson said he had considered opening a new site in Stockport recently, but the rent of £10,000 was almost half the £18,000 business rates. He added:

“Business rates have got completely out of hand. It’s become a real stifler and is stopping businesses from taking more space and trying new things. The higher the business rates the harder the gamble is to pay off.”

The Minister will be aware that last year’s 5.6% rise in business rates was the biggest increase in 20 years. If a chain like Timpson’s is being put off by high business rates, what can it be like for other businesses? As banks are very risk-averse, the current level of business rates must deter them from lending to those wishing to start a new business or extend an existing business. It makes little sense to exhort banks to lend while loading additional costs on business.

Two examples of empty smaller shop units in two key areas of Stockport that we need to develop further —the Market Place and the Underbanks—show the disproportionate level of business rates to rent. In one empty shop in the Market Place, which the council has spent much money on refurbishing, the rent is £9,750, yet the business rate bill is more than half that, at £5,287. In another empty property in our unique Underbanks area, which we are looking to revitalise, the former Greggs bakery, the rent is £15,000 a year but the estimated rates bill is £6,862. Many bigger shops in Merseyway, which we need and which must stay in Stockport, are appealing against their high rateable values.

There is no doubt that business rates are a barrier to new entrants to the high streets and a drag on investment and growth for small business. A recent survey of small shops identified that business taxation was one of the top five barriers to growth. As co-chair of the all-party group on retail, I tabled an early-day motion earlier this month, calling for a freeze of business rates next year to save jobs and prevent more shops from becoming empty.

There is widespread concern that a 2.6% increase in business rates in April 2013 would impede retailers’ ability to invest and create jobs, particularly for young people. The retail industry, as hon. Members have mentioned, is the UK’s biggest private sector employer, providing crucial first jobs to a million 16 to 24-year-olds. In Stockport, 5,700 are people employed in the retail industry. Business rates have already risen dramatically in both 2011 and 2012, by 4.6% and 5.6% respectively, a cumulative increase of more than £500 million.

The early-day motion also calls for a review of the mechanism by which rates are increased, to ensure a fairer and more sustainable formula for the future, based on an annual average of the consumer price index, rather than the lottery of using only September’s RPI. The RPI is unpredictable and usually higher than the measure that the Government choose to use for pensions and benefits.

I, like many colleagues, am also unhappy that the Government are postponing the 2015 rates revaluation until 2017. That will punish northern businesses particularly, by keeping them locked into 2008 rates, set near the peak of the property boom. The rationale for this decision is that local firms and local shops will avoid unexpected hikes in their business rates bills over the next five years. I quote the Minister in a recent article in The Daily Telegraph:

“The best thing Government can do to help such businesses is to provide them with a stable economic environment. This is why we want to protect local firms from soaring tax bills.”

Which businesses is he trying to protect? From the Government’s own calculations there are 800,000 winners and 300,000 losers from the postponement of the revaluations. Those figures, as the hon. Member for Waveney (Peter Aldous) said, probably require closer analysis and examination.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I shall make a helpful comment. Does the hon. Lady agree that, in some instances, local authorities are taking enforcement action against premises that have gone to appeal against their revaluation? It is crazy that there is a risk of their going out of business because of overburdening action by the local authority, pending the outcome of the appeal. Surely, local authorities could at least wait till the appeal is heard before going after the money.

[Ann Coffey]

The hon. Gentleman makes a good point. We must have systems in place that support local businesses and do not create extra barriers and difficulties for them. He is right about that.

Colliers International research shows that prime rents in Stockport fell by 29% between 2008 and 2012, so Stockport will not be a winner in this postponement; we are going to be losers. The winners and beneficiaries of the revaluation’s postponement will be those shopping centres where rents have risen, such as premium centres, which are still doing well. Shopping centres that need to be protected from “soaring tax bills”—I quote the Minister—are going to get hammered.

Mary Portas identified high levels of business rates as both a deterrent to investment and a disincentive to occupy physical shops. This policy can only add to the demise of our high streets. This is unfair and has been called the retail equivalent of the poll tax. I urge the Government to think again.

In addition to the high level of business rates, there are other important reasons why many high streets, particularly those in medium-sized towns, are struggling. They include major changes in shopping trends and habits, which have been accelerated by the economic recession, including fewer shopping trips, increased internet shopping, lack of investment and forward planning over the decades, and the continuing trend towards premium shopping centres. We also see a polarisation of consumers: those on low incomes struggle and shop in Poundland, bargain basement shops and charity stores, whereas those on high incomes continue to spend on designer-style goods in premium centres. There is a classic squeeze of middle shops and middle-sized shopping centres with smaller units.

We have to recognise that some high streets might never go back to being the destination of choice for major purchases, as nearby regional centres act as magnets, drawing shoppers from an ever-wider catchment area. We can, however, rebuild new and unique styles of shopping and experience, and towns such as Stockport need to have a distinctive shopping offer. We are looking at doing that based on the town’s cultural and heritage sites. We are one of the Portas pilots and we are looking at a culture-led renovation of our Underbanks and the Market Place, building on exciting national screening events at the Plaza, teenage and vintage market events and the High Peak beer festivals. We are doing all we can to attract independent retailers to the Underbank area, and some new specialist shops have opened.

Too many shops open and close, however; the economic environment is tough and we need retailers starting a new business to be successful and to expand. I therefore urge the Minister to take heed of the exhortations of the hon. Member for Stockport and other Members in all parties who are passionate about and interested in retail and to think again about postponing the revaluation exercise, freezing the business rates for next year. Please will the Minister give our entrepreneurs the space to take a chance and to build for future jobs and prosperity?

10:11

[Mr Marcus Jones (Nuneaton) (Con)]

Thank you for allowing me to speak in this important debate, Mr Caton. It is a pleasure to follow the hon. Member for Stockport (Ann Coffey), who set out a great advert for Stockport and what it has to offer. I congratulate the hon. Member for Rochdale (Simon Danczuk) on securing the debate; I have great respect for his work on issues relating to town centres and our high streets.

I have been slightly disappointed by the debate’s lack of acknowledgment of the general economic picture. Nor has much mention been made of the state of the public finances, which is another extremely important part of the context for the debate. It is worth restating, in support of the coalition Government, that when they came to power in May 2010 there was a car crash of a situation in the public finances and we had the largest deficit in the G20. To put things into perspective, the Government have had to make difficult decisions over the past two and a half years, but positive progress has been made. The deficit has been reduced by 25% in those two years and, throughout the world and in the markets, our country’s economic position is seen as stable. That is reflected in the low interest rates that we still have and which we would not have had were the Opposition in government; those low rates are allowing people to go out and use our shops to support our retailers.

[Helen Jones (Warrington North) (Lab)]

Perhaps the hon. Gentleman also wants to put on the record that when the previous Labour Government left office the economy was growing and unemployment was falling. This Government have presided over the longest double-dip recession that we have ever seen, and that is why people do not have money to spend in shops.

[Mr Jones]

The coalition Government should not take any lessons from the Labour party on economic management. We all know that we had the biggest bust in living memory under the previous Government, that under them the country was running a structural deficit long before the banks went bust and that since this Government came to power 1 million jobs have been created in the private sector. Growth might have only just come back into the economy and things might be slow, but we are building on a sustainable basis and not on the basis of borrowing and more spending, as we saw under the Labour party.

That brings me on to the points that I would like to make with my other hat on, as chair of the all-party group on town centres. I am passionately interested in issues relating to town centres, so I am concerned about the effect of delaying the revaluation. Town centres have been under the cosh for a number of years, internet retail is booming, out-of-town shopping centres are still buoyant and having an extremely good time in the main, and the net effect is that our town centres are currently in decline. Many of the national multiple retailers, which, only a few years before 2008, many of us were probably criticising for creating clone town centres, are now retrenching and consolidating their estates; when leases or break clauses come up, they are deciding to close town centre stores in favour of stores in large retail parks and of investment that they can make in internet retailing, because they can see that the writing is on the wall.

If we decide not to proceed with the revaluation at this point, we risk causing further damage to our town centres. Since 2008, town centre property values in my constituency have fallen like a stone, and rental income has reduced in the prime rental areas by 38%. Business rates are predicated on property value, and not revaluing the businesses in town centres seriously undermines the progress the Government have made on these issues. I welcome the Mary Portas review and am glad that the Government have taken on most of her recommendations, although such work could be undermined by the current proposals and, as my hon. Friend the Member for Waveney (Peter Aldous) mentioned, by local authorities that consider their car parks to be cash cows and think nothing of putting up car-parking charges year on year. We need to be careful that we do not price our town centres out of existence in a number of ways.

It is incumbent on the Government to be more creative. I would not personally advocate putting up business rates throughout the country, but the situation needs to be re-examined. My hon. Friend the Member for Waveney was critical of the valuation office figures for the proposed review, because they were now probably well out of date given the difference in economic circumstances between 2008 and now. The issue, therefore, needs to be looked at more carefully; we need to look at what we can do to support our town centres.

I hope that the Minister can give me, as chair of the all-party group, more confidence that the Government are listening to the concerns of those running businesses in our town centres—small, independent retailers and the large, multiple retailers which are seriously considering withdrawing their stores from many of our town centres. I hope that he takes the message back to the Government and that they reconsider what we can do to support such a vulnerable group of businesses in our community hubs. Most of our constituencies rely on town centres as the community centre for a local area, and we ignore that fact and the community values of our town centres and what they provide at our peril.

10:19

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure, Mr Caton, to serve under your chairmanship. I congratulate my very good friend, my hon. Friend the Member for Rochdale (Simon Danczuk) on securing this important debate, and setting out the arguments effectively and stylishly.

As a north-eastern lad, I feel somewhat hemmed in by the north-west contingent, but I will do my best to set out some of my concerns about my constituency, and the impact of the Government’s policy on Hartlepool. I will mention five specific points.

First, any discussion of underpinning business rates in my constituency should take account of the Hartlepool economy’s peculiar characteristics. Hartlepool borough council must deal with high need and a low base, by which I mean that it must tackle complex and long-enduring social problems but is generally unable to raise locally the taxes to fund those services. That is why redistribution of business rates from more affluent areas to relatively deprived ones, such as my constituency, is vital. About a fifth of my population are over 65, and that percentage will increase in the next few decades, placing enormous strain on already tight social care budgets.

Hartlepool has 81 looked-after children per 10,000 population of children, which is four times the rate of comparable local authorities. The town suffers from one of the highest levels of youth unemployment anywhere in the country, with one in four young men without a job or not in education or training. Hartlepool borough council must tackle those problems, but finds it difficult to raise the necessary revenue because of the narrow local tax base. Only 43% of council tax is raised locally. Three quarters of properties in Hartlepool are in council tax bands A and B, and only 7% of properties in the town are in band D.

That brings me to my second point, which is the peculiar nature of my local economy when it comes to rates. Hartlepool collects around £27 million in business rates, and receives back from the Government around £40 million. That £13 million redistribution is vital for the complex social needs that I have mentioned. The nature of the town and our economy leaves the local authority hugely exposed to major financial and economic risks. As I said, we raise around £27 million a year from business rates, and over 40% of that—around £11 million —comes from only 10 businesses. Hartlepool power station alone—that one single business—contributes about £4 million, or 15% of the total revenue collected locally through business rates. That leaves Hartlepool borough council exposed to a huge financial risk. If one of these 10 businesses closed or relocated, or the power station, as it comes to decommissioning at the end of its life, reduced its output and, therefore, pressed for a lowering of its rateable value, Hartlepool borough council would be extremely vulnerable to a considerable financial shortfall. The Government’s proposals to set safety net thresholds at between 7.5% and 10% will not provide my local authority with adequate financial protection because of its high reliance on large business rate payers.

I raised the matter with the Minister about a month ago in oral questions, when he made his first appearance at the Dispatch Box, and he kindly offered to meet me to discuss it. I hope we can agree a time for that meeting soon, but I hope that he will outline today any protection that could be made available to local authorities such as Hartlepool that are exposed financially in this way.

The third issue is the effect of top-slicing of local government spending control, funded mainly from the business rate take, which the Government intend to implement before determining grant allocations for individual local authorities. The awards to be top-sliced are considerable, with £250 million to fund capitalisation allocations, and £500,000 for the new homes bonus allocations. One purpose of capitalisation allocations is merely to allow councils to pay for the costs of redundancy through borrowing. Hartlepool borough council, rightly and prudently, has taken the view that any redundancy costs should not be paid through capitalisation as it is not prudent to fund the cost of making people unemployed through loans, thereby increasing the budget deficit in future years.

Although Hartlepool is keen to build more homes, the configuration of the new homes bonus shifts the redistribution of business rates away from areas of high need and low base in the north to more affluent areas in the south. My local authority has stated:

“These arrangements change the basis for allocating total available funding and will reinforce the disproportionate impact of grant cuts on councils in the North East, including Hartlepool Borough Council, compared to other parts of the country”.

What is the Minister doing to mitigate the effects of that top-slicing of business rates, which impacts most harshly on local authorities such as mine and those throughout the north?

Fourthly, as every contributor to this excellent debate has mentioned, the Government’s decision earlier this month to delay the revaluation of rates—my hon. Friend the Member for Rochdale spoke far more eloquently about this matter than I could—will have a massive impact on retailing. The Government have form on this. My hon. Friend and I sat on the Enterprise and Regulatory Reform Bill Committee, so we know that on matters such as unemployment legislation, feed-in tariffs for solar panels, and the tax grab for oil and gas companies in the north-east, the Government implement measures without consulting business or providing them with the ability to adapt, and without providing empirical evidence. Why do the Government not provide such evidence for what they are doing, and why do they not have a pro-business policy to consult and engage with businesses about their decisions?

Changing shopping habits, the existence of three large supermarkets in the centre of town, and the general harsh economic climate in the north-east has had an impact on retailing in Hartlepool. As a result, it has the fourth worst-performing medium centre for retail, with a vacancy rate of 28.8% according to the local data centre. The decision to delay revaluation of rates—as hon. Members have said elsewhere, 2008 was the height of the property boom—will have a further hugely severe impact on retail in areas such as mine, and further closures are inevitable. Those high streets that are already struggling will be hit hardest. That has come out loud and clear during the debate. What will the Minister do to mitigate the detrimental impact of his decision on areas such as mine, and other high street centres?

My final point is one of context. Changes to business rates must not be made without considering the wider context of local government finance. Local authorities such as mine have suffered severely the brunt of Government cuts. Hartlepool borough council had disproportionate cuts in 2011-12 and 2012-13 amounting to about £150 per person, compared with the national average of about £50. The local authority faces cuts to its budget of around one quarter this year, on top of cuts of £10 million last year. In an area of high social need and economic deprivation, cuts of such magnitude will unleash enormous and potentially irreparable damage to the fabric of Hartlepool society.

Will the Minister reconsider what he is doing with business rates and the cuts to local government finance in general and, most relevant to the debate and my area, the redistribution element of his policy, which will see much-needed funds flow from high-need, deprived areas such as mine to more affluent areas? Hartlepool borough council needs that redistribution exercise to provide the services required by the town’s population and heritage. I hope that the Minister will respond positively, because my town really needs that redistribution.

10:28

[Helen Jones (Warrington North) (Lab)]

It is a pleasure, Mr Caton, to speak under your chairmanship. I congratulate my hon. Friend the Member for Rochdale (Simon Danczuk) on securing this debate. Since he came to the House, he has been a powerful advocate for his constituency, and has done an enormous amount of work with businesses to try to promote growth in Rochdale. We congratulate him on that. He made the point that the Government are failing to manage that change and to consider important issues, such as rebalancing the economy, the gap between what is happening in some of our more deprived areas and in other areas, and the gap between the Government’s windfall from increasing business rates and the money being spent on the Portas pilots to help our high streets.

Other hon. Members have also made powerful points. The hon. Member for Waveney (Peter Aldous), who gave a thoughtful and considered speech, mentioned the reasons why the high street is being hit hard—the changes in our buying habits, the growth of internet sales, and so on—and he made the point powerfully about the differences between out-of-town shopping centres and high streets. That issue must also be considered. My hon. Friend the Member for Stockport (Ann Coffey) has consistently put the case for retail, and especially for smaller shops, and she showed how rental values in Stockport have fallen enormously, by 29%, so that they are now totally out of line with the business rates paid. My hon. Friend the Member for Hartlepool (Mr Wright), who was not only an accountant but a very effective Local Government Minister, pointed out the real problems of low tax bases in places such as Hartlepool, as well as the need for a redistribution of business rates, and the high risk that authorities in those places have when they are dependent on a few large businesses for a high proportion of their rates. We raised those issues during the passage of the Local Government Finance Bill, and I will return to them shortly.

In the Growth and Infrastructure Bill—never has a Bill been more inaptly named—the Minister has decided to bring forward proposals to delay the revaluation of business rates. We want to support business in any way possible, but during the passage of that Bill, we will want to scrutinise the evidence that he is bringing forward—evidence that has been queried in today’s debate. We will also want to look at exactly where the winners and losers are, and what the effect would be on our regional economy. There is no doubt, as hon. Members have said, that the rise in business rates has had a huge impact on businesses, particularly small and medium-sized enterprises and the retail trade. We have all seen it in our constituencies, as many hon. Members have said: we have seen shops closing and young people unable to get jobs. I know many graduates who cannot get jobs aimed at their level of education, and who have sought jobs in retail to show that they are willing to work. Businesses, however, are simply not taking them on as they used to. They cannot afford to.

As my hon. Friend the Member for Rochdale pointed out, last year the RPI rise was 5.6%. The RPI figure in September was 2.6%, and even though that is lower, it will mean an extra cost of £175 million for businesses. Some of those businesses are in areas where rental values have fallen alarmingly, and they are struggling to survive. We all know that business rates are the third biggest outgoing for most firms, after rent and staff costs. As has been said, the current business rates use the rateable values from 2010, which were based on the rental values in April 2008, when property values were close to their peak. Many businesses therefore find themselves in a trap: in many areas, they are paying high rates while struggling to cope with the effects of a recession.

When the Minister made his announcement about revaluation, he said that the five-yearly review will resume

“once the economy has had a chance to recover fully from the financial and fiscal crisis”.—[Official Report, 18 October 2012; Vol. 551, c. 33WS.]

Perhaps when he responds he might tell us when that will be. He clearly does not think it will be by 2015, which is what the Chancellor told us originally. Is he confident that it will be by 2017, and that another review will be carried out then? If he cannot say that, he is simply introducing more uncertainty for businesses.

Whatever the answer, it is clear that the system is not working as well as it should; that is evidenced by the number of outstanding appeals, to which my hon. Friend the Member for Rochdale pointed. There are 241,700 of them, and the Valuation Office Agency is struggling to clear the backlog. One thing the Minister could do is ensure that the VOA has more resources to tackle that backlog, so that at least businesses could have their appeals dealt with and can pay the right level of business rates. I hope that he will commit to that.

As the Minister will be aware, although the Localism Act 2011 introduced more powers for local authorities to grant discretionary rate relief, that power has rarely been used, because the councils that would most need to use it are often precisely those that have had the biggest cuts in their budgets, and they cannot afford to. As with everything the Government have done, it is the poorest authorities that have seen the biggest reduction in their spending power. In this Alice in Wonderland—or should I say “Through the Looking-Glass”—world that the Government have created, those who most need to offer discretionary rate relief are the least likely to be able to afford to do so. How does the Minister plan to tackle that problem?

Need is particularly acute, at a time when the Treasury is getting increased revenue from business rates. Over the last four years for which we have the figures, the contribution to the national pool has gone up by £3.5 billion, not because there is a hugely growing economy, but because the rates were calculated at a time when property values were high. That has particularly hit the retail sector, because year-on-year growth for retail has averaged only 2.1% over the past two years, while consumer spending fell for three quarters in a row.

The Government, however, are facing another problem, which my hon. Friend the Member for Hartlepool touched on. The Local Government Finance Bill makes local authorities more dependent for their income on business rates. They will get back 50% of their business rates. I believe that the Government’s intention in the long term is to get out of paying grants altogether—grants are discretionary under that Bill—and put more reliance on business rates. Local authorities, however, do not set the rate. It would be out of the scope of the debate to go through the whole Bill, but I suspect that the Government have clocked a real problem. If they have a revaluation in 2015, some local authorities could see their income fall drastically because their rental values have fallen. I have great respect for the guile and cunning of the Secretary of State. I suspect he has seen that problem, and has seen that what he is setting up in the Local Government Finance Bill might well implode as a result, which is part of his reason for wanting to postpone the revaluation.

If the Government are going to use that postponement to consider how business rates should be set, which I hope they will—as hon. Members have said, there are issues about whether we should take a 12-month average based either on the consumer prices index or RPI; whether we should take the RPI based on one month; how often revaluation should be done; and so on—they need to involve those who receive business rates as well as the businesses that pay them. That means not simply the Treasury, but local authorities as well. It is even more important to do that, because as we have heard today, the postponement of the revaluation is being viewed very differently in different parts of the country. It is not simply a north-south divide, although I accept what my hon. Friends have said about it impacting hugely on the north. Businesses that were hoping for a better alignment between rental values and the business rates that they are paying have been hugely disappointed. There is a big difference between what has happened in, for example, Rotherham, where rental values have fallen by 35% between 2008 and 2012, and what has happened in Bond street, where they have gone up by an average of 50%.

In that context, I wonder what the Minister plans to do to assist businesses, particularly small and medium-sized enterprises, in areas where rental values have fallen and business rates are now totally out of line with the values that currently apply. I hope that he will be able to answer some of the fundamental questions that we have posed today, because he will simply be creating more uncertainty and more difficulties for business if he cannot resolve those problems. Hon. Members have made that clear in the debate, and I hope that we will now hear more from the Minister about how he intends to respond to those concerns.

10:40

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

It is a pleasure to respond to the debate under your chairmanship, Mr Caton. I join other hon. Members in congratulating the hon. Member for Rochdale (Simon Danczuk) on securing the debate, which is indeed on an important subject. I thank him for drawing it to the attention of the Chamber, and I thank all hon. Members who have spoken so passionately on the issue. It is useful for me to be able to set out the Government’s position on business rates, and on revaluation in particular.

First, let me correct the fundamental misunderstanding that some people have about revaluations. They do not change the amount of revenue raised through business rates. Revaluations simply redistribute the rates burden among ratepayers. Therefore, what revaluations ensure is that the share of the national rates bill paid by any one business reflects changes over time in the value of its property relative to others. That means—this is the important point—it is likely that very many businesses whose rents have fallen, but by less than the average, would have seen a tax increase from 2015. The detailed work of reassessing all 1.7 million properties has not yet started, but the estimates prepared by the Valuation Office Agency suggest that 800,000 premises would have seen a real-terms increase in their rates in a 2015 revaluation. Sectors facing big hikes would have included retail as well as petrol stations, hotels and pubs. My hon. Friend the Member for Nuneaton (Mr Jones) mentioned pubs; as the Minister responsible for community pubs, I fully appreciate that point.

Let me set out the action that we have taken. To provide certainty and stability to all businesses, the Government intend to postpone the next revaluation from 2015 to 2017. To answer one of the points raised, the date of 2017 is in the Growth and Infrastructure Bill. Thereafter, revaluations will continue to take place every five years. The required legislative changes are in the Growth and Infrastructure Bill.

[Simon Danczuk]

If the revaluation took place in 2015, and was not moved to 2017, how many businesses would pay less in business rates?

[Brandon Lewis]

I am not sure that I followed the hon. Gentleman’s point. Could he clarify it?

[Simon Danczuk]

If the revaluation took place in 2015, as it should, how many businesses would see their business rates reduced?

[Brandon Lewis]

As I published yesterday, the Valuation Office Agency’s view is that about 800,000 premises would have seen an increase and about 300,000 a decrease. We are talking about the retail sector, petrol stations, hotels and pubs. Those kinds of business would have been most affected by hikes. Postponing the revaluation—

[Simon Danczuk]

Where do the 300,000 businesses in the Government’s figures tend to be based—which regions?

[Brandon Lewis]

At the moment, the estimate is done across the country. We are looking at publishing these estimates, but what the Valuation Office Agency can and will publish is a matter for the VOA. We are looking to ensure that that is resolved before the Bill’s Second Reading on Monday.

Postponing the 2015 revaluation in England will avoid local firms and local shops having to face unexpected hikes in their business rate bills during the next five years. As business rates are linked to inflation, there will be no real-terms increase in rates over the period. The reform therefore provides certainty for businesses to plan and invest, supporting local economic growth.

Since the last revaluation, which was based on 2008 valuations, the economy and property market have faced exceptional changes. A revaluation at this point would therefore be likely to result in sharp changes to business rate bills in many parts of the country and in many sectors. Tax stability is vital to businesses that are looking to grow and to help improve the economy. The Government are committed to maintaining up-to-date rate bills through regular five-yearly revaluations, which will resume, as I said, after 2017.

We can look only at estimates for the revaluation in 2015, because the detailed work has not yet started. The estimates have been prepared by the Valuation Office Agency and are based on professional judgments informed by limited rental market evidence up to January 2012. They suggest that many smaller and medium-sized firms would have seen rate increases in 2015. Overall, the estimates suggest, as I have said, that 800,000 premises would have had a real-terms increase in their rates from a 2015 revaluation. The retail sector, some parts of which have criticised our decision to postpone the revaluation, would have faced big hikes in bills in 2015.

[Helen Jones]

If I understood the Minister correctly, he said that the detailed work had not been done by the VOA. If that is the case, how can he be confident of the numbers that he has given on winners and losers?

[Brandon Lewis]

As I have said, the publication of the figures is a matter for the VOA, and one that we are looking to resolve before the Bill’s Second Reading on Monday, but those are the figures from the VOA that we have at the moment. To do the full, detailed calculation, we would need to go through the full revaluation procedure, and the figure for that is just under £50 million. I will come back to that in a moment. We have taken steps to change the legislation, but both Houses—I think that my hon. Friend the Member for Waveney (Peter Aldous) raised the point about reviewing and looking at what is happening—will of course have the chance to examine the policy fully during the passage of the Growth and Infrastructure Bill.

Variation in business rates can have a significant impact on businesses. As has been noted, business rates can add 50% to property costs and can equate to 7% or more of turnover. Large-scale changes in these costs can be very disruptive to businesses at a time when they want to concentrate on delivering growth. That is why we felt that postponing the revaluation was the right thing to do. It provides certainty and stability, allowing businesses to have confidence in what they are doing.

I am aware of concerns that have been heard recently from organisations such as the British Retail Consortium that business rates are generally too high and should not be increased in line with inflation. In fact, the system of increasing the rating multiplier only in line with inflation, which was introduced in 1990, has provided valuable certainty for businesses over the years. It has meant that they have been able to forecast their business rates bill between revaluations and plan accordingly. That was touched on by the hon. Member for Warrington North (Helen Jones), I believe.

The Government have said that they will review the case for uprating in line with CPI instead of RPI, or using a 12-month average instead of the September inflation figure. That commitment still stands. I do understand that in the current economic climate, there are retailers and other businesses that would like lower business rate bills, and there are businesses that would like the Government to raise less money from business rates at the next revaluation. When we consider calls, such as those made today, for lower business rate bills, we have to balance that not just against a system that has capped business rate yields for 22 years, but against the Government’s deficit reduction priority and the tough decisions needed to reduce the deficit. To back up the comments made by my hon. Friend the Member for Nuneaton, it is important, if there is to be that deficit reduction, that we do not make further spending pledges, which is, to an extent, what hon. Members have invited me to do today.

To date, the approach to granting business rates relief has been to target it where support is most needed—on, for example, small businesses, charities, and businesses in hardship. However, we find discussions with groups such as the British Retail Consortium helpful—I will meet it in the next couple of weeks—and will of course continue to keep the rating system under review.

Let me touch on a couple of specific points that were raised. I am aware that there have been delays in relation to rating appeals at the VOA. It has devoted extra resources this year to help to clear the backlog. My officials have regular meetings with the VOA to discuss the appeal numbers. Postponing the revaluation will allow it to deploy more resources to clear the appeals, but we will also be looking to work with the VOA to see what more can be done to clear appeals.

[Kate Green]

I am grateful for that assurance. We look forward to seeing the impact of the additional resources. Will the Minister also commit to ensuring that up-to-date data about the VOA’s performance continue to be published? There have been delays in publishing the statistics, which might mean that worse performance is deliberately being suppressed.

[Brandon Lewis]

I will certainly take that point back to the Department. May I highlight that any ratepayers with an outstanding appeal who are in financial hardship or facing enforcement action from a local authority should contact the VOA directly, because it will look at bringing appeals forward in such cases?

[Simon Danczuk]

I do not know whether the Minister has ever tried to contact the VOA, but my office certainly has. I speak on behalf of many businesses that find it exceptionally difficult to deal with the VOA. Does he agree that its performance on appeals is completely unacceptable?

[Brandon Lewis]

The hon. Gentleman invites me to stray well outside the scope of the debate, but I take his point on board and will take it back to the Department. My offices speak and meet with the VOA regularly, and I will ensure that that matter is considered.

A specific point on out-of-town car parks was raised. The VOA independently assesses all properties, including out-of-town retail premises, for business rates on the same basis—annual rental value. I assure hon. Members that the rateable values reflect the value of car parking in an out-of-town location, to the extent that it is reflected in rents. I know that there is an issue with some councils seeing car parking in town centres as a cash cow; we have made changes to the rules around the transparency of car parking charges, so that residents can understand fully what councils are doing.

Of course, the Government have already taken action on business rates. We have doubled the level of small business rate relief in England for two and a half years, so the higher level of relief will apply throughout the 2012-13 billing year. We estimate that more than 500,000 businesses in England are benefiting, with approximately a third of a million businesses paying no rates. The measure therefore reduces fixed costs for existing and new small businesses, helping them to make the most of opportunities as the economy returns to growth. It is a useful measure. My hon. Friend the Member for Sherwood (Mr Spencer), who is no longer in his place, mentioned empty shops and start-up ventures. It is an interesting point, which I will take back to the Department to look at.

Through the Localism Act 2011, we simplified the process for claiming small business rate relief; waived £175 million of backdated business rates demands levied on businesses, including some in ports; and gave local authorities wide-ranging discretionary powers to grant business rates discounts. We listened to concerns about the RPI increase for 2012-13, and gave businesses the option of spreading the increase over three years.

As has been mentioned, we are also introducing the new business rates retention scheme. We want to give councils every encouragement to drive growth, so that they fully play their part in growing our economy through the planning system and their other levers. The business rates retention proposals represent a fundamental shift in the way that local authorities are funded. They give councils a strong financial incentive to drive local economic growth and to engage with local businesses to develop a positive approach to growth. Subject to the Local Government Finance Bill receiving Royal Assent, we will introduce the business rates retention scheme in April 2013.

We have taken other steps to boost the high street and growth. We have doubled the number of Portas pilots. Following applications by local MPs, over 300 town teams have signed up to become town team partners, and will benefit from a package of support. In March this year, we announced a £10 million high street innovation fund for the top 100 places most affected by the riots, or with the highest empty shop rates. In August, we announced the £1 million future high street X-fund. For those who have not yet applied, its closing date is 6 December.

We will shortly announce the details of a £500,000 fund to help set up business improvement districts. We will continue to support the high street by working with areas to remove barriers that prevent local high streets from prospering. We will publish a further response to Mary Portas’s review in spring 2013, building on the knowledge from the pilots, experiences across the country, and the progress that we have made on many of the other recommendations in the review since last December.

As was mentioned, next week is the Second Reading of the Growth and Infrastructure Bill, which will help the country to compete on the global stage by setting out a comprehensive series of practical reforms to reduce confusing and overlapping red tape that delays and discourages investment, new infrastructure and job creation. Postponing the revaluation until 2015 in England is the right thing to do.

[Simon Danczuk]

The Minister’s figures confirm that at least 300,000 businesses will pay more than they should in business rates for two years, from 2015 to 2017. Many businesses will have many more than one premises, so we cannot assume that that is 300,000 shops. Is that the right way to run a tax system?

[Brandon Lewis]

The hon. Gentleman omits to point out that 800,000 businesses would have had to pay more, and does not mention the uncertainty that would have been created over the next couple of years while businesses worked through the situation. That is not sensible in the current exceptional economic climate.

We want to provide local firms and local shops, including many of the most disadvantaged, with the certainty that they need to plan, invest and grow. VOA estimates suggest that the change will save 800,000 premises from a tax hike and protect key sectors such as retail. We recognise that regular revaluations are important to maintain up-to-date rates bills, but such immense volatility is not, at this time, in the public interest. Postponing revaluation will provide businesses with a stable economic environment in which to deliver growth.

10:55

Sitting suspended.

Cabling

Tuesday 30th October 2012 Westminster Hall

11:00

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

It is a pleasure to serve under your chairmanship, Mr Caton. In August, I visited a cable factory in Washington, in my constituency, which supports more than 100 local jobs and is part of a company that employs more than 1,350 people across the UK. It produces some of the highest-quality cabling in the world—the kind of cable that is used in everything from laptops to submarines. I met Paul Atkinson, chief executive officer of the cable company Prysmian UK, to discuss the challenges facing the industry. Despite the fact that his company faces similar economic pressures to many other companies, one of his chief concerns was the issue of counterfeit substandard cabling. I was shocked to discover that the cable that we so often take for granted in our homes, hospitals, schools and even in the Palace of Westminster is largely unregulated and potentially dangerous. Some 20% of all cable in the UK is suspected of being counterfeit and therefore at risk of overheating and emitting toxic fumes.

Electrical fires are soaring in number in parallel with the increase in counterfeit cabling that is being imported into this country. As a result of improper regulation, this unsafe cable is hard to detect and is often installed by professionals who are unaware that it is counterfeit. A council in my local region recently had to reinstall all its newly fitted data cables after it detected, at the last minute, that cheap and dangerous material had been used within the cable. That came at a cost of tens of thousands of pounds, which the council had to bear.

Counterfeit cable not only poses risks to our safety, but is harming the British cable industry, which is a world leader for high-quality cables. Over the past few years, more than 30 producers of safe high-quality cable have been forced out of business at the gain of cut-throat distributors of unsafe and counterfeit cable from overseas. This export-led, globally respected domestic industry will shrink further if we do not act now. The problem of counterfeit cabling could be substantially mitigated by suitable enforcement of basic regulation for the detection of unsafe cables.

The cable industry is not asking for anything other than for the UK to catch up with global standards for regulation, in order to halt the victimisation of British manufacturers and to ensure that our schools, hospitals and homes are safe from the dangers that substandard cables can cause.

Customs and Excise statistics show that the UK has become a global target for distributors of counterfeit and substandard cabling, and it is now estimated that a fifth of all cabling in the UK is suspected to fall into that category, and therefore be potentially dangerous. To put that in perspective, the Olympic venues alone required more than 350 miles of cabling, so if they followed the national trend, that would mean that more than 70 miles of that cabling was counterfeit.

On a national scale, there is potentially hundreds of millions of miles of cable that is not only substandard but potentially life-threatening. That is backed up by the official fire statistics for 2010-11, which show that electrical distribution caused more than 4,000 fires in homes and 3,000 in other buildings.

According to statistics from the Department for Communities and Local Government, fatalities caused by faulty electrical distribution systems have tripled since 2004. The incentive to source cheap cabling has been greatly increased by the dramatic increase in the cost of copper, which now accounts for more than 90% of the total cost of the cable. Therefore, manufacturers of counterfeit cable are able to undercut quality cable by cutting down on the amount of copper they use. However, doing that leads not only to more faults, but to overheating, which dramatically increases the risk of fire. The fire itself is not the only life-threatening risk. Due to the present lack of regulation, substandard cable distributors are also free to cut costs by using cheap material that emits toxic fumes, and which falls below fire-resistant standards. If such cable is used as part of emergency lighting or fire alarm systems, which should function for up to two hours to allow people to escape safely, those systems could fail within minutes, thereby increasing the risk of casualties.

The Minister will share my deep concern that, because of a lack of any real regulation, cables in our schools, homes, and hospitals will almost certainly contain counterfeit cabling, which could lead to deadly consequences.

[Ian Lucas (Wrexham) (Lab)]

I congratulate my hon. Friend on securing this important debate. My father worked in a cabling factory in County Durham for 40 years, and Prysmian is also based in my constituency. She is emphasising a hugely important point. There have been a number of very serious fires that have led to deaths. There was one recently in Prestatyn, in north Wales. This is an urgent problem, which we need to address.

[Mrs Hodgson]

I agree, and I thank my hon. Friend for his contribution. I am so pleased that he was able to come along this morning because he is as passionate as I am about this issue.

In addition to the serious safety issues that we have been discussing, unregulated counterfeit cabling is also undermining British jobs. As I said earlier, more than 100 people are directly employed at the Prysmian factory in Washington, and even more may be employed in my hon. Friend’s constituency in Wrexham. However, high-quality cable manufacturers operating in Britain are struggling to survive because of the unfair competition from counterfeit cables. Britain’s domestic cabling industry is a world leader because of the refusal by its companies to compromise on quality and safety standards. However, that integrity and sense of responsibility to the end user has left the members of that industry under threat from cut-throat distributors of unsafe, substandard products. At a time of rising unemployment, my understanding is that the entire cable industry, which includes manufacturers as well as supply chain jobs and distributors, provides more than 150,000 private sector jobs nationally, and also helps support efforts towards an export-led recovery, with exports totalling more than £300 million. However, those jobs are constantly under threat due to the lack of protection that basic regulation would provide.

The extent of the damage that counterfeit cabling is doing to the British cable industry can be seen clearly in the rapid decline of jobs in the sector over the past 15 years. In 1995, there were 70 domestic cable manufacturing firms, providing 110,000 jobs. Now there are just three cable manufacturing firms, providing 5,000 jobs. All the other manufacturers have fallen victim to cheap and often substandard imports from abroad. By sacrificing product safety and misleading consumers, distributors of dangerous counterfeit cabling are able to undercut UK suppliers, potentially putting more of them out of business. Such manufacturers ceasing operations not only means that jobs are lost, but further increases the market share available for distributors of counterfeit and substandard products to exploit.

The problem of counterfeit cabling risking jobs and lives in Britain can be solved with relatively simple regulation and suitable enforcement. However, the issue has been largely neglected by Government, falling victim, as it has, to being caught between the responsibilities of the Department for Business, Innovation and Skills, and the DCLG. Indeed, I believe that there was some discussion last week about which Department would answer this debate today.

The British cable industry has been clear; it believes that fair competition incentivises innovation and higher standards. I do not for one moment want to stop fair competition in the cable industry, or to stop cable manufactured overseas, whether in Europe or elsewhere, from being imported and distributed in the UK. This is not about doing British manufacturers special favours, even when they employ our constituents. This is about creating a level playing field for competition, based on the fundamental point that cabling is a product that needs to be up to standard because of the potentially fatal consequences if it is not.

British manufacturers, including Prysmian, do not believe that the safety of the British public should be compromised, especially in public buildings such as schools and hospitals. In the present marketplace, however, this belief costs them competitiveness and therefore customers, who are often uneducated about the dangers of counterfeit cables. Consequently it is vital that the tide of counterfeit and dangerous cable is halted and that safety standards are enforced.

Dangerous cable could be tackled by revising legislation to incorporate four checks on the market. First, there should be quality checks on cable at ports of entry, ensuring that products coming into the country are up to the standards that we require of British-made products. Secondly, there should be a requirement that, at the very least, all cable used in public buildings in the UK is third party-certified, meaning that it has been tested and proven to be of the quality that we expect. Thirdly, cable inspection and verification should be added to the list of mandated checks performed by building inspectors, ensuring that any counterfeit product is identified as early as possible, so that it can be replaced. Fourthly and finally, there have to be consequences for those who are found to be endangering life and property knowingly by installing substandard cabling, and at the very least that should mean prosecution for those found to be doing so in public buildings. Similar measures already operate internationally, so implementing them would merely be addressing an anomaly that leaves Britain uniquely vulnerable to the kind of dangerous electrical cabling that causes deaths, casualties and damage to property, while undermining British jobs.

[Ian Lucas]

I am grateful to my hon. Friend for giving way to me again. She has made a compelling case about the dangers of cable that is not health and safety-certified. Does she agree that it is regrettable that we sometimes have soundbites that criticise this type of regulation, whereas in fact it creates an opportunity for good manufacturers who have safe systems in the UK and the absence of such regulation penalises those good manufacturers at the expense of those that do not provide safe cables?

[Mrs Hodgson]

Yes. On that very point, I know that the Minister announced last week that he is going to tackle Europe’s “regulatory machine” and that he is committed to reducing red tape for small and medium-sized businesses. However, I hope he will agree that, as my hon. Friend just said, cabling is very different. I hope he sees that this kind of regulation for cabling would be welcomed and would definitely help British businesses, as well as reducing electrical fires and ultimately saving lives. I look forward to hearing his response to the debate.

11:12

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

It is a pleasure to serve under your chairmanship, Mr Caton.

I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on securing the debate and on raising important issues, and I recognise that she has a particular constituency interest in this issue. I also welcome the hon. Member for Wrexham (Ian Lucas) to the debate and welcome the interest that he has shown in it.

I will begin by describing some of the regulatory regimes that electric cables fall under, so that we are clear about them. As far as safety is concerned, there are robust safety regulations that apply to manufacturers, importers, distributors and retailers, which require products to be safe. How do we interpret “safe”? We do so on a case-by-case basis, taking account of good engineering practice, the extent of scientific knowledge, the ability of engineering to provide solutions, and the reasonable expectations of the user of the product, among other factors.

A “safe” product means that a product does not present any risk, or only the minimum risks compatible with its use, consistent with providing a high level of protection for the safety and health of persons. It is important that we distinguish between the requirements of legislation and the requirements of standards. There is no requirement in the legislation for compliance with a standard, and there is a good reason for that. While compliance with a relevant standard provides a presumption that a product is safe, there has to be a route for innovative products and advances in technology. Standards generally cannot prejudge advances in technology, and therefore are amended and updated in the wake of innovation and scientific advances.

I now turn to a specific issue that the hon. Lady raised, which is misusing trade marks to mislead consumers deliberately. Counterfeiting is an issue that the Government take very seriously, because—as she set out very clearly—it threatens legitimate businesses and the economy, and of course it also poses a risk to consumer health and safety, as well as undermining consumer confidence in these products.

The infringement of an intellectual property right is a civil matter. However, the infringement of trade marks can also be a criminal offence. Trading standards officers are primarily responsible for enforcing the criminal IP laws, with support from the police and investigative assistance from the owners of the IP rights. Government and the associated public enforcement organisations continue to engage actively with British businesses to raise the profile of the threat of counterfeit products entering relevant supply chains, including supply chains in the electrical cabling sector. For example, the IP crime toolkit, which was launched by the Intellectual Property Office in November 2011, aims to make businesses more aware of the growing risk from counterfeit goods entering supply chains, and it also gives guidance on how to strengthen and protect IP assets.

There is also legislation for addressing issues relating to falsely described goods, and it is applicable when such goods are supplied to a business or a consumer. The supply of cables that are falsely described by any means to a consumer is likely to be a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008. Businesses enjoy similar protection against misleading advertising and marketing, including false statements, under the Business Protection from Misleading Marketing Regulations 2008. Both of those sets of regulations are enforced by local authority trading standards officers.

I now turn to some of the concerns that the cabling industry has expressed. It initially raised safety concerns about cabling with my Department back in 2009. Those concerns were referred to the Health and Safety Executive, which is the relevant enforcement authority. The HSE then approached my Department for funding for a special project. A special market surveillance exercise undertaken by HSE was agreed, to determine the state of the UK market given the serious concerns that had been raised. That exercise commenced early in 2010.

The market surveillance project had the overall objectives of determining how the cable supply sector was functioning and whether there were any market failures that needed to be addressed. Once the HSE had performed an initial study of how the sector functioned, it was able to proceed to taking samples from across the sector. It had to take a sufficiently large number of samples to determine whether the cables available on the market were safe or not. Those samples were not taken at random; they were a biased selection taken from cables that were considered by HSE inspectors to be the most likely to be non-compliant.

That project has now concluded, but the final report is still to be produced; it is expected very early next year. I understand that the findings of the report will show that, with the exception of one large batch of cable that had copper content that was 50% underweight and of two samples with questionable origin, there was no justification from the other samples that were found for the HSE to remove any product from the market. The samples that were found to be non-compliant were voluntarily removed from the market without any formal action being taken by the HSE.

Part of the administrative requirement of the legislation is for those in the supply chain to be able to provide a copy of the declarations of conformity that the cable complies with the legislation. These declarations were found not to be generally available, but they were provided within the 10 days requested by the HSE. If the HSE had formally requested them, it would have had to allow 21 days for them to be produced, rather than the initial 10 days. The HSE found that some manufacturers outside the EU were reluctant to supply declarations of conformity and that there was evidence of hostility from those manufacturers towards importers who requested the declarations of conformity, however they were supplied. The HSE is not an enforcement authority for counterfeit goods, but it should be reported that it did not identify any counterfeit product during its market surveillance assessment.

While it was assessing the sector, the HSE found that the market is dominated by a small number of importers, most of whom had a low level of awareness of the administrative requirements, although some were fully aware of their obligations. The industry is standards-led, and considers that the standards provide all the protection that it needs. However, it was generally unaware of the general failure to meet the requirements of the standards. The industry also suffers from a poorly developed system of product recall. The HSE has therefore advised that on the basis of its assessment most products on the market are safe. Although they may not always be compliant with the standards with which they are claimed to be compliant, they meet the requirements of the safety legislation.

While carrying out the assessment of the market, the HSE identified a considerable lack of awareness of the administrative requirements of the legislation. It has now put in place measures to increase awareness of them. The measures led to distributors and importers demonstrating a greater understanding of their obligations and of the risks—financial liability and reputational risks—that they expose themselves to. I understand that that has led to a significant improvement of best practice by some of those in the supply chain. The HSE’s recent follow-up visits to a leading UK distributor-importer have verified that it has adopted processes to identify substandard, non-compliant cable before it enters the UK wholesale-domestic market. The HSE will facilitate awareness of that best practice at an event that it is planning, to engage other distributors.

The current HSE assessment of the market demonstrates that most cables on the market are generally safe and that there are robust regulations in place dealing with safety, counterfeiting and false declarations. Traceability is an issue and all cable needs to be marked, but market surveillance hands are tied until the industry puts its house in order on marking. The thorough HSE market surveillance assessment provides a reassuring and clear statement of the market: that it is functioning satisfactorily. There are cases where non-compliant products are identified. Those should be referred on a case-by-case basis to the relevant enforcement authority. In matters of product safety that is the HSE for workplace products and trading standards officers for products supplied to consumers; in relation to false marketing declarations it is trading standards officers for both business-to-business and business-to-consumer transactions; in relation to counterfeit goods, or in cases of suspicion of counterfeiting, evidence should be supplied to trading standards, Her Majesty’s Revenue and Customs and the police.

[Mrs Hodgson]

I have been listening intently to the Minister’s response, as has my hon. Friend the Member for Wrexham (Ian Lucas). So, I am sure, have the industry experts in the business world, who are far more cognisant than I am of the finer points of what he says. I am not an expert in the field, although I am trying to represent my constituents as well as I can on the issue. Will I therefore be able to enter into correspondence with the Minister, for follow-up, if we want to drill down on some of the points in his response?

[Michael Fallon]

I am certainly happy to engage with the hon. Lady in correspondence on any of the technical points I have raised. If anything is not clear I shall get back to her about it. I, too, am not an expert on cabling regulations. The hon. Member for Wrexham may be the only expert in the Chamber—apart from you, Mr Caton. I know that you have some knowledge of the area.

[Ian Lucas]

Although I am a former Minister in the Department, I too have work to do on the matter, and wish the Minister good luck in getting on top of it. He certainly seems on top of the subject today.

[Michael Fallon]

It is kind of the hon. Gentleman to say so. Perhaps it is a process of lifelong learning for all of us.

I do not want to introduce too much levity into the discussion. There are concerns about conformity of the distribution chain with the administrative requirements of the product safety legislation, but the products on the market, which I have accepted may often be non-compliant with the current standards, are generally considered to be adequate for the purpose intended and are safe. However, I assure the hon. Member for Washington and Sunderland West that we take the concerns seriously. We believe that the legislative framework is robust; but I urge her and the hon. Member for Wrexham to report directly to me at the Department any evidence that they have in connection with the points they have made, so that we may look at it. If they have any specific evidence of counterfeiting or false marketing, that should be reported directly to trading standards officers in the specific local authority areas.

11:25

Sitting suspended.

Leeds Children’s Heart Surgery Unit

Tuesday 30th October 2012 Westminster Hall

[Mr Philip Hollobone in the Chair]

14:30

[Stuart Andrew (Pudsey) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to have a further opportunity—you might wonder why we are taking another chance to raise the issue—to discuss the Leeds children’s heart unit. Given that there is a new ministerial team at the Department of Health—I am delighted to welcome the Under-Secretary of State for Health, my hon. Friend the Member for Broxtowe (Anna Soubry) to her new post—and that the decision on the unit has been referred to the Independent Reconfiguration Panel, it is critical that the independent review gets this right. The issues that we have been raising need to be assessed in great detail by the independent panel.

It is important for us to remind ourselves of the key issues. I want to make it crystal clear at the outset that we have always supported the objective of the review. Of course, we all want the best services for our children, and having fewer specialist centres is a principle that we have never doubted. My grave concern is that the review will fail to meet the objectives, particularly in the north of England, subjecting my constituents and those in Yorkshire and Lincolnshire to a worse service than the one that they currently enjoy. That is why I want to outline our concerns.

First, the review has always made it clear that units need to perform 400 operations or more a year. If that is the agreed standard, we must accept that. However, a survey by PricewaterhouseCoopers showed that the majority of patients who live in east, west and south Yorkshire would not travel to Newcastle. Instead they would go to Liverpool, Birmingham, or, in some cases, even to London. Anyone who knows our area knows that that is instinctively the case. Since the decision was made, adverse weather over the past couple of months has caused huge problems on the A1. Would a parent go there or would they choose less problematic routes? The issue is made clear in the analysis. The independent review document states:

“There was more reluctance amongst members of the public to consider travelling to Newcastle as a centre. If the preference of the parents and the public were factored into assumptions of patient flows, they may have implications for projected levels of activity at – in particular – the Newcastle centre.”

What is the review’s answer to the problem? At the decision-making process meeting—a seven-hour meeting to rubber-stamp a decision that clearly had already been made—it was said that patients preferring centres other than Newcastle would be influenced by referring doctors, with the assumption made that they would be pointed to Newcastle. Frankly, the evidence points to the contrary: all 20 referring clinicians in the Leeds network, whose views were never sought by the Safe and Sustainable review, said that they would not refer patients there for treatment.

In addition, the review argued that if 25% of patients from Leeds, Sheffield, Doncaster and Wakefield chose to go to Newcastle, that unit would perform 403 operations a year, conveniently just over the target of 400. That also assumes that 100% of patients in the other remaining postcodes, including Hull and Harrogate, would go to Newcastle. Newcastle can only reach the 400 figure if all the assumptions—that 25% will go from south and west Yorkshire, that clinicians will refer, and that 100% in Harrogate, Hull and elsewhere would use the centre—are correct, but there is no evidence to support such assumptions.

Given the importance of the 400 figure, it is staggering that it has been reached on the basis of assumptions. I know my hon. Friend the Minister was a barrister before entering the House. I wonder how the court would have reacted if she had based her defence or her prosecution on assumptions. That is why I believe the review is flawed. If we are going to change, it must be for a much better service.

That brings me to the issue of co-location. The foundation of the review was the inquiry at Bristol, and ensuring that such events never happen again is crucial. A key recommendation of the inquiry was to have all paediatric services under one roof. The British Congenital Cardiac Association has stated:

“It is important that the centres designated to provide paediatric cardiac surgery must be equipped to deal with all of the needs of increasingly complex patients. For these services at each centre to remain sustainable in the long term, co-location of key clinical services on one site is essential.”

I completely agree with that statement. Indeed, Professor Sir Ian Kennedy, in his report following the Bristol inquiry, stated in recommendation 178:

“Children’s acute hospital services should ideally be located in a children’s hospital, which should be physically as close as possible to an acute general hospital. This should be the preferred model for the future.”

Yet despite Sir Ian’s assessment panel describing the location of key services on a single site as optimal, Sir Ian accepted a watered-down definition of co-location, which allowed Newcastle to be described as a co-located service, and that led to the decision to close Leeds, despite the Paediatric Intensive Care Society’s assertion that it

“would dismiss any suggestion that a service located on another hospital within the same city can be regarded as being equivalent to a service located on the same hospital site.”

What has caused Sir Ian Kennedy to change his mind? Anyone visiting the Leeds unit will know that it is a wonderful, integrated unit. It has all the services that are needed for children with complex and multiple needs. They need paediatricians there with other specialities. On my several visits to that unit, on each occasion I have seen paediatricians coming to help patients with complex needs.

[Philip Davies (Shipley) (Con)]

My hon. Friend has led this campaign in Parliament with his customary charm and tenacity. As ever, he is making an excellent case. The national health service is paid for by the public for the benefit of the public. Ultimately, the services that we provide should be the ones that the public want. MPs from our region, from across the parties, are here today, and it is clear that the people in Yorkshire have confidence in the unit, want it to continue and believe it will offer the best possible treatment. Should that not be one of the most important factors that the Government bear in mind?

[Stuart Andrew]

I am grateful for my hon. Friend’s kind words. It has been a tremendous cross-party campaign. People right across our region have been speaking in high praise of the unit. My hon. Friend is absolutely right that it should be about what patients want. Patient choice is a bedrock of the NHS. I hope that today’s debate will enable us further to put across our grave concerns about the review.

[Julian Smith (Skipton and Ripon) (Con)]

Another concern that people have raised is the initial consultation that took place, especially with regard to the language and translation for a large section of our community who suffer particularly from congenital heart disease. Will my hon. Friend comment on that? Does he think that that issue has been fully addressed thus far in the process?

[Stuart Andrew]

No, I do not. The projections of population growth, particularly in the south Asian community, are a huge issue that has not been fully addressed. I hope that that issue will be taken up by the independent panel when it considers the detail of the decision that was reached.

It would be a backward step for us to go to a unit that was separated from the rest of children’s services by three miles. We have a wonderful unit at Leeds general infirmary, where all the children’s services are under one roof. Staff there talk about the difference between now, and when the unit was at Killingbeck. There were great problems with getting doctors to travel there, even though it was only a couple of miles away. It is unacceptable for our constituents and poorly patients to receive a much lesser overall service, because the rest of the services will be three miles across the city of Newcastle.

A phrase that I have heard a lot in this campaign is, “Bring the doctors to where the patients are and not the other way around.” The review has been inconsistent regarding whether population density matters. The consultation document said that Birmingham gets a high number of referrals because of the large population in its catchment area, and it should therefore remain as a unit, but that simply does not seem to apply to Leeds. Leeds serves a population of some 5.5 million, double the 2.6 million in Newcastle, and projections show that that number will increase. The recent census showed that the population of the north-east had increased by 57,000, compared with an increase of 300,000 in Yorkshire, so surely we should put the services where the population is, and where it is growing.

The health impact assessment stated that options G and I were the only ones to induce few negative impacts—option G being the one that includes Leeds—and it admitted that option B would have a more negative impact than option G. That information was released only at the meeting on 4 July.

I want to talk about public opinion because, as my hon. Friend the Member for Shipley (Philip Davies) mentioned, support for the campaign has been phenomenal. Some 600,000 people have signed a petition, which shows the strength of feeling in our area, but those signatures were counted as just one response, while 22,000 separate text messages in support of Birmingham were counted as 22,000 separate responses. The NHS constitution states that the NHS is guided by several key principles, one of which is:

“NHS services must reflect the needs and preference of patients, their families and their carers. Patients, with their families and carers, where appropriate, will be involved in and consulted on all decisions about their care and treatment.”

The fact that so many people felt compelled to sign the petition shows the strength of feeling that they have.

I have spent a great deal of time in the Leeds unit, speaking to families that use it. One of them is the family of one-month-old Lauren, who had problems with feeding and was referred to the Airedale hospital when she was approximately one week old. A heart problem was then suspected, and she was referred to Leeds general infirmary, which has strong links with Airedale. She was transferred to LGI through Embrace, the Yorkshire and Humber specialist ambulance service—a service that does not exist in Newcastle—and it took four hours to get the baby in a stable enough position to undergo the journey to Leeds. Imagine expecting that child to go all the way to Newcastle. Her mum, Sara, said that she could not understand why, given the size of the population in Leeds and the surrounding areas, as compared to the size of the population in Newcastle, it was contemplated making people travel further and separating them from their often crucial family support. I know from my time at Martin House children’s hospice how important it is to have family support close by. The patients are in incredibly stressful situations, and it is critical that others can share in the care and visit the children.

[Julian Smith]

What assurances has my hon. Friend had regarding ambulance services? He is right that Embrace, the Leeds service that looks after children in getting them from home to hospital, is second to none. How will Newcastle get anywhere near that quality of service in the time scale required?

[Stuart Andrew]

The answer is that I do not know. I have not been given any assurances that that will happen, which again highlights the crucial problem with the decision: we will be subjecting our constituents to a lesser service.

I spoke to another family at the unit. Libby was diagnosed at 20 weeks with complex heart problems, and her mum was referred for the rest of her antenatal care to LGI, where the baby was delivered; that again demonstrates the crucial co-location of services. It was clear that the daughter needed treatment immediately after birth, and at six days old she had her first of many operations. As she has complex medical needs, she has also needed support from the paediatric neurology and renal teams, and all those services are under one roof, which provides first-class care. My final example is of a child who had an operation in Leeds at 18 months. All the care was then delivered in Barnsley by doctors from Leeds. Leeds doctors have been out working in all the towns and cities across Yorkshire, at 17 different locations, over the past decade. We have a well-established network of services. Those are just a few examples of the kind of impact that the proposal could have on any of our families.

[Fabian Hamilton (Leeds North East) (Lab)]

I congratulate the hon. Gentleman on securing the debate, which, as he rightly points out, is extremely important. Does he agree that it is not just the children’s congenital heart problem services that serve us so well at Leeds general infirmary, but the post-16 services, which the review did not take into account? Does he also agree that Leeds is perhaps the leading centre in the country for training post-16 congenital heart problem surgeons in what is a valuable and important skill?

[Stuart Andrew]

The hon. Gentleman makes an absolutely first-class point. Indeed, I think we have all asked the question: why is the review into children’s services being held separately from that into adults’ services? It is bizarre. We know that the surgeons operating on adults are often the same people who operate on children. We have yet to get a sufficient explanation of why the reviews have not been run in tandem, and we expect, or at least hope, that the Independent Reconfiguration Panel will consider that issue.

That brings me on to my next point. I wholeheartedly welcome the fact that the Secretary of State has decided to refer the decision to the Independent Reconfiguration Panel—that is great news—but it is absolutely crucial that we get the decision right. There is no point in simply reviewing the decision; we want the panel to consider the whole process, right down to the information that was used at the very beginning regarding what the services were like at the different units. That must include the scoring.

[Hilary Benn (Leeds Central) (Lab)]

I echo other Members’ compliments about the force of the hon. Gentleman’s case. The review, if it is about anything, must be about the right clinical outcomes for children. That is why we are all here. We are all so passionate about the Leeds children’s heart surgery unit, which I have the privilege to represent. Will he confirm that despite the impression that is being given in some quarters, no assessment of the relative clinical effectiveness of the units considered in the review has been undertaken? Does he agree that the independent review must do that, as we all believe that it would lead to the decision being overturned?

[Stuart Andrew]

The right hon. Gentleman is absolutely right. He makes a clever and important point, because that is the foundation of the decision, and the information either does not exist or is incorrect. I want a root-and-branch review of the decision and all the information that was at the disposal of the Safe and Sustainable review team. I hope we can get an assurance today that the panel will do that.

There are further problems with the decision-making process. The joint committee of primary care trusts is still not disclosing information requested by the joint health and overview scrutiny committee in our area, including the agendas, minutes and reports of several meetings material to the JCPCT decision. There is also no evidence that the joint health and overview scrutiny committee’s report was even discussed by the JCPCT. The JCPCT has refused to disclose the breakdown of the Kennedy scores awarded to each children’s heart surgery unit by the panel. The value of the total scores, which are the supposed measure of quality, could neither be understood nor scrutinised.

I think we all believe that the JCPCT has misused the Kennedy scores. The JCPCT requested not to be shown the breakdown of the Kennedy scores, which raises many questions about the JCPCT’s ability to make an informed decision. The Kennedy scores were not prepared for the purposes of comparing one centre with another, yet a ranking of the units by total score was published. The scores were misused as indicators of quality, even though the scores did not assess units on what most of us would regard as measures of quality, such as clinical effectiveness, safety and patient experience.

The total unit score was given as 401 for Leeds and 425 for Newcastle. Those scores were published with the independent expert panel’s report in 2010. According to the first breakdown of the total scores, however, which was only released after the JCPCT made its decision, the Leeds unit gets 414 points and the Newcastle unit gets 421 points. Despite the enormity of the review, a basic mistake appears to have been made in the calculation. That matters because, in the eyes of the JCPCT, which saw only total scores, the advantage of the Newcastle unit was more than trebled from seven points to 24. When that was pointed out to the JCPCT, a second set of sub-scores was published that still did not add up to the original scores of 401 for Leeds and 425 for Newcastle; it stated that the Leeds unit outscored Newcastle on the core clinical standards used by Professor Kennedy by 347 points to 336. On care quality, Leeds is ahead; Newcastle outscores Leeds only because of the addition of leadership and vision standards, which are non-clinical standards covering IT and business strategy, working practices, and so on, that were developed by commissioners, not clinicians.

When the fact that Leeds outscores Newcastle on core clinical standards was pointed out to the JCPCT by the Yorkshire and Humber joint health and overview scrutiny committee, a third set of sub-scores was published, with the dubious claim that they were the raw Kennedy scores. The scores did add up to the original 401 for Leeds and 425 for Newcastle, but, mystifyingly, they now put Newcastle ahead of Leeds on core clinical standards. It is unclear which of those different sets of scores was used by the JCPCT because they give such different impressions.

The Kennedy scores were subject to a weighting system that disproportionately emphasised certain aspects of the assessment in a way that produced misleading results when used in a comparative process. No explanation was given for the way the weightings were worked out. I could address further issues, but I am aware that other hon. Members want to take part in this debate.

We suggested that the JCPCT’s decision be implemented elsewhere, but that in north-east England, both Leeds and Newcastle remain open and that the decision be delayed until April 2014. That would give an opportunity for patient choice and for parents to consider which centre they want to use, as is their constitutional right. By the end of that period, each centre would have to demonstrate that it is fully compliant with all the standards set by the Safe and Sustainable review. The judicial action brought against the JCPCT by Save Our Surgery might then cease; that would avoid the risk of sinking the review in its entirety. Leeds and Newcastle would have the opportunity to demonstrate their compliance with Safe and Sustainable standards. Less controversial decisions taken by the JCPCT could proceed elsewhere in the country, and the Government would be shown to be listening to the concerns of patients. That would give a clear message from the Department of Health that patient choice comes ahead of professional convenience. We made that suggestion, and it was rejected out of hand in no time at all. It is a sensible proposal for a solution that would allow us the very best services for our children and young people, as evidenced by where people go and what services they want.

Finally, I attended last week’s Westminster Hall debate on the Leicester unit. My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) summed up the debate well. There is no point in my trying to come up with a fancier conclusion, so I will do him the honour of quoting what he said:

“The House does itself no great service if it shilly-shallies around process and avoids the question. As Members of Parliament, we must ensure that the question is put…The Secretary of State has the levers of power in this question and he must pull them—he must exercise them—and make a decision…I do not care who made the decision or how the dainty route was created to get to it. We all know that the current decision is wrong and needs to be dealt with.”—[Official Report, 22 October 2012; Vol. 551, c. 188WH.]

[Several hon. Members]

rose—

[Mr Philip Hollobone (in the Chair)]

I am just checking that the seven Members standing match the seven names in front of me, and they do tally. We have 45 minutes until I call the Opposition Front-Bench spokesman, which gives you about six minutes each. I cannot enforce that, but I urge Members to stick to six minutes so that everyone can get in. To be helpful, I will read out the batting order: Nic Dakin, Greg Mulholland, George Mudie, Martin Vickers, Julian Sturdy, David Ward and Andrew Jones.

14:58

[Nic Dakin (Scunthorpe) (Lab)]

Thank you, Mr Hollobone. That is very helpful, as your chairmanship always is. It is a pleasure to serve under your chairmanship.

I welcome the Minister to her post, and I congratulate the hon. Member for Pudsey (Stuart Andrew) on securing this debate. His cross-party and cross-regional leadership on this matter has been a credit to him and the region, and it is a pleasure to have worked with him. I hope we have a satisfactory outcome. He has spelled out in clinical detail the key issues in this case: the need to get the right clinical outcomes; the discrepancies in the clinical information issued throughout the process; the number of operations necessary to secure a unit; and the difficulties in securing that number of operations if Leeds closes and other centres are expected to receive its patients, given that if there is patient choice, it is clear that patients from the area that I represent, Scunthorpe, will probably go south, rather than north, to access services.

The hon. Gentleman has reminded us of the largest petition that I can remember in the region, which some 600,000 people signed at fairs and civic events in my constituency and, presumably, across the whole region. That was an active process in which people were engaged and supportive. Counting that as one response is not giving the public view the weight that it should have.

The villages and towns of the area that I represent will always be peripheral and on the edge. People from our area must travel to access services. It is interesting to note their concerns. I will refer to a couple of correspondents, because theirs are the voices of which we need to be reminded, and their observations echo the points made by the hon. Member for Pudsey. One correspondent said:

“All of us heart families, as you can imagine, are devastated…Please can you review this decision and hear our views?”

Behind the petition signed by 600,000 people are many people’s views. Another correspondent said:

“Our daughter is diagnosed with a rare condition, truncus arteriosus. She had major open heart surgery in July 2011 at Leeds general infirmary. Naturally, we were devastated with the diagnosis, coming to terms with it and going through her operation and hospital stay. The service they provide at Leeds is…at its best. I feel that our daughter is in extremely safe hands there. The staff on ward 4, ward 10 and HDU provide the best quality of care. The cardiologists and surgeons are truly amazing in the work they do. Whilst our daughter was in hospital, this was a terrifying time for us. Leeds is a good hour’s drive away, which is bearable in this situation”,

but

“it could endanger lives if people have to travel further, for example those babies born who need emergency heart surgery. I have read so many comments on the support group page that if Leeds surgery closed and they had had to travel further afield, their baby would not have survived the journey.

All the facilities are on site at Leeds general infirmary, i.e. X-rays and other investigations that need to be done prior to operation. Again, if Leeds was closed and we had to go to Newcastle, my understanding is the checks have to be done at other hospitals, again endangering lives in those more serious cases.”

Another constituent of mine says:

“I would now like to explain how the threatened closure affects my daughter. I have a 5 year old daughter who has 22q deletion…She has a number of complex, life-affecting and life-threatening health conditions, including serious congenital heart defects, as well as learning and communication problems. She is a pupil at St Luke’s school in Scunthorpe. Routine antenatal appointments at Scunthorpe failed to pick up her problems; an additional late scan there found a problem, and antenatal care was then transferred to Leeds.

Leeds general infirmary provides many services under one roof. During her stay on the cardiac ward, I required treatment due to birth complications and had access to the midwifery team and appropriate treatment. I was unable to walk following the birth for several days, and was able to stay on the heart ward with food provided and then in family accommodation.”

That emphasises the proximity of all services, and how that affects the well-being of not only heart patients, but mothers and other family members.

I take note of your instructions and encouragement, Mr Hollobone. I feel that I have reinforced the issues that were raised in the excellent speech made by the hon. Member for Pudsey, and I have added a couple of illustrations from my constituency that underline the point.

15:03

[Greg Mulholland (Leeds North West) (LD)]

I congratulate my neighbour, my hon. Friend the Member for Pudsey (Stuart Andrew), on everything that he has done and on securing this debate. It is also good to have four other parliamentary neighbours here, as well as many other colleagues from our region. That speaks for itself.

I put on record my regret that we have still not had a full and proper debate on the Floor of the House of Commons. Six minutes is not enough for me or other hon. Members to state our serious technical concerns about a deeply flawed process, and I do not believe that this debate should be seen as a substitute. However, I thank the Minister and her colleagues for doing the right thing in listening and correctly, considering the huge concerns, referring the decision to the Independent Configuration Panel. That is clearly essential. I am pleased that she and her colleagues did so, considering the outrageous protestations from the Joint Committee of Primary Care Trusts and, I am afraid, from other organisations trying to stop the process and prevent what is clearly essential democratic scrutiny. That in itself is a matter that should be taken further. It is a disgraceful thing for any body involved in the decision to seek to do.

Briefly, in the time that I have, I will raise with the Minister the slight concern also mentioned by the joint health overview and scrutiny committee for Yorkshire and the Humber. We want an assurance—today is a good opportunity—that the terms of reference for the Independent Reconfiguration Panel will not be restrictive. Otherwise, there is a danger that it could simply repeat the same deeply flawed assessment process that my hon. Friend the Member for Pudsey eloquently described. Will the Minister ensure that that is not the case, and that the IRP can properly and fully consider the decision?

We have all heard what a blow the decision has been to the wonderful staff who work at the unit and, most importantly, to the families and children involved, as well as to people in the region and beyond who rely on the unit or could do so in future. We must be clear on this point, which I want the Minister to take away. Of course we have all heard the stories of the awful situation in which families and children have found themselves. Each and every one is heart-rending, and they deserve to be listened to. However, we must also accept that the same stories would apply to any of the units in the review, so that is not the point. The point is a cold, hard one: by the review’s own criteria for bigger and smaller units, the JCPCT has made an absurd decision in favouring the closure of Leeds.

The JCPCT has demonstrated a clear bias all the way through. I am sorry to have to say it, but the JCPCT’s decision was clearly a stitch-up. If it had followed its criteria properly and gone through the process following the criteria set down by the previous Government, it could not have failed to argue, given the troubled times and all the other things that we have heard about, that Leeds must be a fully functioning bigger unit, yet it has not. I believe that investigations are still needed.

It is utterly disgraceful how the JCPCT and others have sought to avoid proper scrutiny. To back up what my hon. Friend the Member for Pudsey said, the JCPCT has continued to refuse to provide all the information requested of it by the body charged in the health service to scrutinise it. That is not only disgraceful but quite sinister, and I ask the Minister to look into it properly. If the JCPCT will not release its reports and minutes properly under the Freedom of Information Act, it must say why, but it simply has not done so. I pay tribute to Councillor Illingworth, his predecessor and the body of councillors for all the good work that they have done. They are being refused the information that they need to do their job. That is not acceptable, and I want it to be taken up properly with the JCPCT.

The other issue that has not been raised so far—none of us wants to repeat what has been said—and that I want to bring to the Minister’s attention is the absolute nonsense that despite the geography of the whole country, the Yorkhill unit was not included. There is already a flow of cross-border patients from the north of England to Scotland and the other way around. It is somewhat ironic that Sir Ian Kennedy, who chaired the Safe and Sustainable review panel in England and Wales, also separately commissioned a review by NHS Scotland of Yorkhill. He said:

“The panel had significant concerns about important aspects of the service in the surgical unit...Of most concern was a lack of leadership and coherent team working. Also of concern was a sense that the provision of paediatric intensive care may be unsafe if critical staffing problems are not addressed.”

He concluded:

“The panel was of the view that urgent remedial action is required in PICU to prevent care from becoming unsafe.”

I have to say to the Minister that it is nonsensical as well as dangerous for Yorkhill not to be included in the Safe and Sustainable review. If it had been, the only logical conclusion would have been to keep the Leeds unit open, and to allow the patients in the north of England and south of Scotland to choose between Leeds and Glasgow.

There is a concern about the whole review itself. The Scottish Government—we accept that there is devolution—have now decided that the Glasgow unit does not have to comply with the magical 400 cases per year, but that three surgeons performing 300 operations is enough to be safe.

I am sorry about the time, but as I have made clear, I object to the fact that we have not had a proper debate so far on this serious matter. I will be as brief as I can.

It is simply not acceptable to have one rule for children in Scotland—to say that it is safe to have 300 units—and to say to the people of Leeds that we have to close a perfectly safe unit on the basis of a number that has been dreamt up in Whitehall. That is inconsistent. Yes, there is devolution and we may even have independence, but even then we would still have people crossing the border to access surgery.

This simply does not make sense. It is dishonest. I am afraid to say that the Little Hearts Matter charity has been quite dishonest, on the one hand saying that Safe and Sustainable is the right way forward, and on the other saying that it is okay for Yorkhill to carry on performing only 300 operations per year. That simply does not make sense.

My final question to the Minister is one that has not been answered. If Leeds does close, will we be told how much it will cost to close it? It will cost an awful lot to close and to reconfigure the services. We have not had that figure yet. If we do get it, I think people will be even more angry about the decision to close a much-needed, perfectly safe and excellent children’s heart surgery unit.

15:12

[Mr George Mudie (Leeds East) (Lab)]

I join with hon. Members in congratulating the hon. Member for Pudsey (Stuart Andrew) on securing the debate and on the way that he has handled the campaign. He has been inclusive. He has handled it sympathetically and intelligently, and he has worked with a very good campaign in Leeds. I hope it is successful above all for the children’s unit, but it would also reflect on the hon. Gentleman. I echo his comments about the Minister. I am delighted to see an independent mind in the Department of Health. It makes such a difference, but I wonder how long it will be before those officials weigh down on her.

As a layman, it seems to me incredible to place such an important facility in Newcastle rather than West Yorkshire. Some 5.5 million people are served by the Leeds unit and 2.5 million served by Newcastle. By 2030, the population of Yorkshire and Humberside will increase by 16.5%, up to 6.2 million people. Newcastle’s will increase by only half of that—8.2%. If those figures are challenged as being only projections, in the last census Yorkshire and Humberside went up by 300,000 and the north-east by 57,000. If we are talking about placing a strategically important, sensitive service, Newcastle is not the place where the conurbations and numbers are.

When the subject was first debated, I argued in the House that we should look at Newcastle in a different light. I hate the idea of us and Yorkshire saying, “Our kids cannot go 100 miles because of this, that and the other,” but we are then put in this corner of arguing that Newcastle kids can come down and do the same thing and it is okay for them. The hon. Member for Leeds North West (Greg Mulholland) said that Scotland is content with the numbers. If the people of Newcastle wanted that unit and were prepared to have that unit, I think there is a case for leaving it, because the geographical distances cause a great problem.

In Leeds, 23% of the children are from an Asian ethnic background. In Yorkshire and Humberside, that figure is 6.2%, or 326,000. In the north-east, it is less than 70,000. I had to fight to close the South Shields immigration tribunal centre and open the Bradford centre, because I was aghast at the cost for people from ethnic minorities—the Bangladeshi community are among the poorest in the city—having to travel all that way. That is compounded when going to sit beside a child who has had surgery, and who is recovering or not recovering. The time and expense is a factor that does not seem to have been considered.

This is not the time—perhaps it is appropriate: more publicity and so on—to re-argue the case. The case has been argued. The case is stated. It is how this review body carries out the review. There are fears that the panel will not address the accuracy, objectivity and rigour in the assessment processes throughout the Safe and Sustainable review, and that impact assessments carried out by independent bodies were all ignored. The Minister said that it would be for the review body to decide the full extent of its review of all the decisions that have been made. That seems to suggest—we all agree with this—that the finding of the panel will be independent but the evidence it chooses to consider will be its own choice. I seek assurances from the Minister that she shares my view that all the facts that were part of the eventual decision—all the facts—should be investigated, and in particular, the specific facts raised in relation to Leeds and Leicester.

The hon. Member for Pudsey asked the Department of Health to ensure that the JCPCT released non-confidential information to the joint health and overview scrutiny committee. The Minister replied with the unsatisfactory,

“it is for the JCPCT to decide what information to release about the review and we are unable to comment further.”

Why did the Minister take this clearly unsatisfactory line? When she replies, I would like her to indicate whether she or her colleagues even asked the panel to release non-confidential evidence and, if they did not, why not.

15:18

[Martin Vickers (Cleethorpes) (Con)]

It is a pleasure to take part in a debate under your chairmanship again, Mr Hollobone. I, too, congratulate my hon. Friend the Member for Pudsey (Stuart Andrew). This is something of an action replay, not only for you, Mr Hollobone—you were in the Chair last week for the debate on Glenfield hospital in Leicester—but for the Minister. I apologise to her that some of the points that I am going to press her on now are identical to those that I raised last week. One is the point about distance.

It is noticeable that three out of the four representatives from northern Lincolnshire are here to take part in the debate. We are the remotest part of the area served by the hospital. That does not just present problems for people visiting. As we have heard in previous debates and meetings, getting babies to a unit has actually made the difference between life and death, and that cannot be ignored. In the Cleethorpes area, there are a large number of parents and grandparents whose children have received treatment here. We held a public meeting in July and the strength of opinion was evident.

In last week’s debate on the Leicester unit I was slightly disappointed by the Minister’s response. I appreciate that she is walking a tightrope, but she is noted for being an independent voice. She showed signs of being sucked into the departmental bureaucratic nonsense that we often hear, but I am sure she will rectify that in half an hour’s time. Commenting in her reply on something that I said, she made the perfectly valid point that in cases of the kind that we are considering we want

“fewer, but much bigger units.”—[Official Report, 22 October 2012; Vol. 551, c. 186WH.]

That is the opinion of some experts, but equally, of course, other experts disagree. If we are to be ruled by expert opinion, there are two possibilities. One is that we pack up and go home, because we are superfluous. The other is that because experts always disagree, someone democratically accountable is needed to arbitrate between them. My hon. Friend the Member for Brigg and Goole (Andrew Percy) wishes to intervene, as usual.

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

I want to intervene to defend the Minister. My hon. Friend is entirely right about the geographical problems in our area; but even if we accept the argument that we need bigger units, is not the core issue the fact that the population—the patient base—is in our region, not in the north-east? If we must go along this line—let us assume that we must—we should move the doctors to where the patients are, not the other way around.

[Martin Vickers]

As usual, my hon. Friend and neighbour is correct. Because of the remoteness and so on, the assumption that all patients in northern Lincolnshire will transfer to Newcastle will simply not be borne out. They will choose alternatives and I suggest that most will gravitate south. Therefore the Newcastle target of 403 will not be achieved.

There are expert opinions on both sides of the argument. The significant point is that the parents and grandparents of the children who receive the treatment are not convinced about the alternatives, because they have seen surgeons and other experts in Leeds performing miracles on their children with modern medical technology. That is their doubt: they do not have confidence in the alternatives when they have seen the Leeds centre of excellence in action.

My hon. Friend the Member for Pudsey stole a line from me because I too was going to quote the point that my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) made in last week’s debate. I will take another line from his speech:

“The Secretary of State has the levers of power in this question and he must pull them—he must exercise them”.—[Official Report, 22 October 2012; Vol. 551, c. 188WH.]

That is what we expect. We do not want the question shuffled off to a panel of experts, with automatic acceptance of what they say. Different experts come up with different decisions.

Time is pressing. In Leeds we have a centre of excellence. It deserves our support, and already has the support of those we represent. I am sure that the Minister and the Secretary of State would not want to be responsible for destroying it.

[Mr Philip Hollobone (in the Chair)]

If the final three hon. Members who want to speak in the debate take five minutes, they will all get in.

15:23

[Julian Sturdy (York Outer) (Con)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Hollobone. I congratulate my hon. Friend the Member for Pudsey (Stuart Andrew) on securing this important debate. He has been a champion of the children’s heart unit in Leeds, and I know that the staff, and, most importantly, the young patients, appreciate all that he does to lead the campaign in Westminster to save it from closure. It is a testament to the campaign that so many hon. Members from across the House are here to support it.

The debate over the Safe and Sustainable review has been going on for months. At each stage I have openly supported the need for the review. We must always strive to improve clinical standards in the health service. That is right; and it is right that the responsibility for treating children’s heart problems should be transferred to units that can offer the outstanding treatment that all affected children and their families deserve. The families of those children would not want anything else. I am a parent and understand it completely. Indeed, my support for the Leeds children’s heart unit is based not simply on close geographical links to my constituency or the wider region that it serves; it is based on the fact that the unit offers superb clinical outcomes for young patients. Indeed, as other hon. Members have mentioned, it scores higher on the JCPCT’s core clinical standards than the preferred option for the north-east. Core clinical standards should be combined with core statistics from the local area, too. More than 600,000 people have signed a local petition demanding that the Leeds unit should remain open. Leeds serves a population of 5.5 million, and 14 million are within two hours of the city. That is a catchment area far larger than those of other units.

Throughout the saga, I have been reluctant to compare the Leeds unit directly with others, particularly Newcastle.

15:25

Sitting suspended for a Division in the House.

15:40

On resuming—

[Mr Philip Hollobone (in the Chair)]

Order. Mr Sturdy has about three minutes remaining.

[Julian Sturdy]

Thank you, Mr Hollobone. As I was saying, throughout this saga I have been reluctant to compare the Leeds unit directly with others, in particular Newcastle’s. My intention is not to criticise the Newcastle unit, which has also carried out great work, saving many young lives over a number of years. Rather, my belief continues to be that the Leeds unit has always had the strengths to merit its survival without such comparisons. Put simply, its own case is strong enough. That is my message to the Minister today, and it was also put eloquently by my hon. Friend the Member for Pudsey.

The single biggest failing in the consultation has been the flawed decision-making process of the Joint Committee of Primary Care Trusts, from the lack of weight given to transport and travel times, and the population that centres such as Leeds serve, to the true co-location of services. There has also been a lack of clarity over the terms of the review, and the failure of the JCPCT to release the information and evidence behind its decision is only adding to the controversy and suspicion. Without being able to break down the scores awarded to each children’s heart surgery unit by Professor Sir Ian Kennedy’s assessment panel, the decision-making process lacks basic transparency and scrutiny.

Throughout York there exists huge public interest in this ongoing and disruptive issue. I am particularly concerned for the families of affected children in York who now face the problem of having to travel to other areas for treatment—I stress “other areas”. The Minister must be under no illusion that the families and children displaced to Newcastle if Leeds closes will not automatically head north. They will disperse to centres throughout the country, and we must not lose sight of that.

In conclusion, the Save our Surgery campaign has suggested a balanced solution to the current dispute, as set out by my hon. Friend the Member for Pudsey. It suggests that the decision should be implemented in full throughout the country, but delayed in the north-east until April 2014. That window of opportunity could then be used to clarify the figures and findings of the JCPCT, allowing both affected units to demonstrate their capacity and capability on a level playing field.

I am delighted that since the election, the Government have worked to make health services more representative and more responsive to local people. I urge the Minister to continue that fine work by listening to the concerns of patients and residents in Yorkshire and taking on board and responding positively to the Save our Surgery campaign to save the children’s heart surgery unit in Leeds from an unjust and ill-informed closure.

15:43

[Mr David Ward (Bradford East) (LD)]

I add my thanks and compliments to my hon. Friend the Member for Pudsey (Stuart Andrew) and all hon. Members who have engaged in this debate. The brevity of my thanks and congratulations in no way reflects my sincerity.

I want to make a brief point about where I believe responsibility for the decision lies. The Health and Social Care Act 2012 contains a contentious element concerning the Secretary of State. The contentious Bill was debated at length in the Lords, and in the Commons, but it remains within the legislation that the Secretary of State retains ministerial responsibility to Parliament for the provision of the health service in England. That is where I believe responsibility for the final decision should lie.

I turn to local circumstances. Most people will be aware that Bradford has the fastest-growing young population outside London. It has grown by 25% during the past 10 years. The issue is not simply the large number of young people in the area, but the incidence of the ailments that must be dealt with. As was said, 23% of Leeds cardiac surgery patients are south Asian, which is 6% of the population in the catchment area as a whole, but 23% are children on cardiac wards. Many come from Bradford and south Leeds—about 90 a year, and the number is increasing. Proportionately, those children have far more complex bowel deformities and facial deformities such as cleft lip and palate, and can be treated under one roof—that is the key—only at Leeds children’s hospital.

I am sorry that the hon. Member for Bradford West (George Galloway) is not here. That is not surprising but it is a shame because two of the constituencies in Bradford are in the top 3% in terms of deprivation and unemployment in the country. Bradford is generally a community that is less well off than average, and people would face particular difficulties in having to travel more than 100 miles further, not only because of the cost of travel and accommodation, but because of lost income from having to be away from work to be with their children. Bearing in mind what I said about incidence, it does not make sense to move the children’s heart surgery unit away from the community that is statistically more likely to need it.

Finally, much has been said about the flawed process in the analysis, but I want to talk about the flawed process of the consultation. The review did not have any translated documentation. Of the families attending the unit, 23% speak Urdu at home. Translated copies were requested, and a small number finally arrived, but they arrived three months after the consultation had started. The translation was largely unreadable in Urdu because italics were used for quotes. The Safe and Sustainable review tried to rectify that by holding separate events for black and minority ethnic participants, but they were told that that community would not travel to Newcastle. They were clearly given that strong message. The community indicated that to the review team, and it was shown clearly in the PricewaterhouseCoopers analysis and in a Mott MacDonald study, which stated that children from that community would be worse off and would not travel north.

The message has been consistently clear. Unfortunately, there has been an unwillingness to listen to that message, and I hope the Minister has taken it on board now. The community has largely been ignored in the process, and that shows that the process outlined by my hon. Friend the Member for Pudsey and others was flawed not only in its methodology, but in the consultation exercise.

15:47

[Andrew Jones (Harrogate and Knaresborough) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I add my congratulations to my hon. Friend the Member for Pudsey (Stuart Andrew) on securing this debate and providing very effective team leadership that has crossed parties and brought us all together in support of this unit. Teams need leaders, and he has been a very effective one.

I am aware of the time, but I want to say a few words. I welcome the decision to have an independent review of the Safe and Sustainable process. I do not think it was wrong; it was right in principle, and none of us would want a repeat of the Bristol scandal, but the highly unexpected decision surprised and disappointed me. I did not expect the Leeds unit to be rejected in favour of Newcastle.

Colleagues have explored some of the arguments, and my hon. Friend the Member for Pudsey detailed the excellent clinical standards in Leeds, and compared them with those of Newcastle. This is not a Leeds versus Newcastle fight. We must focus on the process and recognise that both units have merit, and both have patients with heart-rending stories. We need to look at how we take this forward to deliver the best for patients. In Leeds, we have a unit that offers excellence. The question in the review is about location, and in my opinion, that is where the Leeds unit should have scored particularly highly. It is also where the independent review needs to focus.

Colleagues have mentioned the 5.5 million people in our area, and compared that number with the numbers in the north-east, but transport links are also an issue. Leeds has good transport links, not only from north to south, but from east to west, and the key point is that the review proposed that 100% of people in the Harrogate postcode should now travel north to Newcastle. It assumes that everybody will do that, but I want to share with colleagues that the feedback from those in the Harrogate and Knaresborough postcodes—I acknowledge that that area stretches beyond the Harrogate and Knaresborough constituency—is that that is nonsense. It is absolutely ridiculous; they simply will not do it. Bear in mind that the geography suggests that if anybody is going to do it, it should be those in the Harrogate and Knaresborough constituency, because we are already 15 to 20 miles north of Leeds, and therefore 15 to 20 miles nearer Newcastle.

The impact of population numbers, and travel times and patterns, simply needs far more weight in the review. I want to see the Leeds unit continue its excellent work, serving the people of Yorkshire and beyond, but as we take the review forward, correct weighting needs to be given to the important factors of travel time and population numbers. I hope that the Minister hears that point today, and that we do not start viewing this as a Leeds versus Newcastle contest. We should explore the opportunities for co-location and for a child-driven service.

15:51

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

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Pudsey (Stuart Andrew) on securing the debate, and on the way in which he and other Members across the House have put their case. The issues surrounding Leeds children’s heart surgery unit are important and certainly merit our debate. I also take the point made by the hon. Member for Leeds North West (Greg Mulholland) that a wider debate on the Floor of the House may be warranted.

I take this opportunity to pay tribute to the dedicated NHS staff who work in children’s heart services, both in Leeds and across the country. We are all incredibly grateful for the tremendous job that they do, more often than not in complex, difficult circumstances.

Clinicians and professional bodies, including the Royal College of Nursing and the Royal College of Paediatrics and Child Health, have been clear that children’s heart services need to change. Surgeons are too thinly spread, and services have grown in an ad hoc manner in England, which, to be fair, the hon. Member for Pudsey recognised in his opening speech. Changing how we provide any hospital service is difficult, but when changes are necessary to improve patient care, as they may be for children’s heart services, politicians on both sides of the House should be prepared to listen to that argument and, if necessary, support it.

I know, however, that there have been real concerns and a great deal of protest in the communities surrounding the unit at Leeds general infirmary, particularly about the plans to close it. A motion of support from Leeds city council has been supported by people from across the political spectrum in the city. There has also been a large protest in Millennium square in Leeds, where, I am informed, over 3,000 protestors were joined by local MPs, parents and nurses to campaign to prevent the closure.

As we have heard today, there are similar concerns about plans to close the Glenfield hospital in Leicester, and the Royal Brompton in Chelsea, west London. That could mean that in future, children’s heart surgery would remain at the London children’s hospitals, and in Southampton, Birmingham, Bristol, Newcastle and Liverpool. Although the Opposition support the principle of fewer, more specialist centres, we have concerns about the location of the selected sites, which would leave a huge swathe of the east of England, from Newcastle right down to London, potentially without a centre.

As we have heard, the unit based at Leeds general infirmary serves the 5.5 million residents of Yorkshire and the Humber, and performs 360 operations a year, done by three surgeons. We have heard, too, that there are concerns that the closure of the unit will leave millions of people in the region without local access to the children’s heart surgery expertise that currently exists in Yorkshire and the Humber at Leeds. The local Save Our Surgery campaign group, under the Children’s Heart Surgery Fund, believes that families from Yorkshire, north Lincoln and the wider Humber region may have to travel up to 150 miles for treatment at the nearest unit in Newcastle or Liverpool, if the closure goes ahead.

As an aside, I was privileged to visit the hospital in Hull, at the invitation of my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), as part of my duties as a shadow Health Minister. It took me an hour and a half to get from Manchester to Hull to visit the hospital. However, because there was a slight flurry of snow on the way back, the M62 ground to a halt, and it took me over five hours to get back over the Pennines to Manchester. I have never seen so many Lancastrians trying to desert Yorkshire at the same time as me, but it shows that geography matters in such decisions. We cannot ignore the fact that the Pennines are there, and sometimes they are impenetrable.

Clearly, there is concern that families may be faced with having to travel further at what is undeniably a very stressful time for them. That case has been made eloquently by Members on both sides of the House in the debate. It is also worth remembering that it is not only the care of poorly children that needs to be taken into account; the care of the whole family is important.

I ask the Minister, for whom I have a great deal of respect, whether she was satisfied that the NHS joint committee of primary care trusts properly balanced clinical decisions with practical and transport issues for families. Furthermore, does she believe that the review was fair to families in the eastern half of England, which is now left with no centre between Newcastle and London? As we know, the JCPCT came to the decision in July to close the unit. The SOS campaign group launched legal proceedings against the NHS to stop the unit being closed, submitting an application to the High Court for permission for a judicial review. Last week, as we have heard, the Health Secretary asked the Independent Reconfiguration Panel to review the decision to close three centres.

We know that children’s heart surgery matters greatly to many people. However, as we also know, the issues surrounding children’s heart surgery have needed to be resolved for some time. The findings of the Bristol Royal infirmary inquiry into children’s heart surgery 10 years ago highlighted that between 1990 and 1995, a number of children died at the infirmary as a result of poor care. It is clear that children’s heart surgery has become an increasingly complex treatment. The aim must be for children’s heart services to deliver the very highest standard of care. The NHS should use its skills and resources collectively to gain the best outcomes for patients. The Government rightly want changes to children’s heart surgery services, so that they provide not only safe standards of care, but excellent, high quality standards for every child in every part of the country.

[Fabian Hamilton]

Does my hon. Friend agree that it is not only the continuum of children’s heart services and the care of parents and other family members that is important? The treatment should continue beyond 16, if it has to. There needs to be an overview of pre- and post-16 services; they should be taken together, because that is how we ensure that the young person, who becomes an adult, survives and lives the rest of their life.

[Andrew Gwynne]

I agree absolutely with my hon. Friend. He makes the point that I was about to come on to. We want that for children’s heart services. It cannot be good enough to say that it is possible to move a service; we want to know whether it is desirable to do so, in order to get the very best outcomes. He makes the point that if we are to have a specialist centre for adults, we should remember that it is often the same surgeons who deal with children, and rather than losing that, it is better to have one specialist centre for all.

It is proposed that the number of cardiac centres in England be reduced from 11 to seven, and it follows that they will all be working at full capacity, so can the Minister ensure that in the event of a superbug outbreak like the one in the Belfast neonatal unit this year; a fire like the one in the Birmingham hospital in 2010, or the one in Leicester in 2011; or any other unforeseen incident occurring in one of the cardiac units, the other six will be able to cope with the pressure without endangering the lives of the critically ill children and babies in their care?

As I have previously said, I welcome the recent decision by the Health Secretary to have a review of the decision to close the children’s heart surgery unit at Leeds general infirmary. It is important that there be a full review, and that the right decision be made, with full consideration of all the facts. I echo the concerns raised by other hon. Members on that point. Many campaigners are concerned that the review by the Independent Reconfiguration Panel will simply repeat a process that was seen as flawed the first time round. What steps will the Minister take to reassure the campaigners in Leeds that it will be a full and comprehensive review? As I have said before, it is not good enough just to close one service and move it to a different part of the country. We must ensure that any potential decisions take full account of the facts, and that any moving of a service will result in a clear and demonstrable improvement in the outcomes for children’s cardiac services.

16:01

[The Parliamentary Under-Secretary of State for Health (Anna Soubry)]

Here we are again. It is a pleasure to speak under your chairmanship, Mr Hollobone. It is about a week since we had a very similar debate, also under your chairmanship. That has already been described by my right hon. Friend—sorry, I always call my hon. Friend the Member for Pudsey (Stuart Andrew) the right hon. Member for Pudsey. [Hon. Members: “Soon!”] Perhaps I am trying to elevate him too soon, but as he has explained, we had a similar debate only last week about the situation at Glenfield. I join everyone else in paying tribute to him for securing this debate.

I pay tribute to all hon. Members who have spoken, of whatever party. In many ways, this has not actually been a debate, because normally in a debate there is a degree of disagreement and people put forward their arguments for or against a particular motion or notion, but that has not been the case in this debate. Here, we have had an outbreak of complete unity, which I acknowledge, between all political parties. It is right and proper that, on this matter, people come together, are not divided by political party and are determined not to score any form of party political point in making their argument. All hon. Members have come to this debate for the right reasons. They have come to represent their constituents and to put forward all the arguments that they can on behalf of their constituents and with full force. That is absolutely right and as it should be, but I want to make this point as well, and not because I am any form of coward—after all, I spent 16 years defending, largely, the indefensible.

I have to say that the hon. Member for Denton and Reddish (Andrew Gwynne) was treading somewhat on my good humour with some of his remarks when he was asking me for my opinion because, as we all know, this whole review has taken great pride in the fact that it has been an independent review—independent of Government. It was set up, quite properly, by the last Government, on a cross-party basis, and it was on the basis that we needed fewer but larger and more specialised children’s heart services in England. It was accepted—I say this with great respect to my hon. Friend the Member for Cleethorpes (Martin Vickers)—that that was the basis of it all and that it was being done so that we could secure the best children’s heart services for babies and young children that we could possibly obtain, and so that we could ensure that those services were sustainable. We wanted to concentrate the specialist heart surgeons in a smaller number of centres to ensure that they had the best skills for dealing with babies and young children.

At the end of the day, we are talking about arguably some of the most specialised surgery that exists. There are instances in which surgeons are operating on a baby’s heart that is no bigger than a walnut. As I say, it is perhaps the most specialised and the most precarious of all types of surgery, so their skills have to be the best. It is also the case that if we have fewer, but larger, more specialised units, we can ensure that those surgeons, those doctors, those nurses and the other health professionals are training the future surgeons, doctors, nurses and other health professionals to do this very important and highly specialised work.

I pay tribute to my hon. Friend the Member for Pudsey. As we would all have expected, he advanced a thoughtful, well researched and sound set of arguments on behalf of his constituents. He gave the examples of Lauren, Libby and Abi. The hon. Member for Scunthorpe (Nic Dakin) also spoke with considerable feeling about what his constituents had told him. That is only right and proper. I am sure that all those constituents will welcome the comments of their Members of Parliament in advancing their arguments for keeping their children’s heart surgery unit open. It is quite clear from the various interventions that this has all-party support. We heard from my hon. Friend the Member for Shipley (Philip Davies), the right hon. Member for Leeds Central (Hilary Benn) and my hon. Friends the Members for Skipton and Ripon (Julian Smith) and for Brigg and Goole (Andrew Percy). As I said, people are coming together, whatever political differences they might otherwise have, in agreement and in support of children’s heart surgery at Leeds general infirmary.

A number of matters strike me from the speeches that have been made. In addressing some of the remarks made and arguments advanced by hon. Members on both sides of the Chamber, I shall try to give a response that perhaps allays some fears and certainly answers some questions.

[Fabian Hamilton]

I am sorry to intervene when the Minister is about to give those responses, but she said that the review, quite rightly, was independent; it was set up by the previous Government to be independent of Government. I think that the prevailing view this afternoon is that it was not impartial. Will she comment on that?

[Anna Soubry]

I will not comment on that, quite deliberately, because it is imperative that I am seen and, indeed, fellow Ministers are seen to be completely independent and impartial ourselves. Of course, that does not prevent hon. Members from making their own judgments and vocalising them, and there may be merit in them, but it is not for me to say whether there is, because, as hon. Members know, this has all been referred to the Independent Reconfiguration Panel—that is right and proper, in my view—and it will look at all aspects of how these decisions have been made. It will take evidence not just from the NHS, clinicians and local authorities, but from Members of Parliament. I am in no doubt that all hon. Members who are here today will make their own representations to the IRP on behalf of the children’s heart services at Leeds general infirmary and will make them with the force with which they have made them today and on the basis of as much information, sound evidence and argument as they have shown us here today.

[Julian Smith]

Will the Minister give way?

[Anna Soubry]

I was going to try to move on to some of the issues, but I will happily give way.

[Julian Smith]

I thank the Minister for giving way. Can she confirm that the panel will include some people who are actually living in the north? What is the make-up of the panel?

[Anna Soubry]

I shall be absolutely blunt: I cannot answer that question. I took a strong view some time ago that if I did not know the answer to a question, I would say so. However, I am more than happy to write to my hon. Friend and answer his question as much as I can.

Travelling times were mentioned by a number of hon. Members. I was going to go through all those who mentioned them, but I may not have time to do so. I shall just make this point. Of course, it is surgery that it is proposed will be lost from Leeds and will go to Newcastle. It is very important that all hon. Members, when they communicate to their constituents about this debate, make the point that the plan is that the surgery will take place in Newcastle, but all the follow-up, all the support and all the other things that we might imagine are involved when a baby or a small child has surgery will continue to be provided at Leeds. It is not the case that the whole thing will move up to Newcastle; it is simply the surgery. I just put that into the pot because the point was made about travelling times. Of course, it is for others to say, but it may be that they take the view that those were very good points that hon. Members advanced in the debate today.

The hon. Member for Leeds East (Mr Mudie) asked specifically about the JCPCT’s refusal, or otherwise, to disclose information. The hon. Member for Leeds North West (Greg Mulholland) spoke with passion, as ever, and commented on that, as did my hon. Friend the Member for Pudsey and other hon. Members. It is for the JCPCT to decide what information should be disclosed, in accordance with the requirements of the Freedom of Information Act. I am told that the Yorkshire overview and scrutiny committee has indicated its intention to refer the matter to the Information Commissioner, which is the established recourse laid down by legislation. I am afraid that it is not for Ministers to order the JCPCT to disclose information to the OSC in Yorkshire or any of the other local authorities involved. The various authorities are open to make applications under the Freedom of Information Act. I hope that answer deals with that point.

The powerful arguments the hon. Member for Leeds East put forward were largely based on population figures. I have already alluded to the contribution of my hon. Friend the Member for Cleethorpes. In large part, my hon. Friend and I disagree on the basis of the review. He said that different experts have different views, but I have to tell him that we have seen an outbreak of unity on this issue among many of the royal colleges, experts and leading clinicians in the field, who welcomed the decision of the JCPCT.

[Martin Vickers]

We heard from my hon. Friend the Member for Leeds North West that experts in Scotland disagree, so there is clearly some basis for doubt.

[Anna Soubry]

I am grateful for that contribution, but I know that when the JCPCT’s decision was announced, it was universally welcomed by many of the clinicians who have been involved in such specialised surgery, certainly throughout England, but I cannot comment on the views of those north of the border.

I have a short time left to speak. The Independent Reconfiguration Panel is just that—an independent reconfiguration panel. I can provide details to those who need to know its composition. It comprises independent experts, and Members can be assured that they will conduct a full and independent review. As I said, they will take evidence from NHS organisations, local authorities and local MPs. It is hoped that their deliberations will conclude at the end of February. It will then be for the Secretary of State to receive the findings and recommendations and to decide whether to act on them. There is a concern that there may be some delay due to a legal challenge.

In last Monday’s debate my hon. Friend the Member for Pudsey made a helpful intervention, to which I responded that if any local authorities in Yorkshire are minded through their OCSs to refer the matter to the IRP, they should get on and do it. I want to put that into the pot, because the one thing that nobody wants is any more delay.

This debate began back in the 1990s, and hon. Members talked about what happened in Bristol. It was determined then that we needed to ensure that our babies and young children had the finest specialised heart surgery services possible, which is why it has been a long process. It is difficult and painful, but the Safe and Sustainable review was set up on the basis that there would be a reduction in the number of units. No one wants to set one hospital against another, and I pay tribute to everyone who has avoided doing so, but unfortunately sometimes tough decisions have to be made. It is always important to remind ourselves that they are made for the very best reason, which is to ensure that our babies and young people are safe and get the very best service.

Court-appointed Deputies

Tuesday 30th October 2012 Westminster Hall

16:14

[Duncan Hames (Chippenham) (LD)]

It is a pleasure to have you in the Chair, Mr Hollobone. I applied for a debate on this subject to raise the case of one of my constituents, who, for today’s purposes, I will call Mr Able. He has seemingly exhausted every official regulatory channel available, without anyone taking responsibility for remedying what has happened to him. Although cases of his kind may be in a minority, I want to illustrate how easily a vulnerable adult has been appallingly failed through poor communication and a lack of scrutiny in the system of court-appointed deputies and in the Office of the Public Guardian.

In 1997, my constituent was awarded a not insubstantial sum following a road traffic accident in which he was injured. He was assessed as being affected by learning difficulties and additional cognitive impairment following the collision. The following year, the Public Trustee was appointed his receiver—the role now known as that of the deputy—and in 2001 that role passed to a firm of solicitors. They failed not only to protect his existing funds, but to secure and maximise his income. Over the nine years that followed, Mr Able’s award was virtually wiped out, and the local authority has been looking after his deputyship since 2010.

It is clear that the eventual decision to replace his court-appointed deputy with Wiltshire council is the best thing that has happened to Mr Able during my involvement in his case. Before that, inadequate sharing of information across agencies about my constituent’s actions and circumstances led to a large proportion of his capital being eaten up by solicitors’ fees, and to him not receiving the benefits to which he was entitled.

Nearly £33,000 was spent on the cost of his court-appointed deputy, but despite the hefty price tag, the deputy was not able to prevent a further £13,500 being spent on a different firm of lawyers’ pursuit of a speculative unfair dismissal case, which adds up to more than £46,000. That firm predicted that Mr Able could secure between £20,000 and £36,000 in damages, but won him less than a tenth of that, leaving him substantially out of pocket and his deputy trying in vain to get those lawyers’ costs below £13,000. How can the system conclude that it is in the best interests of a vulnerable adult, with no other means, to run up such fees? How could the situation have gone so far with no one in authority suggesting that it was in any way exploitative?

The Court of Protection has a panel of people who can be appointed deputies. My constituent’s case suggests that those considered for appointment are not suitably equipped to serve some of the clients assigned to them. It also suggests a disturbing degree of laxity in how some individuals become deputies. Mr Able’s deputy for much of the period had no links to the panel of deputies. To all intents and purposes, he had inherited his case from a deceased colleague. The level of vagueness that my staff and I encountered when trying to clarify exactly what happened in that period, and how the application process to find Mr Able a new deputy was managed, was disturbing.

I understand from the Office of the Public Guardian that a review has been undertaken of the panel of deputies, one of the aims of which was to introduce clearer procedures on how individuals become and remain panel members. I would appreciate the Minister’s assessment of how that exercise has gone, and how it has treated the question of whether solicitors are, in all circumstances, suitable for appointment by the court as deputies.

Mr Able has gained access to the support he needs only through a patient and conscientious local authority team, to whom he pays nothing comparable to the solicitors’ fees I outlined. However, that support was secured only when he was approaching the point of crisis, and after his money—the management of which was his deputy’s task—had been almost entirely depleted.

It seems that at that and too many other points in this case, Mr Able’s behaviour and capacity have been cited as a reason why certain things did or did not happen, and have been used to explain and justify action, or inaction, by those who were supposed to have his best interests at heart. That is not acceptable. If professional court-appointed deputies are unable to work with their clients’ behaviour, they are probably not the right people to do the job. If that is what happened in this case, they should have said so. Instead, they were just happy to take his money for the time and the attention that he demanded of them.

There is a related point about scrutiny and who monitors whether deputies are undertaking their duties effectively. The Court of Protection visitor had decided to stop visiting Mr Able back in April 2003. Mr Able did not receive another visit until January 2011.

[Jim Shannon (Strangford) (DUP)]

Would this gentleman’s circumstances have been different if the court had recognised early on that he did not have the capacity to look after himself, and if someone suitable had been appointed from an organisation that looks after people with disabilities? Does responsibility for what took place lie with the court or the solicitor?

[Duncan Hames]

That is the astonishing thing about this case. The court made an assessment, in which it determined that Mr Able was not capable of managing his own finances. The things that we are led to believe the system considered Mr Able capable of doing, in terms of looking after his best interests and challenging what was happening to him, is extraordinary given that original assessment. I certainly agree that part of the problem is that inconsistency in what he was expected to be able to do, given the decision that the court had already made about his ability to manage his finances. That does not absolve the court-appointed deputy of the responsibility of saying that in the circumstances they were not the best people to serve him.

Mr Able did not receive a visit from the Court of Protection visitor again until January 2011. Even a change of deputy in 2005 was not considered an appropriate trigger for a visit, despite the fact that it took a year for Mr Able’s deputy’s replacement to be confirmed. As part of the oversight process to protect people who lack capacity, visitors can be commissioned to make reports by either the Court of Protection or the Office of the Public Guardian. I contend that not having Mr Able visited at any time in eight years demonstrates a terrible sense of complacency among those who were meant to be looking after his best interests.

In this case, my constituent was removed from the list of people to be visited for the “time being” on the grounds that regular visits would not “achieve anything”. However, a court visitor was engaged on Mr Able’s case when the deputy applied to be discharged, and produced a report in 2009, which seems to have been compiled without the visitor even meeting Mr Able. In such cases, the system seems to serve the needs of the deputies rather more than those of their clients. I wonder how well the criteria for how deputies manage their clients’ money are set and monitored, especially clients in Mr Able’s position, given the view that had been taken about his capability. I would welcome the Minister’s opinion on whether the system of visits is in need of review to help improve the situation for people in similar circumstances.

[Mr Richard Bacon (South Norfolk) (Con)]

I am interested to hear my hon. Friend say that a review is required. Does he agree that there is perhaps a need for a fundamental review of the entire system? I have come across a case of a court-appointed deputy, a solicitor, who made a misleading statement to the Court of Protection, gave incorrect information to agencies such as Her Majesty’s Revenue and Customs, appointed inappropriate case managers who did not have the required expertise, paid bills against invoices without first checking that the invoices were valid, and took an enormous fee in the process. I must declare an interest, because my wife was recently appointed court deputy in place of the solicitor and is, of course, saving the client a fortune in fees. Does he agree that the system has basically not performed adequately at all, and needs fundamental review?

[Duncan Hames]

I do agree. I hope that the Minister will conclude—if not today, then before long—that a thorough review of the situation is required. I raised this case because it is illustrative of many others. As I shall explain, one of the things about this case that has frustrated me immensely is the lack of accountability for what is happening. In any situation, there will be people whose conduct is not up to the standard that we would hope for. There may even be people who exploit a situation. If there is sufficient accountability in a system, we have some safeguards. I am not convinced that there is such accountability in this case.

[Mr Bacon]

Does my hon. Friend agree that one possible way forward is to increase the powers of the Public Guardian, whom I met quite recently and found to be an extremely reasonable individual? He said that one of the issues is that his current statutory powers are limited. Is one way forward to increase the scope of what the Public Guardian can do?

[Duncan Hames]

I understand that we have a relatively new Public Guardian. I hope that he will be rather more concerned about this situation than his predecessor appeared to be, given the report that I received when I made this investigation. Perhaps that is something that we will hear more about from the Minister.

I have been pursuing this case, with the help of my staff, since before my election in 2010. I have taken every available route, up to and including the parliamentary ombudsman, to get the full facts and to bring scrutiny to bear on the individuals and agencies involved. Frustratingly, after all the reviews and oversight processes that have been triggered at every level, none has found any individual at fault, and that is despite the evident general failure to ensure my constituent’s financial well-being. Indeed when I requested that the parliamentary ombudsman investigate this case, I received a thoughtless parroting of the Public Guardian’s own review, which had been conducted at my request and completed in January last year. It added no value to the scrutiny of the situation, and I find that completely unsatisfactory.

There was consensus among professionals that Mr Able did not have the capacity to manage his finances, so it cannot be suggested that the outcome—the depletion and, in some cases, wasting of his money—was his fault, or something for which he can be held to account; that is the very point of deputies acting on his behalf. None the less, the result, effectively, is that a vulnerable man has been left more or less penniless by the inaction of those who were meant to protect him, and the regulatory reaction has been tacit indifference. For example, on the costs that my constituent was charged by his deputy, the Office of the Public Guardian’s internal review said that it found no evidence that Mr Able was ever formally told by his deputy, or anyone else, that he was entitled to challenge the assessment of his costs by the Senior Court Costs Office.

Similarly, I look at the failure to secure Mr Able’s income through benefits to which he was entitled. The Public Guardian considers that his deputy “made reasonable attempts”' to do that, but that these did not always succeed, and that

“with hindsight, different approaches should have been tried.”

More than a third of the personal capital that Mr Able possessed when control of his financial affairs was passed to court-appointed solicitors was subsequently paid to those solicitors as fees for the job of controlling his expenditure, yet they did not even ensure that he received appropriate benefits when he was unemployed. The Public Guardian, however, does not consider that Mr Able’s deputy was at fault for not providing him with the support to ensure that he attended the right appointments, was able to cope with benefits-related interviews and assessments, and continued to sign on.

However, now that Wiltshire council acts as Mr Able’s deputy, he has qualified for employment and support allowance, and he receives support that addresses his needs appropriately, including the use of reports from medical staff and social workers when applications are made. If the council can achieve that, surely—given the expense that Mr Able was forced to incur—his court-appointed deputy should have been able to achieve it, too.

No review of the case has concluded that any agency has done something wrong, and no lessons have been learned. Although this case may be unique, as we have heard today, the failings exposed by it are certainly not unique. I draw the Minister’s attention to the Westminster Hall debate secured by the hon. Member for Cardiff West (Kevin Brennan) on 19 July 2011, in which I participated, and to the transcript of BBC Radio 4’s “File on 4” report on court-appointed deputies by Fran Abrams—I gave the Minister a copy today—which catalogues failings similar to those I describe.

I ask the Minister what other avenue is available in seeking redress for my constituent. I recognise that she is new in her post, so I ask that she personally looks further into the wider issues discussed today, and raises them with her colleagues in the Ministry of Justice. In particular, I ask her to consider whether the panel from which deputies appointed by the court are drawn is too narrow, and whether it could include, for certain cases, representatives of voluntary sector organisations, especially those with experience of dealing with the sometimes complex circumstances of vulnerable people. My final question is this: is the OPG, as currently constituted, fulfilling its responsibilities to vulnerable people, or has it been captured by the learned and organised legal practitioners who collectively draw such great revenue from this work?

Exasperated as I am to see my constituent suffer this unremedied injustice, it is imperative that—at the very least—lessons are learned from his saga, so that others do not face the same fate in future.

16:31

[The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant)]

It is a pleasure, Mr Hollobone, to serve under your chairmanship today.

I congratulate my hon. Friend the Member for Chippenham (Duncan Hames) on securing this debate. I know that he has a keen interest in these matters, and I am glad to have the opportunity to speak about the work of the Office of the Public Guardian and in particular the Public Guardian’s role in supervising deputies appointed by the Court of Protection. This is a vital and complex area of work, and people who have lost capacity are often very vulnerable indeed. It is absolutely right and proper that we consider whether the arrangements that are in place to support and protect them are completely acceptable and operating as well as possible.

My hon. Friend raised issues that centre on the role of deputies appointed by the Court of Protection and then supervised by the OPG. It would be helpful if I outlined how the system of deputyship currently operates, before describing how the OPG is considering, through a fundamental review, some of the wider issues raised about deputies and how they are supervised.

The decision whether a deputy is required, and who the proper person is to take on that role, is entirely a judicial matter. The court will only appoint a deputy when the person concerned lacks capacity to make the relevant decisions and if no legal arrangement had been made while they still had capacity. In the case of financial matters, if there are assets that require management frequently the only option is to appoint a deputy.

Once a deputy is appointed, they must always act in the best interests of the person for whom they have been appointed. They must also ensure that the individual concerned is supported to make as many decisions for themselves as they can. Where the deputy has to make decisions on the person’s behalf, they must still ensure that the person concerned is involved in the process as much as possible. That is especially important in cases where a person may lack capacity to make some decisions but not others, or where their level of capacity can fluctuate or vary over time. These factors make the role of deputy a challenging one and the balance between allowing a person to make decisions for themselves and having to make a decision for them is often a fine one.

When a deputy needs to be appointed, they will often be a family member or close friend of the person lacking capacity. Normally, the court will consider appointing a professional deputy only in circumstances where there is no one else suitable and able to act. It may be that the person lacking capacity has no close family or friends, or it may be that a conflict of interest exists within the family, or that the size and complexity of the estate mean that a professional deputy is better placed to act on their behalf. Such professional deputies are entitled to charge fees and in complex cases these costs can be very high. However, the costs must be representative of the work done by the deputy. The costs charged by professional deputies are set out in a practice direction issued by the president of the Court of Protection. If a deputy wishes to claim over and above the fixed costs, their claim must be assessed and approved by the senior court costs office.

Once a deputy has been appointed by the Court of Protection, the Public Guardian is responsible for supervising them to ensure that they carry out their duties properly and act in the best interests of the person they are representing. This is a statutory duty placed upon the Public Guardian by the Mental Capacity Act 2005 and it is entirely right that, where the state has had to intervene to appoint an individual to make decisions on another person’s behalf, that individual is subject to adequate but proportionate oversight.

However, the Public Guardian does not have any role in directly managing the affairs of a person who lacks capacity. Their role is entirely to supervise and investigate. It is not within their jurisdiction to remove a deputy once they are appointed or to place limits on how the deputy exercises their powers. If the Public Guardian believes that a deputy is unable to fulfil their role or functions effectively, they may make an application to the Court of Protection seeking the deputy’s replacement or seeking to have limits placed on their powers.

In most cases, the Public Guardian will require the deputy to report to them on at least an annual basis. In the early stages of appointment, there may also be additional contact from the Public Guardian’s office to ensure the deputy is carrying out their duties properly and to identify any need for additional support. In certain cases, that may also involve a visit from an independent Court of Protection visitor who will report their findings to the Public Guardian. My hon. Friend may be pleased to know that almost 6,500 such visits took place last year.

I now turn to the work that is currently going on at the OPG as part of the Ministry of Justice’s “Transforming Justice” agenda. This work is being taken forward under Alan Eccles, who was appointed earlier this year as the new Public Guardian. The OPG is currently taking forward a major transformation programme that is designed to move its services on to a digital platform, to reduce the bureaucracy of the current paper-based system. The programme is focused squarely on placing the needs of users, including deputies and those whom they support, at the heart of the business, and on ensuring that the OPG is able to meet the demands placed on its services well into the future.

As part of that work, the new Public Guardian has launched a fundamental review of how the supervision of deputies is carried out. The aims of the review are twofold: first, to ensure that proper safeguards are in place to protect people who lack capacity and to ensure that decisions are made in their best interests; and secondly, to ensure that supervision is proportionate. That means focusing attention on those cases that require most support or where there are potential concerns, but allowing deputies who are operating effectively to do their job with minimal intervention. That might mean tailoring supervision to the needs of different kinds of deputies. Professional deputies, such as legal professionals and public authorities, might require a different type of supervision from lay people acting on behalf of family members. Also, a new deputy will often require additional support so that they understand their responsibilities and the support available to them.

Any changes will also need to be in line with the Public Guardian’s statutory duties, to which my hon. Friend referred, and must also consider the demands that the increasingly ageing population places on the OPG’s services. The OPG must be able to deal with the rising number of deputies in the future, as well as encouraging people to plan for the future by making lasting powers of attorney, which may remove the need for a deputy to be appointed at all. A key element of the work is the need to build a richer understanding of the deputies’ circumstances and their needs. I am pleased to say that the OPG has already surveyed some 1,300 deputies. In the coming months the OPG will conduct in-depth interviews with deputies to gain a deeper insight into their needs and the needs of those for whom they care.

The OPG will continue to listen to experts across the mental capacity field as it looks to improve its services. Building a clearer picture of its customers will help the OPG to design a more responsive and effective supervision regime, which I know my hon. Friend the Member for Chippenham will support.

[Mr Bacon]

The Minister mentioned the Office of the Public Guardian and his statutory powers. In cases of over-billing, once it has been stamped by the court, as the Minister alluded to, the issue for the Public Guardian is that, under present legislation, his scope to act is extremely limited, even if, as it may transpire, the over-billing has happened as a result of the Court of Protection successfully being misled by a deputy.

[Mrs Grant]

The issue that my hon. Friend raises in relation to over-charging vulnerable people is extremely important. It is worrying and it is one of the reasons why the new Public Guardian has launched a fundamental review into the supervision of deputies. My hon. Friend the Member for Chippenham raised the matter with me just a few moments ago, and I will look into it. I will write to him, and perhaps we can take matters forward.

I thank my hon. Friend for raising the issues. I also thank my hon. Friend the Member for South Norfolk, who I know has met the Public Guardian and who has extensive personal experience of the current system of deputyship. The issues are important and I hope that both my hon. Friends are reassured that the Government take matters very seriously. I will look carefully into the issues they have raised on accountability, visits, the statutory powers of deputies and panel composition. I hope they are both reassured that the OPG continues to look into this area to make further significant improvements.

[Duncan Hames]

I very much welcome the fundamental review that the Minister has advised us of this afternoon. She said that the OPG had been and would be surveying deputies as part of the review. I hope that she will ensure that the clients of deputies are consulted and interviewed and asked their views as part of the review in order that the true customers of the service have their voices heard.

[Mrs Grant]

I am happy to look into all the important issues that my hon. Friend has raised today. The Government consider vulnerable people to be very important and a high priority. I am happy to talk further to my hon. Friend about what more might be done.

4G (Interference)

Tuesday 30th October 2012 Westminster Hall

16:42

[Mr John Whittingdale (Maldon) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful for the opportunity to debate an issue that has so far received little attention, but one that will affect large numbers of people in this country quite soon. It is appropriate that we should be debating it today. This is the day on which 4G services have become widely available in a number of cities as a result of Everything Everywhere making use of the 1,800 MHz spectrum.

Understandably, the competitors to Everything Everywhere have been concerned that it should be given a lead and so have been pressing to be able to go ahead with the provision of their own 4G services, and to do that they require access to the 800 MHz band. The Culture, Media and Sport Committee, which I am proud to chair, also shared the view that we needed to get on with the allocation of spectrum for 4G, because 4G carries real benefit to the economy, and we did not wish to get left behind.

I am pleased that Ofcom is now pressing ahead with the auction. However, the use of 800 MHz for mobile telephony will have consequences. It will result in interference with the provision of services currently using that band, particularly digital terrestrial television.

We have, of course, just been through a major exercise: the analogue switch-off and digital switchover. When I first became Chairman of the Committee, the first inquiry we had was into analogue switch-off. We felt that this was a huge undertaking, with risks that we highlighted. Happily, the exercise has now been completed and it has gone remarkably smoothly. I pay tribute to Digital UK for its success in overseeing the switchover process with very little problem or complaint. I like to think that the report of my Committee, in which we flagged up some of the problems in advance, allowed us to take account of those and put in place measures so that they did not cause the complaints or disruption that we were concerned about.

Similarly, I want to flag up one or two concerns that I have about the effect of mobile services being made available on 800 MHz, and what we might do to try to avoid difficulties. It is estimated that the reception of digital terrestrial television in 2.3 million homes may be affected once mobile 4G services become available. Of those, 900,000 are primary DTT households that will require filters for them to continue to receive television without interference. I welcome moves by the Government to make filters available to those households. I also welcome the additional help of a £50 voucher, should they have a loft or masthead amplifier, so that the filter can be professionally installed.

I recently met with Ofcom and saw one of the filters that it is intended should be fitted. I accept that as long as someone does not have an amplifier, it is pretty simple to unplug the aerial cable, insert the filter and plug it back in again. However, there will be households for which it is not so simple and the Government are right to make additional help available.

One of my concerns, however, is that the Government are making the filters available only for primary DTT households, and yet there will be a large number of additional households that have second sets, and they will not receive filters. I accept that the Government have to draw a line somewhere, but given that the mobile companies will be bidding a substantial amount of money for the spectrum, I think there is a case for households that still use DTT, but not as their primary means of receiving television, to receive some help.

I also understand that additional measures can be taken to try to mitigate the effect of the interference at the base station. That could help all households that are likely to suffer from interference, but it is not clear to me yet what plans the Government have put in place to ensure that the mobile companies carry out the base station mitigation at the stations that will result in interference. I think it is relatively cheap to install a filter at the base station—I was given a figure of £400—and I hope that the mobile companies do that. Will that be made a condition of the auction, so that the mobile companies carry out the base station mitigation to try to minimise the interference that could result?

I am also slightly concerned that while we are relying on projections of the number of households that may be affected, to some extent we cannot know whether such forecasts are right. The Minister conceded that point when he gave evidence to the Select Committee. One way in which we could perhaps get round that is to have a trial in advance, similar to that which took place at Whitehaven prior to the beginning of digital switchover. There may well be a case for a trial in order to get precise figures for exactly which households will suffer interference and to what extent that interference is a serious problem. I hope that MitCo will consider that. I understand it is still a possibility once the advice is received.

Another issue is whether the filters will work properly, and it would help if they too could be tested in a trial. The prototype filters are now available—as I have said, I have seen one—but mass production has not yet started on the scale that will be required.

The situation has been made more difficult by the bringing forward of the timetable for 4G’s introduction. I do not criticise that; it is important that we get 4G roll-out as soon as possible, but there is no question but that the accelerated timetable will make the process more difficult. Digital UK did a good job in overseeing the transition for analogue switch-off, but it did so over a number of years. It mounted a significant publicity campaign in advance, region by region, so that when it came to switch-off almost everyone knew what was happening, and was hopefully prepared.

Instead of a period of years, however, this process will be done in a period of weeks. The auction of the 800 MHz band is due to start in February and it is intended that the installation will take place shortly after, perhaps in March or April, so we could start rolling out 4G in June. Yet, I am prepared to bet that we would be hard-pressed to find anyone on the street who was aware that there was a risk of their television reception suffering interference again, and that they might have to take further measures to those they have already taken to deal with the analogue switch-off.

[Mr David Nuttall (Bury North) (Con)]

My hon. Friend makes a powerful case. Is he aware that in a presentation to the all-party parliamentary media group, Arqiva estimated that for some 40,000 homes there was no solution at all, because they were too near to the base stations? In those cases, there will be more than interference; the households will simply not be able to get television reception at all.

[Mr Whittingdale]

My hon. Friend raises an important point, which I have not addressed. He is entirely right. I have been informed that 38,500 households—very much the figure he gave—will still be affected after filter installation and that, of those, perhaps 18,000 will be primary DTT households. After the various measures have been taken, there will certainly be some households that still cannot get DTT, and the Government have put aside a budget to address that problem. The only solution will be for such households to change platform, to Freesat, cable or Sky, and where those options are not available either, they might even need to have a special relay station installed. It will be interesting to hear whether the Minister accepts that those are the current figures. The degree of interference will vary, but some households at the extreme end will no longer be able to get DTT under any circumstances.

As I was saying, the Government need to start alerting people to the problem very soon. I have been told that it is difficult to mount a publicity campaign until we know who has obtained the licences and therefore which base stations will be affected, but it would be a good idea to start informing people of the problem. We must have a fairly good idea of the base stations that are likely to be involved. We do not know which operator will obtain which licence, but if the Government are successful in their hope to achieve competition in 4G provision, it seems likely that at least the majority of the major operators will obtain licences, so there is certainly a case for beginning to prepare the ground now for telling people what will happen.

I want to raise two other concerns. The first is about our old friend the PMSE sector, with which the Minister will be very familiar. The programme making and special events sector includes those who need microphones for television productions and live music performances. This important sector is concerned that it, too, might be affected by interference. It has already had to vacate channel 69 and deal with problems resulting from the analogue switch-off and the making available of the spectrum there, and it is now concerned that the problems might continue. It has been suggested to me that industry experts have said that anything above channel 56 might no longer be suitable for PMSE use, which leaves the sector with just two options. The first is that it suffers interference in the five channels it currently has that might be affected, but that is not really an option. If there is a live performance by Bon Jovi—I think I cited them on a previous occasion—sudden interference in the communications is simply not acceptable. The alternative is that the PMSE sector has to vacate those five channels and find new ones further down. The sector has made a perfectly reasonable request for MitCo’s remit to be extended at least to consider the potential interference, and that the sector be represented on its supervisory board, and I hope that the Minister will consider that.

Finally, I turn to the longer term. The Minister will be aware that there is a debate about the likely ever-increasing demand for mobile services and about mobile telephony’s appetite for bandwidth, as a result of which it is being suggested that mobile telephony might in due course creep into the 700 MHz band, possibly from 2018. That would cause further problems for DTT, which might have to move out of 700 MHz and into the 600 MHz band. That date of 2018 is still a little way off, and it is after whatever decisions are taken at the next world radiocommunication conference, but I ask the Minister for one or two assurances now.

First, in the event that that were to happen, it would seem only right that there should be an allocation of spectrum in the 600 MHz band for DTT, and that if DTT were forced out of its current spectrum it should not have to participate in an auction process. It is worth beginning to consider, some way in advance, how many households might be affected and how many might need new set-top boxes.

My real concern, however, which I hope the Minister feels able to address, is that there has been a suggestion that in due course we might no longer need DTT. We have internet protocol television, or IPTV, coming down the wire, and there might come a time when the different ways of receiving television—broadband and satellite—mean that there is no longer a need for Freeview DTT. I can anticipate that day being reached, but as IPTV services are still in their infancy I think it would take a long time.

A certain amount of concern was raised within the industry by the recommendation of the Lords Committee on Communications. I do not want to criticise my colleagues in the other place, but the Committee’s report on broadband states:

“We recommend that the Government, Ofcom and the industry begin to consider the desirability of the transfer of terrestrial broadcast content from spectrum to the internet and the consequent switching off of broadcast transmission over spectrum”.

As 2018 is likely to be too soon to even contemplate that, I seek the Minister’s assurance that if DTT finds itself unable to use the 700 MHz spectrum and has to move as a result of further allocation of spectrum to mobile telephony, it would be the Government’s intention to continue to have DTT services, certainly for some considerable time to come.

16:59

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I congratulate my hon. Friend the Member for Maldon (Mr Whittingdale) on securing this important debate. As he points out, apart from a brief evidence session before his Select Committee, Parliament has not debated 4G interference with digital terrestrial television, so this debate is a useful opportunity to set out the Government’s position and perhaps address some of the concerns that he highlighted in his excellent speech.

First, I make it clear—my hon. Friend is an expert in such matters, but those watching the debate may not be—that we are talking about interference from the 800 MHz spectrum. As hon. Members may know, after the spectrum auction, mobile phones will use a range of spectrums—800 MHz, 900 MHz, 1,800 MHz, 2.1 GHz and 2.6 GHz—but only the 800 MHz spectrum risks causing interference as it is adjacent to the 700 MHz spectrum used for digital terrestrial television. It is important to make that point, because as my hon. Friend points out, today sees the launch of the UK’s first 4G service by EE, as we must now learn to call it, but that is in the 1,800 MHz spectrum, so nobody need go home tonight in fear that they will miss “BBC News at Ten” or “Newsnight.”

Secondly, only digital terrestrial television viewers will be affected. Again, effectively that is people watching Freeview. People who get their television through Freesat, cable or a commercial satellite provider will not be affected by the 800 MHz spectrum.

My hon. Friend points out that Ofcom has estimated that some 2.3 million households will be close enough to mobile phone base stations using the 800 MHz spectrum to risk being affected by interference. That is an estimate, and the figure may be substantially lower. There are a number of reasons why that may be the case. First, Ofcom estimates that only 40% of those households will be viewing Freeview; the rest will be getting their television in other ways. That brings the figure to 900,000 homes.

My hon. Friend asks whether mobile operators will be compelled to put filters on their base stations. I am pleased to inform him that all the base stations being procured by potential winners of the 800 MHz licence will include a filter as a matter of course. Without wishing to confine myself to a specific figure, I have been informed that it is therefore likely that the new base stations, which are substantially more advanced than the ones used in other countries, may substantially reduce the number of households affected. When that becomes clearer, I will, of course, inform him.

My job as a Minister, working with Ofcom, was to work out the best way to reduce any interference for potentially affected households. First, the obvious decision was to put the mitigation measures into the hands of the mobile operators. They are the ones who will site the base stations and procure the relevant technology, so it seems sensible that, as the people potentially causing the interference, they are in charge of reducing that interference as much and as upstream as possible.

Secondly, I was given a range of financial support options that I could make available for mitigation. To put it bluntly, those options included zero and figures across the spectrum. I chose the higher end of the spectrum. I would rather be the Minister who set aside too much money for this programme than the Minister who set aside too little to get the job done.

How will the money be used? First, all the households that might be affected by the base stations will receive a free filter. So, on the current figure, 2.3 million households will receive a free filter. That means that, for the sake of argument, if a household receives the signal for the main television set in the living room through cable or satellite, it will receive a free filter for, say, a Freeview set in the bedroom. That will help many households that have second sets.

If we zone in, as it were, on the 900,000 households that use Freeview for their primary set, we estimate that some 150,000 of those households will be able to fit a filter without any problem. I have fitted a filter, and my hon. Friend has fitted a filter, which is literally a piece of aerial, to put it in layman’s terms. I simply unplugged the aerial, attached the filter and put the aerial back in. That took me 10 seconds, and I would not class myself as a DIY expert.

We are then left with 220,000 households that are technically vulnerable, which means people with disabilities or people aged over 75. I do not want to get into a secondary debate—I know many 75-year-olds who might not class themselves as vulnerable—but technically, they are vulnerable. That is about one in four of the 900,000 households, and help will be available to them should they so choose. We know from the digital switchover scheme that, of the people who were eligible for help, only 15% chose to make use of the available help scheme. Nevertheless, money will be set aside on the basis that every single one of those households will use the help scheme.

The next category is people with amplifiers, which are used to boost the power level of the TV signal. Before the switchover, amplifiers were quite prevalent because, obviously, people were using them to boost weak digital signals before we completed the switchover. Sometimes amplifiers are used to boost a strong signal where there are two or three televisions in a home. Ofcom estimates that some 380,000 of the affected Freeview homes have amplifiers, but many of those will no longer be in use and there will be no need to fit a filter. Where there is an amplifier, there is no reason why, in quite a significant number of cases, a normal able-bodied person will not be able to fit a filter. There has been a suggestion that, if the amplifier is in the loft, that could be a problem, but it should be possible to go into the loft to fit the aerial extension.

We acknowledge, however, that if the amplifier is on the roof, we certainly would not expect someone to get out the ladder and climb on the roof to fit the aerial. Ofcom estimates that there are some 125,000 households in that category and, as a result of the high-profile concerns that were raised on that specific issue, we have instructed that about £12 million of the £180 million be set aside to pay for the reasonable costs of professional installation. We have estimated those costs to be about £50 plus VAT. It is important to stress that by “professional installation” we mean going up a ladder safely and putting the aerial extension into an amplifier. That is not the same as adjusting an aerial for the digital terrestrial television switchover, which was a more complicated, technical task, but we expect people to use a registered digital installer. That is something that we inherited from the digital switchover scheme and will ensure that people are using professional installers.

Finally, there comes the issue of fitting filters to communal properties. We think there are about 20,000 such properties, which make up the rest of the 900,000 affected households. Those properties will require a more sophisticated filter, which we think will cost up to £300, but those filters will be provided to communal properties free of charge. Fitting such a filter is probably more demanding than fitting the filter that my hon. Friend and I have used, and we think a figure of about £220 is right. As a general rule, we would expect landlords to be responsible for ensuring the fitting of that filter to their property.

My hon. Friend says that he thinks people with second or third sets should get additional free filters. I am afraid that at this stage all I can do is agree to disagree with him. Additional filters will be easy to obtain and should cost £10 or less. It is difficult to give an open-ended commitment to provide free filters and to ask people to write in to say that they have two, three, four, five or six television sets, or to try to guess how many television sets they have. I think it is easier simply to give everyone a free filter and then say, “If you want a second filter, they are relatively cheap.”

I have also noted my hon. Friend’s suggestion for a pilot or trial period before rolling out 4G. There have been a number of technical trials already, and we have seen commercial roll-out in other countries, so we have a great deal of experience to draw on. We do not believe that a trial would add anything to our knowledge, and it would significantly delay much-anticipated 4G services. We will keep the matter under review, but it is important to explain again that 4G will roll out gradually; not all the country will be covered by services the minute 4G goes live in the 800 spectrum category.

I note my hon. Friend’s concerns about the lack of a public awareness campaign. Again, the mitigation programme is different from the digital switchover programme, because it does not affect every household in the country. Far fewer households will be affected. Also, every single household within range of a base station will get at least four weeks’ notice, and the roll-out process will take two to three years. We believe that embarking on a widespread publicity campaign at the moment might not have the impact that my hon. Friend suggests.

It is also important to stress that those who hold 800 MHz licences after the auction will have strict key performance indicators on the provision of public information as part of their licence conditions. Our final guarantee is that if any of the mobile network operators fails to meet the key performance indicators, the immediate sanction will be that they must switch off the offending base station and not add any others until they have remedied the issues for local TV viewers. That strikes me as an elegant and effective way of ensuring that mobile network operators take the issue seriously.

My hon. Friend is right to point out that because of our work in clearing the spectrum more quickly than we had anticipated, bringing the benefits of 4G to the UK more quickly than planned, we have a stretching timetable, but I am pleased that the mobile network operators moved quickly to set up the mitigation company, which has the elegant title of Digital Mobile Spectrum Limited and Andrew Pinder as its interim chair. The creation of the company has been at the heart of discussions with the MNOs about bringing forward the roll-out of services, and the MNOs are still required to have the mitigation company operational in time to launch services. I am confident that the MNOs are taking that requirement seriously. Furthermore, we will have oversight through an oversight board. I am delighted to tell my hon. Friend that the board had its first meeting this morning, and it was very productive.

Finally, let me address three points quickly; I am conscious that I might run out of time. My hon. Friend said that 38,500 people could be so seriously affected that no filter will help them. That figure may change over time as base stations become more sophisticated, but yes, we have made provisions for them to have a full platform change, or even a direct digital terrestrial television relay should one be required.

We note the concerns of the programme making and special events sector. I met with Lord Grade recently to hear its concerns. It is for Ofcom to deal with the PMSE sector and find suitable frequencies for it. It has a dedicated channel, channel 38, but we will keep the issue under review, and I promised Lord Grade that we would meet regularly.

Finally, my hon. Friend mentioned the long-term future of 700 MHz. We note concerns about the long-term future for spectrum as mobile phone demand increases, and we have an ambitious campaign to release public sector spectrum. There is, of course, an international dimension to the designation of the 700 MHz band, and we will undoubtedly continue to negotiate with our international partners about its future use, but I note absolutely my hon. Friend’s comments. It is important that we do not run before we can walk.

[Mr Philip Hollobone (in the Chair)]

I do not think that there were any problems with transmission or reception during that debate, but I am afraid it is time to tune out and switch off.

Question put and agreed to.

17:13

Sitting adjourned.